First Hawaiian heads into its October 23 earnings date with short sellers quietly trimming positions but options traders hedging more aggressively than at any point in recent months.
The most striking divergence in the data this week is between short interest direction and options positioning. Short interest has pulled back meaningfully from its recent peak. At 9.6% of free float, it remains a real conviction short, but the week-on-week decline of 5.6% is material. Shorts had built to around 12.8 million shares in mid-September before retreating to roughly 11.9 million by September 29. The cost of borrowing has followed the same trajectory, falling 38% on the week to just 0.25%, its lowest level in the 30-day window. Borrow availability is extremely loose at over 2,000%, meaning there is no shortage of supply for new short positions, which makes the retreat look like genuine covering rather than a squeeze. The borrow market is not tight by any measure.
Options positioning tells a different story. Put demand has climbed sharply. The put/call ratio now runs at 5.76, well above its 20-day average of 3.43 and roughly 1.4 standard deviations elevated. While the PCR has a 52-week high of 20.35 that puts the current reading in context, the shift from sub-2.5 readings in mid-September to the current level is notable. Traders appear to be paying for downside protection into the earnings print even as the active short base has reduced exposure. That is not a contradiction: shorts may be covering to avoid squeeze risk while more cautious longs buy puts as an alternative hedge.
The Street is broadly neutral to negative. Most covering analysts rate FHB at Neutral or equivalent, and Wells Fargo trimmed its target to $26 this week while maintaining Underweight, a signal that at least one major bank sees the stock as fairly priced or slightly rich at current levels. Goldman Sachs holds a Sell with a $30 target, JP Morgan rates it Underweight with a $31 target. The mean target across the group sits at $30.44, implying roughly 23% upside to the $24.82 close. The bull case rests on First Hawaiian's position as Hawaii's largest bank, its 1.20% cost of deposits and a loan book anchored by commercial real estate at 52% of total loans. Bears point to concentration risk: tourism and defense spending dominate the Hawaiian economy, and loan growth has been sluggish. The P/E ratio has compressed roughly 0.38 turns over the past month, pulling to around 10x, and price-to-book has slipped 0.03 turns over the same period to 0.92x, suggesting no meaningful re-rating either way.
The FDIC call report data published for Q2 flags a notable balance sheet development. Total assets at the company's insured bank charters hit a record low for any second quarter since the data series began in 2024, at $23.6 billion. Total deposits followed the same pattern, also a record low Q2 reading at $20.2 billion. The FDIC call report series has not yet been tested as a leading indicator against First Hawaiian's reported figures, so these readings are colour rather than signal, but the trajectory is worth tracking as the Q3 print approaches on October 23.
Institutional ownership remains largely passive and stable. BlackRock holds 13.6% of shares, Vanguard entities collectively account for another 12% or so, and State Street raised its position by 363,000 shares in the period ending August 31. No 13D activists are on the register. The ownership base is broadly index and quantitative, which tends to dampen headline volatility.
The closest correlated peers all dipped on the week, with FITB off 3.4% and VLY down 3.0%, making First Hawaiian's 1.4% weekly decline look relatively contained. The next thing to watch is whether the options positioning, which has shifted dramatically toward puts since mid-September, proves defensive or prescient when the Q3 earnings release lands on October 23.
See the live data behind this article on ORTEX.
Open FHB on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
