First Hawaiian (FHB) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $59.2 million, or $0.47 per diluted share, up from $52.5 million in the prior quarter and up 9% year-over-year.

• Net interest income rose to $160.5 million, up $1.8 million sequentially and 4% year-over-year, driven by lower deposit costs and investment portfolio restructuring.

• Net interest margin improved by 5 bps sequentially to 3.08%, and efficiency ratio improved to 58.2% from 65.5%.

• The company maintained strong capital levels, with CET1 ratio at 12.93% and a well-capitalized balance sheet.

• Board declared a $0.26 per share quarterly dividend, and repurchased 974,000 shares for $25 million under the $100 million buyback program.

Financial highlights

• Total loans and leases declined by $115.2 million (0.8%) from the prior quarter to $14.3 billion, mainly due to commercial real estate payoffs.

• Total deposits decreased $106.4 million (0.5%) sequentially to $20.2 billion.

• Noninterest income was $50.5 million, and noninterest expense was $123.6 million, with efficiency ratio improving to 58.2%.

• Cost of deposits decreased to 1.43%, and spot deposit cost at quarter-end was 1.41%.

• Declared a $0.26 per share dividend, consistent with the prior quarter.

Outlook and guidance

• Management expects to maintain strong liquidity, capital, and credit quality, with continued focus on prudent risk management.

• NIM is expected to increase a few basis points to 3.10% in Q2, with guidance inclusive of a forecasted rate cut.

• Full-year expense guidance remains at $510 million, with expenses expected to ramp up over the year.

• Loan growth guidance for the full year remains at low to mid-single digits, subject to economic conditions.

• No material changes in cash requirements or off-balance sheet risks are expected in the next 12 months.