HOPE BANCORP INC
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
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, 2025 · Filed Aug 8, 2025
HOPE$13.18+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001128361-25-000026
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001128361-25-000036
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 132 previous paragraphs and 150 current paragraphs.
68 unchanged; 52 reworded; 27 added; 12 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 17 previous and 23 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 (27)
Current report
During the three months ended June 30, 2025, our operating results included certain notable non-recurring items as a result of the completion of the Merger with Territorial, our legacy investment securities repositioning, the change in the California state tax apportionment rate, and other items. The following table summarizes the impact of non-core notable items recorded for the periods indicated and reconciles them to the most directly comparable GAAP financial measure.
Current report
Net loss for the second quarter of 2025 was $27.9 million, or $(0.22) per diluted common share, compared with net income of $25.3 million, or $0.21 per diluted common share, for the same period of 2024, which was a decrease of $53.2 million. Second quarter 2025 results included an aggregate $52.4 million of notable items, which impacted the comparability of the Company’s operating results with past performance. See the “General” section of this MD&A for a reconciliation of GAAP to non-GAAP financial measures.
Current report
The Company completed its acquisition of Honolulu-based Territorial, the holding company of Territorial Savings Bank, effective April 2, 2025. With the acquisition of Territorial Savings, a division of Bank of Hope, the Company became the largest regional bank catering to multicultural customers across the continental United States and Hawaii. In addition, the Company repositioned a portion of its legacy investment securities portfolio available for sale in June 2025. Accordingly, notable items specific to the second quarter of 2025 totaled $52.4 million after tax, comprising $30.5 million after tax in net loss on sales of securities related to the investment securities repositioning, $17.1 million after tax in merger-related items, and a $4.9 million one-time impact on income tax expense of a change in California’s state tax apportionment law that was signed on June 27, 2025.
Current report
Excluding notable items, net income for the second quarter of 2025 was $24.5 million, or $0.19 per diluted common share, compared with net income of $26.6 million, or $0.22 per diluted common share, for the same period in 2024. The year-over-year decrease in second quarter 2025 net income was primarily due to a decrease in noninterest income, and increases in noninterest expense and provision for loan losses, partially offset by an increase in the net interest income.
Current report
Net loss for the six months ended June 30, 2025, was $6.8 million, or $(0.05) per diluted common share, compared with net income of $51.1 million, or $0.42 per diluted share, for the same period of 2024, which was a decrease of $57.9 million. Excluding notable items referenced above, net income for the six months ended June 30, 2025, was $47.4 million, or $0.38 per diluted common share, compared with net income of $54.2 million, or $0.45 per diluted share, for the same period of 2024. The year-over-year decrease in year-to-date net income was primarily due to increases in noninterest expense and provision for loan losses, and a decrease in noninterest income.
Current report
Comparison of Six Months Ended June 30, 2025, with the Six Months Ended June 30, 2024
Current report
Net interest income before provision for credit losses was $218.4 million for the six months ended June 30, 2025, compared with $220.9 million for the same period of 2024, a decrease of $2.6 million, or 1.2%. The year-over-year decrease in year-to-date net interest income was driven by lower yields on loans and an increase in the average balance of deposits, partially offset by a lower cost of funds resulting from the Federal Funds target rate cut of an aggregate 100 basis points during the second half of 2024 that impacted average yields and rates for the first half of 2025, compared with the same period of 2024.
Current report
The following table summarizes the accretion and amortization adjustments resulting from the Merger with Territorial that were included in net interest income for the three and six months ended June 30, 2025 and 2024:
Current report
The year-over-year decreases in noninterest income for the three and six months ended June 30, 2025, were primarily driven by net losses on sales of investment securities AFS, due to a securities portfolio repositioning, partially offset by increases in net gains on sales of SBA loans, swap fees, and other income and fees.
Current report
As part of a strategic repositioning, in June 2025, the Company sold a portion of its investment securities portfolio AFS with a fair value of$417.9 million, consisting of lower-yielding collateralized mortgage obligations, mortgage-backed, corporate, and municipal securities, and recorded realized losses of$38.9 million. Net proceeds from these sales were redeployed to purchase higher-yielding investment securities.
Current report
Other income and fees for the three months ended June 30, 2025, included a $662 thousand increase in earnings from BOLI and an increase of $224 thousand in other recovery income compared with same period of 2024. Other income and fees for the six months ended June 30, 2025, included increases of $1.6 million in net gains on sale of mortgage loans, $675 thousand in earnings from BOLI, and $807 thousand in unrealized gain from equity investments, compared with the same period in 2024.
Current report
Noninterest expense for the second quarter of 2025 was $109.5 million, an increase of $28.5 million, or 35.2%, from $81.0 million for the second quarter of 2024. Noninterest expense for the six months ended June 30, 2025, was $193.3 million, an increase of $27.5 million, or 16.6%, from $165.8 million for the same period of the prior year. Noninterest expense in the second quarter of 2025 included $17.3 million of merger and restructuring-related costs, which the Company considers a notable item. See the “General” section of this MD&A for a reconciliation of GAAP to non-GAAP financial measures.
Current report
Occupancy expense increased by $2.0 million, or 28.6%, for the second quarter of 2025, compared with the same period of 2024, and increased $2.4 million, or 17.2%, for the six months ended June 30, 2025, compared with the same period in 2024. The increase in occupancy expense was primarily due to the increased number of Bank locations resulting from the Territorial acquisition. The Company acquired 29 branches in Hawaii from its Merger with Territorial.
Current report
Furniture and equipment expense increased $2.3 million, or 42.8%, for the second quarter of 2025, compared with the same period of 2024, and increased $2.7 million, or 25.1%, for the six months ended June 30, 2025, compared with the same period in 2024. The increase in furniture and equipment expense was primarily due to increased depreciation expense on furniture, software and equipment as a result of the Territorial acquisition.
Current report
Other noninterest expense increased by $2.9 million, or 47.7%, for the second quarter of 2025, compared with the same period of 2024, and increased by $4.2 million, or 34.2%, for the six months ended June 30, 2025, compared with the same period of 2024. The year-over-year increase was primarily driven by an increase in credit workout-related expense and increased core deposit intangible amortization expense related to acquired deposits from Territorial.
