First Hawaiian Inc

Equity Research 24 July 2026 | 9:44AM EDT

First Hawaiian Inc. (FHB): First Take: Modest PPNR beat on lower expenses (on the back of pre-announcement); guide points to NIM

Bottom line on the stock: Overall, this was a solid quarter and guide for FHB, in our Ryan M. Nash, CFA | view. With FHB pre-reporting results following the announcement of the TCBK Goldman Sachs & Co. LLC

transaction (which pointed to an EPS beat and higher NII on better NIM), some of the Lucas Haimes | street estimates were updated following the deal so while the results are broadly Goldman Sachs & Co. LLC in-line with expectations, it is on the back of the pre-announced beat. Within the results, FHB saw solid growth with EOP loans coming in ahead of expectations and while AEA trends were a touch softer (post pre-announce updated), NIM came in higher than expected as deposit costs declined 3bps QoQ and loan yields improved 1bp sequentially. Deposit growth was a touch below expectations and declined ~3% QoQ. In terms of its outlook, FHB tweaked its expectations for NIM and expenses, pointing to a ~3.24-3.25% NIM (3.22 – 3.23% prior) which likely reflects the more favorable forward curve for FHB given their asset sensitive balance sheet along with pointing to slightly lower costs of $515mn - $520mn ($520mn prior) while leaving balance sheet and fee expectations unchanged. All together, this points to ~2% PPNR upside vs. consensus. While FHB did not repurchase any shares in the quarter, it is on the back of the recently announced TCBK transaction where the deal model did not assume any repurchases through 2027 (though FHB noted it retained the flexibility to continue with buybacks).

When we put it all together, this was a solid quarter and updated guide. From here we think the focus will be on a) the core trends at FHB, particularly the pacing of loan growth for the year as its guide implies an acceleration in YoY loan growth and what FHB’s expectations are deposit cost repricing through 2H if rates are flat / there is 1 hike, b) the recently announced TCBK transaction, including any incremental thoughts on revenue synergies as well as what level of loan growth it could expect from the combined businesses over time. Overall, we believe the stock could see a positive reaction given the solid quarter and more upbeat guide.

2026 Outlook: FHB provided an updated 2026 outlook which points to PPNR in-line to slightly lower than consensus (we note consensus estimates are noisy given deal announcement) driven by modestly lower NII partially offset by lower expenses. FHB increased their NIM expectations to 3.24-3.25% for FY26, slightly below consensus expectations of 3.25% (pre-deal noise). FHB removes the “assumes two cuts” language from its forward guidance, but we are unsure of the exact rate scenario it assumes. Additionally, FHB noted that 3Q NIM is expected to increase 2bps from 2Q NIM of 3.27%, which is above street expectations of flat QoQ. Lastly, FHB reiterated its fee guide of $220m (in-line with the street).

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Goldman Sachs First Hawaiian Inc. (FHB)

Four key questions for the call: 1) With the recently announced TCBK merger, can you provide any preliminary thoughts on potential revenue synergy opportunities as well as a finer point on what you think the medium-term loan growth profile of the combined banks can be? 2) The reiterated loan growth guide implies some acceleration in YoY trends, can you unpack the drivers of the improvement as you look through the rest of the year? 3) Can you walk us through the drivers of NIM through 2H with and without a Fed hike including deposit cost expectations? 4) While the TCBK deal model didn’t include…