First Hawaiian(US:FHB)2025-11-03 21:34Financial Performance - Interest income for Q3 2025 was $242,575,000, a decrease of 2.4% from $249,996,000 in Q3 2024[246] - Net interest income increased to $169,331,000 in Q3 2025, up 8.3% from $156,707,000 in Q3 2024[246] - Net income for Q3 2025 was $73,840,000, representing a 20.1% increase from $61,492,000 in Q3 2024[246] - Basic earnings per share rose to $0.59 in Q3 2025, compared to $0.48 in Q3 2024, marking a 22.9% increase[246] - The dividend payout ratio decreased to 44.07% in Q3 2025 from 54.17% in Q3 2024[246] - Net income for the three months ended September 30, 2025, was $73.8 million, an increase of 20% compared to the same period in 2024[249] - Basic and diluted earnings per share for the three months ended September 30, 2025, were both $0.59, reflecting a 23% increase from the same period in 2024[249] Interest Income and Margin - The net interest margin improved to 3.19% in Q3 2025, up from 2.95% in Q3 2024[246] - Net interest income for the three months ended September 30, 2025, was $169.3 million, an increase of 8% compared to the same period in 2024[252] - The net interest margin for the same period was 3.19%, an increase of 24 basis points from the prior year[266] - For the nine months ended September 30, 2025, net interest income was $496.5 million, an increase of $28.4 million or 6% compared to the same period in 2024[275] - The net interest margin for the nine months ended September 30, 2025, was 3.13%, an increase of 20 basis points from the prior year[275] Asset Quality and Credit Losses - The provision for credit losses for the three months ended September 30, 2025, was $4.5 million, a decrease of 39% compared to the same period in 2024[252] - Provision for credit losses was $4.5 million for Q3 2025, down from $7.4 million in Q3 2024, primarily due to decreases in consumer loans and home equity lines[279] - The allowance for credit losses (ACL) was $165.3 million as of September 30, 2025, representing 1.17% of total outstanding loans and leases[279] - Total Non-Performing Assets (NPAs) increased to $30.9 million as of September 30, 2025, up by $10.3 million or 50% from December 31, 2024[364] - The ratio of NPAs to total loans and leases and Other Real Estate Owned (OREO) was 0.22% as of September 30, 2025, compared to 0.14% as of December 31, 2024[364] Deposits and Loans - Total deposits increased by $407.3 million or 2% to $20.7 billion as of September 30, 2025, compared to December 31, 2024[259] - Total loans and leases decreased by $278.9 million or 2% to $14.1 billion as of September 30, 2025, from December 31, 2024[255] - Public deposits rose by $527.3 million or 69% to $1.3 billion as of September 30, 2025, compared to December 31, 2024[386] Equity and Capital Ratios - Common Equity Tier 1 Capital Ratio was 13.24% as of September 30, 2025, an increase of 44 basis points from December 31, 2024[254] - Total stockholders' equity increased by $116.4 million or 4% to $2.7 billion as of September 30, 2025, primarily due to earnings of $206.3 million[259] - The Company's total capital ratio was 14.49% as of September 30, 2025, compared to 13.99% as of December 31, 2024[399] Operational Efficiency - The efficiency ratio improved to 55.29% in Q3 2025 from 59.77% in Q3 2024[246] - Total noninterest expense for Q3 2025 was $125.7 million, a slight decrease of $0.4 million compared to Q3 2024[290] - Salaries and employee benefits expense increased by 3% to $61.5 million for Q3 2025, driven by higher incentive compensation[292] Market and Economic Conditions - The statewide seasonally adjusted unemployment rate in Hawaii was 2.7% as of August 31, 2025, lower than the national rate of 4.3%[240] - The median price of a single-family home sold on Oahu was $1,145,000 in the first nine months of 2025, a 4.1% increase from the same period in 2024[242] Interest Rate Risk Management - The estimated percentage change in net interest income for a +200 basis point immediate change in interest rates is projected to be 6.4% for the 12 months following September 30, 2025[418] - The objective of the interest rate risk management process is to maximize net interest income while maintaining adequate levels of funding and liquidity[425] - The Asset and Liability Management Committee (ALCO) oversees strategies to neutralize interest rate risk and ensure compliance with management policies[426]