Current report
For the three months ended June 30, 2025, the Company recorded an income tax benefit of $2.0 million on pretax loss of $29.9 million, representing an effective tax rate of 6.74%, compared with an income tax provision of $9.3 million on pretax income of $34.5 million, representing an effective tax rate of 26.85% for the three months ended June 30, 2025.
Current report
For the six months ended June 30, 2025, the Company recorded an income tax provision of $4.7 million on pretax loss of $2.1 million, representing an effective tax rate of (230.65)%, compared with an income tax provision of $19.3 million on pretax income of $70.4 million, representing an effective tax rate of 27.41% for the six months ended June 30, 2025.
Current report
The year-over-year changes in the income tax provision or benefit, and effective tax rates for the three and six months of 2025 compared with the three and six months of 2024 reflected the impact of merger-related expenses and securities portfolio sales recognized in the second quarter of 2025, both of which reduced pre-tax income. In addition, income tax expense and the effective tax rate were impacted by a change in California’s state tax apportionment law that was signed on June 27, 2025, and which became effective for tax years beginning on or after January 1, 2025.
Current report
On June 27, 2025, California Senate Bill 132 was signed into law, requiring that banks and financial companies transition from an equally weighted three-factor apportionment formula to a single-sales-factor apportionment formula, effective for tax years beginning in 2025. As a result of the change in the California tax apportionment rate during the quarter ended June 30, 2025, we recorded an incremental tax expense of $4.9 million related to the remeasurement of the deferred tax asset. This item is included in the reconciliation of GAAP to non-GAAP financial measures in the “General” section of this MD&A.
Current report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, the restoration of favorable tax treatment for certain business provisions, and accelerated phase outs to the Inflation Reduction Act energy tax credits. We continue to assess any potential impact to our Consolidated Financial Statements but anticipate any impact will be immaterial for the fiscal year 2025.
Current report
Investments AFS and HTM of$18.5 million and$516.7 million, respectively, were acquired as part of the Territorial acquisition on April 2, 2025, and, immediately upon acquisition, categorized as AFS according to management’s intent. The investment securities were sold at a market value of$535.2 million, with no gain or loss impact on the Consolidated Statements of (Loss) Income. The excess cash from the sales was redeployed into investment securities throughout the quarter, contributing to the year-to-date growth in investment securities AFS. See Note 16 - “Business Combinations” of the Notes to the Consolidated Financial Statements for additional information regarding the Merger.
Current report
As part of a strategic repositioning of investment securities in June 2025, we sold a portion of its legacy investment securities portfolio AFS with a fair value of$417.9 million, and recorded realized losses of$38.9 million. Net proceeds from the sales were redeployed to purchase higher-yielding investment securities AFS.
Current report
The year-to-date increase in loans receivable was primarily due to the $1.07 billion in loans acquired from Territorial during the quarter ended June 30, 2025, consisting mostly of residential mortgage loans. See Note 16 - “Business Combinations” of the Notes to the Consolidated Financial Statements for additional information regarding the Merger. As a result of acquisition of Territorial, the residential mortgage loans increased to 16% from 8% of total loan portfolio.
Current report
Annualized
Current report
The following table sets forth the balances of our deposits by category for the periods indicated:
Current report
As part of the 2025 second quarter Territorial acquisition, the Company assumed $160.0 million in face value of FHLB advances, of which $125.0 million was paid off on April 2, 2025, and an additional $5.0 million matured in June 2025. The remaining $30.0 million in FHLB advances outstanding at June 30, 2025, mature through June 2026, have a weighted average coupon rate of 1.70%, and were acquired at a discount of $441 thousand, with $248 thousand in discount remaining at June 30, 2025. See Note 16 - “Business Combinations” of the Notes to the Consolidated Financial Statements for additional information regarding the Merger.
Current report
We invest in the equity of certain limited partnerships or limited liability companies that are associated with affordable housing partnerships that provide income tax benefits and/or CRA credits for the Company. The unfunded commitments on affordable housing partnerships are off-balance sheet liabilities and are funded based on funding schedule or as called by the limited liability companies.
Removed paragraphs (12)
Previous report
Net income for the first quarter of 2025 was $21.1 million, or $0.17 per diluted common share, compared with $25.9 million, or $0.21 per diluted common share, for the same period of 2024, which was a decrease of $4.8 million, or 18.4%. The year-over-year decrease in net income was primarily due to a decrease in net interest income and an increase in provision for credit losses, offset partially by an increase in noninterest income, and a decrease in noninterest expense.
Previous report
The allowance for credit losses coverage ratio was 1.11% of loans receivable at March 31, 2025, compared with 1.16% at March 31, 2024.
Previous report
See the “Financial Condition” section of this MD&A for additional information and further discussion.
Previous report
The year-over-year increase in first quarter noninterest income was primarily driven by gains on sales of SBA loans, of which there were none in the same period of last year, and increases in swap fees and other income and fees.
Previous report
Other income and fees for the three months ended March 31, 2025, included $1.7 million in net gains on sales of other loans compared with zero in the same period of 2024. Other income and fees for the three months ended March 31, 2025, also included an increase of $779 thousand in net gains on foreign currency valuation, from net losses of $341 thousand in the first quarter of 2024, to net gains of $438 thousand in the same period of 2025.
Previous report
Noninterest expense for the first quarter of 2025 was $83.9 million, a decrease of $978 thousand, or 1.2%, from $84.8 million for the first quarter of 2024.
Previous report
FDIC assessments expense decreased by $424 thousand, or 14.5%, for the first quarter of 2025, compared with the same period of 2024. The FDIC assessment expense utilizes an initial base assessment rate, which is calculated as a percentage of the Bank’s average consolidated total assets less average tangible equity. In addition to the initial assessment base, adjustments are added based upon the Bank’s regulatory rating and on other financial measures. The decrease in FDIC assessments expense for the three months ended March 31, 2025, compared with the same period in 2024, was due primarily to lower average consolidated total assets and a lower assessment base.
Previous report
In November 2023, the FDIC approved a special assessment at the rate of approximately 13.4 basis points per year, paid in eight quarterly installments beginning in the first quarter of 2024. This rate was applied to an assessment base of the insured depository institution’s estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits. In February 2024, the FDIC informed banks of an increase from the original estimate related to this special assessment. This additional amount was paid in two additional quarterly installments, at a rate of approximately 9.4 basis points per year on the same adjusted assessment base. $1.0 million was accrued for the special assessment in the first quarter of 2024, compared with zero for the same period of 2025.
