First Hawaiian, Inc. (FHB): history, ownership, mission, how it works & makes money

A Brief History of First Hawaiian, Inc.

First Hawaiian, Inc. (FHB) has established itself as a significant player in the banking sector of Hawaii and the Pacific region. Founded in 1858, it is the oldest bank in Hawaii and has a rich history of serving the local community and evolving with the financial landscape.

Recent Financial Performance

As of June 30, 2024, First Hawaiian reported a net income of $116.1 million for the six months ended June 30, 2024, a decrease of 10% compared to $129.3 million for the same period in 2023. Basic and diluted earnings per share were both $0.91, down from $1.01 in 2023.

Key Financial Metrics

Loan and Lease Portfolio

As of June 30, 2024, First Hawaiian's total loans and leases amounted to $14.4 billion, reflecting a slight increase of less than 1% from $14.39 billion at the end of 2023. The allowance for credit losses (ACL) was reported at $160.5 million, which is 1.12% of total loans and leases outstanding.

Deposits and Funding

Total deposits for First Hawaiian reached $20.3 billion as of June 30, 2024, reflecting a decrease of 5% from $21.3 billion at the end of 2023. The decrease was attributed to a decline in demand and savings deposit balances.

The bank's total stockholders' equity was recorded at $2.6 billion, an increase of 3% from $2.54 billion at December 31, 2023, primarily due to earnings for the period and net unrealized gains in the investment securities portfolio.

In conclusion, First Hawaiian, Inc. continues to navigate a challenging economic environment while maintaining a solid financial foundation and a commitment to serving its community.

A Who Owns First Hawaiian, Inc. (FHB)

Major Shareholders

As of June 30, 2024, the following table summarizes the major shareholders of First Hawaiian, Inc.:

Stock Performance

First Hawaiian, Inc. (FHB) has shown a robust stock performance in 2024. The stock price as of June 30, 2024, was $19.94, reflecting a year-to-date increase of 8.5% from the beginning of the year. The company has a market capitalization of approximately $2.55 billion as of the same date.

Dividends and Earnings

First Hawaiian, Inc. declared a cash dividend of $0.52 per share for the first half of 2024, resulting in total dividend payments of $66.4 million. The earnings per share (EPS) for the first six months of 2024 was reported at $0.91, down from $1.01 in the same period of 2023.

Financial Overview

The financial position of First Hawaiian, Inc. as of June 30, 2024, is as follows:

Ownership Structure

The ownership structure of First Hawaiian, Inc. is predominantly held by institutional investors, accounting for 52.5% of the total shares. Retail investors make up the remaining 47.5% of ownership. The company maintains a strong capital position with a Common Equity Tier 1 (CET1) capital ratio of 12.73% as of June 30, 2024.

Regulatory Compliance

First Hawaiian, Inc. is subject to various regulatory capital requirements imposed by federal banking agencies. The company successfully meets these requirements, maintaining sufficient capital buffers to support its operations and growth plans.

First Hawaiian, Inc. (FHB) Mission Statement

First Hawaiian, Inc. (FHB) articulates its mission as a commitment to providing exceptional financial services tailored to meet the diverse needs of its customers, while enhancing shareholder value through sustainable growth and community engagement.

Core Values

• Customer Satisfaction: Prioritizing customer needs in all services and products offered.
• Integrity: Conducting business with transparency and ethical practices.
• Community Commitment: Supporting the communities served through various initiatives and programs.
• Employee Engagement: Fostering a positive work environment that encourages growth and development.
• Innovation: Continuously improving products and services through technological advancements.

Financial Performance Overview

As of June 30, 2024, First Hawaiian, Inc. reported the following key financial metrics:

Strategic Goals

• Enhance Customer Experience: Invest in technology to streamline services and improve customer interactions.
• Expand Market Presence: Seek opportunities for growth in existing and new markets.
• Promote Financial Literacy: Offer resources and workshops to educate customers about financial management.
• Strengthen Risk Management: Continuously improve risk assessment and mitigation strategies.
• Increase Shareholder Value: Focus on sustainable growth and profitability to benefit shareholders.

Community Engagement Initiatives

First Hawaiian, Inc. emphasizes its responsibility towards community involvement through various programs:

• Volunteerism: Employees are encouraged to participate in community service activities.
• Financial Education: Workshops and resources provided to enhance financial literacy among community members.
• Philanthropy: Contributions to local charities and non-profit organizations.

