First Hawaiian Posts Strong Q3 Earnings, Net Income Jumps 20%

Ticker: FHB · Form: 10-Q · Filed: Nov 3, 2025 · CIK: 36377

Sentiment: bullish

Topics: Regional Banking, Hawaii Market, Net Interest Income, Earnings Growth, Credit Quality, Shareholder Returns, Financial Performance

Related Tickers: FHB

TL;DR

**FHB's Q3 net income surge proves their interest expense control is paying off, making it a solid buy in a tough market.**

AI Summary

FIRST HAWAIIAN, INC. (FHB) reported a significant increase in net income for both the three and nine months ended September 30, 2025. Net income for the three-month period rose by 20.08% to $73.84 million from $61.49 million in the prior year, while the nine-month net income increased by 16.16% to $206.34 million from $177.63 million. This growth was primarily driven by a 8.06% increase in net interest income for the three months, reaching $169.33 million, and a 6.35% increase for the nine months, totaling $493.44 million. Total interest income saw a slight decrease, falling 2.97% to $242.58 million for the quarter and 3.44% to $714.46 million for the nine months, largely due to a decline in interest from loans and lease financing. However, interest expense decreased more substantially, dropping 21.50% to $73.24 million for the quarter and 19.90% to $221.02 million for the nine months, primarily from lower deposit interest. The provision for credit losses increased to $4.50 million for the quarter and $19.50 million for the nine months, up from $7.40 million and $15.50 million respectively in the prior year, indicating a more conservative lending outlook. Total noninterest income grew by 7.08% to $57.06 million for the quarter, boosted by higher service charges on deposit accounts and bank-owned life insurance income. Total noninterest expense remained relatively stable, decreasing slightly by 0.32% to $125.74 million for the quarter and 0.74% to $374.24 million for the nine months.

Why It Matters

FHB's robust net income growth, driven by effective interest expense management, signals strong operational efficiency and profitability in a challenging rate environment. For investors, this indicates a resilient business model capable of delivering shareholder value, as evidenced by the increased basic earnings per share to $0.59 for the quarter. Employees benefit from a stable and growing company, while customers can expect continued reliable banking services from a financially sound institution. In the competitive Hawaiian banking market, FHB's performance positions it favorably against regional rivals, demonstrating its ability to adapt and thrive amidst economic shifts.

Risk Assessment

Risk Level: medium — The provision for credit losses increased to $19.50 million for the nine months ended September 30, 2025, up from $15.50 million in the prior year, suggesting a potential increase in loan defaults or a more cautious lending environment. Additionally, while total interest income decreased by 3.44% for the nine months, primarily from loans and lease financing, this could indicate headwinds in loan demand or pricing power.

Analyst Insight

Investors should consider FHB's strong net income growth and effective interest expense management as positive indicators. The increased provision for credit losses warrants monitoring, but the overall financial health suggests a stable investment. Consider holding or initiating a position, especially given the consistent dividend payouts and share repurchase activity.

Financial Highlights

revenue
$223.17M
net Income
$73.84M
eps
$0.59
revenue Growth
+3.55%

Revenue Breakdown

SegmentRevenueGrowth
Net Interest Income$169.33M+8.06%
Noninterest Income$57.06M+7.08%
Interest Income - Loans and lease financing$196.44M-4.49%
Interest Expense - Deposits$70.85M-18.46%
Interest Expense - Short-term borrowings$2.20M-59.34%

Key Numbers

Key Players & Entities

FAQ

What were FIRST HAWAIIAN, INC.'s net income figures for Q3 2025?

FIRST HAWAIIAN, INC. reported net income of $73.84 million for the three months ended September 30, 2025, a 20.08% increase from $61.49 million in the same period last year.

How did FIRST HAWAIIAN, INC.'s net interest income change in Q3 2025?

Net interest income for FIRST HAWAIIAN, INC. increased by 8.06% to $169.33 million for the three months ended September 30, 2025, compared to $156.71 million in the prior year.

What was the provision for credit losses for FIRST HAWAIIAN, INC. in the first nine months of 2025?

