First Hawaiian, Inc. Completes Investment Portfolio Restructuring
Rhea-AI Summary
First Hawaiian (NASDAQ:FHB) has completed a restructuring of its available-for-sale investment securities portfolio. The company sold $293 million of lower-yielding debt securities, resulting in an after-tax loss of $19.7 million. The proceeds were reinvested in new debt securities yielding 309 basis points higher than the sold securities.
The transaction is expected to increase net interest income by $8.6 million and net interest margin by 4 basis points in 2025, with smaller gains of $0.5 million and 1 basis point respectively in Q4 2024. The sold securities had a 1.92% weighted average yield and 3.2 years duration, while the new securities offer 5.01% yield with 4.1 years duration. The restructuring resulted in a one-time pre-tax loss of $26.2 million in Q4 2024, with an estimated 3-year breakeven period.
AI-generated analysis. Not financial advice.
Positive
- Net interest income projected to increase by $8.6 million in 2025
- Net interest margin expected to improve by 4 basis points in 2025
- New securities yield 5.01% vs. previous 1.92%, representing a 309 basis point improvement
Negative
- One-time pre-tax loss of $26.2 million in Q4 2024
- After-tax loss of $19.7 million from securities sale
- 3-year breakeven period required to recover restructuring losses
- Increased duration risk from 3.2 to 4.1 years
News Market Reaction – FHB
On the day this news was published, FHB gained 0.33%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
HONOLULU, Dec. 09, 2024 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today announced the completion of a restructuring related to its available-for-sale investment securities portfolio.
The Company executed the sale of
The securities sold had a weighted average yield of
This restructuring had no impact on tangible equity, and the Company remains "well capitalized" under applicable regulatory guidelines.
First Hawaiian, Inc.
First Hawaiian, Inc. (NASDAQ:FHB) is a bank holding company headquartered in Honolulu, Hawaii. Its principal subsidiary, First Hawaiian Bank, founded in 1858 under the name Bishop & Company, is Hawaii’s oldest and largest financial institution with branch locations throughout Hawaii, Guam and Saipan. The company offers a comprehensive suite of banking services to consumer and commercial customers including deposit products, loans, wealth management, insurance, trust, retirement planning, credit card and merchant processing services. Customers may also access their accounts through ATMs, online and mobile banking channels. For more information about First Hawaiian, Inc., visit the Company’s website, www.fhb.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized” and “outlook”, or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, there can be no assurance that actual results will not prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements, including (without limitation) the risks and uncertainties associated with the domestic and global economic environment and capital market conditions and other risk factors. For a discussion of some of these risks and important factors that could affect our future results and financial condition, see our U.S. Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024.
| Investor Relations Contact: Kevin Haseyama, CFA (808) 525-6268 khaseyama@fhb.com | Media Contact: Lindsay Chambers (808) 525-6254 lchambers@fhb.com |
