BANK OF HAWAII CORP
For the period ended Jun 30, 2026. Filed Jul 28, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 28, 2026
BOH$69.64-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-27.
0000046195-26-000036
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-28.
0000046195-26-000056
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 166 previous paragraphs and 172 current paragraphs.
108 unchanged; 45 reworded; 17 added; 13 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 19 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Hawai‘i’s near-term economic outlook has weakened due to the Iran war's impact on oil prices, which is expected to raise inflation, increase travel costs, and slow growth in key visitor source markets. Jet fuel prices have roughly doubled recently, resulting in significant transpacific airfare increases and prompting some airline capacity reductions. Japanese travel demand remains constrained by the historically weak yen. Despite these challenges, total visitor arrivals are projected to increase modestly in 2026, although growth is expected to slow in 2027. Hawai‘i’s labor market remains stable but stagnant. Statewide payroll growth was flat through the second quarter of 2026 and there was a slight contraction in the labor force. Construction continues to be a bright spot, supported by federal projects, Maui wildfire rebuilding efforts, and development of the New Aloha Stadium Entertainment District. The real estate market remains soft, with slow resale activity and declining condominium prices.
Current report
•Noninterest income was $43.3 million in the second quarter of 2026, a decrease of 3.3% compared to the same period last year.
Current report
•Noninterest expense was $111.2 million in the second quarter of 2026 and remained flat compared to the same period last year.
Current report
•The effective tax rate for the second quarter of 2026 was 22.3% compared with 21.2% for the same period last year.
Current report
•Total assets were $23.8 billion as of June 30, 2026, a decrease of 1.4% from December 31, 2025.
Current report
•Total loans and leases were $14.3 billion as of June 30, 2026, an increase of 1.5% from December 31, 2025.
Current report
Trust and asset management income is comprised of fees earned from the management and administration of trusts and other customer assets. The management fees are largely based upon the market value of the assets and the fee rate charged to customers. Total trust assets under administration were $14.3 billion and $12.6 billion as of June 30, 2026 and June 30, 2025, respectively. Trust and Asset Management income increased by $1.6 million or 13% in the second quarter of 2026 and by $2.3 million or 10% for the six months ended June 30, 2026 compared to the same periods last year, primarily due to higher agency and trust-related fees.
Current report
Annuity and insurance income increased by$0.6 million or 40%in the second quarter of 2026 and by$0.5 million or 17% for the six months ended June 30, 2026 compared to the same periods last year, primarily due to higher production resulting from expanded product offerings and improved referral activity during 2026.
Current report
Other income decreased by $0.7 million or 13% in the second quarter of 2026 and by $1.5 million or 14% for the six months ended June 30, 2026 compared to the same periods last year. These decreases were primarily due to a gain on sale of other real estate owned (“OREO”) property and the recovery of a previously charged-off bank-owned life insurance policy during the quarter ended June 30, 2025.
Current report
Net equipment expense increased by $0.6 million or 6% in the second quarter of 2026 and by $1.0 million or 5% for the six months ended June 30, 2026 compared to the same periods last year, primarily due to higher software license fees and maintenance.
Current report
Professional fees increased by$1.0 million or 24% in the second quarter of 2026 and by$1.0 million or 11% for the six months ended June 30, 2026 compared to the same periods last year, primarily due to an increase in consulting costs incurred.
Current report
The provision for income taxes was $35.4 million in the six months ended June 30, 2026, an increase of $10.4 million compared to the same period last year. The effective tax rate for the six months ended June 30, 2026 was 22.6%, an increase from 21.4% for the same period last year. The higher effective tax rate for the six months ended June 30, 2026 compared to the same period last year was primarily due to an increase in nondeductible compensation, a decrease in tax benefits from discrete items, and a decrease in tax exempt income.
Current report
Low-income housing investments decreased by $18.8 million or 8% due to the amortization of existing investments. Derivative financial instruments increased by $9.5 million or 10%, primarily due to increasing fair values of our interest rate swaps impacted by prevailing interest rates. Deferred compensation plan assets decreased by $3.2 million or 20%, primarily due to distributions from the executive deferred compensation plan during the six months ended June 30, 2026.
Current report
Net income increased by $11.0 million or 19% in the first six months of 2026 compared to the same period last year, primarily due to increases in net interest income and in noninterest income, partially offset by an increase in noninterest expense. Net interest income increased by $25.0 million or 12%, primarily due to higher deposit spreads on higher deposit balances. Noninterest income increased by $2.1 million or 3% primarily due to higher trust and asset management fees, overdraft fees, and annuity and insurance fees. This was partially offset by lower credit card commissions and lower debit card income. Noninterest expense increased by $12.1 million or 7%, primarily due to higher salaries & benefits expense, mobile and online banking platform costs, operational losses, card production costs, and allocated administrative and support unit costs.
Current report
As of June 30, 2026, our NII sensitivity profile remained relatively balanced for moderate interest rate movements. Compared with December 31, 2025, the balance sheet became less sensitive to both rising and declining rate environments, reflecting a recalibration of assumptions regarding deposit repricing behavior, changes in balance sheet composition, and a reduction in active pay-fixed interest rate swap positions.
Current report
Management also evaluates non-parallel yield curve scenarios to assess the impact of changes in the shape of the yield curve on earnings and economic value.
Current report
Compared to December 31, 2025, EVE sensitivity remained generally consistent, as changes in balance sheet composition and derivatives activity had only a modest impact on the long-term valuation profile of the balance sheet.