Previous report
Other noninterest expense increased by $1.3 million or 21.3%, for the first quarter of 2025, compared with the same period of 2024. The year-over-year increase was primarily driven by increases in credit workout-related expenses.
Previous report
Income tax provision expense was $6.7 million and $10.0 million for the three months ended March 31, 2025 and 2024, respectively. The effective income tax rate for the three months ended March 31, 2025 and 2024, was 24.24% and 27.94%, respectively.
Previous report
The year-to-date decrease in our total loans receivable was primarily due to declines in C&I and CRE loans, partially offset by the growth in residential mortgage loans. During the three months ended March 31, 2025, loan payoffs, paydowns and sales exceeded new origination volume, reflecting, in part, an elevated pace of payoffs in a high interest rate environment.
Previous report
At March 31, 2025, 23.2% of total deposits were noninterest bearing demand deposits, 39.5% were time deposits, and 37.3% were interest bearing money market, NOW accounts, and savings deposits. At December 31, 2024, 23.6% of total deposits were noninterest bearing demand deposits, 40.3% were time deposits, and 36.1% were interest bearing money market, NOW accounts, and savings deposits.
Reworded paragraphs (52)
Previous wording
Hope Bancorp, Inc. is the holding company of Bank of Hope, the only regional Korean American bank in the United States with $17.07 billion in total assets at March 31, 2025. With the addition of Territorial Savings, a division of Bank of Hope, effective April 2, 2025, the Company became the largest regional bank catering to multicultural customers across the continental United States and Hawaii. Headquartered in Los Angeles, the Bank provides a full suite of commercial, corporate and consumer loans, deposit and fee-based products and services, including commercial and commercial real estate lending, SBA lending, residential mortgage and other consumer lending; treasury management services, foreign currency exchange solutions, interest rate derivative products, and international trade financing, among others. The Bank operates 46 full-service branches in California, New York, New Jersey, Washington, Texas, Illinois, New York, New Jersey, Alabama and Georgia under the Bank of Hope banner, and 29 branches in Hawaii under the Territorial Savings banner. The Bank also operates SBA loan production offices, commercial loan production offices, and residential mortgage loan production offices throughout the United States, and a representative office in Seoul, South Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender.
Current wording
Hope Bancorp, Inc. is the holding company of Bank of Hope, the only regional Korean American bank in the United States with $18.55 billion in total assets at June 30, 2025. With the addition of Territorial Savings, a division of Bank of Hope, effective April 2, 2025, the Company became the largest regional bank catering to multicultural customers across the continental United States and Hawaii. Headquartered in Los Angeles, the Bank provides a full suite of commercial, corporate and consumer loans, deposit and fee-based products and services, including commercial and commercial real estate lending, SBA lending, residential mortgage and other consumer lending; treasury management services, foreign currency exchange solutions, interest rate derivative products, and international trade financing, among others. The Bank operates 46 full-service branches in California, New York, New Jersey, Washington, Texas, Illinois, Georgia and Alabama under the Bank of Hope banner, and 29 branches in Hawaii under the Territorial Savings banner. The Bank also operates SBA loan production offices, commercial loan production offices, and residential mortgage loan production offices throughout the United States, and a representative office in Seoul, South Korea. Bank of Hope is a California-chartered bank, and its deposits are insured by the FDIC to the extent provided by law. Bank of Hope is an Equal Opportunity Lender.
Previous wording
The following tables set forth a performance overview concerning the periods indicated and should be read in conjunction with the unaudited Consolidated Financial Statements and Notes set forth elsewhere in this Quarterly Report on Form 10-Q and the following Results of Operations and Financial Condition sections of this MD&A.
Current wording
The following tables set forth a performance overview concerning the periods indicated and should be read in conjunction with the unaudited Consolidated Financial Statements and Notes set forth elsewhere in this Quarterly Report on Form 10-Q and the following Results of Operations and Financial Condition sections of this MD&A. During the second quarter of 2025, the acquisition of Territorial Bancorp Inc. was closed and we repositioned a portion of our investment securities AFS portfolio. The comparability of our operating results with past performance was impacted by acquisition accounting adjustments and merger-related expenses associated with the Territorial Merger and the loss on securities sold, which led to a recorded GAAP net loss in the second quarter of 2025. The Company has provided supplemental non-GAAP information to facilitate a better understanding of financial performance, identifying certain items as “notable”.
Previous wording
(1)TCE per share, TCE ratio, and return on average tangible equity are non-GAAP financial measures that we believe provide investors with information useful in understanding our operating results and financial condition. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures is provided on the following page.
Current wording
(1)Net income excluding notable items, earnings per common share - diluted excluding notable items, TCE per share, ROTCE, ROA excluding notable items, ROE excluding notable items, ROTCE excluding notable items, efficiency ratio excluding notable items, and TCE ratio are non-GAAP financial measures that we believe provide investors with information useful in understanding our operating results and financial condition. A quantitative reconciliation of the most directly comparable GAAP to non-GAAP financial measures is provided on the following pages.
Previous wording
We provide certain non-GAAP financial measures that we believe provide investors with meaningful supplemental information that is useful in understanding our operating results and financial condition. The methodologies for calculating non-GAAP measures may differ among companies. The following tables reconcile the non-GAAP financial measures used in this Form 10-Q to the most comparable GAAP performance measures.
Current wording
We provide certain non-GAAP financial measures that we believe provide investors with meaningful supplemental information that is useful in understanding our operating results and financial condition. The methodologies for calculating non-GAAP measures may differ among companies. The following tables reconcile the non-GAAP financial measures used in this Form 10-Q to the most comparable GAAP performance measures. The non-GAAP financial measures provide information useful to investors in understanding our operating performance and trends and assist in comparing our results with the performance of our peers.
Previous wording
Net interest income before provision for credit losses was $100.8 million for the first quarter of 2025, compared with $115.0 million for the same period of 2024, a decrease of $14.2 million, or 12.4%. The year-over-year decrease in net interest income was primarily driven by a decrease in the average balance of interest earning cash and deposits at other banks and lower yields on loans, partially offset by decreases in interest on deposits and interest on FHLB and FRB borrowings. The decrease in the average balance of interest earning cash and deposits in other banks was attributable to the payoff of FRB Bank Term Funding Program (“BTFP”) borrowings, which matured in the first half of 2024, with interest earning cash. The Federal Funds target rate was cut by an aggregate 100 basis points during the second half of 2024, impacting average yields and rates during the 2025 first quarter, compared with the same period of 2024.
