First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Investor Presentation (June 2019)
23 slides from First Hawaiian's investor presentation, Jun 7, 2019
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 include, but are not limited to, statements relating to the estimated 2019 earnings accretion and p
Slide 2: Q1 2019 Highlights
Q1 2019 HIGHLIGHTS Solid core earnings1 BNP Paribas sold all remaining shares in First Hawaiian, Inc. Announced $100mm stock repurchase authorization premium adjustment efficiency ratio1 in line with guidance (1) Core measurements are non-GAAP financial measurements. Core excludes certain gains, exp
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS 1 Best-in-class Financial Performance Leading Position In Attractive Market 2 3 High Quality Balance Sheet With Steady Growth Realized And Forecasted 4 Proven Through The Cycle Performance Well-Capitalized With Healthy Dividend 5 6 $100 mm 2019 Stock Repurchase Program 3
Slide 4: Best-in-Class Franchise
BEST-IN-CLASS FRANCHISE Branch Presence Financial Overview – 1Q 2019 YTD ($ billions) Market Cap $ 3.5 Loans $ 13.2 59 branches Kauai Assets $ 20.4 Deposits $ 16.8 Efficiency Ratio(2), (3) Oahu ROATCE(2), (4) ROATA(2), (4) Niihau Molokai 51.4% 18.9% Maui 1.6% Honolulu 1.5% Lanai Kahoolawe Hawaii Isl
Slide 5: Hawaii Is an Attractive Market with Strong Economic Backdrop
HAWAII IS AN ATTRACTIVE MARKET WITH STRONG ECONOMIC BACKDROP The Hawaii economy has remained steady through economic cycles and maintains a favorable outlook Real GDP ($ billion) GDP by Industry (2018) Population (000s) ’19-’24 Projected HHI Change: 11.73% Tourism accounts for ~19% of Hawaii GDP(1)
Slide 6: The Clear Leader in Hawaii
THE CLEAR LEADER IN HAWAII The banking market in Hawaii is dominated by local banks with the top 6 banks accounting for ~97% of deposits; First Hawaiian is the clear leader among its Hawaii banking peers 16% 27% 7% 21% 67% 82% 81% 56% Sources: SNL Financial, FDIC, SEC and company filings. Company fi
Slide 7: NIM Well Positioned from Strategic Balance Sheet Management
NIM WELL POSITIONED FROM STRATEGIC BALANCE SHEET MANAGEMENT AND RATIONAL MARKET Proactive Balance Sheet Management, Favorable Deposit Market NIM Increased 24 bp in 2018 4.00 % 3.85 % Grew loans by 6.5% in 2018; increasing loan yields from 3.92% in 4Q 2017 to 4.35% in 4Q 2018 3.50 % Investment portfo
Slide 8: Strong Performance Through the Cycle
STRONG PERFORMANCE THROUGH THE CYCLE Consistent Deposit Growth ($bn) Steady, Balanced Loan Growth ($bn) 1Q19 Cost of Deposits: 0.56% $13.2 $16.8 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 1Q19 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 1Q19 Through the Cycle Credit Performer Strong Expense
Slide 9: Consistent Track Record of Strong Profitability
CONSISTENT TRACK RECORD PROFITABILITY OF STRONG Consistent Core Earnings ($mm)(1) Stable Earnings Drivers Leading loan and deposit position in attractive market $ 217 $ 205 $ 202 $ 198 $ 197 $ 196 Demonstrated history of disciplined expense management Consistent underwriting standards with proven pe
Slide 10: Strong Dividend Payout Ratio, Announced $100MM Stock Repurchase Program
STRONG DIVIDEND PAYOUT RATIO, ANNOUNCED $100MM STOCK PROGRAM Robust Capital Position REPURCHASE Attractive Dividend Yield(2) Tier 2 NCT1 4.0% 13.8% CET 1 First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets 46.0% 29.6% Payout Ratio (3) Stock Repurchase Program On March 1, 2019, announced
Slide 11: Strong Dividend Payout Ratio, Announced $100MM Stock Repurchase Program
y STRONG DIVIDEND PAYOUT RATIO, a ANNOUNCED $100MM STOCK REPURCHASE ERSeHenleu:ine PROGRAM Robust Capital Position Attractive Dividend Yield? Tier 2 4.0% eNCTI 188% =cET1 27% First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets eee atig®) 480% 29.6% Stock Repurchase Program * On March 1,
