First Hawaiian earnings for the third quarter of 2026 showed higher net interest income despite a decline in loans, as a wider lending margin supported revenue. In its October 23 announcement, the company lowered its full-year loan growth forecast to 1%–2% from 3%–4% after unexpected commercial real estate loan payoffs.
Key Takeaways
- Net interest income rose $3.1 million from the previous quarter to $174.1 million.
- Unexpected commercial real estate payoffs reduced loans and prompted lower full-year growth guidance.
- The company disclosed a $24.3 million tax settlement tied to its 2016 separation from BNP Paribas.
Table of Contents
- First Hawaiian earnings benefit from a wider margin
- Loan payoffs reset the full-year growth outlook
- Tax settlement relates to the former ownership structure
- Conclusion
First Hawaiian earnings benefit from a wider margin
Third-quarter net interest margin increased five basis points to 3.30%. The improvement helped First Hawaiian generate more net interest income even as its loan balance contracted.
Net interest income measures interest earned on assets such as loans and securities minus interest paid on funding. Its increase therefore does not, by itself, establish that total net profit improved, particularly when separate tax items affect the earnings picture.
| Item | Details |
|---|---|
| Reporting period | Third quarter of 2026; results announced October 23 |
| Net interest margin | 3.30%, up five basis points sequentially |
| Loan balance change | Down $115 million during the quarter |
| 2026 loan growth guidance | Revised to 1%–2% from 3%–4% |
Loan payoffs reset the full-year growth outlook
Total loans declined $115 million during the quarter, primarily because of unexpected payoffs in commercial real estate lending. Management responded by reducing both ends of its 2026 loan growth forecast by two percentage points.
The revised range still anticipates full-year loan expansion, rather than contraction. But the quarterly decline leaves a clear contrast between improving income from interest-earning assets and a weaker outlook for loan volumes.
Loan repayments reduce outstanding balances, so the decline should not automatically be read as evidence of weaker new lending or deteriorating credit quality. The disclosed figures do not quantify those separate trends.
Tax settlement relates to the former ownership structure
First Hawaiian also disclosed a $24.3 million tax settlement connected with its 2016 separation from BNP Paribas. The settlement is a separate, one-time item rather than a measure of recurring lending performance.
The bank’s ownership history distinguishes the stages of that transition: First Hawaiian shares began trading on Nasdaq in August 2016, while BNP Paribas exited its remaining ownership position in February 2019. Those milestones provide background to the relationship underlying the settlement, not verification of its current financial treatment.
Conclusion
First Hawaiian’s quarter combined stronger interest income with a reduced lending outlook. Fourth-quarter loan balances will show whether the bank finishes 2026 within its revised 1%–2% growth range.
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