The provision for credit losses for FIRST HAWAIIAN, INC. was $19.50 million for the nine months ended September 30, 2025, an increase from $15.50 million in the same period of 2024.

What were the basic earnings per share for FIRST HAWAIIAN, INC. in Q3 2025?

FIRST HAWAIIAN, INC.'s basic earnings per share for the three months ended September 30, 2025, were $0.59, up from $0.48 in the corresponding period of 2024.

How many shares of common stock were outstanding for FIRST HAWAIIAN, INC. as of September 30, 2025?

As of September 30, 2025, FIRST HAWAIIAN, INC. had 123,719,585 shares of common stock outstanding, reflecting a decrease from 126,422,898 shares as of December 31, 2024, due to share repurchases.

What is the impact of the new FASB ASU No. 2024-03 on FIRST HAWAIIAN, INC.?

ASU No. 2024-03, effective for annual reporting periods beginning after December 15, 2026, requires FIRST HAWAIIAN, INC. to disclose disaggregated expense information. The company is currently evaluating its impact on consolidated financial statements.

Did FIRST HAWAIIAN, INC. repurchase any common stock in the nine months ended September 30, 2025?

Yes, FIRST HAWAIIAN, INC. repurchased common stock totaling $74.04 million in the nine months ended September 30, 2025, contributing to a reduction in outstanding shares.

What was the trend in total interest income for FIRST HAWAIIAN, INC. in Q3 2025?

Total interest income for FIRST HAWAIIAN, INC. decreased by 2.97% to $242.58 million for the three months ended September 30, 2025, primarily due to lower interest from loans and lease financing.

How did noninterest expense change for FIRST HAWAIIAN, INC. in Q3 2025?

Total noninterest expense for FIRST HAWAIIAN, INC. slightly decreased by 0.32% to $125.74 million for the three months ended September 30, 2025, compared to $126.15 million in the prior year.

What is the primary business of FIRST HAWAIIAN, INC.?

FIRST HAWAIIAN, INC. is a bank holding company that owns First Hawaiian Bank, which offers a comprehensive suite of banking services including loans, deposit products, wealth management, and credit card services to consumer and commercial customers.

Risk Factors

Industry Context

First Hawaiian, Inc. operates within the highly competitive US regional banking sector, particularly focused on Hawaii and Guam. The industry is characterized by evolving customer preferences towards digital banking, increasing regulatory scrutiny, and sensitivity to interest rate movements. Competition comes from both large national banks and smaller community institutions, with a constant need to balance deposit gathering, loan origination, and fee-based income generation.

Regulatory Implications

As a bank holding company, FHB is subject to stringent regulations from various bodies including the Federal Reserve, FDIC, and state banking authorities. Changes in capital requirements, lending standards, or consumer protection laws can significantly impact operations and profitability. The provision for credit losses also reflects an anticipation of potential regulatory shifts or economic conditions that could affect loan performance.

What Investors Should Do

  1. Monitor Net Interest Margin Trends
  2. Analyze Growth Drivers of Noninterest Income
  3. Evaluate Provision for Credit Losses
  4. Assess Expense Management Effectiveness

Glossary

Net Interest Income
The difference between interest income generated by a bank and the interest paid out to its depositors and lenders. (A primary driver of profitability for banks, reflecting the spread earned on their lending and borrowing activities.)
Provision for Credit Losses
An expense set aside by a financial institution to cover potential losses from loans that may default. (Indicates management's assessment of the risk within the loan portfolio and potential future charge-offs.)
Noninterest Income
Revenue generated by a bank from sources other than traditional interest income, such as fees, service charges, and trading gains. (Diversifies revenue streams and can be a significant contributor to overall profitability, especially in a stable or declining interest rate environment.)
Noninterest Expense
Operating expenses of a bank that are not related to interest payments, including salaries, rent, and technology costs. (Represents the cost of doing business and is a key factor in determining a bank's efficiency ratio and overall profitability.)
Basic Earnings Per Share (EPS)
The portion of a company's profit allocated to each outstanding share of common stock, calculated by dividing net income by the weighted-average number of common shares outstanding. (A key profitability metric for investors, indicating how much profit is generated per share of ownership.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, First Hawaiian, Inc. has demonstrated robust net income growth, with a 20.08% increase for the three months and 16.16% for the nine months ended September 30, 2025. This was primarily driven by a significant reduction in interest expense, particularly on deposits, which more than offset a slight decline in total interest income. While noninterest income saw a healthy increase of 7.08%, the provision for credit losses saw a year-over-year increase for the nine-month period, suggesting a more conservative stance on credit risk. Total noninterest expenses remained largely stable, indicating effective cost control.

