First Hawaiian Q4 2025 Earnings Report

First Hawaiian EPS Results

• Actual EPS: $0.56
• Consensus EPS: $0.55
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $0.41

First Hawaiian Revenue Results

• Actual Revenue: $225.85 million
• Expected Revenue: $225.33 million
• Beat/Miss: Beat by +$526.00 thousand
• YoY Revenue Growth: N/A

First Hawaiian Announcement Details

• Quarter: Q4 2025
• Date: 1/30/2026
• Time: Before Market Opens
• Conference Call Date: Friday, January 30, 2026
• Conference Call Time: 1:00PM ET

First Hawaiian (NASDAQ:FHB) (NASDAQ: FHB) is the holding company for First Hawaiian Bank, a regional financial institution headquartered in Honolulu, Hawaii. Founded in 1858 as Bishop & Company, First Hawaiian Bank is the oldest bank in Hawaii and provides banking and financial services to consumers, businesses and government organizations.

The bank offers deposit accounts, residential and commercial lending, credit cards, treasury management, investment and wealth management services, and online and mobile banking. Its business banking activities include commercial real estate financing, business loans, cash management and other services designed for small and large companies.

First Hawaiian Bank serves customers through its network of branches and offices across Hawaii, Guam and Saipan. The company is led by President and Chief Executive Officer Robert S. Harrison, who has held senior leadership roles at First Hawaiian and its parent company.

First Hawaiian Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong quarter with NIM up to 3.21%, net interest income of $170.3M, and return on average tangible equity of 15.8% in Q4 (16.3% for the full year).
• Positive Sentiment: Company is well-capitalized and completed ~1M share repurchase using the remaining 2025 authorization, then authorized an open‑ended $250M buyback to increase capital-return flexibility.
• Positive Sentiment: Credit quality remains strong: low net charge-offs ($5M in Q4), provision of $7.7M, and allowance for credit losses rose to $168.5M (coverage ~118 bps), with management calling reserves conservative.
• Neutral Sentiment: 2026 outlook: management expects loans to grow 3%–4% (CRE and C&I), NIM guided to 3.16%–3.18%, non‑interest income ~ $220M and expenses ~ $520M, while noting potential headwinds from Fed cuts and deposit beta.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the First Hawaiian, Inc Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speakers' presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded.

[Operator]

I would now like to hand the conference over to your speaker today, Kevin Haseyama, Investor Relations Manager. Please go ahead.

[Kevin Haseyama, Investor Relations Manager at First Hawaiian Bank]

Thank you, Kevin, and thank you everyone for joining us as we review our financial results for the fourth quarter of 2025. With me today are Bob Harrison, Chairman, President, and CEO; Jamie Moses, Chief Financial Officer; and Lea Nakamura, Chief Risk Officer. We have prepared a slide presentation that we will refer to in our remarks today. The presentation is available for downloading and viewing on our website at fhb.com in the Investor Relations section. During today's call, we will be making forward-looking statements, so please refer to slide 1 for our safe harbor statement. We may also discuss certain non-GAAP financial measures. The appendix to this presentation contains reconciliations of these non-GAAP financial measurements to the most directly comparable GAAP measurements.

[Kevin Haseyama, Investor Relations Manager at First Hawaiian Bank]

