First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Investor Presentation (November 2021)
27 slides from First Hawaiian's investor presentation, November 2021
Slide 1: Investor Presentation November 2021
Investor Presentation November 2021 0
Slide 2: Disclaimer
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 reflect our vi
Slide 3: COVID-19 Update
COVID-19 UPDATE STATE OF HAWAII VACCINATION PROGRESS1 STATE OF HAWAII – DAILY NEW CASES PERCENT OF PERCENT OF PERCENT OF POPULATION POPULATION 12+ POPULATION 12+ AVERAGE DAILY TEST POSITIVITY FULLY FULLY INITIATED NEW CASES RATE VACCINATED VACCINATED (Last 7 days) (Last 7 days) 71.6% 83.9% 96.1% 98
Slide 4: Q3 2021 Highlights
Q3 2021 HIGHLIGHTS1 • Net income $64.3 mm Q3 2021 Q2 2021 Net Income ($mm) $64.3 $86.7 • Grew loans $38.6 mm (ex PPP) Diluted EPS $0.50 $0.67 • Deposits grew $1.3 bn, 1 bp decrease in cost of deposits Net Interest Margin 2.36% 2.46% Efficiency Ratio 55.1% 54.7% • Excellent credit quality, $4 mm nega
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS 1 Strong, Consistent Financial Performance 2 Leading Position In Attractive Markets 3 Experienced Leadership Team 4 High Quality Balance Sheet 5 Proven Through The Cycle Performance 6 Well-Capitalized With Attractive Dividend 4
Slide 6: Strong Performer in Attractive Market
STRONG PERFORMER IN ATTRACTIVE MARKET Branch Presence Financial Overview – 3Q 2021 YTD ($ billions) 54 branches Market Cap $3.5 Loans $ 12.8 Kauai Assets $ 25.5 Deposits $ 22.1 Efficiency Oahu ROATCE(2), (4) ROATA(2), (4) Ratio(2), (3) Niihau Molokai Honolulu Maui 1.4% 57.5% 16.4% 16.4% 1.2% 54.5% L
Slide 7: Fundamental Strengths of Hawaii's Economy
DESPITE NEAR-TERM CHALLENGES, THE FUNDAMENTAL STRENGTHS OF HAWAII’S ECONOMY REMAIN INTACT Hawaii GDP by Industry (2019)(1) Fundamental Strengths • Attractive destination for domestic and Visitor spending is ~19% of Hawaii GDP(2) international travelers • Attractive alternative for travelers concerne
Slide 8: Strong Performance Through the Cycle
STRONG PERFORMANCE THROUGH THE CYCLE Consistent Deposit Growth ($bn) Steady, Balanced Loan Growth ($bn) 3Q21 Cost of Deposits: 0.06% $22.1 $12.8 $6.5 $9.1 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 3Q21 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 3Q21 Through the Cycle Credi
Slide 9: Consistent Track Record of Strong Profitability
CONSISTENT TRACK RECORD OF STRONG PROFITABILITY Core Pre-Tax, Pre-Provision Earnings ($mm)(1) (2) Stable Earnings Drivers $ 450 $ 385 $ 411 $ 406 ▪ Dominant loan and deposit positions in attractive $ 400 $ 356 $ 342 $ 341 $ 359 $ 370 $ 332 $ 325 markets $ 350 $ 300 $ 250 $ 243 ▪ Consistent underwrit
Slide 10: 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 NCOs / Average Loans NPAs + 90s / Loans + OREO 1.50% 3.50% 2.94% 1.10% 3.00% 1.00% 2.50% 0.73% 2.00% 1.50% 0.50% 0.21% 0.10% 0.06% 1.00% 0
Slide 11: Well-Capitalized with an Attractive Dividend
WELL-CAPITALIZED WITH AN ATTRACTIVE DIVIDEND $75MM STOCK REPURCHASE PROGRAM IN 2021 Robust Capital Position Attractive Dividend Yield(1)(2) Tier 2 15.2% 3.8% NCT1 13.9% 2.5% CET 1 2.0 % 1.3 % 0.5 % First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets 12.6 % 12.7 % Capital Management Appro
Slide 12: Appendix
Appendix Pi es (A First Hawaiian, Inc.
