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 balance sheet remains strong, with CET1 capital ratio at 12.93%, ample liquidity, and well-capitalized status.

• Board declared a $0.26 per share quarterly dividend, and $25 million in share repurchases were completed in Q1 under a $100 million buyback program.

Financial highlights

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

• Total deposits decreased $106.4 million (0.5%) sequentially to $20.2 billion; retail deposits grew while commercial deposits declined.

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

• Allowance for credit losses increased to $166.6 million (1.17% of total loans), with net charge-offs at 0.11% annualized.

• Tangible book value per share was $13.15, and book value per share was $21.07.

Outlook and guidance

• NIM expected to increase to 3.10% in Q2, assuming a June rate cut; full-year guidance for non-interest income, expenses, and loan growth remains unchanged.

• Expense guidance held at $510 million for the year, with tax rate expected at 23%.

• Management expects to maintain strong liquidity, capital, and credit quality, with no material changes in cash requirements or off-balance sheet risks anticipated.

• Focus remains on prudent risk management amid ongoing macroeconomic and capital market uncertainties.