And now I'll turn the call over to Bob.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Aloha, everyone. Thank you for joining us today. I'll start with some local economic highlights. The state unemployment rate continued to fall and was at 2.2% in November, compared to the national unemployment rate of 4.5%. Through November, total visitor arrivals were down 0.2% compared to last year, primarily due to fewer visitors from Canada. Japan remained a bright spot, up 2.8% on a year-to-date basis. However, year-to-date spending through November was $19.6 billion, up about 6% compared to the same period of last year. Housing market remained stable, with the median single-family home price on Oahu in December was $1.1 million, up 4.3% from the prior year. The median condo sales price on Oahu in December was $512,000, down 5.2% from last year.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Turning to slide 2, we had another strong quarter. Our NIM expanded, net interest income grew, expenses were well contained, and credit quality remained strong. Our profitability measures remained solid, with return on average tangible equity at 15.8% in the fourth quarter and 16.3% for the full year. The effective tax rate in the fourth quarter was 24.8%. This was due to the reversal of our previously accrued tax benefit. We expect the effective tax rate to return to about 23.2% going forward.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Turning to slide 3, balance sheet remains solid. We continue to be well-capitalized with ample liquidity. We had good growth in C&I loans, as well as retail and commercial deposits. During the quarter, we repurchased about 1 million shares, which used the remaining $26 million of our $100 million purchase authorization for 2025. Our new stock repurchase authorization is for $250 million, and unlike prior authorization, the current authorization is not for a specific timeframe.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Turning to slide 4, total loans grew $183 million in the quarter, or 5.2% on an annualized basis. We had good growth in C&I loans, primarily due to draws on existing lines, as well as the addition of a new auto dealer customer. The CRE growth and decline in construction was primarily due to a couple construction deals that were converted from construction to CRE. Outside of those conversions, balances in both portfolios were relatively flat.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Now I'll turn it over to Jamie.

[Jamie Moses, CFO at First Hawaiian Bank]

Thanks, Bob. Turning to slide 5. We saw good growth in retail and commercial deposits, while a lot of the public operating deposits that came in during the third quarter flowed out in the fourth quarter, as we expected. Retail and commercial deposits increased $233 million, while public deposits declined by $447 million. That dynamic resulted in a net increase in deposits of $214 million in the fourth quarter. The total cost of deposits fell by 9 basis points to 1.29%, and our non-interest-bearing deposit ratio was 32%.

[Jamie Moses, CFO at First Hawaiian Bank]

On slide 6, net interest income was $170.3 million, $1 million higher than the prior quarter. The NIM in the fourth quarter was 3.21%, up 2 basis points compared to the prior quarter. The increase in the margin was primarily driven by lower deposit costs and the full quarter benefit of the borrowing that matured in September, partially offset by lower loan yields. The exit NIM for the month of December was 3.21%.

[Jamie Moses, CFO at First Hawaiian Bank]

Turning to slide 7, non-interest income was $55.6 million. Non-interest expense in the fourth quarter was $125.1 million.

[Jamie Moses, CFO at First Hawaiian Bank]

Now I'll turn it over to Lea.

[Lea Nakamura, CRO at First Hawaiian Bank]

Thank you, Jamie. Moving to slide 8. The bank continues to maintain its strong credit performance and healthy credit metrics. Credit risk remains low, stable, and well within our expectations. Overall, we're not observing any broad signs of weakness across either the consumer or commercial books. Classified assets decreased by 7 basis points, while special mention assets increased by 16 basis points. Quarter to date, net charge-offs were $5 million, or 14 basis points of total loans and leases.

[Lea Nakamura, CRO at First Hawaiian Bank]

Year-to-date net charge-offs were $16.3 million. Our annual net charge-off rate was 11 basis points, unchanged from the third quarter. Non-performing assets and ninety-day past due loans were 31 basis points of total loans and leases at the end of the fourth quarter, up 5 basis points from the prior quarter, primarily driven by a single relationship.

[Lea Nakamura, CRO at First Hawaiian Bank]

Moving to Slide 9, we show our fourth quarter allowance for credit losses broken out by disclosure segments. The bank recorded a $7.7 million provision in the fourth quarter. The asset ACL increased by $3.2 million to $168.5 million, with coverage increasing to 118 basis points of total loans and leases. We believe that we continue to be conservatively reserved and ready for a wide range of outcomes.

[Lea Nakamura, CRO at First Hawaiian Bank]

Now I'll turn it back over to Bob.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Thanks, Lea. Turning to slide 10, we have summarized our current full year 2026 outlook for some of our key earnings drivers. Starting with loans, we expect full year loan growth to be 3%-4% range. The growth will be driven primarily by CRE and C&I loans. We anticipate that the full year NIM will be in the 3.16%-3.18% range. We continue to expect tailwinds from fixed asset repricing, but additional Fed rate cuts and a decreasing deposit beta will remain headwinds. We expect non-interest income to be stable and to come in at about $220 million for the year. And finally, we expect expenses to be about $520 million in 2026.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

That concludes our prepared remarks, and now we'd be happy to take your questions.

