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01/11 04:03
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows mixed signals: a slight decline in loans and deposits, but an increase in net interest income and strong NIM. The Q&A highlights concerns about tariffs and economic uncertainty, but also a positive outlook on expenses and credit performance. Share repurchase plans are a positive factor, but the cautious economic outlook and potential risks from tariffs temper enthusiasm. Given the market cap, the stock price is likely to remain stable, resulting in a neutral rating.
Net Interest Income $160,500,000 (up $1.8 million year-over-year); increase due to lower deposit costs and benefits from Q4 investment portfolio restructuring.
Total Loans $14,375,000,000 (down $115,000,000 or 0.8% year-over-year); decline primarily due to commercial real estate loans experiencing scheduled and early payoffs.
Total Deposits $15,000,000,000 (slight decline); retail deposits increased by $105,000,000 while commercial deposits fell by $167,000,000 due to normal fluctuations in larger accounts.
Non Interest Income $50,500,000 (stable year-over-year); no significant nonrecurring items.
Non Interest Expenses $123,600,000 (better than expected); expenses remained well controlled despite seasonal headwinds.
Allowance for Credit Losses $166,600,000 (up $6,200,000); increase reflects a more pessimistic economic forecast.
Classified Assets Decreased by $3,000,000; primarily due to pay downs.
Net Charge Offs $3,800,000; annual year-to-date net charge off rate at 11 basis points.
Non Performing Assets 17 basis points (down 2 basis points from the prior quarter); indicating strong credit performance.
Cost of Deposits Fell by 11 basis points; benefit from Q4 rate cuts fully priced in.
NIM (Net Interest Margin) Increased by 5 basis points to 3.10%; driven by declining deposit costs and investment portfolio restructuring.
Stock Repurchase $25,000,000 spent on repurchasing 974,000 shares; $75,000,000 remaining under the approved 2025 Stock Repurchase Plan.
Visitor Arrivals: Total visitor arrivals were up 1% and spending was up 4.5% compared to 2024 levels.
Retail Deposits: Retail deposits increased by $105,000,000 in the quarter.
Commercial Deposits: Commercial deposits fell by $167,000,000, largely due to normal fluctuations in a few larger accounts.
Net Interest Income: Net interest income was $160,500,000, 1.8 million dollars higher than the prior quarter.
Expenses: Noninterest expenses were $123,600,000, with no significant nonrecurring items.
Share Repurchase: Repurchased about 974,000 shares at a total cost of $25,000,000.
Credit Performance: Maintained strong credit performance with low classified assets and stable credit risk.
Reserve Build: Recorded a $10,500,000 provision for credit losses, increasing the allowance for credit losses to $166,600,000.
Economic Uncertainty: The overall Hawaii economy remains stable, but there is increasing uncertainty due to recent weakness around international rivals and lack of clarity about consumer confidence.
Visitor Arrivals: There is concern regarding the potential impact of tariffs and slowing visitor arrivals on the island economy.
Loan Portfolio Risks: The bank is closely monitoring the commercial real estate (CRE) loan portfolio due to a decline attributed to both scheduled and early payoffs, indicating potential weakness in demand.
Credit Risk: While credit risk remains low, the bank is cautious about the economic forecasting model's pessimistic outlook, leading to an increase in the allowance for credit losses.
Tariff Impact: Potential tariffs could increase costs for construction materials, impacting the construction sector, which is vital for Hawaii's economy.
Consumer Spending: There are concerns about consumer spending due to economic factors, although current performance remains stable.
Regulatory and Economic Factors: The bank is aware of the potential impacts of federal spending cuts and tariffs on the local economy, which could affect various sectors.
Supply Chain Challenges: The bank is monitoring the supply chain dynamics, particularly in relation to the auto dealer floor plan loans, which could be affected by tariffs.
Stock Repurchase: During the first quarter, the bank repurchased about 974,000 shares at a total cost of $25,000,000, with $75,000,000 remaining under the approved 2025 Stock Repurchase Plan.
Loan Growth Outlook: The bank maintains a full-year loan growth guidance of low to mid single digits, subject to economic conditions and uncertainties.
Credit Risk Management: The bank is closely monitoring credit risk, particularly in the consumer and commercial sectors, and has increased reserves due to macroeconomic uncertainties.
Investment in Business: The bank is committed to investing in its business and people, with a focus on projects that can generate returns in the coming years.
Net Interest Margin (NIM) Guidance: The bank anticipates that the NIM in the second quarter will increase a few basis points to 3.10%.
Expense Guidance: The bank reiterated its full-year expense guidance at $510,000,000, despite some slowness in the first quarter.
Tax Rate Guidance: The bank expects a tax rate of 23% for the year.
Allowance for Credit Losses: The bank recorded a $10,500,000 provision in the first quarter, reflecting a more pessimistic economic outlook.
Share Repurchase: During the first quarter, First Hawaiian Bank repurchased about 974,000 shares at a total cost of $25,000,000. There is a remaining authorization of $75,000,000 under the approved 2025 Stock Repurchase Plan.
The earnings call presents a mixed outlook. While strong core deposit growth and optimistic guidance on loan growth and fee income are positive, concerns about substandard loans and management's lack of clarity on M&A and specific financial metrics temper the sentiment. Additionally, the company's strategies to manage deposit costs and NIM amid potential Fed rate cuts show cautious optimism. Given the market cap of $2.6 billion, the stock is likely to experience minimal movement, resulting in a neutral sentiment over the next two weeks.
The earnings call presents a mixed picture. Basic financial performance shows stable but unremarkable growth, with some concerns about tariffs and loan yields. Product development and market strategies seem steady but lack strong catalysts. The Q&A reveals uncertainties in long-term growth and competition, while financial health appears stable with some credit risk concerns. Shareholder returns are positive with planned repurchases. Overall, the sentiment is neutral, with no strong positive or negative drivers evident, and the market cap suggests a moderate reaction.
The earnings call presents a mixed picture: EPS increased slightly, but loan growth is uncertain and there's a decline in commercial deposits. The increase in credit loss allowance due to a pessimistic economic forecast and competitive pressures are concerns. However, the stable noninterest income and expenses, along with a robust share repurchase program, provide some positive aspects. The Q&A revealed uncertainties in loan growth and economic conditions, further supporting a neutral sentiment. Given the mid-cap status, the stock is likely to remain stable, with limited short-term movement.
The earnings call shows mixed signals: a slight decline in loans and deposits, but an increase in net interest income and strong NIM. The Q&A highlights concerns about tariffs and economic uncertainty, but also a positive outlook on expenses and credit performance. Share repurchase plans are a positive factor, but the cautious economic outlook and potential risks from tariffs temper enthusiasm. Given the market cap, the stock price is likely to remain stable, resulting in a neutral rating.
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