Removed paragraphs (13)
Previous report
As of March 31, 2026, Hawai‘i’s economy continues to experience slow and uneven growth amid lingering uncertainty. Tourism conditions have stabilized but remain soft, with visitor volumes flat overall as continued weakness in most international markets offsets a modest recovery from Japan. Visitor spending has been supported by higher per‑visitor expenditures, particularly from U.S. mainland travelers, even as arrivals lag. Construction continues to provide a key source of stability, driven by elevated federal and military infrastructure projects and Maui rebuilding activity, although growth is expected to slow from recent highs. Labor market conditions have improved modestly following federal workforce reductions, and Hawai‘i’s unemployment rate remains historically low at 2.6% in January 2026, well below the national level of 4.3%. Inflationary pressures persist as the pass‑through effect of tariffs and tariff uncertainty, as well as the impact of recent military conflict on gasoline and electricity, continues to affect consumer prices. Recent Kona low storm events have also resulted in localized economic stress, with related impacts still evolving. Hawai‘i’s economy is expected to expand at a modest pace in 2026, constrained by ongoing federal policy uncertainty and a gradual recovery in tourism, but with uncertainty due to the impact on travel of higher jet fuel prices and other increased travel costs and potential erosion of consumer confidence negatively impacting middle-class tourism demand.
Previous report
•Noninterest income was $41.3 million in the first quarter of 2026, a decrease of 6% compared to the same period last year.
Previous report
•Noninterest expense was $116.1 million in the first quarter of 2026, an increase of 5% compared to the same period last year.
Previous report
•The effective tax rate for the first quarter of 2026 was 22.9% compared with 21.7% for the same period last year.
Previous report
•Total assets were $23.9 billion as of March 31, 2026, a decrease of 1.1% from December 31, 2025.
Previous report
•Total loans and leases were $14.2 billion as of March 31, 2026, an increase of 0.8% from December 31, 2025.
Previous report
Bank-owned life insurance increased by $0.5 million or 15% in the first quarter of 2026 compared to the same period last year, primarily due to an increase in death benefits received.
Previous report
Other income decreased by $0.8 million or 15% in the first quarter of 2026 compared to the same period last year. This decrease was primarily due to an insurance settlement recognized in the first quarter of 2025 and lower foreign exchange volumes during the first quarter of 2026.
Previous report
Prepaid expenses increased by $2.8 million or 12%, primarily due to changes in accruals and timing of payments. Deferred compensation plan assets decreased by $3.6 million or 22%, primarily due to distributions from the executive deferred compensation plan during the three months ended March 31, 2026. Other assets increased by $6.1 million or 13%, primarily driven by improved funded status of the Company’s defined benefit pension plans.
Previous report
1 Excludes loans that are fully charged-off and placed on non-accrual status during the same period.
Previous report
Based on our net interest income simulation as of March 31, 2026, net interest income is expected to increase as interest rates rise. Rising interest rates would drive higher rates on floating rate loans, interest rate swaps and investment securities, as well as higher reinvestment rates on loan and investment securities cashflows. However, lower interest rates would likely cause an initial decline in net interest income as lower rates would lead to lower yields on loans, swaps, and investment securities, as well as drive higher premium amortization on existing investment securities. Based on our net interest income simulation as of March 31, 2026, NII sensitivity to changes in interest rates for the twelve months subsequent to March 31, 2026 declined in both rising rates and falling rates compared to the sensitivity profile for December 31, 2025. These NII sensitivity changes are attributable to balance sheet mix changes and a $300 million net reduction in the notional amount of active pay-fixed swaps, resulting in an increase in fixed rate asset exposure.
Previous report
To alternatively analyze the impact of changes in interest rates, we also simulate non-parallel interest rate scenarios. These scenarios help to isolate the sensitivity of earnings to various points on the yield curve. Based upon our interest rate simulations, the Company is exposed to movements in both the short and long-end of the yield curve. A movement higher or lower in the short-end of the yield curve would lead to floating-rate assets immediately repricing, while liability funding would react on a lag. Thus, net interest income may decrease from the base case in the near term if short-term rates were to decrease, although would benefit if short-term rates were to increase and liabilities maintained their ability to lag market rate increases. A movement higher or lower in the long end of the yield curve would lead to assets repricing over time given ongoing cash flows from maturities and prepayments of investment securities and loans. Net interest income may decrease from the base case should long-term rates decline from their current levels, although would benefit if long-term rates were to increase.
Previous report
Compared to December 31, 2025, EVE sensitivity is mostly unchanged in the rising rate scenarios and slightly lower in the falling rate scenarios. The reduction in the notional balance of active pay-fixed interest rate swaps did not have a significant impact on EVE sensitivity.
Reworded paragraphs (45)
Previous wording
The following MD&A is intended to help the reader understand the Company and its operations and is focused on our financial results for the first quarter of 2026, including comparisons of year-to-year performance, trends, and updates from the Company’s most recent 10-K filing. Discussion and analysis of our 2025 fiscal year, as well as the year-to-year comparison between fiscal years 2025 and 2024, are included in Part II, Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 24, 2026.
Current wording
The following MD&A is intended to help the reader understand the Company and its operations and is focused on our financial results for the second quarter of 2026, including comparisons of year-to-year performance, trends, and updates from the Company’s most recent 10-K filing. Discussion and analysis of our 2025 fiscal year, as well as the year-to-year comparison between fiscal years 2025 and 2024, are included in Part II, Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 24, 2026.