[Operator]

Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered, or you wish to remove yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from David Feaster with Raymond James. Your line is open.

[David Feaster, Managing Director of Equity Research at Raymond James]

Hi, good morning, everybody.

[Kevin Haseyama, Investor Relations Manager at First Hawaiian Bank]

Morning, Dave.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Morning, Dave.

[David Feaster, Managing Director of Equity Research at Raymond James]

I wanted to start on the loan growth. It was really encouraging to see some of the trends that you guys had, and especially to see the C&I growth. I was hoping to maybe just get some color on, I guess, first of all, you know, how pipelines are shaping up and, you know, how much of the growth in C&I was, you know, increasing utilization, versus, you know, new relationship growth. Just kind of curious some of the underlying trends you're seeing there. Then just some commentary, too, on mainland versus Hawaii as well.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Sure. Yeah, great question. Thanks, Dave. This is Bob. So on the loan growth, when we looked at it, it really was more, as far as what happened in the quarter, it wasn't quite what we thought it would be. We had some payoffs in the CRE portfolio that we had anticipated to come in later, which is why we didn't quite hit the number we had talked about on the third quarter call. But having said that, it really was pretty broad-based in local, primarily in some mainland, draws on their lines, and then a new dealer relationship helped out as well. We'll see more of that, I think, in the quarters to come. So as we look forward, we're really looking towards, as far as the pipeline of multifamily is still there.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

We're very, very busy, and of course, when you book those deals, it will take a while for them to fund. We're still a little bit outrunning the payoffs that happened in that gap period we talked about on the last call of SVB, kind of slowing down production for a while, a couple of years ago. So that's behind us, mostly in the first half of the year, and we expect the second half of the year to start to see more normalized growth in the CRE on the mainland. We are still seeing activity here in Hawaii. A good amount of the activity this past quarter in Q4 was Hawaii-based, but not exclusively. Does that cover what you were thinking about?

[David Feaster, Managing Director of Equity Research at Raymond James]

That's, that's extremely helpful. And, and, you know, could you maybe talk about the payoffs and paydowns have been a real headwind in the industry. Could you maybe touch on, on what led to maybe some of the, the payoffs and paydowns coming sooner than expected? And, and as you think about, you know, your outlook that you guys have laid out for loan growth, does that contemplate continuation of, of payoffs and paydowns, or, or is that a risk that y'all are concerned about? Just kind of curious your thoughts on that side.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Sure. I think there's two pieces to that. The first piece is, are the payoffs coming sooner than we expected. They have been a bit this year. I think all the permanent lenders are just as hungry for assets as the banks are. And so, you know, they're coming in, maybe a little bit earlier than normal. Not like we saw a few years ago when they were coming in before properties were even completed construction, but maybe before full stabilization, you're seeing permanent lenders come in on some of those, multifamily projects. So that's kind of a, moving up the calendar a bit, but not really a big difference.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

The paydowns in the industry, as we talked about before, I think we're in that belly of the part of the curve that where deals didn't get done a couple of years ago after the, you know, concerns about liquidity with SVB and First Republic, Signature, et cetera. So, we think that should be kind of burning through in the first half of this year, and the back half of the year, that should get better. But there is still a high desire for assets out there and of good quality assets, which is the ones we like to fund. People are looking for that.

[David Feaster, Managing Director of Equity Research at Raymond James]

Okay. And then maybe just shift into the other side of the balance sheet. I mean, core deposit trends have been really good. It's not you all already have a low cost of deposits, and you're continuing to take it down further. You know, a lot of the NIM expansion that we've seen has come from reduction in funding costs. I know your margin guide has, you know, I think two cuts in there. As you think about margin expansion going forward, is on the funding cost side and the back increasing really the tailwind there? And just how has been to reducing deposit costs thus far? Like, have you seen any attrition or much pushback as you work through that?

