First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Investor Presentation (September 2020)
29 slides from First Hawaiian's investor presentation, Sep 4, 2020
Slide 1: Investor Presentation September 2020
0 Investor Presentation September 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: Q2 2020 Highlights
Q2 2020 HIGHLIGHTS (1) 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. (2) Declared on July 22, 2020. Payable Septembe
Slide 4: Loan Deferrals: Majority of Loans Are Returning to Payment
LOAN DEFERRALS MAJORITY OF LOANS ARE RETURNING TO PAYMENT Total Deferred Loans 1 Balance ($ mm) Count Commercial and Industrial 931 1,433 Commercial Real Estate 1,179 434 Construction 66 40 Lease Financing 11 61 Sub - Total Commercial 2,187 1,968 Residential Mortgage 565 1,322 Consumer 276 17,898 Su
Slide 5: Asset Quality Trends
ASSET QUALITY TRENDS HIGHER DOWNGRADES AND CHARGE OFFS BASED ON PORTFOLIO REVIEW 4 0 20 40 60 80 100 Jun-20 Mar-20 Dec-19 Provision and NCO Provision Net Charge Off 0 20 40 60 80 100 Jun-20 Mar-20 Dec-19 NPA and 90 Past Due 0 200 400 600 800 1,000 Jun-20 Mar-20 Dec-19 Commercial Criticized Assets Sp
Slide 6: Commercial Risk Rating Evolution Since Pandemic
COMMERCIAL RISK RATING EVOLUTION SINCE PANDEMIC Risk Rating C&I ($ 000’s) % CRE ($ 000’s) % Const. ($ 000’s) % Lease ($ 000’s) % Total ($ 000’s) % Pass 3,039,942 89% 3,011,228 88% 535,591 87% 207,303 87% 6,794,064 88% Special Mention 188,332 6% 345,639 10% 17,980 3% 24,538 10% 576,489 8% Substandard
Slide 7: Allowance for Credit Loss Provision Incorporates COVID Impact
ALLOWANCE FOR CREDIT LOSS PROVISION INCORPORATES COVID - 19 IMPACT ($ in 000’s) C&I CRE Const Lease Mortgage Home Equity Consumer Total 3/31/20 ACL 20,884 42,838 8,824 851 30,021 6,556 56,039 166,013 Charge - offs (13,974) (2,723) (379) - (14) 0 (8,907) (25,997) Recoveries 100 - 30 - 17 8 2,456 2,61
Slide 8: Investment Highlights
INVESTMENT HIGHLIGHTS 7 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 9: Strong Performer in Attractive Market
NALs / Loans 52.0% 52.7% FHB Top Quartile 7.1% 11.0% FHB Top Quartile STRONG PERFORMER IN ATTRACTIVE MARKET 8 Branch Presence Financial Overview – 2Q 2020 YTD ($ billions) Source: Public filings and S&P Global Market Intelligence as of 25 - Aug - 2020 Note: Financial data as of 30 - Jun - 2020. Mark
Slide 10: Fundamental Strengths of Hawaii's Economy Remain Intact
DESPITE NEAR - TERM CHALLENGES, THE FUNDAMENTAL STRENGTHS OF HAWAII’S ECONOMY REMAIN INTACT 9 • Attractive destination for domestic and international travelers • Attractive alternative for travelers concerned about international travel • Well - developed visitor industry infrastructure • High qualit
Slide 11: Experienced Leadership Team
EXPERIENCED LEADERSHIP TEAM 10 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 12: Strong Performance
Source: Public filings and S&P Global Market Intelligence as of 25 - Aug - 2020 Note: Financial data as of 30 - Jun - 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 13: Proven, Consistent, and Conservative Credit Risk Management
0.21% 0.73% 0.44% 0.11% 1.18% 0.14% 0.00% 0.50% 1.00% 1.50% '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 2Q20 PROVEN, CONSISTENT, AND CONSERVATIVE CREDIT RISK MANAGEMENT Strong through the cycle credit performance driven by conservative approach to credit risk management 12 Year Ended Dec
Slide 14: Consistent Track Record of Strong Profitability
1.39% 1.30% 1.31% 1.22% 1.10% 1.18% 1.22% 1.49% 1.51% 0.58% 0.87% 1.03% 1.05% 1.09% 1.05% 1.10% 1.07% 1.40% 1.37% 0.67% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2Q20 CONSISTENT TRACK RECORD OF STRONG PROFITABILITY 13 Source: Public filings and S&P Global
Slide 15: Well Capitalized with an Attractive Dividend
6.3% 4.0% First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets WELL CAPITALIZED WITH AN ATTRACTIVE DIVIDEND 14 Source: Public filings and S&P Global Market Intelligence as of 25 - Aug - 2020 Note: Financial data as of 30 - Jun - 2020. $10 – $50bn banks constituted as of 31 - Dec - 2019, e
Slide 16: Appendix
OA First Hawaiian, Inc. Appendix
Slide 17: Full Suite of Products and Services
FULL SUITE OF PRODUCTS AND SERVICES 16 • 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 18: Managing NIM Through a Challenging Interest Rate Environment
$ 135 $ 140 $ 141 $ 141 $ 144 $ 145 $ 146 $ 143 $ 140 $ 139 $ 128 3.29 % 3.47 % 3.58 % 3.61 % 3.77 % 3.85 % 3.88 % 3.79 % 3.66 % 3.57 % 2.84 % 0.31 % 0.35 % 0.40 % 0.47 % 0.48 % 0.56 % 0.57 % 0.54 % 0.44 % 0.38 % 0.19 % 2.99 % 3.13 % 3.18 % 3.11 % 3.23 % 3.23 % 3.25 % 3.19 % 3.15 % 3.12 % 2.58 % – %
Slide 19: 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 $19.4 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 2Q20 Demand 36% Money Market 17% Savings 25% Time 10% SOLID, LOW - COST CORE DEPOSIT BASE Strong brand, deep ties to the community and a leading market share
Slide 20: 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 $13.8 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 2Q20 STEADY ORGANIC GROWTH AND BALANCED LOAN PORTFOLIO Steady through the cycle organic loan growth and balanced loan portfolio 19 Well positioned to serve client
Slide 21: Total Exposure to Select Industries and Leveraged Lending
TOTAL EXPOSURE TO SELECT INDUSTRIES AND LEVERAGED LENDING 20 As of 6/30/20 Total (mm) C&I (mm) CRE/ Const (mm) % of Total Loans and Leases Comments Hospitality and Hotels $537 $162 $375 3.9% • 21% Rcvd Pay Deferral, Includes $57 mm PPP loans Retail (ex auto ) $701 $227 $474 5.1% • 33% Rcvd Pay Defer
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% 52.0% 61.7% 63.0% 63.9% 62.8% 61.4% 60.0% 58.3% 56.4% 56.2% 57.3% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2Q20 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 ~92% 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: GAAP to Non-GAAP Reconciliation
GAAP TO NON - GAAP RECONCILIATION 25 ( 1) Annualized for the three months and six months ended June 30, 2020 and 2019 and three months ended March 31, 2020. (dollars in thousands, except per share amounts) Income Statement Data: Net income $ 20,049 $ 38,865 $ 72,433 $ 58,914 $ 142,357 Core net incom
Slide 27: GAAP to Non-GAAP Reconciliation
GAAP TO NON - GAAP RECONCILIATION 26 1) One - time items for all periods shown included nonrecurring offering costs 2) Represents the adjustments to net income, tax effected at the Company’s effective tax rate for the respective period. (dollars in thousands, except per share amounts) Net interest i
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
First Hawaiian — Investor Presentation (September 2020) on 6ix