Current wording
Net interest income before provision for credit losses was $117.5 million for the second quarter of 2025, compared with $105.9 million for the same period of 2024, an increase of $11.7 million, or 11.0%. The year-over-year increase in net interest income was primarily driven by lower cost of deposits and an increase in the average balance of interest earning assets, partially offset by an increase in the average balance of deposits and lower yields on loans. The Federal Funds target rate was cut by an aggregate 100 basis points during the second half of 2024, impacting average yields and rates for the 2025 second quarter, compared with the same period of 2024.
Previous wording
Net interest margin is impacted by the weighted average rates earned on interest earning assets and paid on interest bearing liabilities. The net interest margin for the first quarter of 2025 decreased to 2.54%, from 2.55% for the same period of 2024. The decrease in net interest margin was primarily due to lower weighted average yield on loans, as well as decreases in the average balances of interest earning cash and deposits at other banks and average loans, partially offset by a lower cost of funds and the net impact of paying off FRB BTFP borrowings, which matured in the first half of 2024.
Current wording
Net interest margin is impacted by the weighted average rates earned on interest earning assets and paid on interest bearing liabilities. The net interest margin for the second quarter of 2025 increased to 2.69%, from 2.62% for the same period of 2024. The net interest margin for the six months ended June 30, 2025, was 2.62%, an increase of 4 basis points from 2.58% for the same period of 2024. The increase in net interest margin was primarily due to lower weighted average costs of interest bearing deposits and increases in the average balances of loans, partially offset by higher average balances of interest bearing deposits.
Previous wording
The weighted average yield on loans decreased to 5.88% for the first quarter of 2025, down 37 basis points from 6.25% for the same period of 2024. The year-over-year decrease in loan yields was driven by spread compression on new loan originations and the downward repricing of variable rate loans, reflecting year-over-year decreases in benchmark interest rates. At March 31, 2025, variable interest rate loans made up 45% of the loan portfolio.
Current wording
The weighted average yield on loans decreased to 5.88% for the second quarter of 2025, down 32 basis points from 6.20% for the same period of 2024. The year-over-year decrease in loan yields was driven by spread compression on new loan originations and the downward repricing of variable rate loans, reflecting year-over-year decreases in benchmark interest rates. At June 30, 2025, variable interest rate loans made up 42% of the loan portfolio. The weighted average yield on loans decreased by 35 basis points to 5.88% for the six months ended June 30, 2025, down from 6.23% for the same period of 2024. The year-over-year decrease in average yields was driven by the downward repricing of variable rate loans, reflecting higher benchmark interest rates in 2024 versus 2025.
Previous wording
The weighted average yield on investment securities for the three months ended March 31, 2025 and 2024, was 3.09% and 3.13%, respectively. The decrease in average yields was primarily due to lower rates on new purchases of investment securities, and a downward repricing of variable rate investments. At March 31, 2025, 15% of the investment portfolio consisted of securities with variable coupon rates. The change in yields was also impacted by fluctuations in the overall investment portfolio yield due to the change in pay-down speeds of investment securities.
Current wording
The weighted average yield on investment securities for the three and six months ended June 30, 2025, was 3.25% and 3.17%, respectively, compared with 3.11% and 3.12% for the same periods of 2024, respectively. The increase in average yields was primarily due to higher rates on new purchases of investment securities. At June 30, 2025, 29% of the investment portfolio consisted of securities with variable coupon rates. The change in yields was also impacted by fluctuations in the overall investment portfolio yield due to the change in pay-down speeds of investment securities.
Previous wording
The weighted average yield on interest earning cash and deposits at other banks for the first quarter of 2025 was 4.25%, a decrease of 116 basis points from 5.41% for the same period of 2024. The yield on interest earning cash and deposits at other banks is tied to the Federal Funds rate.
Current wording
The weighted average yield on interest earning cash and deposits at other banks for the second quarter of 2025 was 4.36%, a decrease of 60 basis points from 4.96% for the same period of 2024. The weighted average yield on interest earning cash and deposits at other banks for the six months ended June 30, 2025, was 4.32%, a decrease of 101 basis points from 5.33% for the same period of 2024. The yield on interest earning cash and deposits at other banks is tied to the Federal Funds rate.
Previous wording
The weighted average cost of deposits for the first quarter of 2025 was 3.18%, a decrease of 18 basis points from 3.36% for the same period of 2024. The year-over-year decrease in the cost of deposits was driven by decreases in market interest rates.
Current wording
The weighted average cost of deposits for the second quarter of 2025 was 2.96%, a decrease of 43 basis points from 3.39% for the same period of 2024. The weighted average cost of deposits for the six months ended June 30, 2025, was 3.07%, a decrease of 30 basis points from 3.37% for the same period of 2024. The year-over-year decrease in the cost of deposits was driven by decreases in market interest rates and by the positive impact of the acquired Territorial deposits, which have a lower cost of funds.
Previous wording
The weighted average cost of FHLB and FRB borrowings for the first quarter of 2025 was 1.19%, a decrease of 308 basis points from 4.27% for the same period of 2024. The year-over-year decrease in the cost of FHLB and FRB borrowings primarily reflected the payoff of $1.70 billion in FRB BTFP borrowings in the first half of 2024, which had a weighted average rate of 4.47%, and the impact of cash flow hedges, which reduced interest expense on borrowings starting in the second quarter of 2024.
Current wording
The weighted average cost of FHLB and FRB borrowings for the second quarter of 2025 was 3.00%, an increase of 38 basis points from 2.62% for the same period of 2024. The year-over-year increase in the cost of FHLB and FRB borrowings was primarily due to a decrease in cash flow hedges of FHLB borrowings, some of which matured in second quarter of 2025, and the impact of borrowings acquired from Territorial. The weighted average cost of FHLB and FRB borrowings for the six months ended June 30, 2025, was 1.71%, a decrease of 237 basis points from 4.08% for the same period of 2024. The year-over-year decrease in the year-to-date cost of FHLB and FRB borrowings primarily reflected the payoff of $1.70 billion in FRB BTFP borrowings in the first half of 2024, which had a weighted average rate of 4.47%.
