First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Investor Presentation (November 2020)
29 slides from First Hawaiian's investor presentation, Nov 6, 2020
Slide 1: Investor Presentation November / December 2020
0 Investor Presentation November / December 2020
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 e
Slide 3: Q3 2020 Highlights
Q3 2020 HIGHLIGHTS 1 (1) Comparisons to Q2 2020 (2) ROATA and ROATCE are non GAAP financial measures. A reconciliation of average tangible assets and average tangible stockhold ers ’ equity to the comparable GAAP measurements is provided in the appendix of this slide presentation. (3) Declared on Oc
Slide 4: Asset Quality Improved from Q2
ASSET QUALITY IMPROVED FROM Q2 3 0 10 20 30 40 50 60 Mar-20 Jun-20 Sep-20 Provision and NCO Provision Net Charge Off 0 10 20 30 40 50 60 Mar-20 Jun-20 Sep-20 NPA and 90 Past Due 0 200 400 600 800 1,000 Mar-20 Jun-20 Sep-20 Commercial Criticized Assets Special Mention Classified 0 20 40 60 80 100 Mar
Slide 5: Allowance for Credit Losses
ALLOWANCE FOR CREDIT LOSSES PROVISION STABILIZED ON UNCHANGED OUTLOOK AND IMPROVED ASSET QUALITY ($ in 000’s) C&I CRE Const Lease Mortgage Home Equity Consumer Total 6/30/20 ACL 21,299 53,122 5,276 3,837 33,874 7,635 67,077 192,120 Charge - offs (598) - - - - - (4,238) (4,836) Recoveries 1,699 - 30
Slide 6: Loan Deferrals
LOAN DEFERRALS 96% OF BORROWERS OFF DEFERRAL RETURNED TO PAYMENT As of 9/30/20 Total Deferrals 1 ($ mm) Returned to Pay ($ mm) Original Deferrals ($ mm) 2 nd Deferrals ($ mm) Delinquent ($ mm) Commercial and Industrial 810 789 9 10 1 Commercial Real Estate 1,196 1,093 58 46 - Construction 62 59 3 1
Slide 7: Commercial Risk Rating Composition by Loan Type
COMMERCIAL RISK RATING COMPOSITION BY LOAN TYPE 0 200 400 600 Special Mention Substandard Pre - COVID 3/31/20 C&I CRE Const Lease 6 As of 9/30/20 0 200 400 600 Special Mention Substandard COVID 6/30/20 C&I CRE Const Lease 0 200 400 600 Special Mention Substandard COVID 9/30/20 C&I CRE Const Lease ($
Slide 8: Exposure to Select Industries
EXPOSURE TO SELECT INDUSTRIES BALANCES FLAT TO DOWN VS Q1, EX PPP 7 As of 9/30/20 Total ($ mm) C&I ($ mm) CRE/ Const ($ mm) % of Total Loans and Leases PPP 2 ($ mm) Comments Hospitality and Hotels 525 148 377 3.9% 57 Investment grade SNC and properties with good LTV/Sponsorship Retail (ex auto ) 737
Slide 9: Investment Highlights
INVESTMENT HIGHLIGHTS 8 Strong, Consistent Financial Performance Leading Position In Attractive Market Experienced Leadership Team High Quality Balance Sheet Proven Through The Cycle Performance Well - Capitalized With Attractive Dividend 1 2 3 4 5 6
Slide 10: Strong Performer in Attractive Market
NALs / Loans 51.3% 50.5% FHB Top Quartile 9.8% 12.7% FHB Top Quartile STRONG PERFORMER IN ATTRACTIVE MARKET 9 Branch Presence Financial Overview – 3Q 2020 YTD ($ billions) Source: Public filings and S&P Global Market Intelligence as of 03 - Nov - 2020 Note: Financial data as of 30 - Sep - 2020. Mark
Slide 11: Fundamental Strengths of Hawaii's Economy Remain Intact
DESPITE NEAR - TERM CHALLENGES, THE FUNDAMENTAL STRENGTHS OF HAWAII’S ECONOMY REMAIN INTACT 10 • Attractive destination for domestic and international travelers • Attractive alternative for travelers concerned about international travel • Well - developed visitor industry infrastructure • High quali
Slide 12: Experienced Leadership Team
EXPERIENCED LEADERSHIP TEAM 11 LEADERSHIP TEAM ROBERT HARRISON Chairman, President & Chief Executive Officer ▪ Joined First Hawaiian Bank in 1996. Named Chief Executive Officer in January 2012 and Chairman of First Hawaiian Bank in May 2014. Served as Chief Operating Officer of First Hawaiian Bank f
Slide 13: Strong Performance
Source: Public filings and S&P Global Market Intelligence as of 03 - Nov - 2020 Note: Financial data as of 30 - Sep - 2020. $10 – $50bn banks constituted as of 31 - Dec - 2019; excludes merger targets. (1) FHB ratios shown as core. Core excludes certain gains, expenses and one - time items. See annu
Slide 14: Proven, Consistent, and Conservative Credit Risk Management
0.21% 0.73% 0.29% 0.11% 1.18% 0.15% 0.00% 0.50% 1.00% 1.50% '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 3Q20 PROVEN, CONSISTENT, AND CONSERVATIVE CREDIT RISK MANAGEMENT Strong through the cycle credit performance driven by conservative approach to credit risk management 13 Year Ended Dec
