First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Q3 2023 Earnings Presentation
20 slides from First Hawaiian's earnings presentation, Oct 27, 2023
Slide 1: 3rd Quarter 2023 Earnings Call
3rd Quarter 2023 Earnings Call October 27, 2023 0
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Th
Slide 3: Q3 2023 Financial Highlights
Q3 2023 FINANCIAL HIGHLIGHTS1 • Net income $58.2 mm Q3 2023 Q2 2023 • Total loans and leases declined $30.5 mm Net Income ($mm) $58.2 $62.4 Diluted EPS $0.46 $0.49 • Total deposits increased $433.3 mm Net Interest Margin 2.86% 2.91% • Cost of deposits: 1.40% Efficiency Ratio 58.3% 58.0% • Total cost
Slide 4: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS $ in millions 9/30/23 6/30/23 Assets Cash and Cash $ 1,213.4 $ 558.1 Equivalents1 Comments Investment Securities 2,722.7 2,909.4 - AFS • Solid balance sheet with strong capital levels Investment Securities 4,104.1 4,180.4 - HTM o Cash and cash equivalents elevated at end of
Slide 5: Loans and Leases Flat in Q3
LOANS AND LEASES FLAT IN Q3 Total Loans and Leases Q3 ‘23 vs Q2 ‘23 Net Changes ($ millions) ($ billions) CRE 97 (+2.3%) 14.4 14.3 13.7 0.3 0.3 Home Equity 29 (+2.6%) Leasing 0.3 1.1 1.2 Home Equity 1.0 Leases 0 (0.0%) 1.2 1.2 Consumer 1.2 (-0.3%) (14) Residential 2.2 2.1 C&I 2.0 (-2.4%) (28) Consum
Slide 6: Grew Total Deposits $433 MM, or 2.1%
GREW TOTAL DEPOSITS $433 MM, OR 2.1% Total Deposits Deposit Composition ($ billions) ($ billions) 22.1 21.1 21.5 2.4 Time 1.9 3.3 3.7 Money 9.8 4.2 Market 9.4 3.8 3.9 Savings 6.7 5.8 6.0 Retail Commercial Public Q3 Highlights • $433 mm, or 2.1%, increase in total deposits Demand 9.3 o $332 mm increa
Slide 7: $2.8 MM Decrease in Net Interest Income, 5 bp Decrease in NIM
$2.8 MM DECREASE IN NET INT INCOME, 5 BP DECREASE IN NIM 210.0 5.00% 205.0 4.90% 200.0 4.80% 195.0 Net Interest Income and Net Interest Margin 4.70% Q2 ‘23 – Q3 ‘23 NIM Walk 190.0 4.60% 185.0 4.50% 180.0 ($ millions) 4.40% 175.0 4.30% 170.0 162.7 159.9 4.20% 165.0 157.1 4.10% 160.0 4.00% 155.0 3.90%
Slide 8: Noninterest Income and Expense
NONINTEREST INCOME AND EXPENSE Noninterest Income Noninterest Expense 125.0 ($ millions) ($ millions) 120.9 119.4 120.0 47.3 115.0 113.3 45.9 46.1 110.0 105.0 100.0 58.0% 58.3% 54.0% 95.0 90.0 85.0 80.0 75.0 Q3 22 Q2 23 Q3 23 Q3 22 Q2 23 Q3 23 Nonint Expense Efficiency Ratio • BOLI income $1.4 mm lo
Slide 9: Asset Quality
ASSET QUALITY ($ millions) ($ millions) YTD NCO Rate - Annualized YTD NCO/Avg Loans and Leases Includes OREO and 90+ days past due is comprised of accruing loans ($ millions) ($ millions) TLL - Total Loans and Leases 30-89 days past due is comprised of accruing and non-accruing loans 8
Slide 10: Allowance for Credit Loss
ALLOWANCE FOR CREDIT LOSS RESERVE LEVELS CONTINUE TO PROVIDE FOR UNCERTAINTY • The ACL / Total Loans and Leases increased to 1.08%. • The increase in the reserve reflects the possibility of credit losses on Maui related to the wildfires. Rollforward of the On-Balance Sheet Allowance for Credit Losse
Slide 11: Commercial Real Estate
COMMERCIAL REAL ESTATE (In Millions) Weighted Property Type Balances % of Balances % Criticized Average LTV Office 783 17.9% 59.8% 1.7% Hotel 400 9.1% 53.7% 0.0% Retail 777 17.7% 62.1% 1.5% Multi-family 920 21.0% 55.9% 5.4% Industrial 642 14.6% 58.4% 2.7% Dealer Related 448 10.2% 69.2% 0.0% Other 41
Slide 12: Questions
QUESTIONS 11
Slide 13: Appendix
> AP Pp E N D IX fA First Hawaiian, Inc. 12
Slide 14: Summary Income Statement
SUMMARY INCOME STATEMENT Quarter ended ($ in millions except per share data) 9/30/23 6/30/23 9/30/22 Net interest income $ 157.1 $ 159.9 $ 162.7 Provision for credit losses 7.5 5.0 3.2 Noninterest income 46.1 47.3 45.9 Noninterest expense 119.4 120.9 113.3 Pre-tax income 76.4 81.4 92.1 Tax expense 1
Slide 15: Selected Balance Sheet Items
SELECTED BALANCE SHEET ITEMS As of ($ in millions except per share data) 9/30/23 6/30/23 9/30/22 Selected Assets Investment securities – AFS $ 2,722.7 $ 2,909.4 $ 3,289.2 Investment securities – HTM 4,104.1 4,180.4 4,406.1 Loans and leases 14,332.3 14,362.8 13,700.4 Total assets 24,912.5 24,511.6 24
Slide 16: Maui Update
MAUI UPDATE MAUI REAL ESTATE-SECURED LOANS MAUI REAL ESTATE-SECURED LOAN LOCATIONS $ million All Other Lahaina Kula Maui Total (9/30/23) Areas CRE 23.7 7.2 357.7 388.5 Construction 0.3 0.0 47.5 47.8 Residential 1st position (includes HELOCS 57.2 21.0 990.4 1,068.6 behind FHB 1st) Lahaina Kula Subord
Slide 17: Commercial & Industrial
COMMERCIAL & INDUSTRIAL (In Millions) Property Type Balances % of Balances % Criticized Auto Dealers 611 29.1% 0.0% Retail - 0.0% 0.0% Hospitality/Hotel 74 3.5% 0.4% Food Service 48 2.3% 4.6% Transportation 51 2.4% 2.6% Other 1,317 62.7% 4.0% Total 2,101 100.00% 2.7% Industries deemed to exhibit hig
Slide 18: Construction
CONSTRUCTION (In Millions) Weighted Property Type Balances % of Balances % Criticized Average LTV Office 67 7.6% 46.8% 0.0% Hotel 50 5.7% 49.5% 0.0% Retail 23 2.6% 58.0% 0.0% Multi-family 433 48.9% 55.7% 0.0% Industrial 84 9.5% 50.5% 0.8% Dealer Related 96 10.8% 83.7% 0.0% Other 132 14.9% 58.2% 0.1%
Slide 19: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We compute our return on average tangible assets as the ratio of ne
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION For the Thre e Months Ende d For the Nine Months Ende d Se pte mbe r 30, June 30, Se pte mbe r 30, Se pte mbe r 30, (dollars in thousands) 2023 2023 2022 2023 2022 Income State me nt Data: Net income $ 58,221 $ 62,442 $ 69,018 $ 187,481 $ 186,097 Average total stockho