8-K: First Hawaiian, Inc. Reports Solid First Quarter 2025 Results, Declares Dividend

First Hawaiian, Inc. announces its first quarter 2025 financial results, highlighting growth in retail deposits and net interest income, while maintaining strong credit quality and declaring a quarterly dividend of $0.26 per share.

Summary

• First Hawaiian, Inc. reported a net income of $59.2 million, or $0.47 per diluted share, for the first quarter of 2025.
• Total loans and leases decreased by $115.2 million compared to the previous quarter.
• Total deposits decreased by $106.4 million compared to the prior quarter.
• The net interest margin increased by 5 basis points to 3.08%.
• The company recorded a $10.5 million provision for credit losses.
• The Board of Directors declared a quarterly dividend of $0.26 per share.
• Total assets were $23.7 billion as of March 31, 2025.
• Net interest income for the first quarter of 2025 was $160.5 million, an increase of $1.8 million, or 1.1%, compared to the prior quarter.
• Noninterest income was $50.5 million in the first quarter of 2025, an increase of $21.1 million compared to the prior quarter.
• Noninterest expense was $123.6 million in the first quarter of 2025, a decrease of $0.6 million compared to the prior quarter.
• The efficiency ratio was 58.2% for the quarter ended March 31, 2025.
• The effective tax rate was 23.0% for the quarter ended March 31, 2025.
• The allowance for credit losses was $166.6 million, or 1.17% of total loans and leases, as of March 31, 2025.
• The company repurchased 974 thousand shares of common stock at a total cost of $25.0 million under the stock repurchase program in the first quarter, with an average cost of $25.66 per share.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the solid quarter results, dividend declaration, and stock repurchase program, despite some declines in loans and deposits and economic uncertainties.

Positives

• Retail deposits continued to grow.
• Net interest income rose from the prior quarter, increasing by $1.8 million, or 1.1%.
• Expenses were well managed, decreasing by $0.6 million compared to the prior quarter.
• Credit quality remained strong.
• The company's balance sheet is strong, with a solid capital position.
• Noninterest income increased by $21.1 million compared to the prior quarter.
• The efficiency ratio improved to 58.2% from 65.5% in the prior quarter.

Negatives

• Total loans and leases declined by $115.2 million versus the prior quarter.
• Total deposits declined by $106.4 million versus the prior quarter.
• The company recorded a $10.5 million provision for credit losses, compared to a negative provision of $0.8 million in the previous quarter.

Risks

• The company acknowledges the current economic uncertainty.
• Forward-looking statements are subject to risks, assumptions, estimates, and uncertainties that are difficult to predict.
• Actual results could differ materially from forward-looking statements due to various factors, including the domestic and global economic environment and capital market conditions.

Future Outlook

The press release contains forward-looking statements regarding future events and financial performance, which are subject to various risks and uncertainties.

Management Comments

• 'I'm pleased to report that First Hawaiian Bank started 2025 with a solid quarter,' said Bob Harrison, Chairman, President, and CEO.
• Bob Harrison stated that despite the current economic uncertainty, customers can be confident in the strength of the balance sheet, solid capital position, and deep roots in the community.

Industry Context

This announcement reflects the performance of a regional bank in a period of economic uncertainty, where managing credit quality and maintaining a strong capital position are crucial.

Comparison to Industry Standards

• First Hawaiian's performance can be compared to other regional banks such as Bank of Hawaii Corporation (BOH) and Central Pacific Financial Corp (CPF).
• Key metrics to compare include net interest margin, efficiency ratio, and asset quality ratios.
• The company's capital ratios (Tier 1 leverage, Common Equity Tier 1, and Total Capital) should be assessed against regulatory requirements and peer performance.
• Stock repurchase activity and dividend payout ratios can be compared to industry trends to assess capital allocation strategies.

Stakeholder Impact

• Shareholders will receive a quarterly dividend of $0.26 per share.
• Customers are assured of the bank's stability and reliability.
• Employees are part of a company that is managing expenses and maintaining a solid financial position.

Next Steps

• First Hawaiian will host a conference call to discuss the company's results today at 1:00 p.m. Eastern Time, 7:00 a.m. Hawaii Time.
• Investors can access the live webcast and archive of the conference call at www.fhb.com/earnings.

Key Dates

Keywords

financial results, first hawaiian, dividends, net income, stock repurchase, banking, hawaii