Executive Summary

Q3 2025 delivered clean upside on EPS and margins: diluted EPS was $0.59 vs $0.58 in Q2 and $0.48 in Q3 2024, with NIM up 8 bps to 3.19% and efficiency ratio improving to 55.3% .
Wall Street consensus from S&P Global was $0.522* EPS and $218.3M* revenue; FHB printed $0.59 EPS and $221.9M* revenue, a clear beat on both; noninterest income also rose to $57.1M .
Deposits surged $498M QoQ (public operating accounts) while loans declined $223M on dealer floor plan reductions and corporate line paydowns; management expects loan balances to end 2025 roughly flat to YE 2024 and deposits to be flat in Q4 with mix shift .
Guidance nudged higher for NIM (a few bps above September’s 3.16%), fee run-rate lifted to ~$54M, and full-year expenses now expected below the prior $506M outlook—setting up margin momentum into Q4 despite assumed 25 bp cuts in both Oct and Dec .

What Went Well and What Went Wrong

What Went Well

Margin and earnings quality: NIM rose to 3.19% (+8 bps QoQ) as asset yields and non-recurring loan fees helped; diluted EPS improved to $0.59 and efficiency ratio fell to 55.3% .
Fee strength and cleaner expense trajectory: noninterest income increased to $57.1M, and management raised normalized fee run-rate guidance to ~$54M while flagging full-year expenses should be below $506M .
Deposits and capital: total deposits climbed $498M QoQ with public operating inflows; CET1/Total capital rose to 13.24%/14.49%, and buybacks continued ($24M in Q3, $74M YTD under $100M authorization) .

Management quote: “We continue to expect positive NIM momentum in the fourth quarter…margin will advance a few basis points from the September NIM” .
Management quote: “We had been messaging more in the $51 to $52 [fee] range…now…moving that up to $54 as our expected run rate” .

What Went Wrong

Loan balances contracted $223M, driven by $146M dealer floor headwinds and ~$130M corporate line paydowns; non-accruals and NPAs ticked up modestly QoQ .
Provision held at $4.5M and net charge-offs annualized increased to 12 bps; classified assets rose by ~$30M due to a single long-time borrower migration to substandard (management not concerned) .
Retail deposits dipped seasonally ($43M), and Q4 outlook includes expected outflows in public deposits even as mix shifts toward retail/commercial .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Net Interest Income ($USD Thousands)	$156,707	$160,526	$163,583	$169,331
Noninterest Income ($USD Thousands)	$53,288	$50,477	$53,958	$57,060
Diluted EPS ($)	$0.48	$0.47	$0.58	$0.59
Net Interest Margin (%)	2.95%	3.08%	3.11%	3.19%
Efficiency Ratio (%)	59.77%	58.22%	57.23%	55.29%
Net Income ($USD Thousands)	$61,492	$59,248	$73,247	$73,840
Revenue (S&P definition) ($USD)	—	$200,503,000*	$213,041,000*	$221,891,000*

Note: Asterisked values are from S&P Global (consensus dataset). Values retrieved from S&P Global.

Segment/Lending Mix

Loans ($USD Thousands)	Q3 2024	Q2 2025	Q3 2025
Commercial & Industrial	$2,110,077	$2,370,210	$2,027,504
Commercial Real Estate	$4,265,289	$4,411,585	$4,513,706
Construction	$1,056,249	$884,306	$881,462
Residential Mortgage	$4,187,060	$4,085,827	$4,077,946
Home Equity Line	$1,159,823	$1,161,876	$1,170,822
Consumer	$1,030,044	$1,011,125	$1,013,663
Lease Financing	$432,828	$426,940	$444,280
Total Loans & Leases	$14,241,370	$14,351,869	$14,129,383

