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Business Segments | 12 Months Ended
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Dec. 31, 2024
Segment Reporting [Abstract] |
Business Segments | Note 13. Business Segments The Company’s business segments are defined as Consumer Banking, Commercial Banking, and Treasury and Other. The Company’s chief operating decision maker (“CODM”) is the Chairman and Chief Executive Officer. The CODM uses income from operations to evaluate the performance of the overall business and to allocate resources to each of the segments. The Company's internal management accounting process, which is not necessarily comparable with the process used by any other financial institution, uses various techniques to assign balance sheet and income statement amounts to the business segments, including allocations of income, expense, the provision for credit losses, and capital. This process is dynamic and requires certain allocations based on judgment and other subjective factors. Unlike financial accounting, there is no comprehensive authoritative guidance for management accounting that is equivalent to GAAP. Previously reported results have been reclassified to conform to the current reporting structure. The net interest income of the business segments reflects the results of a funds transfer pricing process that matches assets and liabilities with similar interest rate sensitivity and maturity characteristics and reflects the allocation of net interest income related to the Company’s overall asset and liability management activities on a proportionate basis. The basis for the allocation of net interest income is a function of the Company’s assumptions that are subject to change based on changes in current interest rates and market conditions. Funds transfer pricing also serves to transfer interest rate risk to Treasury. However, the other business segments have some latitude to retain certain interest rate exposures related to customer pricing decisions within guidelines. The provision for credit losses for the Consumer Banking and Commercial Banking business segments reflects the actual net charge-offs of those business segments. The amount of the consolidated provision for loan and lease losses is based on the CECL methodology that the Company used to estimate the consolidated Allowance. The residual provision for credit losses to arrive at the consolidated provision for credit losses is included in Treasury and Other. Noninterest income and expense includes allocations from support units to business units. These allocations are based on actual usage where practicably calculated or by management’s estimate of such usage. The provision for income taxes is allocated to business segments using a 26% effective income tax rate. However, the provision for income taxes for the Leasing business unit (included in the Commercial Banking segment) and Auto Leasing portfolio and Pacific Century Life Insurance business unit (both included in the Consumer Banking segment) are assigned their actual effective income tax rates due to the unique relationship that income taxes have with their products. The residual income tax expense or benefit to arrive at the consolidated effective tax rate is included in Treasury and Other. Consumer Banking Consumer Banking offers a broad range of financial products and services, including loan and lease financing, deposit, and brokerage and insurance products; private banking and international client banking services; trust services; investment management; and institutional investment advisory services. Loan and lease products include residential mortgage loans, home equity lines of credit, automobile loans and leases, overdraft lines of credit, installment loans, small business loans and leases, and credit cards. Deposit products include checking, savings, and time deposit accounts. Brokerage and insurance offerings include equities, mutual funds, life insurance, and annuity products. Private banking (including international client banking) and Trust groups assist individuals and families in building and preserving their wealth by providing investment, credit, and trust services to high-net-worth individuals. The investment management group manages portfolios utilizing a variety of investment products and the institutional client services group offers investment advice to corporations, government entities, and foundations. Products and services from Consumer Banking are delivered to customers through 50 branch locations and 317 ATMs throughout Hawai'i and the West Pacific, and online and mobile banking services. Commercial Banking Commercial Banking offers products including commercial and industrial loans, commercial real estate loans, commercial lease financing, auto dealer financing, merchant services, deposit products and cash management services. Commercial lending and lease financing, deposit products, and cash management and merchant services are offered to middle-market and large companies in Hawaiʻi and the West Pacific. Commercial Banking also offers lease financing and deposit products to government entities in Hawaiʻi. Commercial real estate mortgages focus on investors, developers, and builders predominantly domiciled in Hawaiʻi. Commercial Banking includes international banking which services Japanese, Korean, and Chinese commercial businesses owned by a foreign individual or entity, a U.S. corporate subsidiary of a foreign owner, or businesses where management prefers to speak a foreign language. Treasury and Other Treasury