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OPERATING LEASES | 9 Months Ended
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Sep. 30, 2025
Leases [Abstract] |
LEASES | 12. OPERATING LEASES The Company leases certain land and buildings for its bank branches and ATMs. Some leases include renewal options, which are evaluated and included in the measurement of right-of-use ("ROU") assets and lease liabilities when it is reasonably certain that the options will be exercised, in accordance with ASC 842, "Leases." All leases are classified as operating leases. Several leases contain variable payments, primarily related to common area maintenance costs and Hawaii state tax rates. The Company has elected the short-term exemption, for leases with terms of 12 months or less. Such leases are excluded from the calculation of the ROU assets and lease liabilities and are not included on the Company's balance sheets. The Company has also elected to account for lease and non-lease components as a single lease component for all classes of underlying assets. The most significant assumption in applying ASC 842 is the discount rate. Because most lease agreements do not specify an implicit interest rate, the Company estimates the discount rate using the collateralized borrowing rate it would pay for a loan with a similar term. The following table presents total lease cost, cash flow information, weighted-average remaining lease term and weighted-average discount rate for the periods presented:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(dollars in thousands) | 2025 |  | 2024 |  | 2025 |  | 2024
Lease cost: |  |  |  |  |  |  |
Operating lease cost | $ | 1,316 |  |  | $ | 1,605 |  |  | $ | 3,959 |  |  | $ | 4,345 |
Variable lease cost | 727 |  |  | 484 |  |  | 1,989 |  |  | 2,346 |
Total lease cost | $ | 2,043 |  |  | $ | 2,089 |  |  | $ | 5,948 |  |  | $ | 6,691 |
Other information: |  |  |  |  |  |  |
Operating cash flows from operating leases | $ | (1,283) |  |  | $ | (1,564) |  |  | $ | (3,842) |  |  | $ | (4,246) |
Weighted-average remaining lease term - operating leases | 9.38 years |  | 10.53 years |  | 9.38 years |  | 10.53 years
Weighted-average discount rate - operating leases | 4.15 | % |  | 4.04 | % |  | 4.15 | % |  | 4.04 | %
The following table presents a schedule of annual undiscounted cash flows for our operating leases and a reconciliation of those cash flows to the operating lease liabilities as of September 30, 2025, for the remainder of fiscal year 2025, the next five succeeding fiscal years and all years thereafter:
(dollars in thousands) |  | Undiscounted Cash Flows |  | Lease Liability Expense |  | Lease Liability Reduction
Year Ending December 31, |  |  |
2025 (remainder) |  | $ | 1,197 |  |  | $ | 266 |  |  | $ | 931 |
2026 |  | 4,816 |  |  | 964 |  |  | 3,852 |
2027 |  | 4,048 |  |  | 827 |  |  | 3,221 |
2028 |  | 3,314 |  |  | 711 |  |  | 2,603 |
2029 |  | 2,894 |  |  | 612 |  |  | 2,282 |
2030 |  | 2,921 |  |  | 516 |  |  | 2,405 |
Thereafter |  | 12,849 |  |  | 1,855 |  |  | 10,994 |
Total |  | $ | 32,039 |  |  | $ | 5,751 |  |  | $ | 26,288 |
During the third quarter of 2025, as part of a strategic consolidation of the Company's Operations Center into its main headquarters, the Company terminated its lease for the Operations Center, which was originally scheduled to run through 2038. As a result of the lease termination, the Company recognized a reduction of the ROU asset of $4.7 million, a reduction of the ROU liability of $4.1 million, and a credit of $0.6 million to other operating expense. In addition, the Company, as lessor, leases certain properties that it owns. All of these leases are operating leases. The following table presents lease income related to these leases that was recognized for the periods presented:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(dollars in thousands) | 2025 |  | 2024 |  | 2025 |  | 2024
Total rental income recognized | $ | 402 |  |  | $ | 519 |  |  | $ | 1,351 |  |  | $ | 1,539 |
The following table presents estimated lease payments, based on the Company's leases as lessor as of September 30, 2025, for the remainder of fiscal year 2025, the next five succeeding fiscal years, and all years thereafter:
(dollars in thousands) |
Year Ending December 31, |
2025 (remainder) | $ | 364 |
2026 | 1,304 |
2027 | 1,252 |
2028 | 841 |
2029 | 680 |
2030 | 533 |
Thereafter | 759 |
Total | $ | 5,733 |