Previous wording
The weighted average cost of subordinated debentures for the first quarter of 2025 was 9.13%, a decrease of 128 basis points from 10.41% for the same period of 2024. The subordinated debentures have variable interest rates that are tied to the three-month Chicago Mercantile Exchange term Secured Financing Overnight Rate (“SOFR”) rate.
Current wording
The weighted average cost of subordinated debentures for the second quarter of 2025 was 9.05%, a decrease of 130 basis points from 10.35% for the same period of 2024. The weighted average cost of subordinated debentures for the six months ended June 30, 2025, was 9.09%, a decrease of 129 basis points from 10.38% for the same period of 2024. The subordinated debentures have variable interest rates that are tied to the three-month Chicago Mercantile Exchange term Secured Financing Overnight Rate (“SOFR”) rate.
Previous wording
The provision for credit losses includes both provision for credit loss on loans and provision for unfunded loan commitments. The provision for credit losses for the first quarter of 2025 was $4.8 million, an increase of $2.2 million from $2.6 million for the same period of the prior year.
Current wording
The provision for credit losses includes both provision for credit loss on loans and provision for unfunded loan commitments. The provision for credit losses for the second quarter of 2025 was $15.0 million, an increase of $13.6 million from $1.4 million for the same period of the prior year. The provision for credit losses for the six months ended June 30, 2025, was $19.8 million, an increase of $15.8 million from $4.0 million for the same period of the prior year. The second quarter 2025 provision for credit losses included $4.5 million of merger-related provision expenses that the Company considered a notable item. With the acquisition of Territorial, the Company adopted Territorial’s white-label credit card program. See the “General” section of this MD&A for a reconciliation of GAAP to non-GAAP financial measures.
Previous wording
The increase in provision for credit losses for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to an increase of $2.1 million in provision for credit losses on residential mortgage loans, offset partially by a decrease of $997 thousand in provision for credit losses on CRE loans. The increase in provision for credit losses on residential mortgage loans was primarily due to year-over-year growth in residential mortgage loans, which increased to $1.16 billion at March 31, 2025, compared with $936 million at March 31, 2024. The decrease in provision for credit losses on CRE loans was primarily due to lower balances of CRE loans, which totaled $8.38 billion at March 31, 2025, down from $8.71 billion at March 31, 2024.
Current wording
The increase in provision for credit losses for the three and six months ended June 30, 2025, compared to the same periods in 2024, was primarily due to increases in provision for credit losses on C&I loans and residential mortgage loans, offset partially by a decrease in provision for credit losses on CRE loans. The year over year increase in provision for credit losses on C&I loans was primarily due increased charge offs on C&I loans in 2025, compared with the same periods of 2024. The year-over-year increase in provision for credit losses on residential mortgage loans reflected the impact of the Territorial acquisition, which contributed $1.07 billion of loans. The decrease in provision for credit losses on CRE loans was primarily due to updates to historical loss and prepayment assumptions during the six months ended June 30, 2025.
Previous wording
The recapture of provision for unfunded loan commitments was $400 thousand and $1.0 million for the three months ended March 31, 2025 and 2024, respectively. The year-over-year decrease in the recapture of provision for unfunded loan commitments was due to the change in balances of unfunded loan commitments.
Current wording
The provision for unfunded loan commitments was $1.0 million and $600 thousand for the three and six months ended June 30, 2025, respectively, compared with a recapture of provision for unfunded loan commitments of $300 thousand and $1.3 million for the same periods of 2024, respectively. The year-over-year increase in the provision for unfunded loan commitments was due primarily to the change in balances of unfunded loan commitments.
Previous wording
Noninterest income is primarily comprised of service fees on deposit accounts, international service fees (fees received on trade finance letters of credit), wire transfer and foreign currency fees, swap fee income, net gains on sales of SBA loans, and other income and fees. Noninterest income for the first quarter of 2025 was $15.7 million, compared with $8.3 million for the same period of 2024, an increase of $7.4 million, or 89.3%.
Current wording
Noninterest income is primarily comprised of service fees on deposit accounts, international service fees (fees received on trade finance letters of credit), wire transfer and foreign currency fees, swap fee income, net gains on sales of SBA loans, net gains or losses on sales of investment securities AFS, and other income and fees. Noninterest income for the second quarter of 2025 was $(23.0) million, compared with $11.1 million for the same period of 2024, a decrease of $34.0 million. Noninterest income for the six months ended June 30, 2025, was $(7.3) million, compared with $19.4 million for the same period of the prior year, a decrease of $26.6 million. Noninterest income in the second quarter of 2025 included $38.9 million of losses on investment securities AFS related to the securities portfolio repositioning, which we consider a notable item. See the “General” section of this MD&A for a reconciliation of GAAP to non-GAAP financial measures.
Previous wording
Swap fee income represents fees earned from back to back swap transactions for our loan customers. The number of swap transactions and their total notional amounts increased in 2025, which resulted in an increase in swap fee income for the three months ended March 31, 2025, compared with the same period in 2024.
Current wording
Swap fee income represents fees earned from back-to-back swap transactions for our loan customers. The number of swap transactions is directly proportional to the increase in loan originations, which increased in 2025, and resulted in an increase in swap fee income for the three and six months ended June 30, 2025, compared with the same periods in 2024.
Previous wording
The Bank resumed the sales of SBA guaranteed loans in the second quarter of 2024 due to improved premiums in the secondary markets, after retaining loan production on balance sheet starting in the second half of 2023. During the three months ended March 31, 2025, we sold $49.9 million in SBA guaranteed loans and recorded $3.1 million in net gains on sale of SBA loans.
Current wording
During the three and six months ended June 30, 2025, we sold $67.4 million and $117.3 million in SBA guaranteed loans, respectively, and recorded $4.0 million and $7.1 million, respectively, in net gains on sale of SBA loans. This compares with net gains of $2.0 million for the three and six months ended June 30, 2024, on $29.8 million in SBA guaranteed loans sold. The Bank resumed the sales of SBA guaranteed loans in the second quarter of 2024 due to improved premiums in the secondary markets, after retaining loan production on balance sheet starting in the second half of 2023.
Previous wording
The year-over-year decrease in noninterest expense for the three months ended March 31, 2025 compared with the same period in 2024, was primarily driven by lower earned interest credits expense and FDIC special assessment expense, partially offset by increases in merger-related costs, other noninterest expense, and salaries and employee benefits.