[Jamie Moses, CFO at First Hawaiian Bank]

So, Dave, you kind of cut out there a little bit, but I'm gonna answer the question as I think you asked it, and then you can let me know if I missed something for you. You know, I think the margin guide reflects both an ability to continue to cut deposit rates, you know, when the Fed cuts, as well as that fixed asset repricing that we continue to talk about, and we've seen those trends over time. We think the beta is probably gonna be a little bit lower, go forward, than where we were before. So fourth quarter, you know, interest-bearing deposit beta around 35%.

[Jamie Moses, CFO at First Hawaiian Bank]

You know, we would anticipate with two rate cuts, that the interest-bearing deposit beta on that, somewhere between 30%-35%. So less than, less than where we've been, but still pretty healthy for now, at least. And then on the fixed asset repricing side, we kind of summarized that for you. So inclusive of all of the pay downs in the securities portfolio, as well as fixed rate cash flows coming out of the loan portfolio, we think that's about $400 million a quarter or so, with about 150 basis point repricing accretion on that.

[Jamie Moses, CFO at First Hawaiian Bank]

So, you know, all of those things assume a particular set of loan growth, and obviously the way that the pace and timing of Fed rate cuts will impact that as well. But yeah, that's kind of where we're at on the NIM.

[David Feaster, Managing Director of Equity Research at Raymond James]

That's great. Thanks.

[Operator]

One moment for our next question. Our next question comes from Andrew Terrell with Stephens. Your line is open.

[Andrew Terrell, Managing Director and Research Analyst at Stephens]

Hey, good morning.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Morning.

[Andrew Terrell, Managing Director and Research Analyst at Stephens]

Just to start and just to clarify, the $385 million of fixed cash flows, that's on a quarterly basis, so it kind of checks with, I think we've talked about, like, $1.5 billion in the past on an annual basis?

[Jamie Moses, CFO at First Hawaiian Bank]

Yeah, that was, that was the fourth quarter, to be very specific, Andrew. Yeah.

[Andrew Terrell, Managing Director and Research Analyst at Stephens]

Got it. Okay.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

We didn't put that in deck. We just clarified that was the quarter and not, some of the annual assumptions we had in there and the rest of that page. Thank you for clarifying.

[Andrew Terrell, Managing Director and Research Analyst at Stephens]

Yep, no worries. Thank you, guys. Could you maybe help me just bifurcating that out a little bit? And I think we have a good sense of relative dollars on either side that you've given, but just I'd wanna talk about maybe spread competition you're seeing for new assets today. You know, how much in marginal pickup would you expect from securities cash flow versus, you know, where loans are running off versus where you're kind of able to reprice that today? Just, we've heard a lot on competition recently from other banks, and I'm curious if you're seeing the same thing on new loan growth.

[Jamie Moses, CFO at First Hawaiian Bank]

Yeah, I would say that there is some spread competition. We've definitely seen that. We still think it's, you know, 180-200 basis points on the securities portfolio, and that's pretty fixed. That's pretty well known. And so again, you know, that's about $600 million for the next year, and then about $1 billion on the loan portfolio. So, you know, a little bit less than that, maybe a hundred basis points, somewhere in 80-100 basis points, pick up on the loans, versus the 200 or so on the securities.

[Andrew Terrell, Managing Director and Research Analyst at Stephens]

Yep. Okay. And then on the, just on the full year loan growth guide of 3%-4%, it sounds like you might expect some payoffs maybe in the first part of the year, but then better on the second half of the year. And I guess the question is: Is it fair to think you could start, you know, at the low end or even below the guide in terms of loan growth, and then it picks up throughout the year? Or should we just think about it as kind of ratable 3%-4% throughout the year?

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Yeah, I think it's not so much more payoffs in the first half of the year. I think it's a normal payoff activity. There's just, where fewer loans that are going, that were done 1.5 years, 2 years ago, that are gonna be funding now. So it's really less of the new production from that multifamily portfolio, and that should be through that in the back half of the year. So yeah, fair assumption, it should be probably lower in the first half and a pickup in the second half.

[Andrew Terrell, Managing Director and Research Analyst at Stephens]

Okay, great. Thank you, guys, for taking the questions.

[Operator]

One moment for our next question. Our next question comes from Janet Lee with TD Cowen. Your line is open.