Previous wording
For the first three months of 2026, the median price of single-family home sales on Oahu increased by 2.6% while the median price of condominiums remained flat compared to the same period in 2025. The volume of single-family homes sales on Oahu increased 10.9% and condominium sales decreased 3.6% compared to the same period in 2025. Inventory of single-family homes and condominiums on Oahu was 2.8 months and 6.3 months, respectively, for the first quarter of 2026.
Current wording
For the first six months of 2026, the median price of single-family home sales on Oahu increased by 2.6% while the median price of condominiums increased by 1.5% compared to the same period in 2025. The volume of single-family homes sales on Oahu increased 3.9% and condominium sales decreased 2.3% compared to the same period in 2025. Inventory of single-family homes and condominiums on Oahu was 3.2 months and 7.0 months, respectively, for the second quarter of 2026.
Previous wording
Net income for the first quarter of 2026 was $57.4 million, an increase of $13.4 million, or 31%, compared to the same period in 2025. Diluted earnings per common share was $1.30 for the first quarter of 2026, an increase of $0.33, or 34%, compared to the same period in 2025.
Current wording
Net income for the second quarter of 2026 was $63.8 million, an increase of $16.2 million, or 33.9%, compared to the same period in 2025. Diluted earnings per common share was $1.47 for the second quarter of 2026, an increase of $0.41, or 38.7%, compared to the same period in 2025.
Previous wording
•The return on average common equity for the first quarter of 2026 was 13.90% compared with 11.80% in the same period last year.
Current wording
•The return on average common equity for the second quarter of 2026 was 15.47% compared with 12.50% in the same period last year.
Previous wording
•Net interest income for the first quarter of 2026 was $151.0 million, an increase of 20% compared to the same period last year.
Current wording
•Net interest income for the second quarter of 2026 was $153.6 million, an increase of 18.4% compared to the same period last year.
Previous wording
•Net interest margin was 2.74% in the first quarter of 2026, an increase of 42 basis points from the same period last year.
Current wording
•Net interest margin was 2.78% in the second quarter of 2026, an increase of 39 basis points from the same period last year.
Previous wording
•The provision for credit losses for the first quarter of 2026 and 2025 was $1.8 million and $3.3 million, respectively.
Current wording
•The provision for credit losses for the second quarter of 2026 and 2025 was $3.6 million and $3.3 million, respectively.
Previous wording
•The allowance for credit losses on loans and leases was $147.0 million as of March 31, 2026, an increase of $0.2 million from December 31, 2025. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.04% at the end of the quarter, unchanged from December 31, 2025.
Current wording
•The allowance for credit losses on loans and leases was $147.0 million as of June 30, 2026, an increase of $0.2 million from December 31, 2025. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.03% at the end of the quarter, down 1 basis point from December 31, 2025.
Previous wording
•Net loan and lease charge-offs during the first quarter of 2026 were $1.1 million or 3 basis points annualized of total average loans and leases outstanding. Net loan and lease charge-offs for the first quarter of 2026 were comprised of charge-offs of $4.1 million partially offset by recoveries of $3.0 million. Compared to the same quarter of 2025, net loan and lease charge-offs decreased by $3.3 million. Net loan and lease charge-offs to average loans and leases outstanding during the first quarter of 2026 was 0.03% compared to 0.13% in the same period last year.
Current wording
•Net loan and lease charge-offs during the second quarter of 2026 were $3.4 million, comprised of charge-offs of $4.7 million partially offset by recoveries of $1.3 million. Compared to the same quarter of 2025, net loan and lease charge-offs increased by $0.8 million. Net loan and lease charge-offs to average loans and leases outstanding during the second quarter of 2026 was 0.10% compared to 0.07% in the same period last year.
Previous wording
•Total non-performing assets (“NPAs”) were $12.1 million as of March 31, 2026, down $2.1 million from December 31, 2025. NPAs were 9 basis points of total loans and leases and foreclosed real estate at the end of the quarter, down 1 basis point from December 31, 2025.
Current wording
•Total non-performing assets (“NPAs”) were $11.5 million as of June 30, 2026, down $2.7 million from December 31, 2025. NPAs were 8 basis points of total loans and leases and foreclosed real estate at the end of the quarter, down 2 basis points from December 31, 2025.
Previous wording
•The investment securities portfolio was $7.9 billion as of March 31, 2026, an increase of 1.7% from December 31, 2025. The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.
Current wording
•The investment securities portfolio was $7.7 billion as of June 30, 2026, a decrease of 0.9% from December 31, 2025. The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.
Previous wording
•Total deposits were $21.0 billion as of March 31, 2026 and $21.2 billion as of December 31, 2025.
Current wording
•Total deposits were $20.9 billion as of June 30, 2026 and $21.2 billion as of December 31, 2025.
Previous wording
•During the three months ended March 31, 2026, we repurchased 194,096 shares of common stock at an average cost per share of $77.84 and a total cost of $15.1 million under the share repurchase program. Total remaining buyback authority under the share repurchase program was $105.9 million at March 31, 2026.
Current wording
•During the three months ended June 30, 2026, we repurchased 215,995 shares of common stock at an average cost per share of $78.60 and a total cost of $17.0 million under the share repurchase program. Total remaining buyback authority under the share repurchase program was $88.9 million at June 30, 2026.
Previous wording
2 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $1.4 million and $1.5 million for the three months ended March 31, 2026 and 2025, respectively.
Current wording
2 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $1.4 million and $2.8 million for the three and six months ended June 30, 2026, respectively, and $1.6 million and $3.1 million for the three and six months ended June 30, 2025, respectively.