Current wording
The year-over-year increase in noninterest expense for the three and six months ended June 30, 2025 compared with the same periods in 2024, was primarily driven by an increase in merger and restructuring-related costs, salaries and employee benefits, other noninterest expense, furniture and equipment expense, and occupancy expense, partially offset by a decrease in earned interest credits expense. We closed the acquisition of Territorial on April 2, 2025, and the second quarter of 2025 reflected a full quarter of operating expenses related to the Territorial franchise.
Previous wording
Salaries and employee benefits expense increased $883 thousand, or 1.9%, for the first quarter of 2025, compared with the same period of 2024. The year-over-year increase in salaries and employee benefits was due to increases in salaries, provision for bonus and employee benefits. The number of full-time equivalent employees was 1,227 at both March 31, 2025 and 2024.
Current wording
Salaries and employee benefits expense increased $8.7 million, or 19.8%, for the second quarter of 2025, compared with the same period of 2024, and increased $9.6 million, or 10.5%, for the six months ended June 30, 2025, compared with the same period in 2024. The year-over-year increase in salaries and employee benefits was primarily due to an increase in headcount as a result of the Territorial acquisition. The number of full-time equivalent employees was 1,416 and 1,238 at June 30, 2025 and 2024, respectively.
Previous wording
Earned interest credits are provided to certain commercial depositors to help offset deposit service charges incurred. The earned interest credits are tied to short-term interest rates, and accordingly, earned interest credit expense decreased with the decreases in the Federal Funds rate since September 2024. Earned interest credit expense decreased to $3.1 million for the first quarter of 2025, compared with $5.8 million for the same period in 2024.
Current wording
Earned interest credits are provided to certain commercial depositors to help offset deposit service charges incurred. The earned interest credits are tied to short-term interest rates, and accordingly, earned interest credit expense decreased with the decreases in the Federal Funds rate since September 2024. Earned interest credit expense decreased $2.8 million, or 46.1%, for the second quarter of 2025, compared with the same period of 2024, and decreased $5.6 million, or 46.6%, for the six months ended June 30, 2025, compared with the year-ago period.
Previous wording
Merger-related costs of $2.4 million for the three months ended March 31, 2025, mainly related to employee retention bonuses and professional fees for the acquisition of Territorial Bancorp, Inc., which was completed on April 2, 2025. See Note 21—“Subsequent Events” of the Notes to Consolidated Financial Statements for additional information regarding the merger.
Current wording
Merger and restructuring-related costs increased $15.1 million, or 698.2%, for the second quarter of 2025, compared with the same period of 2024, and increased $16.2 million, or 448.3%, for the six months ended June 30, 2025, compared with the same period in 2024. Merger and restructuring-related costs mainly related to change-in-control and employee severance and retention expenses related to the acquisition of Territorial Bancorp Inc., which was completed on April 2, 2025. See Note 16 - “Business Combinations” of the Notes to Consolidated Financial Statements for additional information regarding the Merger.
Previous wording
We invest in affordable housing partnerships and receive tax credits that reduce our overall effective tax rate. Amortization of investments in affordable housing partnerships is recorded in noninterest expense based on benefit schedules of individual investment projects under the equity method of accounting. The benefit schedules show tax deductions investors can take each year. We amortize the initial cost of the investments in affordable housing partnerships. This amortization expense is more than offset by both tax credits received, which reduce our tax provision expense dollar for dollar, and the tax benefits related to any tax losses generated through the affordable housing project’s expenditures. For the three months ended March 31, 2025 and 2024, total tax credits related to our investment in affordable housing partnerships were approximately $2.2 million and $2.1 million, respectively.
Current wording
We invest in affordable housing partnerships and receive tax credits that reduce our overall effective tax rate. Amortization of investments in affordable housing partnerships is recorded in noninterest expense based on benefit schedules of individual investment projects under the equity method of accounting. The benefit schedules show tax deductions investors can take each year. We amortize the initial cost of the investments in affordable housing partnerships. This amortization expense is more than offset by both tax credits received, which reduce our tax provision expense dollar for dollar, and the tax benefits related to any tax losses generated through the affordable housing project’s expenditures. For the three and six months ended June 30, 2025, total tax credits related to our investment in affordable housing partnerships were approximately $2.3 million and $4.7 million, respectively. This compares with approximately $2.1 million and $4.3 million in tax credits related to our investment in affordable housing partnerships for the same periods in 2024, respectively.
Previous wording
In addition to affordable housing partnerships, during the fourth quarter of 2024, we also invested in projects that qualify for renewable energy tax credits. Amortization of investments in renewable energy projects is recorded as a part of the tax expense under the proportional amortization method of accounting and offsets some of the income tax benefits of the renewable energy tax credits. The amortization on the investment was $319 thousand and the total generated renewable energy tax credits and benefits was $350 thousand for the quarter ended March 31, 2025. There was no amortization on investments in renewable energy projects or tax credits for the same period of 2024.
Current wording
In addition to affordable housing partnerships, during the fourth quarter of 2024, we also invested in projects that qualify for renewable energy tax credits. Amortization of investments in renewable energy projects is recorded as a part of the tax expense under the proportional amortization method of accounting and offsets some of the income tax benefits of the renewable energy tax credits. For the three and six months ended June 30, 2025, the amortization on the investment was $319 thousand and $638 thousand, respectively, and the total generated renewable energy tax credits and benefits was $350 thousand and $700 thousand, respectively. There was no amortization on investments in renewable energy projects or tax credits for the same periods of 2024.
Previous wording
At March 31, 2025, total assets were $17.07 billion, an increase of $14.3 million, or 0.1%, from $17.05 billion at December 31, 2024. The increase in total assets was primarily due to increases in cash and cash equivalents and equity investments, partially offset by a decrease in loans receivable during the three months ended March 31, 2025.
Current wording
At June 30, 2025, total assets were $18.55 billion, an increase of $1.49 billion, or 8.8%, from $17.05 billion at December 31, 2024. The increase in total assets was primarily due to increases in loans receivable, cash and cash equivalents, investment securities, deferred taxes, BOLI, and other intangible assets during the six months ended June 30, 2025. These increases were mainly attributable to the acquisition of Territorial, which was effective April 2, 2025, with total acquired identifiable assets amounting to $1.93 billion.
Previous wording
Cash and cash equivalents totaled $733.5 million at March 31, 2025, up from$458.2 million at December 31, 2024.
