First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Investor Presentation (February 2023)
29 slides from First Hawaiian's investor presentation, Feb 14, 2023
Slide 1: Investor Presentation February / March 2023
0 Investor Presentation February / March 2023
Slide 2: Disclaimer: Forward-Looking Statements
DISCLAIMER Forward - Looking Statements This presentation contains, and from time - to - time in connection with this presentation our management may make, forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward - looking statements refl
Slide 3: Q4 2022 Financial Highlights
Q4 2022 FINANCIAL HIGHLIGHTS 1 (1) Comparisons to Q3 2022 (2) ROATA and ROATCE are non - GAAP financial measures. A reconciliation of average tangible assets and average tangible stockholders ’ equity to the comparable GAAP measurements is provided in the appendix of this slide presentation. (3) Dec
Slide 4: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS 3 $ in thousands 12/31/22 9/30/22 Assets Cash and Cash Equivalents 1 $ 526.6 $ 948.9 Investment Securities - AFS 3,151.1 3,289.2 Investment Securities - HTM 4,320.6 4,406.1 Loans and Leases 14,092.0 13,700.4 Total Assets 24,577.2 24,870.3 Liabilities Deposits $ 21,689.0 $ 22
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS 4 Strong, Consistent Financial Performance Leading Position In Attractive Markets Experienced Leadership Team High Quality Balance Sheet Proven Through The Cycle Performance Well - Capitalized With Attractive Dividend 1 2 3 4 5 6
Slide 6: Strong Performer in Attractive Market
NALs / Loans 55.2% 53.2% FHB Peer Median 20.0% 16.3% FHB Peer Median STRONG PERFORMER IN ATTRACTIVE MARKET 5 Branch Presence Financial Overview – 4Q 2022 YTD ($ billions) Source: Public filings and S&P Global Market Intelligence as of 8 - Feb - 2023 Note: Financial data as of 31 - Dec - 2022. Market
Slide 7: Fundamental Strengths of Hawaii's Economy Remain Intact
DESPITE NEAR - TERM CHALLENGES, THE FUNDAMENTAL STRENGTHS OF HAWAII’S ECONOMY REMAIN INTACT 6 • Attractive destination for domestic and international travelers • Attractive alternative for travelers concerned about international travel • Well - developed visitor industry infrastructure • High qualit
Slide 8: Strong Performance Through the Cycle
$9.1 $21.7 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 22 Source: Public filings and S&P Global Market Intelligence as of 8 - Feb - 2023 Note: Financial data as of 31 - Dec - 2022. $10 – $50bn banks constituted as of 31 - Dec - 2021; excludes merger targets. (1) ROATCE (Return on Ave
Slide 9: Consistent Track Record of Strong Profitability
$ 365 $ 357 $ 355 $ 353 $ 380 $ 387 $ 380 $ 395 $ 365 $ 310 $ 353 $ – $ 50 $ 100 $ 150 $ 200 $ 250 $ 300 $ 350 $ 400 $ 450 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1.40% 1.47% 0.89% 1.11% 0.92% 1.37% 1.03% 1.23% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2011 2012 2013 2014 2015 2016 20
Slide 10: Proven, Consistent, and Conservative Credit Risk Management
0.21% 0.73% 0.08% 0.10% 1.05% 0.04% 0.00% 0.50% 1.00% 1.50% '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 PROVEN, CONSISTENT, AND CONSERVATIVE CREDIT RISK MANAGEMENT Strong through the cycle credit performance driven by conservative approach to credit risk management 9 Year End
Slide 11: Well-Capitalized with an Attractive Dividend
WELL - CAPITALIZED WITH AN ATTRACTIVE DIVIDEND 10 Source: Public filings and S&P Global Market Intelligence as of 8 - Feb - 2023 Note: Financial data as of 31 - Dec - 2022. $10 – $50bn banks constituted as of 31 - Dec - 2021, excludes merger targets. Percentages ma y not total due to rounding. (1) D
Slide 12: Appendix
11 Appendix
Slide 13: Full Suite of Products and Services
FULL SUITE OF PRODUCTS AND SERVICES 12 • Largest commercial lender in Hawaii • 56 commercial bankers (2) • Relationship - based lending • Primary focus on Hawaii, additional focus on California • C&I, leases, auto dealer flooring, CRE, and C&D • Strong relationships with proven local real estate dev
Slide 14: A Leader in Hawaii
A LEADER IN HAWAII 13 The banking market in Hawaii is dominated by local banks, with the top 4 banks accounting for ~93% of deposits Sources: S&P Global Market Intelligence, FDIC, SEC and company filings. Company filings used for peers where available, othe rwi se regulatory data used. Note: Financi
Slide 15: Balance Sheet Well Positioned to Benefit from Rising Rates
BALANCE SHEET WELL POSITIONED TO BENEFIT FROM RISING RATES 14 22 bp NIM increase in Q4 Well Positioned for Rising Rates 1.6 % 2.9 % 3.2 % 5.8 % Ramp Immediate Change NII Sensitivity +100bps NII Sensitivity +50bps • Approximately $5.6 bn, or 41% of the loan portfolio, reprices within 90 days • Well -
Slide 16: Solid, Low-Cost Core Deposit Base
$9.1 $9.4 $10.2 $10.5 $12.2 $12.9 $13.6 $14.7 $16.1 $16.8 $17.6 $17.2 $16.4 $19.2 $21.8 $21.7 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 Demand 39% Money Market 18% Savings 27% Time 7% SOLID, LOW - COST CORE DEPOSIT BASE Strong brand, deep ties to the community and a leading mar
Slide 17: Steady Organic Growth and Balanced Loan Portfolio
$6.5 $7.9 $8.0 $8.3 $8.3 $9.0 $9.5 $10.0 $10.7 $11.5 $12.3 $13.1 $13.2 $13.3 $13.0 $14.1 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 STEADY ORGANIC GROWTH AND BALANCED LOAN PORTFOLIO Steady through the cycle organic loan growth and balanced loan portfolio Expect mid - single digi
Slide 18: Demonstrated History of Disciplined Expense Management
46.5% 45.3% 45.4% 46.1% 48.1% 47.0% 47.3% 49.0% 48.4% 50.1% 56.5% 55.2% 60.3% 60.3% 62.2% 61.9% 61.1% 59.2% 58.3% 55.8% 55.7% 55.6% 57.1% 53.2% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Ass
Slide 19: Asset Quality: Continued Strong Credit Performance
ASSET QUALITY CONTINUED STRONG CREDIT PERFORMANCE 18 • 30 - 89 past due comprised of accruing and non - accruing loans Note: TLL - Total Loans and Leases • 90 past due comprised of accruing loans • Includes OREO • NCO Rate - Based on YTD NCO
Slide 20: Commercial Real Estate
COMMERCIAL REAL ESTATE 19 (In Millions) The CRE portfolio is diversified across product type with a weighted average LTV of 60.3% and solid asset quality metrics. • Office exposure is about 6% of total loans and leases – approximately 1/3 rd of the total is owner - occupied and another 17% comprised
Slide 21: Construction
CONSTRUCTION 20 (In Millions) The construction book is largely centered in rental and for - sale housing. Property Type Balances % of Balances Weighted Average LTV % Criticized Office 46 5.5% 52.0% 0.0% Hotel 8 1.0% 49.0% 0.0% Retail 24 2.8% 63.8% 2.0% Multi - family 419 49.6% 53.3% 0.0% Industrial
Slide 22: Commercial & Industrial
COMMERCIAL & INDUSTRIAL 21 (In Millions) Industries deemed to exhibit higher volatility represent a modest amount of total C&I exposure and dealer related credits represent about 27% of the total inclusive of $456 million in flooring balances. Industry Balances % of Balances % Criticized Auto Dealer
Slide 23: Real Estate – Residential
REAL ESTATE – RESIDENTIAL (In Thousands) Residential real estate is primarily comprised of properties within the branch footprint. The portfolio has a weighted average LTV of under 56% and 93% of the borrowers are in the prime and super - prime FICO buckets. Current FICO Balances % of Balances Weigh
Slide 24: Real Estate – HELOC
REAL ESTATE – HELOC 23 (In Thousands) The HELOC is primarily comprised of properties within the branch footprint. The portfolio has a weighted average LTV of under 46% and 93% of the borrowers are in the prime and super - prime FICO buckets. Roughly 53% of the balances represent a first lien positio
Slide 25: Consumer
CONSUMER 24 (In Thousands) Indirect auto and credit cards represent 65% and 25% of consumer balances, respectively. Prime and super - prime borrowers comprise a substantial majority of new originations. Current FICO Balances % of Balances Super Prime 567,026 46.4% Prime 318,792 26.1% Acceptable 147,
Slide 26: Hawaii Banks Have a Significant Deposit Advantage
HAWAII BANKS HAVE A SIGNIFICANT DEPOSIT ADVANTAGE 25 Source: SNL Financial and the Federal Reserve website (1) Deposit beta is defined as the change in deposit costs as a percentage of the change in Fed Funds over a particular period. D ep osit cost uses starting point (2Q04) to peak (3Q07); one qua
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP TO NON - GAAP RECONCILIATIONS We present pre - tax, pre - provision earnings on an adjusted basis as a non - GAAP financial measure. We believe that the presentation of this non - GAAP financial measure helps identify underlying trends in our business from period to period that could otherwise
Slide 28: GAAP to Non-GAAP Reconciliation
GAAP TO NON - GAAP RECONCILIATION 27 ( 1) Annualized for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021. (dollars in thousands, except per share amounts) Income Statement Data: Net income $ 79,588 $ 69,018 $ 57,022 $ 265,685 $ 265,735 Average total stockholders' e
Slide 29: GAAP to Non-GAAP Reconciliation - Annual
GAAP TO NON - GAAP RECONCILIATION - ANNUAL 28 Note: Totals may not sum due to rounding. As of and for the Twelve Months Ended December 31, (Dollars in millions, except per share data) 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Net Income $265.7 $265.7 $185.8 $ 284.4 $ 264.4 $ 183.7
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