First Hawaiian (FHB) Q4 2024 earnings summary

Executive summary

• Fourth quarter 2024 saw strong performance with growth in loans and deposits, net interest income expansion, excellent credit quality, and well-managed expenses, despite a $26.2 million pre-tax loss on securities sales impacting net income.

• Net income for Q4 2024 was $52.5 million, down from $61.5 million in Q3 2024, with diluted EPS at $0.41.

• Board authorized a new $100 million stock repurchase program for 2025; 1.5 million shares repurchased in Q4, returning $40 million to shareholders.

• Asset quality remained strong with a negative provision for credit losses and low levels of nonperforming assets.

• Declared a $0.26 per share quarterly dividend.

Financial highlights

• Net interest income was $158.8 million, up $2.1 million sequentially; net interest margin expanded to 3.03%.

• Noninterest income was $29.4 million, reflecting a $26.2 million pre-tax loss from securities sales.

• Noninterest expenses were $124.1 million, down $2 million from the prior quarter; efficiency ratio increased to 65.5%.

• Total assets stood at $23.8 billion, with a loan/deposit ratio of 71%.

• Tangible book value per share was $12.83.

Outlook and guidance

• Full-year 2025 loan growth expected in the low to mid-single digits, with origination activity strong but payoffs in CRE and construction portfolios as a headwind.

• NIM projected at 3.06% in Q1 2025, with further expansion possible if no rate cuts occur.

• Noninterest income run rate expected to average $51 million per quarter in 2025.

• Expenses forecasted to rise about 2% to $510 million in 2025.

• Management expects investment portfolio restructuring and positive Q4 trends to enhance future earnings power entering 2025.