Current wording
Cash and cash equivalents totaled $689.7 million at June 30, 2025, up from$458.2 million at December 31, 2024. As part of the Territorial acquisition, we acquired $86.7 million in cash.
Previous wording
At March 31, 2025, we had $1.84 billion in investment securities AFS, compared with $1.82 billion at December 31, 2024. The net unrealized loss on the investment securities AFS at March 31, 2025, was $266.7 million, compared with a net unrealized loss on securities AFS of $299.4 million at December 31, 2024. The year-to-date decrease in net unrealized loss position reflected movements in market interest rates. At March 31, 2025, we had $250.2 million in investment securities HTM, compared with $252.4 million at December 31, 2024. We have the ability and intent to hold securities classified as HTM to maturity.
Current wording
At June 30, 2025, we had $2.02 billion in investment securities AFS, compared with $1.82 billion at December 31, 2024. The net unrealized loss on the investment securities AFS at June 30, 2025, was $217.4 million, compared with a net unrealized loss on securities AFS of $299.4 million at December 31, 2024. The year-to-date decrease in net unrealized loss position reflected movements in market interest rates and second quarter sales of investment securities AFS. At June 30, 2025, we had $247.2 million in investment securities HTM, compared with $252.4 million at December 31, 2024. We have the ability and intent to hold securities classified as HTM to maturity.
Previous wording
During the three months ended March 31, 2025, $54.0 million in investment securities was purchased, $39.0 million in investment securities was paid down, and $35.1 million in investment securities was called.
Current wording
During the six months ended June 30, 2025, $686.7 million in investment securities was purchased, $953.1 million in investment securities was sold, $84.3 million in investment securities was paid down, and $35.1 million in investment securities was called.
Previous wording
We performed an analysis on our investment securities in unrealized loss positions at March 31, 2025 and December 31, 2024, and determined that an allowance for credit losses was not required for investment securities AFS or HTM. The majority of our investment portfolio consists of securities issued by U.S. Government agencies or U.S. Government sponsored enterprises, which were determined to have a zero loss expectation. At March 31, 2025, we also had two asset-backed securities, six corporate securities, and 58 municipal bonds not issued by U.S. Government agencies or U.S. Government sponsored enterprises that were in unrealized loss positions. Based on our analysis of these investment securities, we concluded a credit loss did not exist due to the strength of the issuers, high bond ratings, and because full payment of principal and interest is expected.
Current wording
We performed an analysis on our investment securities in unrealized loss positions at June 30, 2025 and December 31, 2024, and determined that an allowance for credit losses was not required for investment securities AFS or HTM. The majority of our investment portfolio consisted of securities issued by U.S. Government agencies or U.S. Government sponsored enterprises, which were determined to have a zero loss expectation. At June 30, 2025, we also had three asset-backed securities, five corporate securities, and 37 municipal bonds not issued by U.S. Government agencies or U.S. Government sponsored enterprises that were in unrealized loss positions. Based on our analysis of these investment securities, we concluded a credit loss did not exist due to the strength of the issuers, high bond ratings, and because full payment of principal and interest is expected.
Previous wording
Total equity investments include equity investments with readily determinable fair values and equity investments without readily determinable fair values. Equity investments at March 31, 2025, totaled $86.2 million, an increase of $46.3 million, or 115.9%, from $39.9 million at December 31, 2024. The increase in equity investments during the first quarter of 2025 was mostly due to purchases of equity investments with readily determinable fair values amounting to $45.3 million.
Current wording
Total equity investments include equity investments with readily determinable fair values and equity investments without readily determinable fair values. Equity investments at June 30, 2025, totaled $88.2 million, an increase of $48.2 million, or 120.7%, from $39.9 million at December 31, 2024. The increase in equity investments was mostly due to purchases of equity investments with readily determinable fair values amounting to $45.5 million.
Previous wording
At March 31, 2025 and December 31, 2024, total equity investments with readily determinable fair values totaled $50.3 million and $4.3 million, respectively, consisting of mutual funds. Changes to the fair value of equity investments with readily determinable fair values are recorded in other noninterest income.
Current wording
At June 30, 2025 and December 31, 2024, total equity investments with readily determinable fair values totaled $50.5 million and $4.3 million, respectively, consisting of mutual funds. Changes to the fair value of equity investments with readily determinable fair values are recorded in other noninterest income.
Previous wording
We also had $35.9 million and $35.6 million in equity investments without readily determinable fair values at March 31, 2025 and December 31, 2024, respectively. At March 31, 2025, equity investments without readily determinable fair values included $34.6 million in CRA investments, $1.0 million in CDFI investments, and $370 thousand in correspondent bank stock. Equity investments without readily determinable fair values are carried at cost, less impairment, and adjustments are made to the carrying balance based on observable price changes. There were no impairments or observable price changes for equity investments without readily determinable fair values during the three months ended March 31, 2025 and 2024.
Current wording
We also had $37.6 million and $35.6 million in equity investments without readily determinable fair values at June 30, 2025 and December 31, 2024, respectively. At June 30, 2025, equity investments without readily determinable fair values included $36.2 million in CRA investments, $1.0 million in CDFI investments, and $370 thousand in correspondent bank stock. Equity investments without readily determinable fair values are carried at cost, less impairment, and adjustments are made to the carrying balance based on observable price changes. There were no impairments or observable price changes for equity investments without readily determinable fair values during the six months ended June 30, 2025 and 2024.
Previous wording
Loans held for sale at March 31, 2025, totaled $183 thousand, compared with $14.5 million at December 31, 2024, representing a decrease of $14.3 million, or 98.7%. Loans held for sale at March 31, 2025, comprised $183 thousand in residential mortgage loans. At December 31, 2024, loans held for sale consisted of $13.8 million in C&I loans and $646 thousand in residential mortgage loans. During the three months ended March 31, 2025, we sold $80.5 million in loans, consisting of $49.9 million in SBA loans, $4.4 million in residential mortgage loans, and $26.2 million in C&I loans.
Current wording
Loans held for sale at June 30, 2025, totaled $12.1 million, compared with $14.5 million at December 31, 2024, representing a decrease of $2.4 million, or 16.8%. Loans held for sale at June 30, 2025, consisted of $4.7 million in C&I loans, $1.1 million in residential mortgage loans, and $6.3 million in other consumer loans comprising the Company’s credit card portfolio. With the acquisition of Territorial, the Company adopted Territorial’s white-label credit card program. At December 31, 2024, loans held for sale consisted of $13.8 million in C&I loans and $646 thousand in residential mortgage loans. During the six months ended June 30, 2025, we sold $185.2 million in loans, consisting of $117.3 million in SBA loans, $7.9 million in residential mortgage loans, and $60.0 million in C&I loans.
