First Hawaiian Inc (FHB) Reports Mixed Fourth Quarter Results and Announces Dividend and Stock ...
Net Interest Income: Decreased by 3.4% to $151.8 million in Q4 2023 from the previous quarter.
Loan Growth: Slight increase in gross loans and leases by 0.1% to $14.4 billion.
Deposits: Decreased by 0.8% to $21.3 billion compared to the previous quarter.
Noninterest Income: Increased by $12.3 million to $58.3 million in Q4 2023.
Noninterest Expense: Rose by $22.9 million to $142.3 million in Q4 2023.
Asset Quality: Slight increase in non-performing assets to 0.13% of total loans and leases.
Capital Ratios: Common Equity Tier 1 Capital Ratio improved to 12.39%.
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On January 26, 2024, First Hawaiian Inc (NASDAQ:FHB) released its 8-K filing, detailing the financial results for the fourth quarter ended December 31, 2023. The bank holding company, which provides a range of banking services including deposit products, lending services, and wealth management, reported a mixed financial performance with stable loan balances and a strategic move to strengthen the balance sheet.
Financial Performance and Strategic Actions
First Hawaiian's Chairman, President, and CEO, Bob Harrison, expressed satisfaction with the company's performance, highlighting stable loan balances, growth in consumer and commercial deposits, and excellent credit quality. The company took strategic actions during the quarter, selling low-yielding securities to reduce high-cost deposits, aiming to improve net interest margin and net interest income in 2024.
The company's balance sheet remained stable with total assets at $24.9 billion. However, net interest income saw a decline of 3.4% from the previous quarter, settling at $151.8 million, with the net interest margin also decreasing by 5 basis points to 2.81%. Despite this, noninterest income showed a significant increase, and the company's asset quality remained strong, with a slight uptick in non-performing assets to 0.13% of total loans and leases.
Capital Management Initiatives
First Hawaiian's Board of Directors declared a quarterly cash dividend of $0.26 per share, payable on March 1, 2024, to stockholders of record as of February 16, 2024. Additionally, the Board adopted a stock repurchase program for up to $40 million of its outstanding common stock during 2024, reflecting confidence in the company's financial stability and commitment to delivering shareholder value.
Operational Highlights and Future Outlook
Noninterest expense increased to $142.3 million, driven by higher regulatory assessment and fees, among other factors. The efficiency ratio deteriorated to 67.3% from 58.3% in the previous quarter, indicating increased costs relative to revenue. The company's effective tax rate was slightly higher at 24.0%.
Looking ahead, First Hawaiian's strategic actions taken in the fourth quarter are expected to enhance future earnings power. The company's focus on maintaining a robust balance sheet and improving net interest income positions it to navigate the challenges of the current economic environment effectively.
For detailed financial tables and further information, investors and interested parties are encouraged to review the full 8-K filing.
Conclusion
First Hawaiian Inc (NASDAQ:FHB) concluded the fourth quarter with a strategic focus on balance sheet strength and shareholder returns. While net interest income faced headwinds, the company's loan portfolio remained stable, and noninterest income improved. The announced dividend and stock repurchase program underscore the company's commitment to creating value for its shareholders. As First Hawaiian looks to the future, it aims to leverage its strategic initiatives to enhance earnings and maintain its position as a leading financial institution in Hawaii.
Explore the complete 8-K earnings release (here) from First Hawaiian Inc for further details.
This article first appeared on GuruFocus.
