First Hawaiian (FHB) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $61.5 million, or $0.48 per diluted share, flat sequentially and up 6% year-over-year, with EPS up 4% from Q3 2023.

• Return on average total assets was 1.02%, and return on average equity was 9.45% for Q3 2024.

• Net interest income rose to $156.7 million, up $3.9 million sequentially, and noninterest income increased by $1.5 million to $53.3 million.

• Credit quality remained strong, with a $7.4 million provision expense and low nonperforming asset levels.

• The Board declared a quarterly dividend of $0.26 per share, payable November 29, 2024.

Financial highlights

• Net interest margin improved to 2.95%, up 3 basis points sequentially.

• Noninterest income rose 16% year-over-year to $53.3 million, driven by higher BOLI income, service charges, and card fees.

• Noninterest expense increased to $126.1 million, with an efficiency ratio of 59.8%.

• Total loans and leases decreased by $118.5 million, mainly due to unexpected payoffs; total deposits fell by $91.1 million to $20.2 billion.

• Allowance for credit losses was $163.7 million, or 1.15% of total loans and leases.

Outlook and guidance

• Full-year expenses expected to be around $500 million.

• Net interest margin projected to decline modestly in Q4, settling near 2.9%.

• Loan growth for the full year anticipated to be flat due to Q3 payoffs, but Q4 pipeline remains strong.

• Management expects continued resilience in Hawaii's economy but notes uncertainty from Maui wildfires and broader macroeconomic factors.

• Share repurchases to resume in Q4, with $40 million authorization for 2024.