consists of corporate asset and liability management activities, including interest rate risk management and a foreign currency exchange business. This segment’s assets and liabilities (and related interest income and expense) consist of interest-bearing deposits, investment securities, federal funds sold and purchased, and short and long-term borrowings. The primary sources of noninterest income are from bank-owned life insurance, net gains from the sale of investment securities, and foreign exchange income related to customer-driven currency requests from merchants and island visitors. The net residual effect of the transfer pricing of assets and liabilities is included in Treasury and Other, along with the elimination of intercompany transactions. Other organizational units (Technology, Operations, Marketing, Human Resources, Finance, Credit and Risk Management, and Corporate and Regulatory Administration) provide a wide-range of support to the Company’s other income earning segments. Expenses incurred by these support units are charged to the business segments through an internal cost allocation process. The cost allocation is included in Other Noninterest Expense in the table below. Selected business segment financial information as of and for the years ended December 31, 2024, 2023 and 2022 were as follows:
(dollars in thousands) |  | Consumer Banking |  |  | Commercial Banking |  |  | Treasury and Other |  |  | Consolidated Total |
Year Ended December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |
Net Interest Income (Expense) |  | $ | 391,137 |  |  | $ | 206,450 |  |  | $ | (131,007 | ) |  | $ | 466,580 |
Provision for (Recapture of) Credit Losses |  |  | 11,969 |  |  |  | 913 |  |  |  | (1,732 | ) |  |  | 11,150 |
Net Interest Income (Expense) After Provision for Credit Losses |  |  | 379,168 |  |  |  | 205,537 |  |  |  | (129,275 | ) |  |  | 455,430 |
Noninterest Income |  |  | 134,568 |  |  |  | 28,768 |  |  |  | 9,193 |  |  |  | 172,529 |
Salaries and Benefits |  |  | 81,477 |  |  |  | 20,436 |  |  |  | 130,651 |  |  |  | 232,564 |
Net Occupancy |  |  | 27,551 |  |  |  | 1,816 |  |  |  | 12,717 |  |  |  | 42,084 |
Other Noninterest Expense |  |  | 230,916 |  |  |  | 52,100 |  |  |  | (127,556 | ) |  |  | 155,460 |
Noninterest Expense |  |  | 339,944 |  |  |  | 74,352 |  |  |  | 15,812 |  |  |  | 430,108 |
Income (Loss) Before Income Taxes |  |  | 173,792 |  |  |  | 159,953 |  |  |  | (135,894 | ) |  |  | 197,851 |
Provision (Benefit) for Income Taxes |  |  | 44,290 |  |  |  | 40,530 |  |  |  | (36,963 | ) |  |  | 47,857 |
Net Income (Loss) |  | $ | 129,502 |  |  | $ | 119,423 |  |  | $ | (98,931 | ) |  | $ | 149,994 |
Total Assets as of December 31, 2024 |  | $ | 8,288,997 |  |  | $ | 6,145,162 |  |  | $ | 9,166,955 |  |  | $ | 23,601,114 |
Year Ended December 31, 2023 1 |  |  |  |  |  |  |  |  |  |  |  |
Net Interest Income (Expense) |  | $ | 393,310 |  |  | $ | 209,436 |  |  | $ | (105,721 | ) |  | $ | 497,025 |
Provision for (Recapture of) Credit Losses |  |  | 7,773 |  |  |  | 44 |  |  |  | 1,183 |  |  |  | 9,000 |
Net Interest Income (Expense) After Provision for Credit Losses |  |  | 385,537 |  |  |  | 209,392 |  |  |  | (106,904 | ) |  |  | 488,025 |
Noninterest Income |  |  | 126,373 |  |  |  | 33,016 |  |  |  | 17,220 |  |  |  | 176,609 |
Salaries and Benefits |  |  | 84,761 |  |  |  | 21,218 |  |  |  | 128,100 |  |  |  | 234,079 |
Net Occupancy |  |  | 27,514 |  |  |  | 1,571 |  |  |  | 10,839 |  |  |  | 39,924 |
Other Noninterest Expense |  |  | 228,061 |  |  |  | 54,697 |  |  |  | (119,243 | ) |  |  | 163,515 |
Noninterest Expense |  |  | 340,336 |  |  |  | 77,486 |  |  |  | 19,696 |  |  |  | 437,518 |
Income (Loss) Before Income Taxes |  |  | 171,574 |  |  |  | 164,922 |  |  |  | (109,380 | ) |  |  | 227,116 |
Provision (Benefit) for Income Taxes |  |  | 44,141 |  |  |  | 41,109 |  |  |  | (29,336 | ) |  |  | 55,914 |
Net Income (Loss) |  | $ | 127,433 |  |  | $ | 123,813 |  |  | $ | (80,044 | ) |  | $ | 171,202 |
Total Assets as of December 31, 2023 |  | $ | 8,486,771 |  |  | $ | 5,831,880 |  |  | $ | 9,414,645 |  |  | $ | 23,733,296 |
Year Ended December 31, 2022 1 |  |  |  |  |  |  |  |  |  |  |  |
Net Interest Income |  | $ | 323,819 |  |  | $ | 206,182 |  |  | $ | 10,557 |  |  | $ | 540,558 |
Provision for (Recapture of) Credit Losses |  |  | 5,324 |  |  |  | (205 | ) |  |  | (12,919 | ) |  |  | (7,800 | )
Net Interest Income After Provision for Credit Losses |  |  | 318,495 |  |  |  | 206,387 |  |  |  | 23,476 |  |  |  | 548,358 |
Noninterest Income |  |  | 126,336 |  |  |  | 25,937 |  |  |  | 5,268 |  |  |  | 157,541 |
Salaries and Benefits |  |  | 83,378 |  |  |  | 18,177 |  |  |  | 133,715 |  |  |  | 235,270 |
Net Occupancy |  |  | 27,386 |  |  |  | 1,334 |  |  |  | 10,721 |  |  |  | 39,441 |
Other Noninterest Expense |  |  | 219,376 |  |  |  | 51,090 |  |  |  | (129,912 | ) |  |  | 140,554 |
Noninterest Expense |  |  | 330,140 |  |  |  | 70,601 |  |  |  | 14,524 |  |  |  | 415,265 |
Income Before Income Taxes |  |  | 114,691 |  |  |  | 161,723 |  |  |  | 14,220 |  |  |  | 290,634 |
Provision (Benefit) for Income Taxes |  |  | 28,999 |  |  |  | 39,844 |  |  |  | (4,013 | ) |  |  | 64,830 |
Net Income |  | $ | 85,692 |  |  | $ | 121,879 |  |  | $ | 18,233 |  |  | $ | 225,804 |
Total Assets as of December 31, 2022 |  | $ | 8,521,178 |  |  | $ | 5,522,916 |  |  | $ | 9,562,783 |  |  | $ | 23,606,877 |
1. Certain prior period information has been reclassified to conform to current presentation.

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