KPIs and Balance Sheet

KPI	Q3 2024	Q2 2025	Q3 2025
Total Deposits ($USD Thousands)	$20,227,702	$20,231,419	$20,729,557
Total Assets ($USD Thousands)	$23,780,285	$23,837,147	$24,098,728
CET1 / Total Capital (%)	13.03% / 14.25%	13.03% / 14.28%	13.24% / 14.49%
NPAs ($USD Thousands) and % of Loans+OREO	$17,834 (0.20%)	$28,591 (0.20%)	$30,933 (0.22%)
Allowance for Credit Losses ($USD Thousands) and Coverage of Loans (%)	$163,700 (1.15%)	$167,825 (1.17%)	$165,269 (1.17%)
Net Charge-offs (annualized %)	0.11%	0.09%	0.12%
Deposit Cost (Spot, end Sep)	—	—	1.36%
Noninterest-bearing Deposits Ratio	—	—	33%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin (NIM)	Q4 2025	Not specified prior	“Advance a few bps from September NIM of 3.16%”	Raised (sequential expansion)
Noninterest Income Run-rate	Q4 onward	$51–$52M (prior messaging)	~$54M	Raised
Full-year Expenses	FY 2025	~$506M (most recent outlook)	Below $506M	Lowered
Deposits	Q4 2025	Not specified prior	Total deposits flat QoQ; mix shift (public outflows, retail/commercial inflows)	Maintained aggregate; mix shift
Loan Balances	FY 2025 YE	Not specified prior	End 2025 ~flat to YE 2024	Maintained/clarified
Rate Path Assumptions	Q4 2025	—	25 bp cuts in Oct and Dec embedded	New contextual assumption
Dividend	Q4 2025	$0.26 declared prior quarter	$0.26 declared 10/22, payable 11/28/25	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
NIM trajectory	NIM up 5 bps in Q1 to 3.08% ; up 3 bps in Q2 to 3.11%	NIM 3.19%; guide for a few bps more in Q4	Improving sequentially
Fee income	Q1 $50.5M; Q2 $54.0M	$57.1M; normalized run-rate now ~$54M	Stronger; run-rate lifted
Expenses	Q1 $123.6M; Q2 $124.9M	$125.7M; full-year below $506M	Slightly higher in Q3; FY outlook improved
Deposits/mix	Q1 deposits -$106M QoQ ; Q2 +$16M QoQ	Q3 +$498M QoQ (public operating inflows); Q4 flat QoQ with mix shift	Strength with expected mix normalization
Credit quality	Q1 NPAs $20.2M (0.14%) ; Q2 $28.6M (0.20%)	Q3 $30.9M (0.22%); net charge-offs 12 bps; single-borrower classification change	Stable/low but modestly higher NPAs
Loan growth/pipeline	Q1 loans -$115M QoQ ; Q2 +$58.8M QoQ	Q3 -$222.5M QoQ; expect strong Q4 originations and YE 2025 flat vs YE 2024	Near-term headwind; pipeline supportive
M&A stance	Open to opportunities; Hawaii constrained by HHI (implied)	Open to Western US opportunities only; no change	Unchanged/open
Investment portfolio	Let run down previously	Restarted purchases; portfolio held flat; spreads on reinvestments 200–250 bps	Stabilizing; accretive reinvestment
Tariffs/auto channel	—	Tariff impacts may raise auto prices; slower demand could lift floor plan balances	Watch for impact

Management Commentary

CEO economic overview: “We had another strong quarter as net income increased compared to the second quarter…The effective tax rate in the third quarter returned to a more normalized 23.2%” .
Balance sheet and capital: “We repaid the $250 million FHLB advance that matured in September…repurchased about 965,000 shares at a total cost of $24 million…$26 million remaining authorization” .
Margin outlook: “Run-rate NIM for September was 3.16%, and we continue to expect positive NIM momentum in the fourth quarter…advance a few basis points from the September NIM” .
Fee/expense outlook: “Non-interest income benefited…we continue to expect the normalized run rate…about $54 million per quarter…we now expect full-year expenses will come in below…$506 million” .
Credit view: “Credit risk remains low, stable…Classified assets increased $30.1 million due primarily to a single borrower…annualized year-to-date net charge-off rate was 11 bps” .

Q&A Highlights

Deposit betas on the way down: management targets roughly 90% beta for the next cut, then stepping down (e.g., ~88%, ~85%), maintaining ability to lower deposit costs as Fed cuts .
NIM tailwinds: ~$1B fixed-rate loan cash flows over 12 months repricing ~125 bps higher; investment portfolio runoff $500–$600M reinvested at 225–250 bps spreads—supporting NIM through early 2026, contingent on loan growth .
Loan pipeline and growth: dealer floor plan declines tied to franchise sales and one-off corporate paydowns; expect strong Q4 originations and YE 2025 loans ~flat to YE 2024 .
M&A stance: open to Western U.S. opportunities only; no change in posture .
Tariffs: uncertainty around manufacturers passing through costs; slower demand could benefit floor plan balances (inventory stays longer) .

