- Refinancing of existing mortgages and investment in new securities and loans at lower yields will hurt margin next year.
- Loan growth will likely remain low due to the slowdown in the economic activity in Hawaii and the forgiveness of Paycheck Protection Program loans.
- The credit risk is high because a substantial portion of the loan portfolio is under payment deferral. Further, FHB has exposure to the Hawaiian economy that depends on tourism.
- The estimated potential price upside is not high enough to compensate for FHB’s riskiness.
For further details see:
First Hawaiian: Credit Risks Still At A High Level