First Hawaiian(US:FHB)2026-01-30 19:02Financial Data and Key Metrics Changes - The company reported a return on average tangible equity of 15.8% for Q4 and 16.3% for the full year, with an effective tax rate of 24.8% in Q4, expected to normalize to 23.2% going forward [7][17] - Net interest income for Q4 was $170.3 million, a $1 million increase from the prior quarter, with a net interest margin (NIM) of 3.21%, up 2 basis points from the previous quarter [12][7] - Total loans grew by $183 million in the quarter, representing a 5.2% annualized growth rate [10] Business Line Data and Key Metrics Changes - Retail and commercial deposits increased by $233 million, while public deposits declined by $447 million, resulting in a net increase of $214 million in deposits for Q4 [11] - Non-interest income was reported at $55.6 million, while non-interest expense for Q4 was $125.1 million [13] Market Data and Key Metrics Changes - The unemployment rate in the state was 2.2% in November, significantly lower than the national rate of 4.5% [6] - Year-to-date spending through November was $19.6 billion, up about 6% compared to the same period last year [6] Company Strategy and Development Direction - The company anticipates full-year loan growth in the range of 3%-4%, primarily driven by commercial real estate (CRE) and commercial and industrial (C&I) loans [17] - The company has a new stock repurchase authorization of $250 million, indicating a strong capital position and flexibility for future growth initiatives [9][60] Management's Comments on Operating Environment and Future Outlook - Management noted that credit risk remains low and stable, with no broad signs of weakness observed in consumer or commercial books [14] - The company expects non-interest income to remain stable at approximately $220 million for the year, with expenses projected to be around $520 million in 2026 [17][54] Other Important Information - The company repurchased about 1 million shares during the quarter, utilizing the remaining $26 million of its $100 million purchase authorization for 2025 [9] - The allowance for credit losses increased to $168.5 million, with coverage rising to 118 basis points of total loans and leases [16] Q&A Session Summary Question: Loan growth trends and pipeline - Management indicated that loan growth was broad-based, with some payoffs in the CRE portfolio affecting expectations, but they anticipate more normalized growth in the second half of the year [24][25] Question: Payoffs and paydowns in the industry - Management noted that payoffs have been occurring sooner than expected due to increased competition from permanent lenders, but they expect this trend to normalize [26][28] Question: Deposit trends and NIM expansion - Management confirmed that the margin guide reflects the ability to continue cutting deposit rates, with expectations of a lower deposit beta going forward [30][31] Question: Full year loan growth guidance - Management suggested that loan growth may start lower in the first half of the year but expects a pickup in the second half [44] Question: M&A activity and ideal targets - Management reiterated their focus on organic growth but remains open to M&A opportunities, looking for well-managed firms with strong deposit franchises [72][73]