[Janet Lee, Analyst at TD Cowen]

Hello.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Morning.

[Janet Lee, Analyst at TD Cowen]

To clarify on your deposit beta expectations for 30%-35% after two cuts. So, I see 47%, if my calculation is correct, I think I see 47% interest-bearing deposit beta for fourth quarter. So starting in the first or second quarter, does that step down to 30%-35%? Is that the right way to interpret?

[Jamie Moses, CFO at First Hawaiian Bank]

Yeah, I think that's the right way to interpret it, is that the interest-bearing deposit beta is going to step down, you know, over time. But we're—I think we're okay with, you know, like, with the two rate cuts, it should be—it should continue to be close to what we've had in the past.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

And that goes to, we've got a very low deposit cost. So at some point, you just can't keep cutting rates, even though rates are coming down.

[Janet Lee, Analyst at TD Cowen]

Yes, definitely. Thanks for that. For the expenses, you've had, I guess, two years of flattish expense growth. Looks like it's going up about 4%-5%. Is there, is this just a normalization of expense, or are you hiring a little more in 2026? Or, I mean, it's a pretty specific number for the expense guide. How should we think about, you know, potentially you beat $520 million or coming in above? How should we think about your expense trajectory? Thanks.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Yeah, great question, Janet. Let me kind of back up a little bit and tell you, you know, one of the primary reasons why we've been able to hold costs down in the last year or two has been, we're still going out and trying to hire people, just to answer that part of your question. It's difficult to find the people we want to hire, so we haven't been able to staff all the people we want. But the reason for our good expense control over the last couple of years has been some of the investments we made in the past in technology enabled us to exit higher-cost delivery, whatever it was, higher-cost ways of doing business as we've brought things in-house.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

And so that's really been a huge help for us over the last couple of years as we've terminated expensive vendor relationships and been able to take that in-house. Our rate of growth has been increasing over the last couple of years, but it's been held down by our ability to reduce costs in other areas of our expense base. So as we go forward into 2026, we see that most of that we've captured, there'll still be a little bit of it, and we're going back to a little bit more of a normalized expense growth number.

[Janet Lee, Analyst at TD Cowen]

Got it. Thank you.

[Operator]

One moment for our next question. Our next question comes from Kelly Motta with KBW. Your line is open.

[Kelly Motta, Managing Director at KBW]

Hi, good morning. Thanks for the question. On capital return in the buyback, you've been pretty diligent with executing the $100 million you'd had for 2025, and you noted the $250 million doesn't have any, you know, time period associated with it. I'm just wondering your appetite for continuing on at a similar pace here, and how you're thinking through that versus some other maybe M&A aspects of the capital stack. Thank you.

[Jamie Moses, CFO at First Hawaiian Bank]

Thanks, Kelly. You know, I think that we have a pretty good appetite to continue the pace that we had set last year. You know, I think there always will be other considerations as well. You know, there will be some, you know, potentially some opportunism baked into the program that we've set out. You know, but we haven't really made any firm commitments, I would say, internally, even around exactly the pace and timing of the share buyback, other than that, we recognize we have plenty of capital to do, you know, any number of things with. You know, I think that, obviously, organic growth is what we're really looking for, and then the share buyback is a way for us to re-return some of that capital.

[Jamie Moses, CFO at First Hawaiian Bank]

So, I think it's kind of a, you know, it's kind of a combination of all the things that we're looking at, and that will determine that sort of pace.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

And just to add to Jamie's comments, you know, we've messaged for a couple of years now of a 12% CET1 target, and we're certainly well above that at +13%. So I think this larger buyback capacity, it's just an acknowledgment of that, and it just gives us flexibility to bring it back closer to what we had targeted or what we had messaged in the past.

[Kelly Motta, Managing Director at KBW]

Got it. That's helpful. I'll step back. Thank you.

[Operator]

One moment for our next question. Our next question comes from Matthew Clark with Piper Sandler. Your line is open.

[Matthew Clark, Managing Director and Senior Research Analyst at Piper Sandler]

Hey, good morning, everyone.

[Jamie Moses, CFO at First Hawaiian Bank]

Morning.