Previous wording
The average balance of our earning assets for the three months ended March 31, 2026 increased by $357.1 million or 2% compared to the same period last year. The increase was primarily due to an increase in the average balance of available-for-sale investment securities. As compared to the same period last year, yields on our investment securities portfolio increased by 29 basis points during the three months ended March 31, 2026 primarily due to the amortization of lower yielding investments being reinvested into new investments at higher current interest rates, as well as the impact of the repositioning of a portion of our AFS securities portfolio in the fourth quarter of 2025, which resulted in a higher-yielding securities mix. As compared to the same period last year, yields on our loan and lease portfolio increased by 3 basis points during the three months ended March 31, 2026. The increase primarily reflects the continued amortization of lower‑yielding loans along with the origination of new loans at higher prevailing interest rates. This benefit was partially offset by lower income from interest rate swaps and the repricing of certain variable‑rate loans following recent Federal Reserve rate cuts.
Current wording
The average balance of our earning assets for the three and six months ended June 30, 2026 increased by $346.1 million or 2% and $351.6 million or 2%, respectively, compared to the same periods in 2025. These increases were primarily due to an increase in the average balance of available-for-sale investment securities. As compared to the same periods last year, yields on our investment securities portfolio increased by 29 basis points during both the three and six months ended June 30, 2026 primarily due to the amortization of lower yielding investments being reinvested into new investments at higher current interest rates, as well as the impact of the repositioning of a portion of our AFS securities portfolio in the fourth quarter of 2025, which resulted in a higher-yielding securities mix. As compared to the same period last year, yields on our loan and lease portfolio decreased by 1 basis point during the three months ended June 30, 2026, primarily due to a decrease in rates resulting in the repricing of certain variable‑rate loans. Yields on our loan and lease portfolio increased by 1 basis point during the six months ended June 30, 2026, primarily due to the continued amortization of lower‑yielding loans along with the origination of new loans at higher prevailing interest rates, partially offset by a decrease in rates resulting in the repricing of certain variable‑rate loans following Federal Reserve rate cuts.
Previous wording
The average balance of our interest-bearing liabilities for the three months ended March 31, 2026 decreased by $138.2 million or 1% compared to the same period in 2025 primarily due to a decrease in time deposits. As compared to the same period last year, the cost of our interest-bearing liabilities decreased by 42 basis points during the three months ended March 31, 2026 primarily due to a decrease in the prevailing interest rate environment, which was driven by 175 basis points of interest rate cuts by the Federal Open Market Committee from September 2024 through December 2025.
Current wording
The average balance of our interest-bearing deposits for the three and six months ended June 30, 2026 decreased by $94.8 million or 1% and $94.5 million or 1%, respectively, compared to the same periods in 2025. As compared to the same periods last year, the cost of our interest-bearing deposits decreased by 43 basis points during both the three and six months ended June 30, 2026 primarily due to a decrease in the prevailing interest rate environment.
Previous wording
Fees, exchange, and other service charges decreased by$3.5 million or 24% in the first quarter of 2026 compared to the same period last year, primarily due to lower merchant income following the sale of our merchant services portfolio in the fourth quarter of 2025.
Current wording
Fees, exchange, and other service charges decreased by $3.3 million or 23% in the second quarter of 2026 and by $6.8 million or 23% for the six months ended June 30, 2026 compared to the same periods last year, primarily due to lower merchant income following the sale of our merchant services portfolio in the fourth quarter of 2025.
Previous wording
Total salaries and benefits expense increased by $5.6 million or 8.9% in the first quarter of 2026 compared to the same period last year, primarily due to an increase in share-based compensation related to the accelerated vesting of restricted stock awards pursuant to the retirement provisions of performance-based restricted stock awards granted in 2024 and 2025, as well as increases in base salaries and separation expense. These increases were partially offset by decreases in retirement and other benefits expense and medical, dental, and life insurance expense.
Current wording
Total salaries and benefits expense increased by$1.3 million or 2% in the second quarter of 2026, primarily due to an increase in medical, dental, and life insurance expense, base salaries, and commission expense. Total salaries and benefits expense increased by$6.9 million or 6% for the six months ended June 30, 2026 compared to the same period last year, primarily due to an increase in share-based compensation related to the accelerated vesting in the first quarter of 2026 of restricted stock awards pursuant to the retirement provisions of performance-based restricted stock awards granted in 2024 and 2025. Base salaries increased by$1.6 million or 2% primarily due to annual merit increases, while incentive compensation increased by$1.2 million or 11% during the six months ended June 30, 2026 compared to the same period last year.
Previous wording
FDIC insurance expense increased by $1.1 million or 65.6% for the first quarter of 2026 compared to the same period last year, primarily due to a partial recovery of the FDIC special assessment in 2025, partially offset by a lower FDIC assessment rate in the current period.
Current wording
FDIC insurance expense decreased by $0.7 million or 18.2% in the second quarter of 2026 compared to the same period last year, primarily due to a lower FDIC assessment rate. FDIC insurance expense increased by$0.4 million or 8% for the six months ended June 30, 2026 compared to the same period last year, primarily due to a partial recovery of the FDIC special assessment in 2025, partially offset by the lower FDIC assessment rate, discussed above.
Previous wording
Total other expense decreased by $2.0 million or 12.5% for the first quarter of 2026 compared to the same period last year, primarily due to lower merchant transaction and card processing fees following the sale of our merchant services portfolio in the fourth quarter of 2025. This was partially offset by an increase in advertising expense.
