First Hawaiian posts declining profits, but sees lending picking up
First Hawaiian Bank posted lower fourth-quarter profits, beating analysts’ expectations and projecting accelerated loan growth in the new year amid an improving state economy.
The state’s largest bank today announced that net income for the last three months of the year fell 7.6% to $57 million, or 44 cents per share, from $61.7 million. dollars, or 47 cents per share, the previous year. Earnings beat analysts’ consensus estimate of 47 cents a share.
With better prospects, First Hawaiian also repurchased $21.5 million of shares under its stock repurchase program during the quarter and adopted a stock repurchase program of up to $75 million. shares for this year. Deposits increased 13.5% to $21.82 billion from the prior year period.
“We are pleased to report that we closed 2021 with a strong fourth quarter,” First Hawaiian President and CEO Bob Harrison said in a statement. “We delivered strong loan growth, continued to grow retail and business deposits while reducing excess liquidity, and credit quality remained excellent.”
Loan growth slipped 2.4% to $12.96 billion in the fourth quarter from the year-ago period, but rose 1% from the third quarter. The bank forecast loan growth in 2022, excluding Paycheck Protection Program loan holdings, to be in the mid-to-high single digit range.
“The loan pipeline looks good heading into the year, and our balance sheet is well positioned to fund loan growth and benefit from rising interest rates,” Harrison said on the bank’s conference call with the analysts. “Capital levels remain elevated and we have sufficient capital to grow our balance sheet while maintaining our key capital ratios at our desired targets.”
For the year, holding company First Hawaiian Inc. reported net income rose 43.1% to $265.7 million, or $2.05 per share, from $185.8 million, or $1.43 per share, in 2020.
During the quarter, First Hawaiian opened a new branch in Waikiki on December 20 and donated the culturally historic mural by Jean Charlot that was commissioned for the previous Waikiki branch to the State Foundation on the Culture of the Arts, who plans to display it in a public space. Also during the quarter, First Hawaiian employees donated $910,225 to charities in Hawaii, Guam and Saipan.
First Hawaiian did not set aside money for potential loan losses last quarter after taking a loan loss provision of $20 million in the year-ago period.
Net interest income, which is the difference between what the bank generates in loans and pays out in deposits, rose 1.6% to $137.3 million. Its net interest margin however deteriorated by 33 basis points to 2.38% against 2.71%.
Non-interest income, which includes charges and fees, decreased 22.4% to $41.6 million.
First Hawaiian maintained its quarterly stock dividend at 26 cents per share. It will be payable on March 4 to shareholders of record at the close of business on February 18.
Shares of First Hawaiian fell 12 cents today to $28.88 after reporting results on an overall down day for the stock market.
Separately, First Hawaiian announced a day earlier that Foodland President and CEO Jenai Wall will not stand for re-election as a director of the holding company or the bank at the meeting. shareholders’ annual meeting on April 20.
Wall currently sits on the Compensation Committee and the Risk Committee of the Board of Directors. Her 27 years of service began when she joined the board of First Hawaiian Bank in 1995 and continued with her appointment to the board of First Hawaiian Inc. in August 2018.
“With the many challenges posed by the pandemic over the past two years, I feel the need to dedicate my time to my work at Foodland and my community involvements, including my role as Chairman of The Queen’s Board of Directors. Health Systems,” Wall mentioned.