Yahoo Finance First Hawaiian Inc (FHB) (Q1 2024) Earnings Call Transcript Highlights: Navigating Economic ...
Net Income: $54.3 million
Earnings Per Share (EPS): $0.42
Net Interest Income: Increased by $2.6 million from previous quarter to $154.4 million
Net Interest Margin (NIM): Increased by 10 basis points to 2.91%
Loans and Leases: Ended at $14.3 billion
Total Deposit Balances: Decreased by $663 million
Noninterest Income: $51.4 million
Noninterest Expenses: $128.8 million, including a $4.1 million FDIC special assessment
Provision for Credit Losses: $6.3 million for the quarter
Allowance for Credit Losses: Increased by $3.3 million to $159.8 million
Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Could you discuss the trends in noninterest-bearing balances throughout the quarter and your expectations for core deposits growth? A: Jamie Moses, CFO, noted that most noninterest-bearing declines occurred in January and February, with stabilization in March. The forward guidance includes some movement from noninterest-bearing to interest-bearing accounts. The focus remains on generating new checking accounts due to moderated deposit growth needs, driven by the runoff of the securities portfolio.
Q: How are you managing the balance sheet in light of the uncertain rate environment? A: Jamie Moses, CFO, explained that the current strategy involves waiting out the natural runoff of the securities portfolio, funded by higher-cost deposits. The focus is on supporting customer loan growth opportunities, with no immediate plans for hedging. The bank feels comfortable with its balance sheet strategy despite the changing rate outlook.
Q: What drove the recent credit downgrades, and how do you view the overall credit environment? A: Bob Harrison, CEO, and Lea Nakamura, Chief Risk Officer, indicated that the downgrades were limited and within expectations. The overall credit metrics remain strong, with no broad signs of weakness. The bank continues to monitor and support borrowers closely.
Q: Can you provide insights into the expected trends for public time deposits and the strategy for the upcoming FHLB borrowing maturity? A: Jamie Moses, CFO, mentioned that public time deposits are expected to decrease in alignment with the balance sheet size. The strategy for the FHLB borrowing due in September will depend on economic conditions at that time, with possibilities of rolling it over or finding alternative funding sources.
Q: What is your outlook on loan growth, particularly in commercial and C&I segments? A: Bob Harrison, CEO, anticipates strength in flooring due to higher production levels from manufacturers and ongoing commercial real estate deals. However, no significant recovery is expected in the residential segment within the year.
Q: How are you approaching capital management, especially considering potential share buybacks? A: Bob Harrison, CEO, stated that the bank is past the uncertainty period influenced by market disruptions like the SVB situation. The focus is now on rebalancing the balance sheet from securities to loans, which requires higher capital. Share repurchases are more likely to be considered in the latter half of the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