Current wording
Total other expense decreased by $2.3 million or 14.6% in the second quarter of 2026 and by $4.2 million or 14% for the six months ended June 30, 2026 compared to the same periods last year, primarily due to lower merchant transaction and card processing fees following the sale of our merchant services portfolio in the fourth quarter of 2025, as well as a decrease in operational losses due to fewer dispute charge-offs.
Previous wording
The provision for income taxes was $17.1 million in the first quarter of 2026, an increase of $4.9 million compared to the same period in 2025. The effective tax rate for the first quarter of 2026 was 22.9%, an increase from 21.7% for the same period in 2025. The higher effective tax rate in the first quarter of 2026 compared to the same period last year was primarily due to an increase in nondeductible compensation and an increase in tax expense from discrete items.
Current wording
The provision for income taxes was $18.3 million in the second quarter of 2026, an increase of $5.5 million compared to the same period last year. The effective tax rate for the second quarter of 2026 was 22.3%, an increase from 21.2% for the same period last year. The higher effective tax rate for the second quarter of 2026 compared to the same period last year was primarily due to an increase in nondeductible compensation and a decrease in tax benefits from discrete items.
Previous wording
Cash and cash equivalents were $425.1 million as of March 31, 2026, a decrease of $521.4 million or 55.1% from the prior year. The decrease was primarily due to an increase in our investment portfolio.
Current wording
Cash and cash equivalents were $452.8 million as of June 30, 2026, a decrease of $493.7 million or 52.2% from the prior year. The decrease was primarily due to a net decrease in deposits and loan growth during the period.
Previous wording
The carrying value of our investment securities portfolio was $7.9 billion and $7.8 billion as of March 31, 2026 and December 31, 2025, respectively. The increase was primarily due to the purchase of $372.2 million in available-for-sale investment securities during the three months ended March 31, 2026. The increase was partially offset by the amortization of existing securities.
Current wording
The carrying value of our investment securities portfolio was $7.7 billion and $7.8 billion as of June 30, 2026 and December 31, 2025, respectively. The decrease was primarily due to portfolio runoff, including maturities and paydowns, partially offset by the purchase of $445.4 million in available-for-sale investment securities during the six months ended June 30, 2026.
Previous wording
Net unrealized losses in our AFS and HTM investment securities were $777.3 million as of March 31, 2026 and $739.8 million as of December 31, 2025. In addition, we transferred AFS investment securities to the HTM category in 2022. At the time of transfer, these securities had a fair value of $1.3 billion. The unrealized losses at the time of transfer remain in accumulated other comprehensive income and are amortized over the estimated remaining life of the securities through an adjustment to the effective yield of the HTM portfolio. The unamortized balance of these losses was $149.7 million and $155.0 million as of March 31, 2026 and December 31, 2025, respectively. See Note 7 Accumulated Other Comprehensive Incometo the unaudited Consolidated Financial Statements for more information.
Current wording
Net unrealized losses in our AFS and HTM investment securities were $784.7 million as of June 30, 2026 and $739.8 million as of December 31, 2025. In addition, we transferred AFS investment securities to the HTM category in 2022. At the time of transfer, these securities had a fair value of $1.3 billion. The unrealized losses at the time of transfer remain in accumulated other comprehensive income and are amortized over the estimated remaining life of the securities through an adjustment to the effective yield of the HTM portfolio. The unamortized balance of these losses was $144.4 million and $155.0 million as of June 30, 2026 and December 31, 2025, respectively. See Note 7 Accumulated Other Comprehensive Incometo the unaudited Consolidated Financial Statements for more information.
Previous wording
Total loans and leases as of March 31, 2026 increased by $110.8 million or 0.8% from December 31, 2025, primarily due to growth in our commercial loans. This was partially offset by decreases in our consumer loans.
Current wording
Total loans and leases as of June 30, 2026 increased by $204.6 million or 1.5% from December 31, 2025, due to growth in both our commercial and consumer loans.
Previous wording
Commercial loans and leases as of March 31, 2026 increased by $119.4 million or 2.0% from December 31, 2025, primarily due to an increase in our commercial mortgage portfolio, which increased by $135.7 million or 3.2% largely as a result of new originations. This was partially offset by paydowns in our commercial and industrial portfolio. Consumer loans and leases as of March 31, 2026 decreased by $8.6 million or 0.1% from December 31, 2025, primarily due to paydowns in our home equity portfolio and reduced demand for automobile loans. This was partially offset by an increase in our residential mortgage loans, which increased by $24.8 million or 0.5% primarily due to increased production.
Current wording
Commercial loans and leases as of June 30, 2026 increased by $158.7 million or 2.6% from December 31, 2025. The increase was primarily due to growth in our commercial mortgage and commercial and industrial portfolios, which increased by $113.4 million or 2.7% and $92.3 million or 5.8%, respectively. This increase was partially offset by a decrease in our construction portfolio, which decreased by $44.1 million or 21.1%, primarily due to the completion of several construction projects during the second quarter. Consumer loans and leases as of June 30, 2026 increased by $45.9 million or 0.6% from December 31, 2025, primarily due to growth in our residential mortgage portfolio, which increased by $89.4 million or 1.9%, largely attributable to condominium project lending. This was partially offset by paydowns in our home equity and automobile loans portfolios.
