First Hawaiian Beats Q3 Earnings Expectations

First Hawaiian, Inc. (FHB) reported stronger-than-expected Q3 earnings, topping analysts’ estimates, driven by robust growth in deposits and all-time-high total assets that surpassed the $25 billion mark for the first time ever.

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Markedly, shares of the Hawaii-based bank holding company have gained 68% over the past year. (See FHB stock charts on TipRanks)

Adjusted earnings of $0.51 per share beat analysts’ expectations of $0.48 per share. The company reported earnings of $0.50 per share in the prior-year period.

Notably, total deposits surged 17% to $22.1 billion. Furthermore, total assets jumped to $25.5 billion as of September 30, 2021, compared to $22.3 billion a year ago. However, the company reported gross loans and leases of $12.8 billion, down 5.2% year-over-year.

First Hawaiian CEO Bob Harrison commented, “We had good growth in deposit balances, credit quality remained excellent, and we are seeing an increase in loan activity.”

Net interest income came in at $132.6 million, down 1.5% year-over-year, while non-interest income grew 2.5% to $50.1 million. The net interest margin was 2.36% in the quarter, down 10 bps sequentially, and 64 bps from the year-ago period.

The provision for credit losses was a benefit of $4 million in the quarter, while non-interest expenses were up 10.3% to $101 million compared to the prior-year quarter.

Following the quarterly results, Compass Point analyst Laurie Havener increased the price target on First Hawaiian to $32 (4.6% upside potential) from $31.00 and reiterated a Buy rating.

Consensus among analysts is a Hold based on 1 Buy, 2 Holds, and 1 Sell. The average First Hawaiian price target of $30.67 implies 3.5% upside potential from current levels.

FHB scores a 5 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market expectations.