Goldman Sachs Defines 4 Growth Drivers For First Hawaiian

First Hawaiian operates in the attractive Hawaiian market with 36.5 percent deposit share, and Goldman says it is a top performing bank in terms of efficiency, credit and market share.

Related Link: First Hawaiian "A Safe Haven," According To KBW

Following are analyst Ryan Nash's core drivers of growth for the bank:

1. "Attractive banking markets: We see its leading market share in Hawaii driving mid-single digit loan growth and outperformance on credit and deposit pricing through the cycle."
2. "Multiple levers from rates: Its margin should have upside given its leverage to higher rates and via extension of securities duration."
3. "Leveraging excess capital: We believe FHB has >350bps of excess capital; leveraging this should add $0.30 to EPS."
4. "Upward bias to expenses: We see upward bias to expenses as FHB separates. Longer-term we see its efficiency remaining below 50 percent."

Nash said First Hawaiian should be in the focus list of long-term investors due to its "3 percent dividend yield, peer leading rate sensitivity (+12.8 percent NII from +200bps) and excess capital, which could increase earnings by 20 percent over time."

At time of writing, First Hawaiian was down 1.58 percent on Monday, trading at $26.15.

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