First Hawaiian (FHB) Stock Forecast & Price Target

First Hawaiian Inc. has demonstrated a solid net interest margin (NIM) expansion of 8 basis points to 3.03%, driven by lower deposit rates and a favorable funding mix, which is expected to sustain continued margin growth through 2025. The company has adjusted its earnings estimates upward by 11% based on an improved net interest income (NII) outlook, bolstered by a projected NIM increase to approximately 3.06% in the first quarter of 2025. Additionally, the bank has achieved a 5% annualized loan growth, particularly in commercial real estate and commercial and industrial lending sectors, primarily serving Hawaii-based companies, indicating strong local demand and solid operational performance.

First Hawaiian Inc has experienced a decline in its CET1 ratio, dropping from 13.0% to 12.8%, primarily due to capital returns amid ongoing regulatory and technology expenses and mounting risks related to credit costs and reduced loan demand. Despite management's guidance forecasting a steady fee income of approximately $51 million per quarter, this figure indicates a normalization that is lower than previous performance, reflecting broader challenges in consumer lending, particularly in residential and home equity markets. Additionally, with projected operating costs increasing by 2% to about $510 million for 2025, the bank faces potential margin pressure and earnings volatility in a rising interest rate environment, contributing to a significantly negative financial outlook.