Slide 12: Full Suite of Products and Services
FULL SUITE OF PRODUCTS AND SERVICES First Hawaiian is a full service community bank focused on building relationships with our customers Commercial Lending Consumer Lending • • • • Largest commercial lender in Hawaii 58 commercial bankers(2) Relationship-based lending Primary focus on Hawaii, additi
Slide 13: Growing, Low-Cost Core Deposit Base
GROWING, LOW-COST CORE DEPOSIT BASE Strong brand, deep ties to the community and a leading market share position have driven an attractive, low-cost deposit base Consistent Deposit Growth ($bn) Deposit Portfolio Composition Public Time 5% $962 mm reduction in Public Time ~9% of Total Deposits are Pu
Slide 14: Steady Organic Growth and Balanced Loan Portfolio
STEADY ORGANIC GROWTH AND BALANCED LOAN PORTFOLIO Steady through the cycle organic loan growth and balanced loan portfolio with attractive forward growth opportunities Steady Loan Growth ($bn) Balanced Loan Portfolio $13.1$13.2 Consum r 13% HELOC 7% Commercial 25% Residential RE 27% Commercial RE 28
Slide 15: Proven, Consistent, and Conservative Credit Risk Management
PROVEN, CONSISTENT, AND CONSERVATIVE CREDIT RISK MANAGEMENT Strong through the cycle credit performance driven by conservative approach to credit risk management NCOs / Average Loans NPAs + 90s / Loans + OREO 1.50% 3.24% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 1.00% 0.50% % % 0.16% 0.08% 0.0
Slide 16: Demonstrated History of Disciplined Expense Management
DEMONSTRATED HISTORY OF DISCIPLINED EXPENSE MANAGEMENT Well Managed Core Noninterest Expense ($mm)(1),(2) Noninterest Expense / Average Assets(1) CAGR: 2.0% 3.50% $ 312 $ 301 $ 304 $ 296 3.00% 2.50% 2.04% 2.45% 1.71% 1.72% 1.77% 1.87% 1.78% 1.74% 1.74% 2.00% 1.82% 1.50% '11 '12 '13 '14 '15 '16 '17 '
Slide 17: 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 % 5.00 % 4.50 % 4.00 % 3.50 % Current Fun
Slide 18: 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 earnings per share and the related ratios described below, on an adjusted, or ‘‘core,’’ basis, each a non-GAAP financial measure. These core measu
Slide 19: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION For th e Th re e Mon th s En de d March 31, 2019 De ce m be r 31, 2018 March 31, 2018 (dollars in t housands, except per share amount s) In com e S tate m e n t Data: Net income $ 69,924 $ 59,995 $ 67,958 Average t ot al st ockholders' equit y Less: average goodwill A
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION For th e Th re e Mon th s En de d March 31, 2019 De ce m be r 31, 2018 March 31, 2018 (dollars in t housands, except per share amount s) Net interes t income Core net interes t income (non-GAAP) $ 145,089 $ 143,985 $ 139,672 $ 145,089 $ 143,985 $ 139,672 Noninteres t
Slide 21: 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) 2018 2017 2016 2015 2014 2013 2012 2011 Net Income Basic EPS Diluted EPS $ 264.4 $1.93 $1.93 $ 183.7 $1.32 $1.32 $230.2 $1.65 $1.65 $213.8 $1.53 $1.53 $216.7 $1.55
Slide 22: 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) 2018 2017 2016 2015 2014 2013 2012 2011 Net Interest Income $ 566.3 $ 528.8 $491.7 $461.3 $443.8 $439.0 $447.5 $470.0 Accounting Change (ASC 310 Adjustment) – – – – – (4.3) –
Slide 23: GAAP to Non-GAAP Reconciliation - Annual
» GAAP TO NON-GAAP RECONCILIATION - ANNUAL girst Hawaiian. ine For the Fiscal Year Ended December 31, (Dollars in millions, except per share data) 2018 2017 2016 2015 2014 2013 2012 2011 ‘Not interest Income $5003 S588 gai? —SabTS—sSaaSB—~«SASO «SAAS _—~SATOO ‘Accounting Change (ASC 310 Adjustment)