First Hawaiian, Inc. (FHB): Navigating Mixed Signals

First Hawaiian, Inc. ('FHI') is a bank holding company that owns First Hawaiian Bank ('FHB'), the largest full-service bank headquartered in Hawaii. FHB operates 48 branches across Hawaii, Guam, and Saipan, providing a diversified range of banking services to consumer and commercial customers. These services include deposit products like checking and savings accounts, lending services encompassing commercial and industrial, real estate, and construction lending, and consumer lending such as residential mortgages and auto financing. 'FHB' also offers wealth management and trust services, along with consumer and commercial credit cards and merchant processing. The company's strategy centers on developing comprehensive, long-term banking relationships by offering a diverse array of products and services and delivering high-quality customer service. They operate through three segments: Retail Banking, Commercial Banking, and Treasury and Other.

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FHB's technical outlook is mildly bearish. The stock has experienced a notable downtrend over the past 90 days, evidenced by the price decline from approximately $26.63 in early July to $24.41 as of the latest close. The price currently sits below its 21-day EMA, signaling short-term bearish momentum. The MACD is negative and trending downwards, further reinforcing bearish sentiment. The RSI is at 52.28, indicating neither overbought nor oversold conditions, but the trend is downward. The stock price is below both the 50-day SMA (24.90) and 200-day SMA (24.66), confirming the overall downtrend. While the STOCHk is at 71.39 indicating short term buying pressure, the overall trend suggests this may be short lived. The ADX is low at 13.40, suggesting a weak trend. Recent price action has been choppy, with some brief rallies followed by declines, indicating a lack of sustained buying interest. Given the bearish momentum and downtrend, FHB is likely to continue its downward trajectory over the next 1-3 months.

FHI's management discussion presents a largely positive picture, although some economic headwinds are noted. Net income for the three months ended September 30, 2025, increased by $12.3 million or 20% to $73.8 million, driven by an increase in net interest income of $12.6 million and an increase in noninterest income of $3.8 million. For the nine months ended September 30, 2025, net income increased by $28.7 million or 16% to $206.3 million, again driven by an increase in net interest income of $29.5 million and an increase in noninterest income of $5.1 million. Total loans and leases decreased by $278.9 million or 2% from December 31, 2024, to $14.1 billion as of September 30, 2025. Total deposits increased by $407.3 million or 2% from December 31, 2024, to $20.7 billion as of September 30, 2025. The ACL was $165.3 million as of September 30, 2025, an increase of $4.9 million or 3% from December 31, 2024. The MD&A mentions that Hawaii's economy faces 'high consumer prices and housing affordability challenges' and that the 'full impact' of the One Big Beautiful Bill Act is 'unknown at this time'. The US federal government shutdown since October 1, 2025, also presents a potential risk. Despite these uncertainties, FHI maintains 'high levels of liquidity' and is 'well-capitalized', with a Common Equity Tier 1 ratio of 13.24% as of September 30, 2025.

First Hawaiian Bank's Q2 2025 earnings call paints a moderately positive picture. The bank reported a 'very strong second quarter' with net income increasing over 23% compared to the prior quarter, driven by higher net interest and noninterest income, good expense control, and lower provision expense. Loan growth is expected to be in the 'low single digits' for the full year. While commercial and retail deposits declined, public deposits increased, and total deposit costs fell by 4 basis points. The net interest margin (NIM) increased by 3 basis points to 3.11%, with expectations of further increase to 3.13% in Q3. Noninterest income benefited from a few one-time items, but the recurring portion is expected to be around $51 million per quarter. Full year expenses are projected to be around $506 million, better than originally expected. Credit quality remains strong, with management stating they are 'not observing any broad signs of weakness' across portfolios. While classified assets increased, management expects most of these to cure themselves. The bank repurchased shares and intends to continue doing so, indicating confidence in its capital position. Overall, the tone suggests cautious optimism, with solid performance and a stable outlook.

FHB's financial performance presents a somewhat positive picture, though with some inconsistencies. Revenue has fluctuated, starting at $287.8M in Q1 2024, dipping before reaching $242.6M in Q3 2025. Gross profit ratio also experienced some volatility, starting at 0.66 in Q1 2024 and peaking at 0.72 in Q2 2025, before data became unavailable. Operating cash flow was $66.5M in Q1 2024, then $136.4M in Q2 2025, before data became unavailable, indicating positive cash generation in these periods. Total debt remained constant at $250M from Q1 2024 through Q4 2024, then decreased to $0 in Q3 2025, suggesting improved solvency. Overall, the company shows signs of profitability and strong cash flow, but the lack of available data for Q3 2025, as well as volatility in revenue and gross profit ratio, makes a fully bullish assessment difficult.

The company presents a moderately bullish investment profile based on its key metrics and financial ratios. Revenue has shown positive growth, indicating a healthy demand for its products or services. The gross margin has remained relatively stable, suggesting efficient cost management. The Return on Equity (ROE) indicates a solid return for shareholders. The Price-to-Earnings (P/E) ratio suggests the company is appropriately valued by the market. The debt-to-equity ratio has seen a decrease, showcasing the company's improved financial leverage. The current ratio signifies the company's strong ability to meet its short-term obligations. Overall, the company demonstrates a stable and growing business model with a healthy balance sheet, making it a moderately attractive investment for the next 6-12 months.