Estimates Context

Metric	Consensus (S&P)*	Actual (S&P)*	Surprise
EPS (Primary)	$0.522*	$0.59*	Beat
Revenue	$218.3M*	$221.9M*	Beat

Notes: Asterisked values are from S&P Global consensus and actuals. Values retrieved from S&P Global.

Implications: EPS outperformance alongside margin expansion and higher fee run-rate suggests upward pressure on near-term EPS estimates, while full-year expense outlook below $506M reduces opex risk .

Key Takeaways for Investors

Margin momentum and fee run-rate uplift should support sequential EPS into Q4 even with two 25 bp cuts embedded in guidance .
Deposit inflows and strong noninterest-bearing mix (33%) underpin asset yields and rate sensitivity, but expect public deposit normalization in Q4; watch mix shift execution .
Loan headwinds in Q3 were idiosyncratic (dealer franchise sales, corporate paydowns); management points to robust Q4 pipeline and YE 2025 loans flat vs YE 2024 .
Expense discipline now implies FY 2025 below $506M; combined with NIM tailwinds, operating leverage is improving into year-end .
Credit remains benign despite modestly higher NPAs; single-borrower classification drove classified asset increase, with no loss concern signaled .
Capital return continues: $24M buyback in Q3; $74M YTD under $100M authorization alongside stable dividend ($0.26) .
Watch auto tariffs and rate trajectory; slower demand could benefit floor plan balances, while deeper/faster cuts could compress spreads—loan growth remains key to sustaining NIM .

Sources:
- Q3 2025 8-K press release and tables **[36377_0001104659-25-102000_fhb-20251024xex99d1.htm:0]** **[36377_0001104659-25-102000_fhb-20251024xex99d1.htm:3]** **[36377_0001104659-25-102000_fhb-20251024xex99d1.htm:4]** **[36377_0001104659-25-102000_fhb-20251024xex99d1.htm:1]** **[36377_0001104659-25-102000_fhb-20251024xex99d1.htm:5]** **[36377_0001104659-25-102000_fhb-20251024xex99d1.htm:18]** **[36377_0001104659-25-102000_fhb-20251024xex99d1.htm:19]**
- Q3 2025 earnings call transcript **[0000036377_2202693_1]** **[0000036377_2202693_2]** **[0000036377_2202693_3]** **[0000036377_2202693_4]** **[0000036377_2202693_5]** **[0000036377_2202693_6]** **[0000036377_2202693_7]** **[0000036377_2202693_8]** **[0000036377_2202693_9]**
- Q2 2025 8-K press release and tables **[36377_0001558370-25-009584_fhb-20250725xex99d1.htm:0]** **[36377_0001558370-25-009584_fhb-20250725xex99d1.htm:3]** **[36377_0001558370-25-009584_fhb-20250725xex99d1.htm:4]** **[36377_0001558370-25-009584_fhb-20250725xex99d1.htm:5]** **[36377_0001558370-25-009584_fhb-20250725xex99d1.htm:17]** **[36377_0001558370-25-009584_fhb-20250725xex99d1.htm:18]** **[36377_0001558370-25-009584_fhb-20250725xex99d1.htm:19]**
- Q1 2025 8-K press release and tables **[36377_0001558370-25-005188_fhb-20250423xex99d1.htm:0]** **[36377_0001558370-25-005188_fhb-20250423xex99d1.htm:3]** **[36377_0001558370-25-005188_fhb-20250423xex99d1.htm:4]** **[36377_0001558370-25-005188_fhb-20250423xex99d1.htm:5]** **[36377_0001558370-25-005188_fhb-20250423xex99d1.htm:1]**
- Pre-earnings press release (timing/logistics) **[36377_de28b2258f674e61a72cabfa792672ea_0]**
- S&P Global consensus and actuals via GetEstimates (asterisked values). Values retrieved from S&P Global.

FIRST HAWAIIAN, INC. (FHB)·Q3 2025 Earnings Summary