First Hawaiian (FHB) Q3 2026 Earnings Call: NIM Rises, Loan Outlook Cut
Source Tradingkey
Key Takeaways
- Net interest income increased $3.1 million sequentially to $174.1 million, while net interest margin expanded 5 basis points to 3.30%.
- Total loans declined $115 million due to unexpected commercial real estate payoffs, lower dealer floor plan balances and residential mortgage runoff. Management cut its full-year loan growth outlook to 1%–2% from 3%–4%.
- Deposits grew approximately $50 million, total deposit costs declined 3 basis points and noninterest-bearing deposits represented 32% of total deposits.
- Credit costs increased: net charge-offs were $21.9 million, or 60 basis points of loans and leases, including a $12.5 million partial charge-off on a downtown Seattle office loan.
- Management expects Q4 2026 NIM of 3.34%–3.35% and raised its full-year NIM outlook to 3.26%–3.27%.
- First Hawaiian continues to expect the TriCo acquisition to close in Q4 2026, subject to shareholder and final regulatory approvals.
Key Financial Data
| Metric | Q3 2026 result | Change or context |
|---|---|---|
| Net interest income | $174.1 million | Up $3.1 million sequentially |
| Net interest margin | 3.30% | Up 5 basis points sequentially |
| September spot NIM | 3.33% | Month-end level |
| Total loans | Down $115 million | Driven by CRE payoffs, dealer floor plan declines and residential runoff |
| Total deposits | Up approximately $50 million | Commercial and public operating deposit growth partly offset retail declines |
| Total deposit cost | 1.17% | Down 3 basis points; September spot rate was also 1.17% |
| Noninterest-bearing deposit ratio | 32% | — |
| Noninterest income | $56.1 million | In line with management’s outlook |
| Noninterest expense | $160 million | Included $6.7 million of merger costs and a $24.3 million tax settlement expense |
| Tax benefit from settlement | $31 million | Related to the California tax settlement |
| Provision for credit losses | $20.3 million | Reflecting the office charge-off and CRE downgrades |
| Net charge-offs | $21.9 million | 60 basis points of loans and leases |
| Allowance for credit losses | $164 million | Down $4 million; 1.14% coverage ratio |
| Nonperforming assets and loans 90+ days past due | 45 basis points | Increase included mortgage-servicing issues and the Seattle office credit |
Business and Operating Performance
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