First Hawaiian Shows Resilience with Strong Q1 Growth Amid Headwinds

HONOLULU, HI – April 24, 2026 – First Hawaiian, Inc. (NASDAQ: FHB) announced a solid start to 2026, reporting robust growth in core loans and deposits for the first quarter, even as it navigates a complex regional economic landscape marked by recent natural disasters. The bank holding company posted a net income of $67.8 million, or $0.55 per diluted share, and affirmed its commitment to shareholder returns by declaring a quarterly cash dividend of $0.26 per share.

The results come as the communities it serves in Hawai‘i, Guam, and Saipan grapple with the aftermath of severe weather. “We had good growth in loans and deposits, and credit quality remained excellent,” said Bob Harrison, Chairman, President, and CEO, in the company's earnings release. He emphasized the bank's active role in recovery efforts following recent floods in Hawai‘i and the impact of Typhoon Sinlaku. "We will continue to stand alongside our customers across our markets throughout the recovery.”

Steady Growth in a Challenging Environment

First Hawaiian's performance underscores a theme of stability in the face of regional headwinds. The bank's total loans and leases grew by $128.3 million during the quarter to reach $14.4 billion, an annualized growth rate of 3.6%. This expansion was driven primarily by a $125 million increase in its commercial real estate portfolio and a $71 million rise in commercial and industrial lending. The bank reaffirmed its full-year loan growth target of 3% to 4%.

On the other side of the ledger, total deposits saw even stronger growth, increasing by $261.7 million to $20.8 billion. This surge was largely fueled by a $244 million increase in public operating account balances. Notably, the bank avoided the typical seasonal outflows in retail and commercial deposits, a positive signal of customer stability.

This growth occurred against a backdrop of a Hawaiian economy projected for modest expansion. State forecasts predict a 1.7% real GDP growth for 2026, but the recovery is uneven, with some sectors like construction showing strength while others face challenges. The bank's ability to expand its balance sheet while its communities recover from what has been described as the state's worst flooding in two decades highlights its deep market penetration and the resilience of its customer base.

Navigating the Interest Rate Landscape

While top-line growth was strong, profitability metrics reflected broader market trends. The bank’s net interest margin (NIM)—a key measure of lending profitability—saw a slight compression, declining 2 basis points from the prior quarter to 3.19%. Management attributed this dip to the full-quarter impact of the Federal Reserve's interest rate cut in December 2025.

However, the bank demonstrated proactive liability management to counteract this pressure. The total cost of deposits declined by 7 basis points to 1.22% during the quarter. Furthermore, its proportion of noninterest-bearing deposits remained healthy and stable at 31% of total deposits, providing a strong, low-cost funding base. This prudent management has allowed First Hawaiian to maintain a zero-borrowing position, with no outstanding short-term or long-term debt.

Looking ahead, the company projects a rebound in profitability. Management provided guidance for a 2 to 3 basis point increase in its NIM for the second quarter and updated its full-year outlook to a range of 3.22% to 3.23%, assuming a stable interest rate environment for the remainder of the year. This contrasts with some regional peers and suggests confidence in its balance sheet positioning.

Asset Quality Remains a Pillar of Strength

A critical indicator of the bank's health, particularly following regional disasters, is its asset quality, which remained exceptionally strong in the first quarter. The provision for credit losses was reduced to $5.0 million, down from $7.7 million in the fourth quarter of 2025, reflecting continued confidence in the loan portfolio's stability.

Key credit metrics all pointed toward a well-managed and resilient book of business. Total non-performing assets decreased to $39.7 million, representing just 0.27% of total loans and leases, down from 0.29% in the previous quarter. Net charge-offs—loans deemed unrecoverable—held steady at a low 0.14% of average loans, unchanged from the prior quarter.

The allowance for credit losses stood at $169.3 million, or 1.17% of total loans and leases. This robust reserve provides a substantial cushion against potential future losses, with the allowance covering non-accrual loans by a factor of 4.27 times. These figures suggest that the financial impact of the recent storms has, to date, been effectively managed within the bank's risk framework.

Commitment to Shareholder Returns

First Hawaiian continued its long-standing practice of returning capital to its investors. The Board of Directors' declaration of a $0.26 per share quarterly dividend marks another consistent payout for the institution, which has paid a quarterly dividend since 2016. This represents a dividend payout ratio of approximately 47.3% of first-quarter earnings.

In addition to the dividend, the company was active in its stock repurchase program. During the quarter, First Hawaiian bought back approximately 1.3 million shares of its common stock for a total of $32.0 million, at an average price of $24.47 per share. This action, part of a larger $250 million share repurchase authorization, reduces the number of shares outstanding and can enhance earnings per share over time, signaling management's belief that its stock represents a good value for investment. The consistent capital return strategy, backed by solid operational performance and a strong balance sheet, reinforces the bank's position as a stable financial anchor in the Pacific.