Filing Stats: 4,323 words · 17 min read · ~14 pages · Grade level 18.3 · Accepted 2025-11-03 16:34:35

Key Financial Figures

Filing Documents

Financial Information

Part I Financial Information Page No. Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited) 2 Consolidated Statements of Income for the three and nine months ended September 30, 2025 and 2024 2 Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2025 and 2024 3 Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 4 Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2025 and 2024 5 Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 7

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 55 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 96 Item 4.

Controls and Procedures

Controls and Procedures 96

Other Information

Part II Other Information 96 Item 1.

Legal Proceedings

Legal Proceedings 96 Item 1A.

Risk Factors

Risk Factors 96 Item 5. Other Information 97 Item 6. Exhibits 98 Exhibit Index 98

Signatures

Signatures 99 1 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

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) 2025 2024 2025 2024 Interest income Loans and lease financing $ 196,441 $ 205,682 $ 581,936 $ 607,594 Available-for-sale investment securities 13,470 12,850 39,089 41,539 Held-to-maturity investment securities 15,920 16,937 48,866 52,305 Other 16,744 14,527 44,573 38,444 Total interest income 242,575 249,996 714,464 739,882 Interest expense Deposits 70,851 87,500 212,849 257,252 Short-term borrowings 2,195 5,397 7,421 17,303 Other 198 392 754 1,342 Total interest expense 73,244 93,289 221,024 275,897 Net interest income 169,331 156,707 493,440 463,985 Provision for credit losses 4,500 7,400 19,500 15,500 Net interest income after provision for credit losses 164,831 149,307 473,940 448,485 Noninterest income Service charges on deposit accounts 8,096 7,783 23,461 23,122 Credit and debit card fees 15,850 17,533 46,237 49,567 Other service charges and fees 13,807 11,790 39,324 32,730 Trust and investment services income 9,212 9,077 27,736 28,857 Bank-owned life insurance 6,314 4,502 15,409 12,148 Investment securities gains, net — — 37 — Other 3,781 2,603 9,291 10,003 Total noninterest income 57,060 53,288 161,495 156,427 Noninterest expense Salaries and employee benefits 61,533 59,563 181,138 176,562 Contracted services and professional fees 15,785 14,634 46,621 46,440 Occupancy 7,098 6,945 23,132 21,263 Equipment 13,834 13,078 41,742 39,687 Regulatory assessment and fees 3,294 3,412 10,876 15,346 Advertising and marketing 2,033 1,813 6,247 6,190 Card rewards program 8,694 8,678 2

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Organization and Basis of Presentation First Hawaiian, Inc. ("FHI" or the "Parent"), a bank holding company, owns 100 % of the outstanding common stock of First Hawaiian Bank ("FHB" or the "Bank"), its only direct, wholly owned subsidiary. FHB offers a comprehensive suite of banking services to consumer and commercial customers, including loans, deposit products, wealth management, insurance, trust, retirement planning, credit card and merchant processing services. The accompanying unaudited interim consolidated financial statements of First Hawaiian, Inc. and Subsidiary (the "Company") have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The accompanying unaudited interim consolidated financial statements and notes thereto should be read in conjunction with the Company's audited consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair presentation of the interim period consolidated financial information, have been made. Results of operations for interim periods are not necessarily indicative of results to be expected for the entire year. Intercompany account balances and transactions have been eliminated in consolidation. Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the repo

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