BORROWINGS
At December 31, 2025, borrowings totaled $284.9 million, compared with $239.0 million at December 31, 2024. Borrowings at December 31, 2025 included borrowings totaling $275.0 million with a put option that entitles FHLB to require the Company to prepay the borrowings without any prepayment penalties. The Company’s borrowings at December 31, 2025 and 2024, had remaining maturities of less than 12 months aside from the putable borrowings of $275.0 million which, as of December 31, 2025, had a weighted average maturity of approximately 2 years. Borrowings at December 31, 2025 are net of discounts totaling $78 thousand and have a weighted average effective rate of 3.32%.
The tables below summarize the Company’s borrowing lines at December 31, 2025 and 2024:
| | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2025 |
| Total
Borrowing Capacity | | Borrowings Outstanding | | Available Borrowing Capacity |
| | Amount | | Weighted Average Rate | |
| | | | | | | |
| (Dollars in thousands) |
| FHLB | $ | 4,298,514 | | | $ | 285,000 | | | 3.32 | % | | $ | 4,013,514 | |
| FRB Discount Window | 1,653,160 | | | — | | | — | % | | 1,653,160 | |
| | | | | | | |
| Unsecured Federal Funds lines | 331,180 | | | — | | | — | % | | 331,180 | |
| Total | $ | 6,282,854 | | | $ | 285,000 | | | 3.32 | % | | $ | 5,997,854 | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2024 |
| Total
Borrowing Capacity | | Borrowings Outstanding | | Available Borrowing Capacity |
| | Amount | | Weighted Average Rate | |
| | | | | | | |
| (Dollars in thousands) |
| FHLB | $ | 4,151,408 | | | $ | 100,000 | | | 4.88 | % | | $ | 4,051,408 | |
| FRB Discount Window | 1,731,467 | | | 139,000 | | | 4.50 | % | | 1,592,467 | |
| | | | | | | |
| Unsecured Federal Funds lines | 317,391 | | | — | | | — | % | | 317,391 | |
| Total | $ | 6,200,266 | | | $ | 239,000 | | | 4.66 | % | | $ | 5,961,266 | |
| | | | | | | |
The Company maintains a line of credit with the FHLB of San Francisco as a secondary source of funds. The borrowing capacity with the FHLB is limited to the lower of either 25% of the Bank’s total assets or the Bank’s collateral capacity. The terms of this credit facility require the Company to pledge eligible collateral with the FHLB equal to at least 100% of outstanding advances. At December 31, 2025 and 2024, loans with a carrying amount of approximately $8.70 billion and $7.58 billion, respectively, were pledged at the FHLB for outstanding advances and remaining borrowing capacity. At December 31, 2025, in addition to FHLB stock, $11.1 million in investment securities were pledged as collateral at the FHLB. The purchase of FHLB stock is a prerequisite to become a member of the FHLB system, and the Company is required to own a certain amount of FHLB stock based on total asset size and outstanding borrowings.
As part of the 2025 Merger with Territorial, the Company assumed $160.0 million in face value, before any purchase premium or discount, of FHLB advances, of which $125.0 million was paid off on April 2, 2025, and an additional $25.0 million matured prior to December 31, 2025. The remaining $10.0 million in FHLB advances outstanding at December 31, 2025, matures in June 2026, has a weighted average rate of 1.97%, and was acquired at a discount of $211 thousand, with $78 thousand in discount remaining at December 31, 2025. See Note 19 “Business Combinations” for additional information regarding the Merger. The Company may also borrow from the FRB discount window up to the maximum amount, which is limited to 99% of the fair market value of the qualifying loans and securities that are pledged. At December 31, 2025, the outstanding principal balance of the qualifying loans pledged at the FRB discount window was $1.90 billion. There were no investment securities pledged at the discount window at December 31, 2025.
The Company also maintains unsecured federal funds borrowing lines with other banks. There were no borrowings outstanding from other banks at December 31, 2025 and 2024.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.