Slide 15: Consistent Track Record of Strong Profitability
1.39% 1.30% 1.31% 1.22% 1.10% 1.18% 1.22% 1.49% 1.51% 0.80% 0.87% 1.03% 1.05% 1.09% 1.05% 1.10% 1.07% 1.40% 1.37% 0.95% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2011 2012 2013 2014 2015 2016 2017 2018 2019 3Q20 CONSISTENT TRACK RECORD OF STRONG PROFITABILITY 14 Source: Public filings and S&P Global
Slide 16: Well Capitalized with an Attractive Dividend
6.0% 3.9% First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets WELL CAPITALIZED WITH AN ATTRACTIVE DIVIDEND 15 Source: Public filings and S&P Global Market Intelligence as of 03 - Nov - 2020 Note: Financial data as of 30 - Sep - 2020. $10 – $50bn banks constituted as of 31 - Dec - 2019, e
Slide 17: Appendix
OA First Hawaiian, Inc. Appendix
Slide 18: Full Suite of Products and Services
FULL SUITE OF PRODUCTS AND SERVICES 17 • Largest commercial lender in Hawaii • 57 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 19: Managing NIM Through a Challenging Interest Rate Environment
$ 140 $ 141 $ 141 $ 144 $ 145 $ 146 $ 143 $ 140 $ 139 $ 128 $ 134 3.47 % 3.58 % 3.61 % 3.77 % 3.85 % 3.88 % 3.79 % 3.66 % 3.57 % 2.84 % 2.86 % 0.35 % 0.40 % 0.47 % 0.48 % 0.56 % 0.57 % 0.54 % 0.44 % 0.38 % 0.19 % 0.13 % 3.13 % 3.18 % 3.11 % 3.23 % 3.23 % 3.25 % 3.19 % 3.15 % 3.12 % 2.58 % 2.70 % – %
Slide 20: Solid, Low-Cost Core Deposit Base
$8.9 $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 $18.9 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 3Q20 Demand 37% Money Market 18% Savings 26% Time 10% SOLID, LOW - COST CORE DEPOSIT BASE Strong brand, deep ties to the community and a leading market share
Slide 21: Steady Organic Growth and Balanced Loan Portfolio
$6.4 $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 $13.5 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 3Q20 STEADY ORGANIC GROWTH AND BALANCED LOAN PORTFOLIO Steady through the cycle organic loan growth and balanced loan portfolio 20 Well positioned to serve client
Slide 22: Demonstrated History of Disciplined Expense Management
46.7% 46.8% 46.4% 47.9% 50.2% 47.9% 47.0% 46.6% 47.6% 51.3% 61.7% 63.0% 63.9% 62.8% 61.4% 60.0% 58.3% 56.4% 56.2% 56.6% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 3Q20 First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets 2.04% 1.87% 1.78% 1.74% 1.74%
Slide 23: The Leader in Hawaii
THE LEADER IN HAWAII 22 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: Finan
Slide 24: Hawaii Banks Have a Significant Deposit Advantage
HAWAII BANKS HAVE A SIGNIFICANT DEPOSIT ADVANTAGE 23 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 25: GAAP to Non-GAAP Reconciliations
GAAP TO NON - GAAP RECONCILIATIONS We present net interest income, noninterest income, noninterest expense, efficiency ratio, net income, basic and diluted earn ing s per share and the related ratios described below, on an adjusted, or ‘‘core,’’ basis, each a non - GAAP financial measure. These core
Slide 26: (dollars in thousands, except per share amounts) Income Statement Data: Net income $ 65,101
(dollars in thousands, except per share amounts) Income Statement Data: Net income $ 65,101 $ 20,049 $ 74,199 $ 124,015 $ 216,556 Core net income $ 65,083 $ 20,204 $ 75,871 $ 124,090 $ 220,535 Average total stockholders' equity $ 2,704,129 $ 2,697,775 $ 2,648,428 $ 2,687,632 $ 2,600,259 Less: averag
Slide 27: GAAP to Non-GAAP Reconciliation
GAAP TO NON - GAAP RECONCILIATION 26 1) One - time items for the three and nine months ended September 30, 2019 included costs related to a nonrecurring payment for a for mer executive of the Company pursuant to the Bank’s Executive Change - in - Control Retention Plan, nonrecurring offering costs a
Slide 28: GAAP to Non-GAAP Reconciliation - Annual
GAAP TO NON - GAAP RECONCILIATION - ANNUAL 27 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) 2019 2018 2017 2016 2015 2014 2013 2012 2011 Net Income $ 284.4 $ 264.4 $ 183.7 $230.2 $213.8 $216.7 $214.5 $211.1 $
Slide 29: GAAP to Non-GAAP Reconciliation - Annual
GAAP TO NON - GAAP RECONCILIATION - ANNUAL 28 Note: Totals may not sum due to rounding. (1) Noninterest income and expenses prior to 2017 have been revised from the amounts previously reported to reflect the reclassif ica tions described in the footnote to Table 1 of the fourth quarter 2017 earnings
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