First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Q2 2017 Earnings Presentation
25 slides from First Hawaiian's earnings presentation, Jul 28, 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: 2Q 2017 Preliminary Highlights
2Q 2017 Preliminary HIGHLIGHTS Solid Earnings Net income of $56.9 million, or $0.41 per diluted share Core net income(1) of $57.2 million, or $0.41 per diluted share Continued Growth, Strong Balance Sheet Loan and lease growth of $281 million, or 2.4% Deposit growth of $514 million, or 3.0% Net char
Slide 3: 2Q 2017 Financial Preliminary Results
2Q 2017 Financial Preliminary Results 3 Core excludes certain gains, expenses and one-time items. See annual and quarterly non-GAAP reconciliations of core net income, core net interest income, core noninterest income and core noninterest expense used to calculate core ratios in the appendix. Core e
Slide 4: Best-in-Class Franchise
170/30/39 251/177/36 126/34/38 0/170/167 119/176/227 227/227/227 R:79 G:129 B:189 Best-in-Class Franchise 4 Branch Presence Financial Overview – 1Q 2017 ($ billions) Source: Public filings and SNL Financial Note: Financial data as of 31-Mar-17. Market data as of 21-Jul-17. Top quartile is based on p
Slide 5: Full Suite of Products and Services
Full Suite of Products and Services 5 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 $12.3bn
Slide 6: Hawaii is an Attractive Market with Strong Economic Backdrop
Hawaii is an Attractive Market with Strong Economic Backdrop 6 Real GDP ($ 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 7: The Clear Leader in Hawaii
The Clear Leader in Hawaii 7 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 8: Strong Organic Growth and High Performance
Strong Organic Growth and High Performance 8 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 constituted as of 31-Dec-16; excludes merger targets. FHB ratios shown as core. Core excludes certa
Slide 9: 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 10: Positioned for NIM Upside
positioned for NIM upside given earning asset mix and rate sensitivity 10 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 N
Slide 11: Potential Tax Opportunities
Potential Tax opportunities 11 Source: Public filings and SNL Financial Note: Financial data as of 31-Mar-17. $10–$50bn banks constituted as of 31-Dec-16; excludes merger targets. (1) Based on 1Q17 annualized. Potential Tax Optimization Opportunities 2016 Effective Tax Rate Municipal Securities (as
Slide 12: 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) 12 Source: Public filings and SNL Financial Note: Financial data as of 31-Mar-17. Market data as of 21-Jul-
Slide 13: Delivering Value Through Operational Excellence
Delivering Value Through Operational Excellence 13 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 14: Delivering Value Through Operational Excellence
» DELIVERING VALUE THROUGH OPERATIONAL Ma First Hawaiian, inc. EXCELLENCE 1) Growing core deposit base loan growth 3 } Best-in-class credit performance 4) Well positioned for rising rates 5} Disciplined expense culture focused on driving operating leverage 6 ] Delivering low volatility earnings and
Slide 15: 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 15 CAGR: 6.2% Deposits: $16.9bn 1Q17 Deposit Cost: 0.18% Year Ended December 31, Deposit Portfolio Composition (1Q17) Consistent Deposit G
Slide 16: 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 16 Well positioned to serve clients during the financial crisis CAGR: 6.2% Loans: $11.8bn 1Q17 Loan Yield: 3.85% Loans / Deposits 70
Slide 17: 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 17 Year Ended December 31, Year Ended December 31, Year Ended December 31, Year Ended December 31, Source: Public filings and SNL Financia
Slide 18: Operating Leverage
Operating Leverage Through prudent expense management 18 Source: Public filings and SNL Financial Note: Financial data as of 31-Mar-17. $10–$50bn banks constituted as of 31-Dec-16; excludes merger targets. FHB measures shown as core. Core excludes certain gains, expenses and one-time items. See annu
Slide 19: Sustained, Consistent Track Record of Strong Profitability
Sustained, Consistent Track Record of Strong Profitability 19 Source: Public filings and SNL Financial Note: Financial data as of 31-Mar-17. $10–$50bn banks constituted as of 31-Dec-16; excludes merger targets. FHB measures shown as core. Core excludes certain gains, expenses and one-time items. See
Slide 20: FHB Currently Undervalued Relative to Hawaii Peers
FHB currently undervalued relative to Hawaii peers 20 Source: Public filings, SNL Financial, IBES earnings estimates. Note: Financial data as of 31-Mar-17. Market data as of 21-Jul-17. $10–$50bn banks constituted as of 31-Dec-16; excludes merger targets. IPO as of 4-Aug-16. ROATCE (return on average
Slide 21: Hawaii Banks have a Significant Deposit Advantage
Hawaii Banks have a Significant Deposit Advantage 21 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 22: GAAP to Non-GAAP Reconciliations
GAAP to non-gaap reconciliations 22 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 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 23 Note: Totals may not sum due to rounding. (1) Annualized for the three month periods. For the Three Months Ended As of and for the Twelve Months Ended December 31, (Dollars in millions, except per share data) June 30, 2017 March 31, 2017 June 30, 2016 2016 2015 201
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 24 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 25: GAAP to Non-GAAP Reconciliation
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