Recent Achievements

In the first half of 2024, FHB achieved significant milestones:

Conclusion

First Hawaiian, Inc. remains committed to its mission of delivering exceptional banking services while actively engaging in community development and maintaining a strong financial position.

How First Hawaiian, Inc. (FHB) Works

Overview of First Hawaiian, Inc.

First Hawaiian, Inc. (FHB) is a bank holding company that operates First Hawaiian Bank, providing a comprehensive suite of banking services including loans, deposit products, wealth management, insurance, trust, retirement planning, credit card, and merchant processing services to consumers and commercial customers.

Financial Performance

For the three months ended June 30, 2024, FHB reported:

• Net income of $61.9 million, a decrease of 1% from the same period in 2023.
• Basic and diluted earnings per share of $0.48, down from $0.49 in 2023.
• Return on average total assets of 1.04%, an increase of three basis points year-over-year.
• Return on average stockholders’ equity of 9.91%, a decrease of 77 basis points year-over-year.

Income Statement Highlights

Balance Sheet Data

As of June 30, 2024, FHB had:

• Total assets of $23.99 billion.
• Total stockholders' equity of $2.55 billion.
• Tangible stockholders' equity of $1.55 billion.
• Book value per share of $19.94.
• Tangible book value per share of $12.16.

Loan and Lease Portfolio

Total loans and leases were $14.36 billion as of June 30, 2024, with a breakdown as follows:

Deposits and Borrowings

As of June 30, 2024, FHB reported total deposits of $20.3 billion, which included:

• Interest-bearing deposits: $12.27 billion.
• Noninterest-bearing deposits: $6.04 billion.
• Total borrowings of $500 million in short-term fixed-rate advances.

Regulatory Capital Ratios

As of June 30, 2024, FHB maintained the following capital ratios:

Dividend Information

FHB declared cash dividends of $0.52 per share for the six months ended June 30, 2024, totaling $66.4 million.

Market Performance

The stock performance of FHB has shown resilience, and as of the last trading date in June 2024, the share price was approximately $19.94, reflecting a stable market presence.

How First Hawaiian, Inc. (FHB) Makes Money

Net Interest Income

First Hawaiian, Inc. generates a significant portion of its revenue from net interest income, which was reported at $307.3 million for the six months ended June 30, 2024, a decrease of $19.9 million or 6% compared to the same period in 2023. For the second quarter of 2024, net interest income was $152.9 million, down $7.1 million or 4% year-over-year.

Non-Interest Income

Non-interest income is another critical revenue stream for FHB, amounting to $103.1 million for the six months ended June 30, 2024, representing a 7% increase from the previous year. For the second quarter, non-interest income was $51.8 million, up $4.4 million or 9% year-over-year. The components of non-interest income include:

• Service charges on deposit accounts: $15.3 million
• Credit and debit card fees: $30.9 million
• Trust and investment services income: $19.8 million
• Other sources: $8.4 million

Provision for Credit Losses

The provision for credit losses is a crucial factor affecting net income. For the six months ended June 30, 2024, the provision was $8.1 million, a decrease of 41% compared to the same period in 2023. In the second quarter, the provision was $1.8 million, down 64% year-over-year.

Operating Expenses

First Hawaiian's non-interest expenses totaled $250.9 million for the six months ended June 30, 2024, an increase of $11.5 million or 5% from the previous year. For the second quarter, non-interest expenses were $122.1 million, a rise of 1% year-over-year. The main components of non-interest expenses include:

• Salaries and employee benefits: $116.999 million
• Contracted services and professional fees: $31.806 million
• Occupancy expenses: $14.318 million
• Equipment expenses: $26.609 million
• Card rewards program: $17.227 million

Balance Sheet Overview

As of June 30, 2024, First Hawaiian reported total assets of $23.99 billion, down from $24.93 billion at the end of 2023. Total stockholders' equity stood at $2.55 billion, an increase of $64.2 million or 3% from December 31, 2023. Key balance sheet metrics include:

Financial Performance Ratios

FHB's financial performance is further illustrated by several key ratios as of June 30, 2024:

Conclusion

First Hawaiian, Inc. continues to maintain a diversified revenue stream primarily through net interest income and non-interest income, while managing its operational expenses and provisions for credit losses effectively.