First Hawaiian Q3 profit falls as credit loss provision rises

Overview

• US regional bank's Q3 net income fell 13.1% to $63.7 mln

• Total loans and leases declined, while deposits increased slightly

• Results included $24.3 mln noninterest expense and $31 mln tax benefit from prior reorganization

Outlook

• Company did not provide specific financial guidance for the current quarter or full year in its press release

Result Drivers

• CREDIT LOSS PROVISION - Provision for credit losses rose to $20.3 mln, driven by a $12.5 mln partial charge-off related to a single commercial real estate loan and other CRE loan downgrades

• NONINTEREST EXPENSES -Noninterest expense increased by $29.6 mln, including $6.7 mln in merger-related costs and a $24.3 mln expense from settling tax liabilities tied to the 2016 corporate reorganization

• INCOME TAX BENEFIT - Results included a $31.0 mln income tax benefit from an agreement to settle tax liabilities from the 2016 corporate reorganization

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 7 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for First Hawaiian, Inc. is $29.00, about 11% above its October 22 closing price of $26.13

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 12 three months ago

Reuters Recommended Reads

• Oct 21 - Enterprise Financial Q3 profit falls as higher credit provisions offset loan growth

• Oct 22 - Associated Banc-Corp Q3 adjusted EPS beats estimates

• Oct 20 - Bank OZK Q3 net income falls 9%

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)