Third Quarter 2026
Filed Oct 23, 2026First Hawaiian, Inc. Reports Third Quarter 2026 Financial Results and Declares Dividend
Net interest income and net interest margin improved from both the prior quarter and prior year, but quarterly net income declined, noninterest expense rose sharply due to tax-settlement and merger-related costs, and credit costs increased materially following a CRE-related charge-off and other CRE downgrades.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net interest income, three months ended September 30, 2026GAAP | $174.1M | – | – |
| Total interest income, three months ended September 30, 2026GAAP | $234.5M | – | – |
| Total interest expense, three months ended September 30, 2026GAAP | $60.44M | – | – |
| Provision for credit losses, three months ended September 30, 2026GAAP | $20.31M | – | – |
| Net interest income after provision for credit losses, three months ended September 30, 2026GAAP | $153.8M | – | – |
| Noninterest income, three months ended September 30, 2026GAAP | $56.12M | – | – |
| Noninterest expense, three months ended September 30, 2026GAAP | $160.0M | – | – |
| Income before provision for income taxes, three months ended September 30, 2026GAAP | $49.87M | – | – |
| Benefit for income taxes, three months ended September 30, 2026GAAP | $(13,858) | – | – |
| Net income, three months ended September 30, 2026GAAP | $63.73M | – | – |
| Basic earnings per share, three months ended September 30, 2026GAAP | $0.52 | – | – |
| Diluted earnings per share, three months ended September 30, 2026GAAP | $0.52 | – | – |
| Net interest margin, three months ended September 30, 2026GAAP | 3.30% | 5 basis points | – |
| Efficiency ratio, three months ended September 30, 2026GAAP | 69.18% | – | – |
| Effective tax rate, three months ended September 30, 2026GAAP | -27.8% | – | – |
| Return on average total assets, three months ended September 30, 2026GAAP | 1.06% | – | – |
| Return on average tangible assets, three months ended September 30, 2026non-GAAP | 1.10% | – | – |
| Return on average total stockholders' equity, three months ended September 30, 2026GAAP | 8.88% | – | – |
| Return on average tangible stockholders' equity, three months ended September 30, 2026non-GAAP | 13.67% | – | – |
| Net income, nine months ended September 30, 2026GAAP | $204.9M | – | – |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $1.67 | – | – |
| Net interest income, nine months ended September 30, 2026GAAP | $512.6M | – | – |
| Total assets, September 30, 2026GAAP | $23.76B | – | – |
| Cash and due from banks, September 30, 2026GAAP | $258,228 | – | – |
| Interest-bearing deposits in other banks, September 30, 2026GAAP | $1,071,703 | – | – |
| Loans and leases, September 30, 2026GAAP | $14.46B | – | – |
| Allowance for credit losses, September 30, 2026GAAP | $164.4M | – | – |
| Total deposits, September 30, 2026GAAP | $20.20B | – | – |
| Total stockholders' equity, September 30, 2026GAAP | $2,817,544 | – | – |
| Tangible stockholders' equity, September 30, 2026non-GAAP | $1,822,052 | – | – |
| Tangible book value per share, September 30, 2026non-GAAP | $14.97 | – | – |
| Net charge-offs, three months ended September 30, 2026GAAP | $21.95M | – | – |
| Ratio of net loans and leases charged-off to average loans and leases outstanding, three months ended September 30, 2026GAAP | 0.60% | – | – |
| Total non-performing assets, September 30, 2026GAAP | $45.97M | – | – |
| Non-accrual loans and leases / total loans and leases, September 30, 2026GAAP | 0.32% | – | – |
| Common Equity Tier 1 Capital Ratio, September 30, 2026GAAP | 13.50% | – | – |
| Total Capital Ratio, September 30, 2026GAAP | 14.74% | – | – |
| Tier 1 Leverage Ratio, September 30, 2026GAAP | 9.61% | – | – |
Capital returns
- On October 21, 2026, the Board of Directors declared a quarterly cash dividend of $0.26 per share.
- The dividend will be payable on November 27, 2026, to stockholders of record at the close of business on November 16, 2026.
- The Company did not repurchase any shares in the third quarter.
- Dividends declared per share were $0.26 for the three months ended September 30, 2026.
What drove it
- Net interest income was $174,104, compared with $170,993 in the prior quarter; the company attributed the change in net interest income to $1.0 million of volume and $2.3 million of rate effects in its taxable-equivalent analysis.
- Net interest margin was 3.30%, compared with 3.25% in the prior quarter and 3.19% in the prior-year quarter.
- Total deposits were $20,204,570 at September 30, 2026. Savings deposits were $6,248,848 and money market deposits were $4,313,623.
- The effective tax rate was -27.8% due to a $31.0 million income tax benefit from an agreement to settle tax liabilities resulting from the 2016 corporate reorganization.