[Matthew Clark, Managing Director and Senior Research Analyst at Piper Sandler]

Can we, can we get the spot rate on deposits at the end of the year?

[Jamie Moses, CFO at First Hawaiian Bank]

Spot rate on deposits at the end of the year, 1.24% in December.

[Matthew Clark, Managing Director and Senior Research Analyst at Piper Sandler]

Okay. In December or at the end of December?

[Jamie Moses, CFO at First Hawaiian Bank]

It was--

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

The month of December.

[Jamie Moses, CFO at First Hawaiian Bank]

At December. I'm not sure my calculus is good enough to give you that derivative at the moment.

[Matthew Clark, Managing Director and Senior Research Analyst at Piper Sandler]

Okay. Just wondering if it was lower at the end of the year. Okay. And then on expenses, as for the, you know, for the first quarter, can you remind us how the seasonality works, whether or not it's more in the first quarter or second, or combination of both? Just trying to get a sense for the run rate to start the year.

[Jamie Moses, CFO at First Hawaiian Bank]

Yeah, for the most part, the expenses are pretty flat throughout the year. We do see a pickup a little bit in the first quarter. You can, you know, you can see that in our numbers last year and the year before, and then they kind of decline a little bit from that. But in general, I think we're thinking about it pretty flat at the moment.

[Matthew Clark, Managing Director and Senior Research Analyst at Piper Sandler]

Okay, and then just, your updated thoughts on, mainland M&A. Any discussions you've been having, whether or not things are more active? And maybe just remind us what your ideal target would look like.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Yeah, no, we're so as Jamie mentioned, our focus is still on growing our core business, but, you know, it's still an option for us to consider for M&A. Some of the things we've talked about in the past, just to reiterate, we'd be looking for a strong management team who will stick around to be good partners with us. Obviously, a disciplined lending culture, which is similar to the way we look at the business. Strong deposit franchise. And I guess it's a little more touchy-feely, but we want it well-managed. We're not looking for a fixer-upper, if we were looking to partner with somebody. And just for location, west of the Rockies is more what we're familiar with as an organization and where we've had people on the ground and where we have had a lot of relationships already.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

As far as size, probably somewhere between $2 billion and $15 billion would be the range.

[Matthew Clark, Managing Director and Senior Research Analyst at Piper Sandler]

Perfect. Thanks. Thanks again.

[Operator]

One moment before our next question. Our next question comes from Anthony Elian with J.P. Morgan. Your line is open.

[Anthony Elian, Analyst at JPMorgan]

Hi, everyone. On deposits, Jamie, how are you thinking about balances in 1Q? If I look at your past couple of 1Qs, you typically see a seasonal decline.

[Jamie Moses, CFO at First Hawaiian Bank]

Yeah, I think that's fair. Again, that's probably something that we should expect in the first quarter. And then in totality, you know, throughout the year, I think, you know, we're sort of mostly focused on what we can do with commercial and retail deposits. And so, you know, we're expecting kind of low single digits on that for the entire year. And then, you know, for us, it's tough to in totality, the public deposits that we have, they kind of fluctuate, generally speaking, quarter by quarter, week by week, even. But, you know, I think those in general, we should probably see some, you know, normal, like, state, like a GSP-type increase with those things. So, I think that's how we're thinking about balances.

[Anthony Elian, Analyst at JPMorgan]

Okay, and then on the full year NIM guide of 3.16%-3.18%, so that's a pretty tight range. Do you expect each quarter to be within that range this year? Thank you.

[Jamie Moses, CFO at First Hawaiian Bank]

Probably. That's maybe a little taken a little too far. But, you know, I think it's gonna, it really will depend on the, the amount of rate cuts, that, that we see and the timing, of those, and whether they're 25 or whether they're 50. So, this contemplates sort of a May, September, version of that. And so, you know, it, -- I guess that's how I'd answer it.

[Anthony Elian, Analyst at JPMorgan]

Any direction for the 1Q NIM, specifically relative to the 3.21% you printed for 4Q? Thank you.

