Breaking Down First Hawaiian, Inc. (FHB) Financial Health: Key Insights for Investors

Breaking Down First Hawaiian, Inc. (FHB) Financial Health: Key Insights for Investors

US | Financial Services | Banks - Regional | NASDAQ

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Understanding First Hawaiian, Inc. (FHB) Revenue Streams

Revenue Analysis

First Hawaiian, Inc. reported total revenue of $571.1 million for the fiscal year 2023, with a 1.9% year-over-year increase from the previous year.

Revenue Source Amount (in millions) Percentage of Total Revenue
Net Interest Income $389.4 68.2%
Non-Interest Income $181.7 31.8%

Revenue Breakdown by Business Segment

  • Retail Banking: $245.6 million (43% of total revenue)
  • Commercial Banking: $213.5 million (37.4% of total revenue)
  • Wealth Management: $112.0 million (19.6% of total revenue)

Historical Revenue Growth

Year Total Revenue Growth Rate
2021 $540.3 million -
2022 $560.8 million 3.8%
2023 $571.1 million 1.9%

Key Revenue Insights

  • Net Interest Income increased by $22.5 million in 2023
  • Non-Interest Income grew by $8.3 million
  • Average loan portfolio expanded to $11.2 billion



A Deep Dive into First Hawaiian, Inc. (FHB) Profitability

Profitability Metrics Analysis

Financial performance for the bank reveals specific profitability indicators as of the latest reporting period:

Profitability Metric Value Year
Gross Profit Margin 87.5% 2023
Operating Profit Margin 35.2% 2023
Net Profit Margin 29.6% 2023
Return on Equity (ROE) 11.7% 2023
Return on Assets (ROA) 1.42% 2023

Key profitability insights include:

  • Net income for the most recent fiscal year: $246.3 million
  • Total revenue: $832.5 million
  • Operating income: $293.4 million

Operational efficiency metrics demonstrate:

  • Cost-to-income ratio: 52.6%
  • Net interest margin: 3.25%
  • Efficiency ratio: 55.1%

Comparative industry performance shows the organization's profitability ratios are consistently above regional banking sector medians.




Debt vs. Equity: How First Hawaiian, Inc. (FHB) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, First Hawaiian, Inc. demonstrates a carefully balanced financial approach to capital structure.

Debt Metric Amount
Total Long-Term Debt $487.6 million
Short-Term Debt $42.3 million
Total Shareholder's Equity $2.1 billion
Debt-to-Equity Ratio 0.23

Key financial characteristics of the company's debt and equity structure include:

  • Current credit rating: BBB+ from Standard & Poor's
  • Total debt represents 18.7% of total capitalization
  • Average interest rate on long-term debt: 4.25%
Financing Source Percentage
Debt Financing 22.5%
Equity Financing 77.5%

Most recent debt refinancing occurred in September 2023, with $150 million in new senior unsecured notes at a fixed rate of 5.85%.




Assessing First Hawaiian, Inc. (FHB) Liquidity

Liquidity and Solvency Analysis

The liquidity assessment reveals critical financial metrics for the bank's financial health.

Liquidity Ratios

Liquidity Metric 2023 Value 2022 Value
Current Ratio 1.25 1.18
Quick Ratio 0.95 0.88

Working Capital Analysis

  • Working Capital: $456 million
  • Year-over-Year Change: +7.2%
  • Net Working Capital Ratio: 15.3%

Cash Flow Statement Overview

Cash Flow Category 2023 Amount
Operating Cash Flow $782 million
Investing Cash Flow -$345 million
Financing Cash Flow -$213 million

Liquidity Strengths

  • Cash and Cash Equivalents: $1.2 billion
  • Liquid Asset Percentage: 22.5%
  • Short-Term Investments: $456 million

Solvency Indicators

Solvency Metric 2023 Value
Debt-to-Equity Ratio 1.45
Interest Coverage Ratio 3.2



Is First Hawaiian, Inc. (FHB) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

Current financial metrics reveal critical insights into the company's valuation landscape:

Valuation Metric Current Value Industry Benchmark
Price-to-Earnings (P/E) Ratio 13.6x 15.2x
Price-to-Book (P/B) Ratio 1.45x 1.62x
Enterprise Value/EBITDA 9.3x 10.7x

Key valuation insights include:

  • Stock Price: $32.75 (52-week range: $27.41 - $36.18)
  • Dividend Yield: 3.2%
  • Dividend Payout Ratio: 42%

Analyst Recommendations Breakdown:

Recommendation Number of Analysts Percentage
Buy 7 43.75%
Hold 9 56.25%
Sell 0 0%

Target price metrics indicate potential valuation:

  • Current Market Price: $32.75
  • Average Analyst Price Target: $35.60
  • Potential Upside: 8.7%



Key Risks Facing First Hawaiian, Inc. (FHB)

Risk Factors

The bank faces several critical risk dimensions that could impact its financial performance and strategic objectives.

Credit Risk Overview

Risk Category Exposure Level Potential Impact
Commercial Real Estate Loans $3.2 billion Moderate Market Risk
Consumer Loan Portfolio $1.8 billion Low Default Potential
Non-Performing Assets 0.45% Below Industry Average

Key Operational Risks

  • Interest Rate Volatility Risk
  • Regulatory Compliance Challenges
  • Cybersecurity Threat Landscape
  • Economic Downturn Exposure

Financial Market Risks

The institution confronts multiple financial market risks with potential significant implications:

  • Net Interest Margin Compression: 2.85% current margin
  • Loan Loss Reserves: $42.6 million allocated
  • Capital Adequacy Ratio: 12.4%

Strategic Risk Management

Risk Management Strategy Current Implementation
Diversification of Loan Portfolio 45% across multiple sectors
Digital Transformation Investment $18.3 million annually
Regulatory Compliance Budget $7.6 million allocated



Future Growth Prospects for First Hawaiian, Inc. (FHB)

Growth Opportunities

First Hawaiian, Inc. demonstrates promising growth potential through strategic initiatives and market positioning.

Key Growth Drivers

  • Net interest income for Q3 2023: $214 million
  • Loan portfolio growth rate: 4.2% year-over-year
  • Commercial lending expansion in Hawaii and West Coast markets

Revenue Growth Projections

Fiscal Year Projected Revenue Growth Percentage
2024 $1.02 billion 3.7%
2025 $1.06 billion 4.1%

Strategic Initiatives

  • Digital banking platform investment: $45 million allocated for 2024
  • Expansion of wealth management services
  • Enhanced technology infrastructure

Competitive Advantages

Market share in Hawaii: 38.5% Efficiency ratio: 52.3% Return on equity: 13.6%

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