First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Q2 2023 Earnings Presentation
20 slides from First Hawaiian's earnings presentation, Jul 28, 2023
Slide 1: 2nd Quarter 2023 Earnings Call
2nd Quarter 2023 Earnings Call July 28, 2023 0
Slide 2: Forward-Looking Statements
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 performance. Th
Slide 3: Q2 2023 Financial Highlights
Q2 2023 FINANCIAL HIGHLIGHTS1 Q2 2023 Q1 2023 • Net income $62.4 mm Net Income ($mm) $62.4 $66.8 • Grew total loans and leases $141.6 mm Diluted EPS $0.49 $0.52 • Total deposits declined $203.3 mm, 111 bp cost Net Interest Margin 2.91% 3.11% of deposits Efficiency Ratio 58.0% 54.5% • Net interest ma
Slide 4: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS $ in millions 6/30/23 3/31/23 Assets Cash and Cash $ 558.1 $ 865.6 Comments Equivalents1 Investment Securities 2,909.4 3,054.3 - AFS Investment Securities 4,180.4 4,261.4 • Reduced excess cash, while maintaining - HTM ample liquidity Loans and Leases 14,362.8 14,221.3 o Redu
Slide 5: Loans and Leases Grew $142 MM, or 1.0%, in Q2
LOANS AND LEASES GREW $142 MM, OR 1.0%, IN Q2 Total Loans and Leases Q2 ‘23 vs Q1 ‘23 Net Changes ($ millions) ($ billions) CRE 185 (+4.5%) 14.2 14.4 13.3 0.3 0.3 Home Equity 43 (+3.9%) 0.2 1.1 1.1 Leasing Home Equity 1.0 Leases 5 (+1.6%) 1.2 1.2 Consumer 1.2 (-0.0%) (0) Construction 2.3 2.2 C&I 1.9
Slide 6: $203 MM, or 1%, Decline in Total Deposits in Q2
$203 MM, OR 1%, DECLINE IN TOTAL DEPOSITS IN Q2 Total Deposits Deposit Composition ($ billions) ($ billions) 22.6 21.3 21.1 2.2 Time 1.7 2.6 3.3 Money 4.1 9.7 Market 3.8 9.2 3.8 7.2 Savings 6.2 5.8 Retail Commercial Public Q2 Highlights • $203 mm, or 1.0%, decline in total deposits o $664 mm decline
Slide 7: $7.3 MM Decrease in Net Int Income, 20 bp Decrease in NIM
$7.3 MM DECREASE IN NET INT INCOME, 20 BP DECREASE IN NIM 210.0 5.00% 205.0 4.90% 200.0 4.80% 195.0 Net Interest Income and Net Interest Margin 4.70% Q1 ‘23 – Q2 ‘23 NIM Walk 190.0 4.60% 185.0 4.50% 180.0 4.40% 175.0 ($ millions) 167.2 4.30% 170.0 159.9 4.20% 165.0 4.10% 160.0 4.00% 155.0 145.1 3.90
Slide 8: Noninterest Income and Expense
NONINTEREST INCOME AND EXPENSE Noninterest Income Noninterest Expense 125.0 ($ millions) ($ millions) 120.9 120.0 118.6 49.0 115.0 47.3 44.1 109.2 110.0 105.0 100.0 57.3% 58.0% 54.5% 95.0 90.0 85.0 80.0 75.0 Q2 22 Q1 23 Q2 23 Q2 22 Q1 23 Q2 23 Nonint Expense Efficiency Ratio • Q1 BOLI income include
Slide 9: Asset Quality
ASSET QUALITY CONTINUED STRONG CREDIT PERFORMANCE • NCO Rate - Based on YTD NCO • 90 past due comprised of accruing loans • Includes OREO Note: TLL - Total Loans and Leases • 30-89 past due comprised of accruing and non-accruing loans 8
Slide 10: Allowance for Credit Loss
ALLOWANCE FOR CREDIT LOSS RESERVE LEVELS CONTINUE TO PROVIDE FOR UNCERTAINTY • The ACL / Total Loans and Leases remained flat at 1.03%. • The reserve continues to incorporate downside risks for macro uncertainties. Rollforward of the On-Balance Sheet Allowance for Credit Losses 9
Slide 11: Commercial Real Estate
COMMERCIAL REAL ESTATE (In Millions) Weighted Property Type Balances % of Balances % Criticized Average LTV Office 800 18.6% 59.3% 5.8% Hotel 435 10.1% 53.2% 0.0% Retail 776 18.1% 62.1% 0.7% Multi-family 813 19.0% 56.3% 0.6% Industrial 637 14.9% 58.4% 2.7% Dealer Related 447 10.4% 69.1% 0.0% Other 3
Slide 12: Questions
fA First Hawaiian, Inc. a
Slide 13: Appendix
> AP P E N D IX fA First Hawaiian, Inc. 12
Slide 14: Summary Income Statement
SUMMARY INCOME STATEMENT Quarter ended ($ in millions except per share data) 6/30/23 3/31/23 6/30/22 Net interest income $ 159.9 $ 167.2 $ 145.1 Provision for credit losses 5.0 8.8 1.0 Noninterest income 47.3 49.0 44.1 Noninterest expense 120.9 118.6 109.2 Pre-tax income 81.4 88.9 79.1 Tax expense 1
Slide 15: Selected Balance Sheet Items
SELECTED BALANCE SHEET ITEMS As of ($ in millions except per share data) 6/30/23 3/31/23 6/30/22 Selected Assets Investment securities – AFS $ 2,909.4 $ 3,054.3 $ 3,967.7 Investment securities – HTM 4,180.4 4,261.4 4,093.2 Loans and leases 14,362.8 14,221.3 13,262.8 Total assets 24,511.6 24,884.2 25
Slide 16: Deposit Coverage and Borrowing Capacity
DEPOSIT COVERAGE AND BORROWING CAPACITY FDIC DEPOSIT INSURANCE COVERAGE AVERAGE DEPOSIT BALANCES FDIC INSURED DEPOSITS + FDIC INSURED FULLY COLLATERALIZED DEPOSITS PUBLIC DEPOSITS 49% 60% AVERAGE RETAIL AVERAGE COMMERCIAL • Deposit balances over $250k in corporate operating ACCOUNT BALANCE ACCOUNT B
Slide 17: Commercial & Industrial
COMMERCIAL & INDUSTRIAL (In Millions) Property Type Balances % of Balances % Criticized Auto Dealers 626 28.6% 0.0% Retail - 0.0% 0.0% Hospitality/Hotel 73 3.4% 0.5% Food Service 49 2.3% 4.8% Transportation 51 2.3% 2.8% Other 1,388 63.4% 3.8% Total 2,188 100.0% 2.6% Industries deemed to exhibit high
Slide 18: Construction
CONSTRUCTION (In Millions) Weighted Property Type Balances % of Balances % Criticized Average LTV Office 60 6.6% 47.9% 0.0% Hotel 56 6.2% 49.5% 0.0% Retail 20 2.2% 63.3% 0.0% Multi-family 425 46.4% 54.8% 0.0% Industrial 79 8.7% 51.0% 0.0% Dealer Related 97 10.6% 83.5% 0.0% Other 177 19.3% 60.5% 0.1%
Slide 19: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We compute our return on average tangible assets as the ratio of ne
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION For the Thre e Months Ended For the Six Months Ended June 30, March 31, June 30, June 30, (dollars in thousands) 2023 2023 2022 2023 2022 Income State me nt Data: Net income $ 62,442 $ 66,818 $ 59,360 $ 129,260 $ 117,079 Average total stockholders' equity $ 2,344,285