First Hawaiian (FHB) reported a clean second-quarter earnings per share (EPS) of $0.54, $0.01 better than expectations.

In comparison, FHB’s EPS was $0.50 in the second quarter of last year. It is also important to note that a lower tax rate helped the comparison by $0.02.

Higher operating expenses continued to limit profit gains, but management gave positive guidance for expenses in the second half of the year. The fact that loans grew 1% from the first quarter and 5.6% year over year helped net interest margins slightly increase to 3.25%. Credit losses remain very low. In fact, they declined during the quarter and aided EPS comparisons by $0.01.

I believe we should see EPS estimates for $2.15 this year look easily doable, and next year’s estimates could rise to $2.25 a share from the current $2.20. As long as the Hawaiian economy remains firm, I believe that the stock can achieve my $30 target with the next 12 months. The 4% dividend yield should augment returns.

Buy FHB when it trades below $26.