Since January 2025, First Hawaiian Bank has been in a holding pattern, posting a small return of 4.8% while floating around $26.27.
Is there a buying opportunity in First Hawaiian Bank, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Is First Hawaiian Bank Not Exciting?
We're sitting this one out for now. Here are three reasons why we avoid FHB and a stock we'd rather own.
1. Net Interest Income Points to Soft Demand
Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.
First Hawaiian Bank’s net interest income has grown at a 4.6% annualized rate over the last four years, worse than the broader bank industry. Its growth was driven by both an increase in its outstanding loans and net interest margin, which represents how much a bank earns in relation to its outstanding loan book.
2. EPS Growth Has Stalled
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
First Hawaiian Bank’s flat EPS over the last five years was below its 1.3% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.
3. Steady Increase in TBVPS Highlights Solid Asset Growth
We consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation.
Although First Hawaiian Bank’s TBVPS was flat over the last five years. the good news is that its growth has recently accelerated as TBVPS grew at a solid 12.2% annual clip over the past two years (from $10.45 to $13.15 per share).
Final Judgment
First Hawaiian Bank isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 1.2× forward P/B (or $26.27 per share). At this valuation, there’s a lot of good news priced in - you can find more timely opportunities elsewhere. We’d suggest looking at one of our top software and edge computing picks.
Stocks We Would Buy Instead of First Hawaiian Bank
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