FIRST HAWAIIAN, INC. [FHB] Filings

10-Q 1 fhb-20230930x10q.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, 2023

☐ 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: 127,612,083 shares of Common Stock, par value $0.01 per share, were outstanding as of October 31, 2023.

Table of Contents

TABLE OF CONTENTS

FIRST HAWAIIAN, INC.

FORM 10-Q

INDEX




			Page No.
	Item 1.	Financial Statements (unaudited)		2
		Consolidated Statements of Income for the three and nine months ended September 30, 2023 and 2022		2
		Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2023 and 2022		3
		Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022		4
		Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2023 and 2022		5
		Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022		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		95
	Item 4.	Controls and Procedures		95
Part II Other Information				95
	Item 1.	Legal Proceedings		95
	Item 1A.	Risk Factors		95
	Item 5.	Other Information		95
	Item 6.	Exhibits		96
	Exhibit Index			96
	Signatures			97

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)	2023		2022		2023		2022
Interest income
Loans and lease financing	$	194,098	$	134,646	$	551,777	$	350,294
Available-for-sale investment securities		18,426		19,644		55,208		68,394
Held-to-maturity investment securities		18,271		17,950		55,510		36,239
Other		9,004		4,150		20,054		7,828
Total interest income		239,799		176,390		682,549		462,755
Interest expense
Deposits		74,651		13,653		176,006		20,999
Short-term and long-term borrowings		6,838		1		20,057		1
Other		1,162		—		2,152		—
Total interest expense		82,651		13,654		198,215		21,000
Net interest income		157,148		162,736		484,334		441,755
Provision for credit losses		7,500		3,183		21,300		(1,564)
Net interest income after provision for credit losses		149,648		159,553		463,034		443,319
Noninterest income
Service charges on deposit accounts		7,524		7,089		22,001		21,433
Credit and debit card fees		15,748		17,746		47,507		49,652
Other service charges and fees		9,546		9,179		27,764		27,851
Trust and investment services income		9,742		9,800		28,804		27,442
Bank-owned life insurance		1,872		(341)		10,263		(1,617)
Other		1,665		2,384		6,129		6,613
Total noninterest income		46,097		45,857		142,468		131,374
Noninterest expense
Salaries and employee benefits		55,937		51,372		169,873		149,500
Contracted services and professional fees		16,393		16,625		50,204		52,389
Occupancy		6,711		8,115		22,047		22,859
Equipment		11,826		10,791		32,562		24,522
Regulatory assessment and fees		4,149		2,487		11,661		7,012
Advertising and marketing		2,289		1,902		6,174		5,924
Card rewards program		8,358		8,141		24,124		22,309
Other		13,720		13,899		42,186		42,034
Total noninterest expense		119,383		113,332		358,831		326,549
Income before provision for income taxes		76,362		92,078		246,671		248,144
Provision for income taxes		18,141		23,060		59,190		62,047
Net income	$	58,221	$	69,018	$	187,481	$	186,097
Basic earnings per share	$	0.46	$	0.54	$	1.47	$	1.46
Diluted earnings per share	$	0.46	$	0.54	$	1.47	$	1.45
Basic weighted-average outstanding shares		127,609,860		127,377,713		127,552,255		127,534,746
Diluted weighted-average outstanding shares		127,936,440		127,796,617		127,897,829		127,996,672

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

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FIRST HAWAIIAN, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(dollars in thousands)	2023		2022		2023		2022
Net income	$	58,221	$	69,018	$	187,481	$	186,097
Other comprehensive loss, net of tax:
Net change in investment securities		(36,985)		(84,164)		(10,746)		(531,086)
Net change in cash flow derivative hedges		990		(3,135)		1,269		(5,977)
Other comprehensive loss		(35,995)		(87,299)		(9,477)		(537,063)
Total comprehensive income (loss)	$	22,226	$	(18,281)	$	178,004	$	(350,966)