Previous wording
Total deposits were $21.0 billion as of March 31, 2026, a decrease of $230.6 million or 1.1% from December 31, 2025. Consumer deposits increased by $63.6 million due to increases of $66.8 million in savings deposits, $30.5 million in non-interest bearing deposits, and $11.6 million in interest-bearing demand deposits, partially offset by a decrease of $45.3 million in time deposits. Commercial deposits decreased by $257.0 million due to decreases of $153.5 million in savings deposits, $126.8 million in non-interest bearing deposits, and $14.7 million in time deposits, partially offset by an increase of $38.1 million in interest-bearing demand deposits. Public and other deposits decreased by $37.2 million due to a decrease of $82.1 million in interest-bearing demand deposits and noninterest-bearing deposits, partially offset by increases of $29.5 million in saving deposits and $15.4 million in time deposits.
Current wording
Total deposits were $20.9 billion as of June 30, 2026, a decrease of $295.7 million or 1.4% from December 31, 2025. Consumer deposits decreased by $12.5 million due to decreases of $90.6 million in time deposits and $53.6 million in interest-bearing demand deposits, partially offset by increases of $101.8 million in savings deposits and $29.9 million in noninterest-bearing deposits. Commercial deposits decreased by $430.0 million due to decreases of $220.0 million in savings deposits, $203.6 million in noninterest-bearing deposits, and $12.0 million in time deposits, partially offset by an increase of $5.6 million in interest-bearing demand deposits. Public and other deposits increased by $146.8 million due to increases of $212.7 million in interest-bearing demand deposits and $82.3 million in savings deposits, partially offset by a decrease of $148.2 million in time deposits and noninterest-bearing deposits.
Previous wording
The increase in Regular Savings was primarily due to increases in consumer deposits of $71.6 million, commercial deposits of $36.3 million, and public deposits of $29.5 million. The decrease in Money Market was primarily due to decreases in commercial deposits of $189.8 million and consumer deposits of $4.8 million.
Current wording
The increase in Regular Savings was primarily due to increases in consumer deposits of $112.6 million, commercial deposits of $10.2 million, and public deposits of $82.3 million. The decrease in Money Market was primarily due to decreases in commercial deposits of $230.2 million and consumer deposits of $10.8 million.
Previous wording
Securities sold under agreements to repurchase were $50.0 million as of both March 31, 2026 and December 31, 2025. As of March 31, 2026, our remaining repurchase agreement was at a fixed interest rate of 3.89% with a remaining maturity of 3.6 years. Our repurchase agreement was accounted for as a collateralized financing arrangement (i.e., a secured borrowing) and not as a sale and subsequent repurchase of securities. Our remaining repurchase agreement with a private institution may be terminated at earlier specified dates by either the private institution or the Company. See Note 6 Securities Sold Under Agreements to Repurchase to the unaudited Consolidated Financial Statements for more information.
Current wording
Securities sold under agreements to repurchase were $50.0 million as of both June 30, 2026 and December 31, 2025. As of June 30, 2026, our remaining repurchase agreement was at a fixed interest rate of 3.89% with a remaining maturity of 3.38 years. Our repurchase agreement was accounted for as a collateralized financing arrangement (i.e., a secured borrowing) and not as a sale and subsequent repurchase of securities. Our remaining repurchase agreement with a private institution may be terminated at earlier specified dates by either the private institution or the Company. See Note 6 Securities Sold Under Agreements to Repurchase to the unaudited Consolidated Financial Statements for more information.
Previous wording
Net income increased by $2.4 million or 8% in the first quarter of 2026 compared to the same period last year, primarily due to an increase in net interest income and a decrease in the provision for credit losses. This was partially offset by an increase in noninterest expense. Net interest income increased by $10.7 million or 11%, primarily due to higher deposit spreads on higher deposit balances. The provision for credit losses decreased by $0.6 million or 18%, primarily due to lower net charge-offs in the auto loan portfolio. Noninterest expense increased by $7.9 million or 9%, primarily due to higher allocated administrative and support unit costs and higher salaries & benefits expense.
Current wording
Net income increased by $8.5 million or 29% in the second quarter of 2026 compared to the same period last year, primarily due to increases in net interest income and in noninterest income, partially offset by increases in noninterest expense and in the provision for credit losses. Net interest income increased by $14.4 million or 15%, primarily due to higher deposit spreads on higher deposit balances. Noninterest income increased by $2.2 million or 6%, primarily due to higher trust and asset management fees and higher annuity and insurance fees. Noninterest expense increased by $4.2 million or 5%, primarily due to higher allocated administrative and support unit costs and higher salaries & benefits expense. The provision for credit losses increased by $0.8 million or 30%, primarily due to higher net charge-offs in the auto loan, installment loan, and home equity portfolios.
Previous wording
Net income increased by $7.4 million or 23% in the first quarter of 2026 compared to the same period last year, primarily due to an increase in net interest income and a decrease in noninterest expense, partially offset by a decrease in noninterest income. Net interest income increased by $8.1 million or 15%, primarily due to higher average deposit balances and spreads, which increased segment net interest income under our funds transfer pricing methodology, partially offset by lower loan balances. Noninterest income decreased by $3.5 million or 46%, primarily due to a reduction in merchant revenue following the sale of the Bank’s merchant services portfolio in the fourth quarter of 2025, lower loan and commitment fees, and reduced gains on sale of leased assets, partially offset by an increase in account analysis fees. Noninterest expense decreased by $2.9 million or 15%, primarily due to lower merchant transaction processing fees, salaries and benefits, equipment expenses, and allocated administrative, support unit and treasury expenses, partially offset by increases in data processing, customer derivative broker charges, and allocated branch expenses.
