First Hawaiian Completes Investment Portfolio Restructuring

First Hawaiian, Inc. (NASDAQ: FHB) made an announcement on December 9, 2024, regarding the successful completion of a restructuring process related to its available-for-sale investment securities portfolio. The Company executed the sale of $293 million worth of its lower-yielding available-for-sale debt securities, incurring an estimated after-tax loss of $19.7 million. Subsequently, the proceeds from this sale were reinvested into debt securities currently yielding 309 basis points more than the securities that were sold.

This strategic transaction is anticipated to have a positive impact on the Company’s financials. It is projected to increase net interest income by around $8.6 million and net interest margin by approximately 4 basis points in 2025. Additionally, the transaction is expected to contribute to an increase in net interest income by approximately $0.5 million and net interest margin by roughly 1 basis point in the fourth quarter of 2024.

The sold securities had a weighted average yield of 1.92% with an average duration of 3.2 years. In contrast, the reinvested securities offer a weighted average yield of 5.01% and have an average duration of 4.1 years. As a result of this restructuring, the Company recorded a one-time pre-tax loss of $26.2 million, which will be recognized in the quarter ending December 31, 2024. The breakeven period for this transaction is estimated to be 3 years.

Importantly, this restructuring of the investment portfolio did not impact the Company’s tangible equity, and it continues to maintain a status of being “well capitalized” in accordance with relevant regulatory guidelines.

First Hawaiian, Inc. is a bank holding company headquartered in Honolulu, Hawaii. Its primary subsidiary, First Hawaiian Bank, established in 1858 under the name Bishop & Company, is the oldest and largest financial institution in Hawaii with branch locations in Hawaii, Guam, and Saipan. The Company offers a wide range of banking services to both consumer and commercial customers, including deposit products, loans, wealth management, insurance, trust, retirement planning, credit card, and merchant processing services. Customers have access to their accounts through various channels such as ATMs, online, and mobile banking platforms.

Investors are advised to be mindful of forward-looking statements contained in press releases, including those made by First Hawaiian, Inc. These statements are subject to uncertainties and risks that may lead to actual results differing materially from what is expressed or implied. For a comprehensive discussion of potential risks, it is recommended to refer to the Company’s filings with the U.S. Securities and Exchange Commission, such as the Annual Report on Form 10-K for the year ended December 31, 2023, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024.

For further information, investors can reach out to Kevin Haseyama, CFA, at (808) 525-6268 or via email at [email protected]. Media inquiries can be directed to Lindsay Chambers at (808) 525-6254 or through email at [email protected].

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read First Hawaiian’s 8K filing here.

First Hawaiian Company Profile

First Hawaiian, Inc operates as a bank holding company for First Hawaiian Bank that provides a range of banking products and services to consumer and commercial customers in the United States. It operates in three segments: Retail Banking, Commercial Banking, and Treasury and Other. The company offers various deposit products, including checking, savings, and time deposit accounts, and other deposit accounts.