First Hawaiian Executes Balance Sheet Restructuring
First Hawaiian, Inc. has executed a series of balance sheet restructuring transactions related to its investment securities portfolio that are expected to improve its overall financial position.
First Hawaiian reports that as part of its ongoing balance sheet optimization strategy, it recently completed the sale of approximately $898 million of its lower yielding securities available-for-sale, resulting in an after-tax loss of approximately $17.6 million or 13 cents per diluted share to be recognized in the fourth quarter of 2018 and $2.1 million to be recognized in the first quarter of 2019.
The weighted average yield on the securities sold was 1.72% with an estimated duration of 2.8 years. Proceeds from the sales were reinvested in debt securities issued by U.S. government agencies at a weighted average yield of 3.03% with an estimated duration of 2.2 years.
First Hawaiian estimates the restructuring will result in approximately $6.1 million of after-tax earnings accretion in 2019 and that the payback period of the loss will be approximately two and a half years.