First Hawaiian, Inc. announced on December 9, 2024, the completion of a restructuring of its available-for-sale investment securities portfolio. The company sold $293 million of lower-yielding debt securities, incurring an estimated after-tax loss of $19.7 million.
The proceeds from this sale were reinvested into $293 million of new debt securities. These new securities yield 309 basis points more than the ones sold, with the sold securities having a weighted average yield of 1.92% and the new ones yielding 5.01%.
This transaction is projected to increase net interest income by approximately $8.6 million and net interest margin by about 4 basis points in 2025. A one-time pre-tax loss of $26.2 million will be recognized in the fourth quarter of 2024, with the breakeven on this transaction estimated at three years. The company confirmed no impact on tangible equity, maintaining its 'well capitalized' status.
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