Oct 28, 2026 earnings call — Third quarter earnings and margin outlook
Net income was $22.8 million and NIM was 3.62%, with diluted EPS of $0.88 per share.
Revenue $0.1B (est $0.1B) · EPS $0.88 (est $0.85)
Key quotes
"For the fourth quarter, we expect NIM to be in the mid-3.60% range."
"We have approximately $224 million in loan volume, across 71 opportunities in the processing stages scheduled for fourth quarter closings"
"Total deposits ended the quarter at $6.66 billion down $31.9 million or 0.5% from the prior quarter. And up $86.2 million or 1.3% from the prior year."
Analyst Q&A 5
demand and loan payoffs
Q (David Feaster · Raymond James): The analyst asked how demand looks now, whether higher rates have changed client demand or caused deals to fall out of the pipeline, and wanted an update on paydown activity slowing growth.
A: Management said the pipeline looks fairly healthy and they underwrite loans for a higher rate environment. They said mainland lending is supplementing, not replacing, the Hawaii franchise and reported about $380 million in production in Hawaii and about $310 million on the mainland. They also said runoff is greater in Hawaii and much of it is in residential mortgage and home equity lines.
"I would say in terms of the forecast, the best forecast we have right now is what we have in the pipeline." — Ralph Mesick (CHAIR)
deposit rates and CD maturities
Q (Matthew Clark · Piper Sandler): He asked for the spot deposit rate at the end of September and what deposit repricing beta they expect if rates rise. He also asked about CD maturities, roll-off and roll-on rates, and the run rate for fee income and expenses in Q4.
A: Management said the spot deposit cost in the first month of September was 91 basis points and they expect to manage beta similar to prior cycles. They said they expect a total deposit beta around 24% or about 33% on total interest bearing deposits. For CDs, they said about $410 million of CD maturities in the fourth quarter running off at a weighted average rate of about 2.7% and new blended CD rates around 3.0%, and on fees expect total other operating income to be generally flattish year over year with about $13 million in Q4.
"I am expecting a total deposit beta of around 24% or about 33% on total interest bearing deposits." — Dayna Matsumoto (CFO)
mainland growth and tax rate
Q (Kelly Motta · KBW): She asked whether mainland growth can supplement Hawaii and how the firm views that part of the business. She also asked for the expected tax rate after a higher-than-expected quarter.
A: Management said current originations are running about a 50-50 mix between Hawaii and the mainland through the first month of the quarter, and if fixed-rate long-duration asset runoff continues they expect fairly muted growth. On tax, they said the increase was due to less tax-exempt BOLI income and higher pretax book income, and they expect a normalized ETR around 22% to 24% while noting BOLI volatility and potential tax credits not included in guidance.
"Going forward, I would expect our normalized ETR to be around 22% to 24%." — Dayna Matsumoto (CFO)
margin guidance and rate effects
Q (Andrew Liesch · Stonex Financial): He asked why the margin guide is mid-3.6% rather than high-3.6% given asset repricing and modest asset sensitivity.
A: Management said they will get cash-flow repricing benefits on loans and securities and their balance sheet is neutral to slightly asset sensitive, which could be a slight net positive. They also said loan yields are rising but deposit rates will also rise, offsetting some benefits, which is why guidance is not higher. They noted more potential upside next year if loan growth increases and pricing stays rational, but they are not providing 2027 guidance.
"But I will note, loan yields are going up, but on the deposit side, those rates will also be going up, offsetting some of those benefits." — Dayna Matsumoto (CFO)
securities cash flows and loan runoff
Q (Matthew Clark · Piper Sandler): He asked for the securities cash-flow rolloff and expected yields on new purchases, and for loan payoffs, new production yields, and back-book loan repricing.
A: Management said securities cash flows are about $30 million a quarter and new securities purchases have yielded about a 225 to 250 basis point pickup. They also said loan portfolio runoff is about $200 million in total quarterly runoff and that payoffs are being replaced at weighted average yields around 50 to 60 basis points higher.
"On the loan portfolio, it is about $200 million in total quarterly runoff." — Dayna Matsumoto (CFO)