FIRST HAWAIIAN, INC. [FHB] Filings

10-Q 1 fhb-20240930x10q.htm 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-14585

FIRST HAWAIIAN, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware		99-0156159
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

999 Bishop Street, 29th Floor

Honolulu, HI

96813

(Address of Principal Executive Offices)

(Zip Code)

(808) 525-7000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol(s)	Name of each exchange on which registered:
Common Stock, par value $0.01 per share	FHB	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 127,886,167 shares of Common Stock, par value $0.01 per share, were outstanding as of October 31, 2024.

Table of Contents

TABLE OF CONTENTS

FIRST HAWAIIAN, INC.

FORM 10-Q

INDEX




Part I Financial Information			Page No.
	Item 1.	Financial Statements (unaudited)		2
		Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023		2
		Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023		3
		Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023		4
		Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2024 and 2023		5
		Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023		7
		Notes to Consolidated Financial Statements (unaudited)		8
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		53
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk		94
	Item 4.	Controls and Procedures		94
Part II Other Information				94
	Item 1.	Legal Proceedings		94
	Item 1A.	Risk Factors		94
	Item 5.	Other Information		94
	Item 6.	Exhibits		95
	Exhibit Index			95
	Signatures			96

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FIRST HAWAIIAN, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(dollars in thousands, except per share amounts)	2024		2023		2024		2023
Interest income
Loans and lease financing	$	205,682	$	194,098	$	607,594	$	551,777
Available-for-sale investment securities		12,850		18,426		41,539		55,208
Held-to-maturity investment securities		16,937		18,271		52,305		55,510
Other		14,527		9,004		38,444		20,054
Total interest income		249,996		239,799		739,882		682,549
Interest expense
Deposits		87,500		74,651		257,252		176,006
Short-term and long-term borrowings		5,397		6,838		17,303		20,057
Other		392		1,162		1,342		2,152
Total interest expense		93,289		82,651		275,897		198,215
Net interest income		156,707		157,148		463,985		484,334
Provision for credit losses		7,400		7,500		15,500		21,300
Net interest income after provision for credit losses		149,307		149,648		448,485		463,034
Noninterest income
Service charges on deposit accounts		7,783		7,524		23,122		22,001
Credit and debit card fees		17,533		15,748		49,567		47,507
Other service charges and fees		11,790		9,546		32,730		27,764
Trust and investment services income		9,077		9,742		28,857		28,804
Bank-owned life insurance		4,502		1,872		12,148		10,263
Other		2,603		1,665		10,003		6,129
Total noninterest income		53,288		46,097		156,427		142,468
Noninterest expense
Salaries and employee benefits		59,563		55,937		176,562		169,873
Contracted services and professional fees		14,634		16,393		46,440		50,204
Occupancy		6,945		6,711		21,263		22,047
Equipment		13,078		11,826		39,687		32,562
Regulatory assessment and fees		3,412		4,149		15,346		11,661
Advertising and marketing		1,813		2,289		6,190		6,174
Card rewards program		8,678		8,358		25,905		24,124
Other		18,024		13,720		45,653		42,186
Total noninterest expense		126,147		119,383		377,046		358,831
Income before provision for income taxes		76,448		76,362		227,866		246,671
Provision for income taxes		14,956		18,141		50,233		59,190
Net income	$	61,492	$	58,221	$	177,633	$	187,481
Basic earnings per share	$	0.48	$	0.46	$	1.39	$	1.47
Diluted earnings per share	$	0.48	$	0.46	$	1.38	$	1.47
Basic weighted-average outstanding shares		127,886,167		127,609,860		127,820,737		127,552,255
Diluted weighted-average outstanding shares		128,504,035		127,936,440		128,362,433		127,897,829

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

Table of Contents

FIRST HAWAIIAN, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(dollars in thousands)	2024		2023		2024		2023
Net income	$	61,492	$	58,221	$	177,633	$	187,481
Other comprehensive income (loss), net of tax:
Net change in investment securities		66,101		(36,985)		76,452		(10,746)
Net change in cash flow derivative hedges		373		990		1,100		1,269
Other comprehensive income (loss)		66,474		(35,995)		77,552		(9,477)
Total comprehensive income	$	127,966	$	22,226	$	255,185	$	178,004

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

Table of Contents

FIRST HAWAIIAN, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Unaudited)



	September 30,		December 31,
(dollars in thousands, except share amount)	2024		2023
Assets
Cash and due from banks	$	252,209	$	185,015
Interest-bearing deposits in other banks		820,603		1,554,882
Investment securities:
Available-for-sale, at fair value (amortized cost: $2,290,781 as of September 30, 2024 and $2,558,675 as of December 31, 2023)		2,055,959		2,255,336
Held-to-maturity, at amortized cost (fair value: $3,475,143 as of September 30, 2024 and $3,574,856 as of December 31, 2023)		3,853,697		4,041,449
Loans held for sale		—		190
Loans and leases		14,241,370		14,353,497
Less: allowance for credit losses		163,700		156,533
Net loans and leases		14,077,670		14,196,964

Premises and equipment, net		287,036		281,461
Accrued interest receivable		81,875		84,417
Bank-owned life insurance		490,135		479,907
Goodwill		995,492		995,492
Mortgage servicing rights		5,236		5,699
Other assets		860,373		845,662
Total assets	$	23,780,285	$	24,926,474
Liabilities and Stockholders' Equity
Deposits:
Interest-bearing	$	13,427,674	$	13,749,095
Noninterest-bearing		6,800,028		7,583,562
Total deposits		20,227,702		21,332,657
Short-term borrowings		250,000		500,000
Retirement benefits payable		100,448		103,285
Other liabilities		554,101		504,466
Total liabilities		21,132,251		22,440,408

Commitments and contingent liabilities (Note 12)

Stockholders' equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 141,735,601 / 127,886,167 as of September 30, 2024; issued/outstanding: 141,340,539 / 127,618,761 as of December 31, 2023)		1,417		1,413
Additional paid-in capital		2,558,158		2,548,250
Retained earnings		915,062		837,859
Accumulated other comprehensive loss, net		(452,658)		(530,210)
Treasury stock (13,849,434 shares as of September 30, 2024 and 13,721,778 shares as of December 31, 2023)		(373,945)		(371,246)
Total stockholders' equity		2,648,034		2,486,066
Total liabilities and stockholders' equity	$	23,780,285	$	24,926,474

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

Table of Contents

FIRST HAWAIIAN, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


	Three Months Ended September 30, 2024
								Accumulated
				Additional				Other
	Common Stock			Paid-In		Retained		Comprehensive		Treasury
(dollars in thousands, except share amounts)	Shares	Amount		Capital		Earnings		Income (Loss)		Stock		Total
Balance as of June 30, 2024	127,879,012	$	1,417	$	2,554,795	$	887,176	$	(519,132)	$	(373,944)	$	2,550,312
Net income	—		—		—

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