LEASES | 12. OPERATING LEASES The Company leases certain land and buildings for its bank branches and ATMs. Some leases include renewal options, which are evaluated and included in the measurement of right-of-use ("ROU") assets and lease liabilities when it is reasonably certain that the options will be exercised, in accordance with ASC 842, "Leases." All leases are classified as operating leases. Several leases contain variable payments, primarily related to common area maintenance costs and Hawaii state tax rates. The Company has elected the short-term exemption, for leases with terms of 12 months or less. Such leases are excluded from the calculation of the ROU assets and lease liabilities and are not included on the Company's balance sheets. The Company has also elected to account for lease and non-lease components as a single lease component for all classes of underlying assets. The most significant assumption in applying ASC 842 is the discount rate. Because most lease agreements do not specify an implicit interest rate, the Company estimates the discount rate using the collateralized borrowing rate it would pay for a loan with a similar term. The following table presents total lease cost, cash flow information, weighted-average remaining lease term and weighted-average discount rate for the periods presented:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(dollars in thousands) | 2025 |  | 2024 |  | 2025 |  | 2024
Lease cost: |  |  |  |  |  |  |
Operating lease cost | $ | 1,316 |  |  | $ | 1,605 |  |  | $ | 3,959 |  |  | $ | 4,345 |
Variable lease cost | 727 |  |  | 484 |  |  | 1,989 |  |  | 2,346 |
Total lease cost | $ | 2,043 |  |  | $ | 2,089 |  |  | $ | 5,948 |  |  | $ | 6,691 |
Other information: |  |  |  |  |  |  |
Operating cash flows from operating leases | $ | (1,283) |  |  | $ | (1,564) |  |  | $ | (3,842) |  |  | $ | (4,246) |
Weighted-average remaining lease term - operating leases | 9.38 years |  | 10.53 years |  | 9.38 years |  | 10.53 years
Weighted-average discount rate - operating leases | 4.15 | % |  | 4.04 | % |  | 4.15 | % |  | 4.04 | %
The following table presents a schedule of annual undiscounted cash flows for our operating leases and a reconciliation of those cash flows to the operating lease liabilities as of September 30, 2025, for the remainder of fiscal year 2025, the next five succeeding fiscal years and all years thereafter:
(dollars in thousands) |  | Undiscounted Cash Flows |  | Lease Liability Expense |  | Lease Liability Reduction
Year Ending December 31, |  |  |
2025 (remainder) |  | $ | 1,197 |  |  | $ | 266 |  |  | $ | 931 |
2026 |  | 4,816 |  |  | 964 |  |  | 3,852 |
2027 |  | 4,048 |  |  | 827 |  |  | 3,221 |
2028 |  | 3,314 |  |  | 711 |  |  | 2,603 |
2029 |  | 2,894 |  |  | 612 |  |  | 2,282 |
2030 |  | 2,921 |  |  | 516 |  |  | 2,405 |
Thereafter |  | 12,849 |  |  | 1,855 |  |  | 10,994 |
Total |  | $ | 32,039 |  |  | $ | 5,751 |  |  | $ | 26,288 |
During the third quarter of 2025, as part of a strategic consolidation of the Company's Operations Center into its main headquarters, the Company terminated its lease for the Operations Center, which was originally scheduled to run through 2038. As a result of the lease termination, the Company recognized a reduction of the ROU asset of $4.7 million, a reduction of the ROU liability of $4.1 million, and a credit of $0.6 million to other operating expense. In addition, the Company, as lessor, leases certain properties that it owns. All of these leases are operating leases. The following table presents lease income related to these leases that was recognized for the periods presented:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(dollars in thousands) | 2025 |  | 2024 |  | 2025 |  | 2024
Total rental income recognized | $ | 402 |  |  | $ | 519 |  |  | $ | 1,351 |  |  | $ | 1,539 |
The following table presents estimated lease payments, based on the Company's leases as lessor as of September 30, 2025, for the remainder of fiscal year 2025, the next five succeeding fiscal years, and all years thereafter:
(dollars in thousands) |
Year Ending December 31, |
2025 (remainder) | $ | 364 |
2026 | 1,304 |
2027 | 1,252 |
2028 | 841 |
2029 | 680 |
2030 | 533 |
Thereafter | 759 |
Total | $ | 5,733 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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- Definition The entire disclosure for lessor's operating leases. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-30/tableOfContent + Details
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