- Noninterest expense included $6.7 million of merger-related costs and a $24.3 million noninterest expense from the tax-liability settlement agreement.
Concerns
- Provision for credit losses was $20,308, compared with $5,600 in the prior quarter and $4,500 in the prior-year quarter.
- The provision was driven by a $12.5 million partial charge-off related to a single CRE loan and other CRE loan downgrades.
- Net charge-offs were $21,948, or 0.60% of average loans and leases on an annualized basis, compared with $4,137, or 0.11%, in the prior quarter.
- Total non-performing assets were $45,974, compared with $39,501 in the prior quarter. Accruing loans and leases past due 90 days or more were $19,227, compared with $4,093 in the prior quarter.
- Noninterest expense was $160,047, compared with $130,445 in the prior quarter, and the efficiency ratio was 69.18%, compared with 56.17%.
What to watch
- Credit performance in commercial real estate following the $12.5 million partial charge-off and other CRE loan downgrades.
- Whether net interest margin sustains the third-quarter level of 3.30%.
- Loan growth following loans and leases of $14,462,228 at September 30, 2026, versus $14,577,299 at June 30, 2026.
- Deposit trends in the competitive market, including the mix of demand, savings, money market and time deposits.
- Merger-related costs and progress toward the Tri Counties Bank acquisition.
Balance sheet and cash flow
- Total assets were $23,764,015 at September 30, 2026, compared with $23,646,049 at June 30, 2026.
- Loans and leases were $14,462,228 at September 30, 2026, compared with $14,577,299 at June 30, 2026.
- Total deposits were $20,204,570 at September 30, 2026, compared with $20,154,181 at June 30, 2026.
- Cash and due from banks were $258,228 at September 30, 2026.
- Interest-bearing deposits in other banks were $1,071,703 at September 30, 2026.
- Total stockholders' equity was $2,817,544 at September 30, 2026.
- Operating cash flow and free cash flow were not reported.
Analysis
First Hawaiian reported third-quarter net income of $63,730 and diluted earnings per share of $0.52, compared with $73,375 and $0.60 in the prior quarter and $73,840 and $0.59 in the prior-year quarter. The quarter included a $31.0 million income tax benefit and a $24.3 million noninterest expense from an agreement to settle tax liabilities associated with the 2016 corporate reorganization. The resulting effective tax rate was -27.8%, compared with 22.9% in the prior quarter.
Core spread income improved. Net interest income was $174,104, versus $170,993 in the prior quarter and $169,331 a year earlier, while net interest margin increased to 3.30% from 3.25% and 3.19%, respectively. In the company's taxable-equivalent sequential analysis, the change in net interest income reflected $1.0 million of volume effects and $2.3 million of rate effects. Total deposits were $20,204,570 at quarter end, compared with $20,154,181 at June 30, 2026, while loans and leases were $14,462,228, compared with $14,577,299.
Expense and credit costs weighed on the period. Noninterest expense rose to $160,047 from $130,445 in the prior quarter, including $6.7 million of merger-related costs and the $24.3 million tax-settlement expense. The efficiency ratio increased to 69.18% from 56.17%. Provision for credit losses increased to $20,308 from $5,600, driven by a $12.5 million partial charge-off tied to a single CRE loan and other CRE loan downgrades. Net charge-offs reached $21,948, or 0.60% of average loans and leases on an annualized basis, and total non-performing assets increased to $45,974 from $39,501.
Capital ratios strengthened sequentially despite total stockholders' equity of $2,817,544 versus $2,826,028 at June 30, 2026. The Common Equity Tier 1 Capital Ratio was 13.50%, the Total Capital Ratio was 14.74%, and the Tier 1 Leverage Ratio was 9.61%. The company did not repurchase shares in the third quarter and declared a quarterly cash dividend of $0.26 per share. Management highlighted deposit growth, potential balance-sheet benefits from rising interest rates, and preparation for the Tri Counties Bank acquisition; the filing provided no financial outlook.
Management, verbatim
I’m pleased with the solid earnings we delivered this quarter and the continued trust our customers place in us.
Bob Harrison, Chairman, President and Chief Executive Officer
Our deposit growth in a competitive market reflects the strength of those relationships, and our balance sheet is well positioned to benefit from rising interest rates.
Bob Harrison, Chairman, President and Chief Executive Officer
As we prepare for the Tri Counties Bank acquisition, we’re focused on building on that foundation and the growth opportunities ahead.
Bob Harrison, Chairman, President and Chief Executive Officer
Not in the filing
stated, not guessed- Forward financial guidance was not provided.
- Previous-period outlook was not provided.
- Total revenue was not reported.
- Segment revenue was not reported.
- Gross margin was not reported.
- Operating income was not reported.
- GAAP and non-GAAP adjusted earnings measures beyond the listed tangible-asset and tangible-equity measures were not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- CFO commentary was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.