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)	2023		2022
Assets
Cash and due from banks	$	246,028	$	297,502
Interest-bearing deposits in other banks		967,400		229,122
Investment securities:
Available-for-sale, at fair value (amortized cost: $3,172,031 as of September 30, 2023 and $3,549,599 as of December 31, 2022)		2,722,704		3,151,133
Held-to-maturity, at amortized cost (fair value: $3,433,029 as of September 30, 2023 and $3,814,822 as of December 31, 2022)		4,104,114		4,320,639
Loans and leases		14,332,335		14,092,012
Less: allowance for credit losses		154,795		143,900
Net loans and leases		14,177,540		13,948,112

Premises and equipment, net		277,805		280,355
Other real estate owned and repossessed personal property		—		91
Accrued interest receivable		84,327		78,194
Bank-owned life insurance		477,698		473,067
Goodwill		995,492		995,492
Mortgage servicing rights		5,855		6,562
Other assets		853,561		796,954
Total assets	$	24,912,524	$	24,577,223
Liabilities and Stockholders' Equity
Deposits:
Interest-bearing	$	13,612,493	$	12,824,383
Noninterest-bearing		7,898,996		8,864,646
Total deposits		21,511,489		21,689,029
Short-term borrowings		500,000		75,000
Retirement benefits payable		99,685		102,577
Other liabilities		450,341		441,612
Total liabilities		22,561,515		22,308,218

Commitments and contingent liabilities (Note 12)

Stockholders' equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 141,330,663 / 127,609,934 as of September 30, 2023; issued/outstanding: 140,963,918 / 127,363,327 as of December 31, 2022)		1,413		1,410
Additional paid-in capital		2,545,659		2,538,336
Retained earnings		823,895		736,544
Accumulated other comprehensive loss, net		(648,731)		(639,254)
Treasury stock (13,720,729 shares as of September 30, 2023 and 13,600,591 shares as of December 31, 2022)		(371,227)		(368,031)
Total stockholders' equity		2,351,009		2,269,005
Total liabilities and stockholders' equity	$	24,912,524	$	24,577,223

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, 2023
								Accumulated
				Additional				Other
	Common Stock			Paid-In		Retained		Comprehensive		Treasury
(dollars in thousands, except share amounts)	Shares	Amount		Capital		Earnings		Loss		Stock		Total
Balance as of June 30, 2023	127,608,037	$	1,413	$	2,543,226	$	799,045	$	(612,736)	$	(371,210)	$	2,359,738
Net income	—		—		—		58,221		—		—		58,221
Cash dividends declared ($0.26 per share)	—		—		—		(33,178)		—		—		(33,178)
Equity-based awards	1,897		—		2,433		(193)		—		(17)		2,223
Other comprehensive loss, net of tax	—		—		—		—		(35,995)		—		(35,995)
Balance as of September 30, 2023	127,609,934	$	1,413	$	2,545,659	$	823,895	$	(648,731)	$	(371,227)	$	2,351,009

Nine Months Ended September 30, 2023

Accumulated

Additional

Other

FIRST HAWAIIAN, INC. [FHB] Filings
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10-Q	[2023-08-07]
10-Q	[2023-05-08]
10-K	[2023-02-24]
10-Q	[2022-11-07]
10-Q	[2022-08-08]
10-Q	[2022-05-02]
10-K	[2022-02-25]
10-Q	[2021-11-01]
10-Q	[2021-08-02]
10-Q	[2021-05-04]
10-K	[2021-02-25]
10-Q	[2020-11-02]
10-Q	[2020-08-04]
10-Q	[2020-05-08]
10-K	[2020-02-28]
10-Q	[2019-10-24]
10-Q	[2019-07-29]
10-Q	[2019-04-26]
10-K	[2019-02-28]
10-Q	[2018-10-26]
10-Q	[2018-07-27]
10-Q	[2018-04-27]
10-K	[2018-02-28]
10-Q	[2017-10-27]
10-Q	[2017-08-10]
10-Q	[2017-04-28]
10-K	[2017-03-15]
S-1	[2017-01-24]
10-Q	[2016-11-10]
10-Q	[2016-09-09]
S-1	[2016-07-08]