OPERATING LEASES

12 Months Ended

Dec. 31, 2025

Leases, Operating [Abstract]

OPERATING LEASES

15. OPERATING LEASES

The Company leases certain land and buildings for its bank branches and ATMs with lease terms expiring through 2045. In some instances, a lease may contain renewal options for periods ranging from five to fifteen years. All renewal options are likely to be exercised and therefore have been recognized as part of our right-of-use assets and lease liabilities in accordance with ASC 842, "Leases". Certain leases also contain variable payments that are primarily determined based on common area maintenance costs and Hawaii state tax rates. All leases are operating leases.

The Company has elected the short-term exemption, for leases with terms of 12 months or less. Such leases are excluded from the calculation of the ROU assets and lease liabilities and are not included on the Company's balance sheets. The Company has also elected to account for lease and non-lease components as a single lease component for all classes of underlying assets.

The most significant assumption in applying ASC 842 is the discount rate assumption. Because most of lease agreements do not specify an implicit interest rate, the Company estimates the discount rate using the collateralized borrowing rate it would pay for a loan with a similar term.

The following table presents total lease cost, cash flow information, weighted-average remaining lease term, and weighted-average discount rate for the periods presented:

	Year Ended December 31,
(Dollars in thousands)	2025			2024			2023
Lease cost:
Operating lease cost	$	5,174		$	5,233		$	5,108
Variable lease cost	2,586			3,229			3,751
Less: sublease income	—			—			(34)
Total lease cost	$	7,760		8,462			8,825
Other information:
Operating cash flows from operating leases	$	(5,048)		$	(5,073)		$	(5,095)
Weighted-average remaining lease term - operating leases	9.22 years			10.25 years			10.64 years
Weighted-average discount rate - operating leases	4.16		%	4.07		%	3.96		%

The following is a schedule of annual undiscounted cash flows for our operating leases and a reconciliation of those cash flows to the operating lease liabilities for the next five succeeding fiscal years and all years thereafter:

(Dollars in thousands)
Year Ending December 31,	Undiscounted Cash Flows		Lease Liability Expense		Lease Liabilities
2026	$	4,920	$	969	$	3,951
2027	4,143		828		3,315
2028	3,314		711		2,603
2029	2,894		612		2,282
2030	2,921		516		2,405
Thereafter	12,850		1,857		10,993
Total	$	31,042	$	5,493	$	25,549

In 2025, as part of a strategic consolidation of the Company's operations center into its main headquarters, the Company terminated its lease for the operations center, which was originally scheduled to run through 2038. As a result of the lease termination, the Company recognized a reduction of the ROU asset of $4.7 million, a reduction of the ROU liability of $4.1 million, and a credit of $0.6 million to other operating expense.

In addition, the Company leases certain properties that it owns as lessor. All of these leases are operating leases. The following represents lease income related to these leases that was recognized for the periods presented:

	Year Ended December 31,
(Dollars in thousands)	2025		2024		2023
Total rental income recognized	$	1,720	$	2,059	$	2,132

Based on the Company's leases as lessor as of December 31, 2025, estimated lease payments for the next five succeeding fiscal years and all years thereafter are as follows:

(Dollars in thousands)
Year Ending December 31,
2026	$	1,320
2027	1,268
2028	858
2029	698
2030	547
Thereafter	760
Total	$	5,451

OPERATING LEASES

15. OPERATING LEASES

The Company leases certain land and buildings for its bank branches and ATMs with lease terms expiring through 2045. In some instances, a lease may contain renewal options for periods ranging from five to fifteen years. All renewal options are likely to be exercised and therefore have been recognized as part of our right-of-use assets and lease liabilities in accordance with ASC 842, "Leases". Certain leases also contain variable payments that are primarily determined based on common area maintenance costs and Hawaii state tax rates. All leases are operating leases.

The Company has elected the short-term exemption, for leases with terms of 12 months or less. Such leases are excluded from the calculation of the ROU assets and lease liabilities and are not included on the Company's balance sheets. The Company has also elected to account for lease and non-lease components as a single lease component for all classes of underlying assets.

The most significant assumption in applying ASC 842 is the discount rate assumption. Because most of lease agreements do not specify an implicit interest rate, the Company estimates the discount rate using the collateralized borrowing rate it would pay for a loan with a similar term.

The following table presents total lease cost, cash flow information, weighted-average remaining lease term, and weighted-average discount rate for the periods presented:

	Year Ended December 31,
(Dollars in thousands)	2025			2024			2023
Lease cost:
Operating lease cost	$	5,174		$	5,233		$	5,108
Variable lease cost	2,586			3,229			3,751
Less: sublease income	—			—			(34)
Total lease cost	$	7,760		8,462			8,825
Other information:
Operating cash flows from operating leases	$	(5,048)		$	(5,073)		$	(5,095)
Weighted-average remaining lease term - operating leases	9.22 years			10.25 years			10.64 years
Weighted-average discount rate - operating leases	4.16		%	4.07		%	3.96		%

The following is a schedule of annual undiscounted cash flows for our operating leases and a reconciliation of those cash flows to the operating lease liabilities for the next five succeeding fiscal years and all years thereafter:

(Dollars in thousands)
Year Ending December 31,	Undiscounted Cash Flows		Lease Liability Expense		Lease Liabilities
2026	$	4,920	$	969	$	3,951
2027	4,143		828		3,315
2028	3,314		711		2,603
2029	2,894		612		2,282
2030	2,921		516		2,405
Thereafter	12,850		1,857		10,993
Total	$	31,042	$	5,493	$	25,549

In 2025, as part of a strategic consolidation of the Company's operations center into its main headquarters, the Company terminated its lease for the operations center, which was originally scheduled to run through 2038. As a result of the lease termination, the Company recognized a reduction of the ROU asset of $4.7 million, a reduction of the ROU liability of $4.1 million, and a credit of $0.6 million to other operating expense.

In addition, the Company leases certain properties that it owns as lessor. All of these leases are operating leases. The following represents lease income related to these leases that was recognized for the periods presented:

	Year Ended December 31,
(Dollars in thousands)	2025		2024		2023
Total rental income recognized	$	1,720	$	2,059	$	2,132

Based on the Company's leases as lessor as of December 31, 2025, estimated lease payments for the next five succeeding fiscal years and all years thereafter are as follows:

(Dollars in thousands)
Year Ending December 31,
2026	$	1,320
2027	1,268
2028	858
2029	698
2030	547
Thereafter	760
Total	$	5,451