First Hawaiian(US:FHB)2025-02-28 21:10Employee and Diversity - As of December 31, 2024, the company had over 2,000 employees with an average tenure of 11.8 years[20] - The board of directors includes 40% women and 70% ethnically diverse individuals, with 62% of employees being women and 87% of the workforce being ethnically diverse[25] - The company recognizes the importance of employee engagement and development to meet evolving corporate and customer needs[21] - The company offers 12 leadership development programs and over 20,000 professional development courses through its Online Learning Center[23] Regulatory Environment - The company is subject to extensive regulation under federal and state banking laws, impacting its growth potential and financial performance[32] - The company must obtain prior approval from the Federal Reserve for acquisitions that would result in owning 5% or more of any class of voting shares of a bank[46] - The company controls more than 30% of the total deposits in the Hawaii market, limiting its ability to acquire additional banks in Hawaii[47] - The company is a Federal Deposit Insurance Corporation (FDIC) insured bank chartered under Hawaii law and is not a member of the Federal Reserve System[37] - FHI is required to maintain a capital conservation buffer of 2.5% of CET1, effectively resulting in minimum ratios of 7% CET1 to risk-weighted assets[59] - FHI is subject to regulatory oversight by the Federal Reserve regarding its dividend policies and share repurchases[51] - The FDIA mandates that a bank must not pay dividends if it would cause the institution to become undercapitalized[64] - The Bank must maintain a minimum paid-in common stock and additional paid-in capital of $6.5 million to pay dividends under Hawaii law[50] - The FDIA prohibits an IDI from accepting brokered deposits unless it is well capitalized or adequately capitalized with a waiver from the FDIC[69] Financial Performance - Total noninterest income for the year ended December 31, 2024, was $185.8 million, a decrease of $15.0 million or 7% compared to 2023[295] - Service charges on deposit accounts increased to $31.1 million for the year ended December 31, 2024, up $1.4 million or 5% from 2023[296] - Credit and debit card fees reached $64.4 million for the year ended December 31, 2024, an increase of $0.5 million or 1% compared to 2023[297] - Other service charges and fees were $45.9 million for the year ended December 31, 2024, an increase of $8.6 million or 23% from 2023[298] - Trust and investment services income was $38.3 million for the year ended December 31, 2024, a slight decrease compared to 2023[299] - Total noninterest expense for the year ended December 31, 2024, was $501.2 million, an increase of $0.1 million compared to 2023, while it increased by $60.7 million or 14% compared to 2022[306] - Net income for the Retail Banking segment was $238.4 million for the year ended December 31, 2024, an increase of $55.4 million or 30% compared to 2023, primarily due to a $48.7 million increase in net interest income[319] - Total net income for the company was $230.1 million for the year ended December 31, 2024, a decrease from $234.9 million in 2023[317] Capital Ratios - FHI's CET1 capital ratio and Tier 1 capital ratio were each 12.80% as of December 31, 2024, exceeding the minimum requirements[67] - The total capital ratio for FHI was 13.99% as of December 31, 2024, which is above the required minimum of 10%[67] - Under the Capital Rules, the minimum capital ratios include 4.5% CET1, 6.0% Tier 1 capital, and 8.0% total capital to risk-weighted assets[61] Loans and Leases - Total loans and leases were $14.4 billion as of December 31, 2024, an increase of $54.8 million or less than 1% from December 31, 2023[361] - Commercial and industrial loans increased by $82.1 million or 4% to $2.2 billion as of December 31, 2024[363] - Commercial real estate loans increased by $123.7 million or 3% to $4.5 billion as of December 31, 2024[364] - The total residential loan portfolio was $5.3 billion, with residential mortgages making up a significant portion at $4.2 billion[375] - The company evaluates loans for impairment and non-accrual status, with loans on non-accrual status generally classified as impaired[378] Non-Performing Assets - Total Non-Performing Assets (NPAs) increased to $20.7 million as of December 31, 2024, up by $2.1 million or 11% from $18.6 million in 2023[383] - The ratio of NPAs to total loans and leases and Other Real Estate Owned (OREO) was 0.14% as of December 31, 2024, an increase of one basis point from 0.13% in 2023[383] - Residential mortgage non-accrual loans rose to $12.8 million, a significant increase of $5.1 million or 68% from $7.6 million in 2023[384] Deposits - Total deposits decreased by $1.0 billion or 5% to $20.3 billion as of December 31, 2024, primarily due to a $747.6 million decrease in public time deposit balances[399] - The amount of deposits exceeding FDIC insurance limits was estimated to be $9.9 billion or 49% of total deposits as of December 31, 2024, compared to $10.8 billion or 51% in 2023[401] Investment Securities - The carrying value of the investment securities portfolio was $5.7 billion as of December 31, 2024, a decrease of $579.6 million or 9% compared to December 31, 2023[352] - The total available-for-sale securities decreased from $2,255.3 million in 2023 to $1,926.5 million in 2024[349] - The total held-to-maturity securities decreased from $4,041.4 million in 2023 to $3,790.7 million in 2024[349] Other Financial Metrics - The company charged off $22.0 million in loans and leases in 2024, compared to $23.5 million in 2023, with net charge-offs of $13.6 million[390] - The allowance for credit losses (ACL) was considered adequate as of December 31, 2024, based on ongoing analysis of expected credit losses and economic outlook[393] - Goodwill remained unchanged at $995.5 million as of December 31, 2024, with no impairment identified for the year[395]