First Hawaiian Bank’s third quarter was marked by a positive market response, as the company surpassed analysts’ revenue and profit expectations. Management attributed the improvement to higher net interest and noninterest income, as well as disciplined cost control. CEO Robert Harrison pointed out that “the balance sheet remains solid as we continue to be well capitalized with ample liquidity,” while strong deposit growth and active customer engagement contributed meaningfully to results. The quarter also saw a normalization of the tax rate and the impact of previously announced share repurchases.

Is now the time to buy FHB? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From First Hawaiian Bank’s Q3 Earnings Call

• David Feaster (Raymond James) focused on prospects for organic loan growth and whether management would consider loan pool purchases. CEO Robert Harrison said the bank remains open to selective pool purchases, particularly where it has expertise, but prefers organic growth.

• David Feaster (Raymond James) also inquired about deposit growth drivers and liquidity deployment. CFO James Moses emphasized relationship-building in both retail and commercial channels, noting that liquidity is being steadily redeployed into the investment portfolio after a period of runoff.

• Anthony Elian (JPMorgan) questioned how much tailwind remains from loan repricing. Moses responded that a sizable tailwind persists, with approximately $1 billion in fixed-rate cash flows expected to reprice higher in the next 12 months, though future rate cuts could narrow these spreads.

• Matthew Clark (Piper Sandler) asked about the slight rise in classified assets and whether broader credit risk was emerging. Chief Risk Officer Lea Nakamura and Harrison stated it was due to a single, long-time borrower and that no systemic credit issues have emerged.

• Jared David Shaw (Barclays) pressed on the impact of federal spending shifts on Hawaii’s economy. Harrison said the long-term trend remains defense-focused and stable, with little risk to the core federal employment base in the state.

Catalysts in Upcoming Quarters

Looking forward, the StockStory team will be monitoring (1) the pace of loan origination and whether new production can offset C&I paydowns, (2) management’s ability to maintain or expand net interest margin despite expected rate cuts, and (3) stability in credit quality, especially in light of potential macroeconomic disruptions such as a prolonged federal government shutdown. Execution on prudent liquidity deployment and fee income sustainability will also be key areas of focus.

First Hawaiian Bank currently trades at $24.38, up from $23.69 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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