Current wording
Net income increased by $6.8 million or 22% in the second quarter of 2026 compared to the same period last year, primarily due to an increase in net interest income and a decrease in noninterest expense, partially offset by a decrease in noninterest income. Net interest income increased by $8.6 million or 16%, primarily due to higher average deposit balances and spreads, which increased segment net interest income under our funds transfer pricing methodology. Noninterest income decreased by $2.2 million or 36%, primarily due to a reduction in merchant revenue following the sale of the Bank’s merchant services portfolio in the fourth quarter of 2025, partially offset by increased loan commitment fees and gains on the sale of leased assets. Noninterest expense decreased by $2.9 million or 15%, primarily due to lower merchant transaction processing fees, salaries & benefits, professional fees, and allocated administrative, support unit and treasury expenses, partially offset by increases in data processing, excise taxes, and customer derivative broker charges.
Previous wording
Net loss decreased by $3.6 million or 21% in the first quarter of 2026 compared to the same period last year, primarily due to a decrease in net interest expense and an increase in noninterest income, partially offset by an increase in the provision for credit losses and an increase in noninterest expense. Net interest expense decreased by $6.4 million or 25%, primarily due to an increase in interest income from higher earning asset balances and yields. Noninterest income increased by $0.9 million or 30%, primarily due to an increase in BOLI and COLI income and a decrease in investment securities losses. Noninterest expense increased by $0.6 million or 14%, primarily due to higher salaries and benefits expense. The provision for credit losses and income taxes in this business segment represents the residual amounts to arrive at the total amount for the Company.
Current wording
Net loss decreased by $0.9 million or 7% in the second quarter of 2026 compared to the same period last year, primarily due to a decrease in net interest expense, a decrease in the provision for credit losses, and a decrease in noninterest expense, partially offset by a decrease in noninterest income. Net interest expense decreased by $1.0 million or 5%, primarily due to an increase in interest income from higher earning asset balances and yields. Noninterest income decreased by $1.5 million or 31%, primarily due to decreases in other income. Noninterest expense decreased by $0.9 million or 19%, primarily due to decreases in other noninterest expense, partially offset by an increase in salaries & benefits expense. The provision for credit losses and income taxes in this business segment represents the residual amounts to arrive at the total amount for the Company.
Previous wording
Non-accrual loans and leases as of March 31, 2026 were $11.8 million, a decrease of $2.1 million or 15% from December 31, 2025 primarily due to a $2.1 million payoff of a commercial mortgage in the first quarter of 2026. As of March 31, 2026, our residential mortgage non-accrual loans were comprised of 16 loans with a weighted average current loan-to-value ratio of 69%. As of March 31, 2026, our home equity non-accrual loans were comprised of 55 loans with a weighted average current loan-to-value ratio of 42%.
Current wording
Non-accrual loans and leases as of June 30, 2026 were $11.3 million, a decrease of $2.6 million or 19% from December 31, 2025 primarily due to a $2.1 million payoff of a commercial mortgage in the first quarter of 2026. As of June 30, 2026, our residential mortgage non-accrual loans were comprised of 20 loans with a weighted average current loan-to-value ratio of 68%. As of June 30, 2026, our home equity non-accrual loans were comprised of 56 loans with a weighted average current loan-to-value ratio of 51%.
Previous wording
Foreclosed real estate represents property acquired as the result of borrower defaults on loans. Foreclosed real estate is recorded at fair value, less estimated selling costs, at the time of foreclosure. On an ongoing basis, properties are appraised as required by market conditions and applicable regulations. Foreclosed real estate was $0.3 million as of March 31, 2026 and December 31, 2025.
Current wording
Foreclosed real estate represents property acquired as the result of borrower defaults on loans. Foreclosed real estate is recorded at fair value, less estimated selling costs, at the time of foreclosure. On an ongoing basis, properties are appraised as required by market conditions and applicable regulations. Foreclosed real estate was $0.2 million as of June 30, 2026 compared to $0.3 million as of December 31, 2025.
Previous wording
Loans and leases past due 90 days or more and still accruing interest were $13.7 million as of March 31, 2026, a $1.5 million or 12% increase from December 31, 2025. The increase was primarily in our residential mortgage portfolio, partially offset by a decrease in our home equity portfolio. This category includes loans and leases that are well-secured and in the process of collection, as well as loans and leases that have not reached the specified past due status to be placed on non-accrual.
Current wording
Loans and leases past due 90 days or more and still accruing interest were $14.1 million as of June 30, 2026, a $1.9 million or 15% increase from December 31, 2025. The increase was primarily in our home equity portfolio due to an increase in delinquencies. This category includes loans and leases that are well-secured and in the process of collection, as well as loans and leases that have not reached the specified past due status to be placed on non-accrual.
Previous wording
As of March 31, 2026, the Allowance was $147.0 million or 1.04% of total loans and leases outstanding compared with an Allowance of $146.8 million or 1.04% of total loans and leases outstanding as of December 31, 2025.
Current wording
As of June 30, 2026, the Allowance was $147.0 million or 1.03% of total loans and leases outstanding compared with an Allowance of $146.8 million or 1.04% of total loans and leases outstanding as of December 31, 2025.
Previous wording
Net charge-offs on loans and leases for the three months ended March 31, 2026 and 2025 were $1.1 million or 0.03% and $4.4 million or 0.13%, respectively, of total average loans and leases on an annualized basis.
