Aloha! First Hawaiian largest bank IPO since 2014

First Hawaiian, the state's largest bank, raised nearly $500 million in an initial public offering. CEO Bob Harrison talks about why the time was right to IPO.

First Hawaiian Shares Extend Gains After Debut

IPOs Reuters

First Hawaiian Inc's shares rose as much as 6.5 percent in their debut on Thursday, valuing the lender at $3.41 billion in the biggest initial public offering by a U.S. bank in nearly two years.

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The offering by the U.S. unit of BNP Paribas, France's biggest bank, was priced at $23 per share - the top end of its expected range of $21-$23. The 21.1-million-share offering raised $485 million.

The Honolulu-based bank's shares opened at $24.20 and hit a high of $24.41 on the Nasdaq.

The offering is the largest for a U.S. bank since Citizens Financial Group Inc raised $3.5 billion in 2014, when the number of new issues by U.S. banks stood at the highest level in a decade, according to Thomson Reuters data.

The U.S. IPO market has been tepid this year, with only US Foods and MGM Growth Properties having raised more than $1 billion.

BNP Paribas said in December that it was looking at "strategic options" for First Hawaiian as part of its plans to improve its finances and to respond to new regulatory requirements.

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The bank said at the time that realizing value from First Hawaiian could boost the parent bank's common equity tier 1 ratio - a key measure of banks' capital stability - by up to 40 basis points. BNP had a CET 1 ratio of 10.7 as of last September.

After the offering, BNP's ownership in First Hawaiian Inc fell to 84.9 percent.

First Hawaiian Inc operates the First Hawaiian Bank, the largest and the oldest bank in the island state. It has more than $19 billion of assets and operates 62 branches in Hawaii, Guam and Saipan.

First Hawaiian's net income rose 0.5 percent to $54.86 million for three months ended June 30.

Goldman Sachs, Barclays Capital, Credit Suisse Securities and Citigroup Global Markets were among the underwriters for the offering. (Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty)