First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Investor Presentation (June 2017)
26 slides from First Hawaiian's investor presentation, Jun 9, 2017
Slide 1: Disclaimer
Disclaimer 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 perf
Slide 2: Best-in-Class Franchise
170/30/39 251/177/36 126/34/38 0/170/167 119/176/227 227/227/227 R:79 G:129 B:189 Best-in-Class Franchise 2 Branch Presence Financial Overview – 1Q17 ($ billions) Source: Public filings and SNL Financial Note: Financial data as of 31-Mar-17. Market data as of 30-May-17. Top quartile is based on publ
Slide 3: Full Suite of Products and Services
Full Suite of Products and Services 3 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 developers $12.3bn
Slide 4: Hawaii is an Attractive Market with Strong Economic Backdrop
Hawaii is an Attractive Market with Strong Economic Backdrop 4 Real GDP ($ billion) Population (000s) Source: Hawaii Department of Business, Economic Development & Tourism, Bureau of Labor Statistics, Federal Housing Finance Agency, and SNL Financial Note: Real GDP adjusts nominal GDP to 2009 dollar
Slide 5: The Clear Leader in Hawaii
The Clear Leader in Hawaii 5 The banking market in Hawaii is dominated by local banks with the top 6 banks accounting for ~98% of deposits; First Hawaiian is the clear leader among its Hawaii banking peers based on size and operating performance Source: SNL Financial and FDIC. For peer companies, pe
Slide 6: Strong Organic Growth and High Performance
Strong Organic Growth and High Performance 6 Consistent Deposit Growth Through the Cycle Credit Performer Source: Public filings and SNL Financial Note: Financial data as of 31-Mar-17. $10–$50bn banks as of 31-Dec-16; excludes merger targets. FHB ratios shown as core. Core excludes certain gains, ex
Slide 7: FHB currently undervalued relative to Hawaii peers
FHB currently undervalued relative to Hawaii peers 7 Source: Public filings, SNL Financial, IBES earnings estimates. Note: Financial data as of 31-Mar-17. Market data as of 30-May-17. $10–$50bn banks as of 31-Dec-16; excludes merger targets. IPO as of 4-Aug-16. ROATCE (return on average tangible com
Slide 8: Opportunities for increased Shareholder Returns
Opportunities for increased Shareholder Returns Rising Interest Rates Well positioned for NIM improvement in rising interest rate environment Opportunity to Reduce Effective Tax Rate Tax optimization strategies Tax reform Capital Distribution Strong annual capital generation Ability to consider incr
Slide 9: Positioned for NIM upside given earning asset mix and rate sensitivity
positioned for NIM upside given earning asset mix and rate sensitivity 9 Improving NIM Well Positioned for Rising Rates 98% of balance sheet funded with deposits Hawaii has experienced lower deposit costs and had a lower deposit beta in the last rate cycle Source: Public filings and SNL Financial No
Slide 10: Potential Tax Opportunities
Potential Tax opportunities 10 Source: Public filings and SNL Financial Note: Financial data as of 31-Mar-17. $10–$50bn banks as of 31-Dec-16; excludes merger targets. (1) Based on 1Q17 annualized. Potential Tax Optimization Opportunities 2016 Effective Tax Rate Municipal Securities (as a % of Secur
Slide 11: Capital Distribution
Capital Distribution Robust capital levels and strong capital generation support an attractive return opportunity for shareholders through organic growth, dividends and/or share repurchases(1) 11 Source: Public filings and SNL Financial Note: Financial data as of 31-Mar-17. Market data as of 30-May-
Slide 12: Delivering Value Through Operational Excellence
Delivering Value Through Operational Excellence 12 1 2 3 5 4 6 7 Growing core deposit base Consistent high quality loan growth Best-in-class credit performance Well positioned for rising rates Disciplined expense culture focused on driving operating leverage Delivering low volatility earnings and to
Slide 13: Delivering Value Through Operational Excellence
» DELIVERING VALUE THROUGH OPERATIONAL EXCELLENCE O CS LS © LS O CS 6 as 0 as OS 12 @A First Hawaiian, Inc.
Slide 14: Appendix
Appendix
Slide 15: 1Q 2017 Highlights
1Q 2017 HIGHLIGHTS Solid Earnings Net income of $56.7 million, or $0.41 per diluted share Core net income(1) of $57.0 million, or $0.41 per diluted share Good Growth, Strong Balance Sheet Loan and lease growth of $261 million, or 2.3% Deposit growth of $144 million, or 0.9% Net charge-off ratio: 0.1
Slide 16: 1Q 2017 Financial Results
1Q 2017 Financial Results 16 Core excludes certain gains, expenses and one-time items. See annual and quarterly non-GAAP reconciliations of core net income, core net interest income, core noninterest income and core noninterest expense used to calculate core ratios in the appendix. Core efficiency r
Slide 17: Growing, Low-Cost Core Deposit Base
Growing, Low-Cost Core Deposit Base Strong brand, deep ties to the community and a leading market share position have driven an attractive, low-cost deposit base 17 CAGR: 6.2% Deposits: $16.9bn 1Q17 Deposit Cost: 0.18% Year Ended December 31, Deposit Portfolio Composition (1Q17) Consistent Deposit G
Slide 18: Steady Organic Growth and Balanced Loan Portfolio
Steady Organic Growth and Balanced Loan Portfolio Steady through the cycle organic loan growth and balanced loan portfolio with attractive forward growth opportunities 18 Well positioned to serve clients during the financial crisis CAGR: 6.2% Loans: $11.8bn 1Q17 Loan Yield: 3.85% Loans / Deposits 70
Slide 19: Proven, Consistent, and Conservative Credit Risk Management
Proven, Consistent, and Conservative Credit Risk Management Strong through the cycle credit performance driven by conservative approach to credit risk management 19 Year Ended December 31, Year Ended December 31, Year Ended December 31, Year Ended December 31, Source: Public filings and SNL Financia
Slide 20: Operating Leverage
Operating Leverage Through prudent expense management 20 Source: Public filings and SNL Financial Note: Financial data as of 31-Mar-17. $10–$50bn banks as of 31-Dec-16; excludes merger targets. FHB measures shown as core. Core excludes certain gains, expenses and one-time items. See annual and quart
Slide 21: Sustained, Consistent Track Record of Strong Profitability
Sustained, Consistent Track Record of Strong Profitability 21 Source: Public filings and SNL Financial Note: Financial data as of 31-Mar-17. $10–$50bn banks as of 31-Dec-16; excludes merger targets. FHB measures shown as core. Core excludes certain gains, expenses and one-time items. See annual and
Slide 22: Hawaii Banks have a Significant Deposit Advantage
Hawaii Banks have a Significant Deposit Advantage 22 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. Deposit cost uses starting point (2Q04) to peak (3Q07); one quart
Slide 23: GAAP to Non-GAAP Reconciliations
GAAP to non-gaap reconciliations 23 We present net interest income, noninterest income, noninterest expense, net income, earnings per share and the related ratios described below, on an adjusted, or ‘‘core,’’ basis, each a non-GAAP financial measure. These core measures exclude from the correspondin
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 24 Note: Totals may not sum due to rounding. (1) Annualized for the three and nine month periods. For the Three Months Ended As of and for the Twelve Months Ended December 31, (Dollars in millions, except per share data) March 31, 2017 December 31, 2016 March 31, 2016
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 25 Note: Totals may not sum due to rounding. (1) Adjustments that are not material to our financial results have not been presented for certain periods. (2) Other adjustments include a one-time MasterCard signing bonus and a recovery of an investment that was previous
Slide 26: GAAP to Non-GAAP Reconciliation
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