First Hawaiian Reports Mixed Q3 Results with 6% Net Income Increase, Decline in Total Revenue

First Hawaiian, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, showing a mixed performance compared to the previous fiscal period. The company achieved a net income of $61.5 million for the three months ended September 30, 2024, reflecting a 6% increase from $58.2 million in the same period of 2023. For the nine months, net income decreased to $177.6 million from $187.5 million year-over-year, marking a 5% decline. Basic and diluted earnings per share for the third quarter rose to $0.48, up from $0.46 in 2023, while for the nine months, it fell to $1.39 from $1.47.

Total revenue for the third quarter was $210.0 million, an increase from $203.2 million in the prior year, driven by a 16% rise in noninterest income to $53.3 million. However, net interest income slightly decreased to $156.7 million, down from $157.1 million. The net interest margin improved to 2.95%, up nine basis points from the previous year. For the nine months, total revenue was $620.4 million, a slight decrease from $626.8 million in 2023.

The company’s total assets as of September 30, 2024, were $23.8 billion, down from $24.9 billion at the end of 2023. Total deposits decreased by 5% to $20.2 billion, primarily due to declines in demand and savings deposits, partially offset by an increase in money market deposits. The total loans and leases portfolio also saw a nominal decrease of 1% to $14.2 billion, attributed to declines in residential real estate and consumer loans, although construction loans increased by 17%.

First Hawaiian's capital position remained strong, with a Common Equity Tier 1 (CET1) capital ratio of 13.03%, up from 12.39% at the end of 2023. Total stockholders' equity increased by 7% to $2.6 billion, supported by earnings and other comprehensive income, despite dividend payments totaling $99.7 million during the nine months.

The company continues to manage its credit risk effectively, with an Allowance for Credit Losses (ACL) of $163.7 million, representing 1.15% of total loans and leases, an increase from 1.09% at the end of 2023. Net charge-offs for the three months ended September 30, 2024, were $3.9 million, compared to net recoveries in the same period last year.

Strategically, First Hawaiian is focused on maintaining its capital strength and managing interest rate risks, with ongoing adjustments to its investment portfolio and lending practices in response to market conditions. The company has also announced a stock repurchase program of up to $40 million, although no repurchases have been made as of the reporting date.