Current wording
Net charge-offs on loans and leases for the three and six months ended June 30, 2026 were $3.4 million or 0.10% and $4.5 million or 0.06%, respectively of total average loans and leases on an annualized basis, compared to $2.6 million or 0.07% and $7.0 million or 0.10% of total average loans and leases on an annualized basis for the three and six months ended June 30, 2025, respectively.
Previous wording
The Unfunded Reserve was $2.1 million as of March 31, 2026, an increase of $0.5 million or 29% from December 31, 2025, primarily due to higher unfunded commitments in our commercial and industrial portfolio. The reserve for unfunded commitments is recorded in other liabilities in the unaudited consolidated statements of condition.
Current wording
The reserve for unfunded commitments was $2.3 million as of June 30, 2026, an increase of $0.6 million or 39% from December 31, 2025, primarily due to higher unfunded commitments in our commercial and industrial portfolio. The reserve for unfunded commitments is recorded in other liabilities in the unaudited consolidated statements of condition.
Previous wording
For the three months ended March 31, 2026, the provision for credit losses was $1.8 million, compared to $3.3 million for the same respective period last year. The decrease in the provision for credit losses was primarily due to a $1.6 million recovery of a commercial mortgage loan in the first quarter of 2026.
Current wording
For the three and six months ended June 30, 2026, the provision for credit losses was $3.6 million and $5.4 million, respectively, compared to $3.3 million and $6.5 million for the same respective periods last year. The increase in the provision for credit losses for the three months ended June 30, 2026 was primarily due to an increase in the reserve for unfunded commitments. The decrease in the provision for credit losses for the six months ended June 30, 2026 was primarily due to a $1.6 million recovery of a commercial mortgage loan in the first quarter of 2026.
Previous wording
We utilize two management guidelines to measure our interest rate risk exposure: 1) net interest income (“NII”) sensitivity, and 2) economic value of equity (“EVE”) sensitivity. NII and EVE sensitivities measure the estimated percentage change in forward looking net-interest income and economic value, respectively, under instantaneous parallel shocks of the yield curve ranging from -400 basis points to +400 basis points. We measure NII sensitivity over two successive 12-month periods to evaluate interest rate risk over short-term and medium-term time horizons. EVE sensitivity, which captures the present value of all on and off-balance sheet positions, measures interest rate risk over a long-term time horizon. The results are measured relative to established limits and early warning indicators that ensure that fluctuation in income and valuation in both up and down rate shocks remain within levels approved by the Asset and Liability Management Committee (“ALCO”) and the Board of Directors. While we recognize that instantaneous parallel shocks of the entire yield curve are unrealistic, we believe that the application of immediate shocks provides us with a sufficient range of sensitivities to frame our risk exposures. We pay particular attention to the rate shock sensitivities within the range of +/-200 basis points, as we believe this range represents the highest probability of rate movements that could occur in the near to medium term. As of March 31, 2026, we remained within applicable guidelines for such scenarios.
Current wording
We utilize two management guidelines to measure our interest rate risk exposure: 1) net interest income (“NII”) sensitivity, and 2) economic value of equity (“EVE”) sensitivity. NII and EVE sensitivities measure the estimated percentage change in forward looking net-interest income and economic value, respectively, under instantaneous parallel shocks of the yield curve ranging from -400 basis points to +400 basis points. We measure NII sensitivity over two successive 12-month periods to evaluate interest rate risk over short-term and medium-term time horizons. EVE sensitivity, which captures the present value of all on and off-balance sheet positions, measures interest rate risk over a long-term time horizon. The results are measured relative to established limits and early warning indicators that ensure that fluctuation in income and valuation in both up and down rate shocks remain within levels approved by the Asset and Liability Management Committee (“ALCO”) and the Board of Directors. While we recognize that instantaneous parallel shocks of the entire yield curve are unrealistic, we believe that the application of immediate shocks provides us with a sufficient range of sensitivities to frame our risk exposures. We pay particular attention to the rate shock sensitivities within the range of +/-200 basis points, as we believe this range represents the highest probability of rate movements that could occur in the near to medium term. As of June 30, 2026, we remained within applicable policy limits for such scenarios.
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Current report — wording carried from elsewhere
Net income increased by $14.1 million or 23% in the first six months of 2026 compared to the same period last year, primarily due to an increase in net interest income and a decrease in noninterest expense, partially offset by a decrease in noninterest income. Net interest income increased by $16.7 million or 13%, primarily due to higher average deposit balances and spreads on interest-bearing and savings deposits, which increased segment net interest income under our funds transfer pricing methodology, partially offset by a decline in time deposits. Noninterest income decreased by $5.7 million or 41%, primarily due to a reduction in merchant revenue following the sale of the Bank’s merchant services portfolio in the fourth quarter of 2025, partially offset by increased customer derivative program revenue. Noninterest expense decreased by $5.8 million or 15%, primarily due to lower merchant transaction processing fees, salaries & benefits, professional fees, and allocated administrative, support unit and treasury expenses, partially offset by increases in data processing, excise taxes, and customer derivative broker charges.
Current report — wording carried from elsewhere
Net loss decreased by $4.5 million or 15% in the first six months of 2026 compared to the same period last year, primarily due to a decrease in net interest expense and a decrease in noninterest expense, partially offset by an increase in the provision for credit losses. Net interest expense decreased by $7.4 million or 20%, primarily due to an increase in interest income from higher earning asset balances and yields. Noninterest expense decreased by $0.3 million or 4%, primarily due to decreases in other noninterest expense, partially offset by an increase in salaries & benefits expense. The provision for credit losses and income taxes in this business segment represents the residual amounts to arrive at the total amount for the Company.