Previous wording
At March 31, 2025, loans receivable totaled $13.34 billion, a decrease of $283.0 million, or 2.1%, from $13.62 billion at December 31, 2024. The following table summarizes our loan portfolio by amount and percentage of total loans outstanding in each loan segment as of the dates indicated:
Current wording
At June 30, 2025, loans receivable totaled $14.43 billion, an increase of $816.5 million, or 6.0%, from $13.62 billion at December 31, 2024. The following table summarizes our loan portfolio by amount and percentage of total loans outstanding in each loan segment as of the dates indicated:
Previous wording
(1) Weighted average loan-to-value (“LTV”): LTVs are based on collateral value which utilizes the most recent available appraisal and property-specific data, including submarket appreciation or depreciation, and changes to vacancy, debt service coverage or rent per square foot.
Current wording
(1)Weighted average loan-to-value (“LTV”): LTVs are based on collateral value which utilizes the most recent available appraisal and property-specific data, including submarket appreciation or depreciation, and changes to vacancy, debt service coverage or rent per square foot.
Previous wording
Nonperforming assets, which consist of nonaccrual loans, accruing delinquent loans past due 90 days or more, and OREO, totaled $83.9 million at March 31, 2025, compared with $90.8 million at December 31, 2024, a decrease of 7.6%. The decrease in nonperforming loans was largely driven by a decrease in C&I nonaccrual loans. The ratio of nonperforming assets to total assets decreased to 0.49% at March 31, 2025, compared with 0.53% at December 31, 2024. Nonaccrual loans to loans receivable was 0.63% at March 31, 2025, compared with 0.67% at December 31, 2024.
Current wording
Nonperforming assets, which consist of nonaccrual loans, accruing delinquent loans past due 90 days or more, and OREO, totaled $112.9 million at June 30, 2025, compared with $90.8 million at December 31, 2024, an increase of 24.3%. The increase in nonperforming loans was largely driven by the migration of a CRE loan that is well secured by collateral property in a prime location. The ratio of nonperforming assets to total assets increased to 0.61% at June 30, 2025, compared with 0.53% at December 31, 2024. Nonaccrual loans to loans receivable was 0.77% at June 30, 2025, compared with 0.67% at December 31, 2024. As of the close of the acquisition of Territorial, Territorial’s nonperforming assets amounted to $1.3 million, after acquisition accounting adjustments.
Previous wording
(1) Nonaccrual loans exclude the guaranteed portion of delinquent SBA loans that are in liquidation totaling $11.8 million at March 31, 2025, and $12.8 million at December 31, 2024.
Current wording
(1) Nonaccrual loans exclude the guaranteed portion of delinquent SBA loans that are in liquidation totaling $15.3 million at June 30, 2025, and $12.8 million at December 31, 2024.
Previous wording
The ACL was $147.4 million at March 31, 2025, compared with $150.5 million at December 31, 2024. The ACL was 1.11% of loans receivable at both March 31, 2025 and December 31, 2024, respectively. The following table reflects the allocation of the ACL by loan segment and the ratio of total ACL to total loans as of the dates indicated:
Current wording
The ACL was $149.5 million at June 30, 2025, compared with $150.5 million at December 31, 2024. The ACL was 1.04% and 1.11% of loans receivable at June 30, 2025 and December 31, 2024, respectively. The year-to-date change in the ACL coverage ratio reflected the impact of the Territorial acquisition, which contributed $1.03 billion of residential mortgage loans at the close of the Merger. The following table reflects the allocation of the ACL by loan segment and the ratio of total ACL to total loans as of the dates indicated:
Previous wording
Overall ACL coverage at March 31, 2025, remained unchanged at 1.11% compared with December 31, 2024. The third-party economic forecast used in the calculation at March 31, 2025, improved slightly relative to the forecast used at December 31, 2024. The updated macroeconomic forecast projected on average slightly higher GDP growth, CRE price index, and lower unemployment rates. The decrease in ACL at March 31, 2025, compared with December 31, 2024, was primarily due to a decline in ACL for CRE loans which was due to a decrease in the balance of CRE loans and updates to historical loss and prepayment assumptions during the three months ended March 31, 2025. The decline in ACL on CRE loans was offset partially by increases in ACL for residential mortgage loans and C&I loans. ACL for both collectively evaluated loans and individually evaluated loans declined as of March 31, 2025 compared to December 31, 2024.
Current wording
The decrease in ACL at June 30, 2025, compared with December 31, 2024, was primarily due to a decline in ACL for CRE loans, which was due to a decrease in the balance of CRE loans and updates to historical loss and prepayment assumptions during the six months ended June 30, 2025, which outweighed the impact of updated forecasted macroeconomic conditions. The third-party economic forecast used in the calculation at June 30, 2025, projected lower GDP growth and CRE price index, and slightly higher unemployment rates, relative to the forecast used at December 31, 2024. The decline in ACL on CRE loans was partially offset by increases in ACL for C&I loans and residential mortgage loans. The increased ACL on C&I loans largely reflected the weaker macroeconomic conditions forecasted, while the increased ACL on residential mortgage loans was primarily driven by a higher residential mortgage loan balance due to the acquisition of Territorial.
Previous wording
Net loan charge offs as a percentage of average loans were 0.25% and 0.10%, annualized, for the three months ended March 31, 2025 and 2024, respectively. Net loan charge offs for the three months ended March 31, 2025, primarily reflected C&I loan net charge offs of $7.4 million.
Current wording
Net loan charge offs as a percentage of average loans were 0.33% and 0.29%, annualized, for the three and six months ended June 30, 2025, respectively, compared with net loans charge offs of 0.13% and 0.12%, respectively, for the same periods in 2024. Net loan charge offs for the three and six months ended June 30, 2025, primarily reflected C&I loan net charge offs of $11.8 million and $19.2 million, respectively.
Showing the first 40 of 52 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
(1)Interest income on loans includes loan fees.
Current report — wording carried from elsewhere
(2)Average balances of loans consist of loans receivable and loans held for sale.
Current report — wording carried from elsewhere
(3)Interest income and yields are not presented on a tax-equivalent basis.