Abstract

First Hawaiian will report second-quarter 2026 results on July 24, 2026 before the market opens (Pre-Mkt), with current expectations centered on revenue of 227.69 million US dollars, EBIT of 98.47 million US dollars, and adjusted EPS of 0.58 US dollars, while investors also track updates related to the pending TriCo Bancshares transaction.

Market Forecast

Consensus for the current quarter points to revenue of 227.69 million US dollars, up 6.46% year over year, EBIT of 98.47 million US dollars, up 12.62% year over year, and adjusted EPS of 0.58 US dollars, up 18.81% year over year; there is no explicit consensus in the market on gross margin or net margin for the quarter. Management attention appears focused on sustaining earnings resilience through stable net interest income, disciplined expense control, and measured provisioning, while fee lines are positioned to provide incremental support. The most promising near-term operating contributor remains the Retail Banking franchise, which generated 158.26 million US dollars last quarter; year-over-year growth by segment was not disclosed.

Last Quarter Review

In the prior quarter (first quarter of 2026), First Hawaiian delivered revenue of 200.58 million US dollars, down 4.94% year over year, gross margin not disclosed, GAAP net profit attributable to shareholders of 67.78 million US dollars, a net profit margin of 31.48%, and adjusted EPS of 0.55 US dollars, up 17.02% year over year. A key highlight was bottom-line resilience: adjusted EPS of 0.55 US dollars exceeded consensus by 0.02 US dollars, helped by controlled operating expenses and steady pre-provision earnings, while revenue lagged expectations as balance-sheet mix and rate dynamics moderated reported growth. Main business composition remained concentrated in consumer-facing activities: Retail Banking contributed 158.26 million US dollars (71.82% of total), Commercial Banking added 62.57 million US dollars (31.00% of total adjusting for rounding), and Treasury and Other posted -0.48 million US dollars; year-over-year changes by segment were not disclosed.

Current Quarter Outlook (with major analytical insights)

Main Business: Core Banking Earnings Drivers This Quarter

The core earnings engine this quarter is expected to be a combination of net interest income stability and continued discipline on operating costs. With the first quarter illustrating that earnings can outpace revenue when costs and provisions are well-managed, the second quarter setup leans on incremental margin steadiness and cautious provisioning. Even as loan growth remains measured and funding remains competitive, the company’s ability to maintain an earnings bridge through expense control, modest fee momentum, and stable credit should support the modeled EPS advance of 18.81% year over year. One variable to watch is the mix within deposits and loans, because small shifts can exert noticeable effects on net interest income. A tilt toward lower-cost balances can protect the spread, while continued repricing of assets can gradually lift asset yields. If management preserves deposit mix quality while allowing loan yields to reflect prior rate dynamics, the gap between asset yields and funding costs should stabilize to modestly favorable levels, underpinning the 12.62% year-over-year EBIT growth implied by current expectations. Noninterest expense management remains central to the earnings narrative. The first quarter’s beat against EPS expectations occurred alongside a revenue shortfall, underscoring that cost governance can buffer top-line variability. This quarter, continued prudence in compensation, occupancy, technology investments, and vendor spending can extend that buffer. If fee revenues from service charges, cards, wealth-related activities, and other recurring sources hold steady or edge higher, they can supplement net interest income and reduce reliance on spread dynamics to meet targets. Together, these levers frame a path to deliver on the consensus EPS estimate of 0.58 US dollars even if revenue growth remains in the mid-single-digit range.

Most Promising Business: Retail Banking Through-the-Cycle Resilience

Retail Banking, which contributed 158.26 million US dollars last quarter, remains the most promising near-term contributor due to its scale and recurring nature of deposit and transaction flows. A steady flow of service charges, card fees, and consumer engagement typically lends a degree of stability to the income mix, and this stability can matter during quarters when funding costs, asset yields, or balance-sheet volumes move only incrementally. With consensus calling for group revenue growth of 6.46% year over year and adjusted EPS growth of 18.81% year over year, even slight improvements in retail fee intensity or deposit mix could make a measurable difference at the consolidated level. This quarter, the watch items inside Retail Banking include the mix between noninterest-bearing and interest-bearing deposits, migration between checking and time deposits, and the elasticity of card spending patterns. When the mix holds up, it helps limit the pass-through of higher funding costs into the income statement, and that, in turn, supports net interest income. Meanwhile, any sequential improvement in payment volumes or service-fee activity can act as an incremental tailwind to fee income, giving management more flexibility on expenses and provisioning choices without compromising the earnings trajectory implied by consensus. Credit performance within consumer portfolios will also be closely watched, particularly trends in delinquencies, nonaccruals, and charge-offs. The first quarter’s outcome—a double-digit percentage increase in adjusted EPS year over year despite revenue contraction—suggested that credit costs were kept in check and that operating discipline was firm. Maintaining that discipline in the current quarter would add credibility to the view that the Retail Banking platform can provide through-the-cycle support to consolidated profitability. Year-over-year Retail Banking growth rates were not disclosed, but the segment’s size and recurring nature make it the logical base for moderate, dependable contribution this quarter.