[Jamie Moses, CFO at First Hawaiian Bank]

Yeah, I think we think it's gonna come down a little bit. You know, we had two cuts, you know, two rate cuts in the quarter, obviously, one in December. So we think it's probably gonna come down a few basis points off of the December number.

[Anthony Elian, Analyst at JPMorgan]

Great. Thank you.

[Operator]

One moment for our next question. Our next question comes from Timur Braziler with Wells Fargo. Your line is open.

[Timur Braziler, Analyst at Wells Fargo]

Hi, good morning.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Morning.

[Jamie Moses, CFO at First Hawaiian Bank]

Hey.

[Timur Braziler, Analyst at Wells Fargo]

Maybe just going back to the loan growth and trying to bifurcate how much of it is expected to come from some of the increased draws on production in years past, versus what the opportunity to kind of reengage on the mainland with seemingly some better momentum, starting there.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Yeah, Timur, I'm not sure I 100% understand your question, but there has been, you know, for our existing lines, it's a little hard to predict with our larger corporate and commercial customers, exactly when an opportunity will come up that they need to fund, versus their line versus a new production. We are seeing, while still continued activity here in Hawaii, for sure, and in Guam, you know, there's just a broader economic base on the West Coast where we operate, and there's a lot of opportunities up there. So we're continuing to pursue new dealer opportunities as well as commercial real estate opportunities, on the mainland U.S., primarily on the West Coast. So I don't have a breakdown for you per se, but, I guess that's, broadly how we're looking at it.

[Timur Braziler, Analyst at Wells Fargo]

Okay, maybe another way of asking that, just if you can kind of frame the opportunity set of, I think you had mentioned the multifamily production that was booked, you know, 12, 18, 24 months ago, that is gonna start funding up, just how much of an opportunity that's gonna be.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

Yeah, I don't have that number handy, but we can look into that.

[Timur Braziler, Analyst at Wells Fargo]

Okay. And then during the prepared remarks, you had made a comment that you had a couple construction deals that were converted to commercial real estate. I'm just wondering, is that, is that pretty normal to have kind of the construction piece of it and then do the permanent financing in-house? Like, is that a pretty normal, kind of, continuation for you guys?

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

It depends on the sector. You know, for customers kind of within the footprint, that is very normal. For the multifamily construction activity we're doing primarily in the Mainland, on the West Coast, but it's not. And so it wasn't those deals, it was really more of our other customers within the footprint. So it really depends on the customer segment, I guess that's, quote, "normal or not.

[Timur Braziler, Analyst at Wells Fargo]

Okay, got it. And then just last for me, the C&I yields held up really well this quarter. I'm just wondering, is that kind of new production maybe offsetting some of the decline in the variable rate portfolio? Or maybe just kind of talk me through internally if you were maybe surprised or that was kind of expected decline within the C&I book, because it seemed to hold up pretty well relative to the type of decline we saw during the 2024 rate cutting cycle.

[Bob Harrison, Chairman, President, and CEO at First Hawaiian Bank]

I think a little bit— Well, I'm not, I don't have a perfect answer for you, but given that the draws were under line, existing lines, so I think that speaks to why the rate, you know, the yield didn't change as much in the fourth quarter. I think if you go back to right when the pandemic happened, you had a lot of backup lines with very highly rated customers that just had lower pricing at the time. And so when they were drawing, that pricing structurally in those agreements was lower than more of our, quote, "normal base." But I'd need to do more analysis to make certain of that.

[Timur Braziler, Analyst at Wells Fargo]

Okay. No, that, that makes sense. Okay. Thank you.

Participants

Executives

• Bob Harrison, Chairman, President, and CEO
• Jamie Moses, CFO
• Kevin Haseyama, Investor Relations Manager
• Lea Nakamura, CRO

Analysts

• Andrew Terrell, Managing Director and Research Analyst at Stephens
• Anthony Elian, Analyst at JPMorgan
• David Feaster, Managing Director of Equity Research at Raymond James
• Janet Lee, Analyst at TD Cowen
• Kelly Motta, Managing Director at KBW
• Matthew Clark, Managing Director and Senior Research Analyst at Piper Sandler
• Timur Braziler, Analyst at Wells Fargo