First Hawaiian Q3 Net Income Hits $63.7 Million

First Hawaiian, Inc. (NASDAQ: FHB) reported third-quarter 2026 net income of $63.7 million, or $0.52 per diluted share, as the Honolulu-based bank navigated a competitive deposit market and merger preparations. The company declared a quarterly cash dividend of $0.26 per share on October 21, 2026, payable November 27, 2026.

Chairman, President and Chief Executive Officer Bob Harrison attributed the results to strong customer relationships and a balance sheet positioned to benefit from rising interest rates. He noted that the firm is focused on building on its foundation while preparing for the Tri Counties Bank acquisition.

Total assets stood at $23.8 billion at September 30, 2026, up from $23.6 billion at the end of the second quarter. Gross loans and leases decreased by $115.1 million to $14.5 billion, while total deposits increased by $50.4 million to $20.2 billion. Net interest income rose to $174.1 million for the quarter, a $3.1 million increase from the prior period, with the net interest margin expanding five basis points to 3.30%.

Earnings were impacted by specific items, including a $24.3 million noninterest expense and a $31.0 million income tax benefit related to an agreement to settle tax liabilities from the 2016 corporate reorganization. These factors drove the effective tax rate to -27.8% for the quarter, compared to 22.9% in the prior quarter. Merger-related costs added another $6.7 million to expenses.

The provision for credit losses reached $20.3 million, driven by a $12.5 million partial charge-off on a single commercial real estate loan and other downgrades in that sector. This was a significant increase from the $5.6 million provision recorded in the second quarter. Consequently, net charge-offs rose to $21.9 million, or 0.60% of average loans on an annualized basis, up from 0.11% in the prior quarter.

Asset quality metrics showed total non-performing assets at $46.0 million, or 0.32% of total loans and other real estate owned, compared to 0.27% in June. The allowance for credit losses was $164.4 million, representing 1.14% of total loans and leases.

Capital ratios improved slightly across the board at September 30, 2026. The tier 1 leverage ratio was 9.61%, common equity tier 1 was 13.50%, and the total capital ratio was 14.74%. The company did not repurchase any shares during the third quarter.