Key Stock Price Drivers This Quarter: Execution, Funding, Credit, and M&A

Short-term stock performance is likely to be most sensitive to four factors: funding stability, net interest income delivery relative to expectations, credit cost prints, and any incremental disclosures about the proposed acquisition of TriCo Bancshares. Funding stability and mix quality determine how close the realized spread stays to expectations, thereby affecting net interest income and, by extension, EBIT. If deposit costs stabilize faster than expected—or if deposit mix shifts toward lower-cost balances—investors could reward the stock for improved visibility into spread preservation. Conversely, if funding proves more competitive or deposit migration intensifies, the market could react to the potential pressure on the top line and margins. Credit metrics can alter the earnings profile quickly, so investors will scrutinize the path of provisions, nonperforming assets, and net charge-offs. A steady or improving credit picture would validate the mid-teens EPS growth expectation and potentially limit downside scenarios embedded in bearish ratings. However, if management signals higher provisioning needs due to any pockets of stress, investors may recalibrate EPS expectations to the lower end of the range implied by consensus. The first-quarter pattern—strong EPS despite revenue slippage—demonstrated the power of operating levers, but repeated success hinges on credit remaining orderly. Finally, the proposed TriCo Bancshares transaction remains an overhang and an opportunity at the same time. Communications during the last week indicate a definitive agreement for an all-stock combination, and trading in both names reacted around the announcement window, underscoring integration timing and synergy questions. In the near term, investors will look for clarity on regulatory timelines, expected cost synergies, pro forma capital levels, and share-count implications. If management articulates a path that is capital-accretive with credible synergy capture, the market may look through interim noise and assign a higher probability to sustained EPS compounding. On the other hand, any perceived dilution risk, protracted timelines, or integration complexity may keep a discount embedded in the multiple until milestones are met. In that sense, deal commentary around and after July 24, 2026 could be as important to the equity narrative as the reported quarter’s print.

Analyst Opinions

Bearish opinions are the clear majority among directional calls over the last six months, with multiple sell or underweight stances and cautious previews outweighing bullish endorsements. J.P. Morgan analyst Anthony Elian reiterated a Sell rating on First Hawaiian with a 27.00 US dollars price target, and a separate J.P. Morgan note also maintained a Sell with a 25.00 US dollars target; these views center on valuation sensitivity to funding costs, spread durability, and credit provisioning through the next several quarters. The broader rating stance summarized in recent coverage indicates an average recommendation skewed to underweight with a mean price target near 30 US dollars, framing near-term expectations as restrained until there is more visibility on sustainable net interest income and merger execution. The bearish majority highlights several themes that align with the key drivers discussed above. First, skeptics emphasize that modest revenue growth can mask underlying pressure if funding costs remain sticky relative to asset yield repricing. This is why they look for concrete proof of deposit mix improvement and evidence that net interest income does not require outsized provisioning relief to meet the quarter’s EPS estimate of 0.58 US dollars. Second, they point to the asymmetry around credit: while recent trends appeared manageable, any unexpected uptick in nonperforming assets or charge-offs could translate into higher provisions and erode the margin of safety behind the 12.62% year-over-year EBIT growth forecast. Third, transaction risk from the proposed all-stock combination with TriCo Bancshares figures prominently in bearish frameworks. Investors who are cautious want clarity on pro forma returns, integration costs, and timing, as well as how quickly management can deliver identifiable cost synergies without distracting from organic blocking and tackling. Given that the shares traded lower around the deal announcement window, these investors infer that the equity market seeks a high-confidence roadmap showing that the combination can be absorbed with minimal friction while preserving capital strength and dividend capacity. Until that roadmap becomes clearer, they assume a discount persists in valuation and remain guarded on near-term upside. It is important to note that the bearish stance does not argue against the company’s ability to meet this quarter’s consensus targets; rather, it questions the durability of those gains and the shape of forward earnings. As a result, bearish analysts are likely to frame a “show-me” quarter: they expect delivery on the reported figures, but they are focused on the composition of earnings, the sustainability of funding and margin trends, and explicit merger milestones. If the company demonstrates progress on all three fronts—net interest income stability, controlled credit costs, and pragmatic integration planning—those same analysts could moderate their negative bias. For now, their majority view remains cautious-to-bearish, with the onus on proof points that extend beyond a single quarter’s print.