Slide 13: Full Suite of Products and Services
FULL SUITE OF PRODUCTS AND SERVICES First Hawaiian is a full service community bank focused on building relationships with our customers Commercial Lending Consumer Lending • Largest commercial lender in Hawaii • Services provided to individuals and small • 56 commercial bankers(2) to mid-sized busi
Slide 14: A Leader in Hawaii
A LEADER IN HAWAII The banking market in Hawaii is dominated by local banks, with the top 4 banks accounting for ~93% of deposits Branches 54 54 42 31 FTEs 2,025 2,049 1,075 800 Assets ($bn) 25.5 23.0 9.0 7.3 Loans ($bn) 12.8 12.1 5.1 5.0 Deposits ($bn) 22.1 20.5 8.0 6.5 YTD 3Q 2021 ROATCE 16.4%(1),
Slide 15: Managing NIM Through a Challenging Interest Rate Environment
MANAGING NIM THROUGH A CHALLENGING INTEREST RATE ENVIRONMENT NIM Negatively Impacted by Excess Liquidity Actively Managing Funding Costs 3.85 % 3.88 % 3.77 % 3.79 % ▪ Active repricing of high-cost commercial and 3.66 % 3.57 % consumer deposit accounts has helped to partially offset the impact of the
Slide 16: Solid, Low-Cost Core Deposit Base
SOLID, 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 Growing Consumer and Commercial Deposits, Deposit Portfolio Composition Reducing Public Time Deposits Public Time Time ~9% of Total ▪ Reduce
Slide 17: 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 Balanced Loan Portfolio (as of 9/30/21) Loan Portfolio Highlights (as of 9/30/21) Other Credit Card Consumer Loans: $12.8 bn $115 mm $280 mm 2% 1% 3Q21 Loan Yield: 3.4% ▪ Larges
Slide 18: Demonstrated History of Disciplined Expense Management
DEMONSTRATED HISTORY OF DISCIPLINED EXPENSE MANAGEMENT Well Managed Core Noninterest Expense ($mm)(1),(2) Noninterest Expense / Average Assets(1) 3.50% CAGR: 1.9% $ 368 $ 368 $ 331 $ 342 $ 359 3.00% $ 312 $ 301 $ 296 $ 304 $ 327 3.00% 2.90% 2.87% $ 293 2.72% 2.65% 2.54% 2.49% 2.43% 2.38% 54.5% 2.50%
Slide 19: Asset Quality
ASSET QUALITY GOOD CREDIT PERFORMANCE • 90 past due comprised of accruing loans • 30-89 past due comprised of accruing and non-accruing loans Note: TLL - Total Loans and Leases 18
Slide 20: Allowance for Credit Loss
ALLOWANCE FOR CREDIT LOSS RESERVE LEVELS PROVIDE FOR UNCERTAINTY The economic outlook remained unchanged from Q2 due to the slowing recovery resulting from the Delta variant. Q3 Asset ACL decreased by 4.7% or $7.9 million to $161.2 million. The reserve for unfunded commitments increased by $3.3 mill
Slide 21: Hawaii Banks Have a Significant Deposit Advantage
HAWAII BANKS HAVE A SIGNIFICANT DEPOSIT ADVANTAGE Hawaii banks experience more favorable deposit behavior across all rate cycles; Hawaii banks experienced a deposit beta(¹) of ~34% vs. ~47% for broader U.S. banks during the last rising rate cycle 6.00 % 5.50 % 5.25 % 5.00 % 4.50 % 4.00 % 3.50 % 3.32
Slide 22: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS We present net interest income, noninterest income, noninterest expense, efficiency ratio, net income, pre-tax, pre-provision earnings, basic and diluted earnings per share and the related ratios described below, on an adjusted, or ‘‘core,’’ basis, each a non-GAAP fi
Slide 23: 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, except per share amounts) 2021 2021 2020 2021 2020 Income State me nt Data: Net income $ 64,279 $ 86,741 $ 65,101 $ 208,713 $ 124
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, September 30, (dollars in thousands, except per share amounts) 2021 2021 2020 2021 2020 Net interest income $ 132,593 $ 131,481 $ 134,002 $ 393,232 $ 400,507 Core net interest in
Slide 25: GAAP to Non-GAAP Reconciliation - Annual
GAAP TO NON-GAAP RECONCILIATION - ANNUAL As of and for the Twelve Months Ended December 31, (Dollars in millions, except per share data) 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Net Income $185.8 $ 284.4 $ 264.4 $ 183.7 $230.2 $213.8 $216.7 $214.5 $211.1 $199.7 Basic EPS $1.43 $2.14 $1.93 $
Slide 26: GAAP to Non-GAAP Reconciliation - Annual
GAAP TO NON-GAAP RECONCILIATION - ANNUAL For the Fiscal Year Ended December 31, (Dollars in millions) 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Net Interest Income $ 535.7 $ 573.4 $ 566.3 $ 528.8 $ 491.7 $ 461.3 $ 443.8 $ 439.0 $ 447.5 $4 70.0 Accounting Change (ASC 310 Adjustment) – – – – –
Slide 27: GAAP to Non-GAAP Reconciliation - Annual
GAAP TO NON-GAAP RECONCILIATION - ANNUAL For the Fiscal Year Ended December 31, (Dollars in millions, except per share data) 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Net Income $ 185.8 $ 284.4 $ 264.4 $ 183.7 $ 230.2 $ 213.8 $ 216.7 $ 214.5 $ 211.1 $ 199.7 Accounting Change (ASC 310 Adjustm
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