First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Q1 2020 Earnings Presentation
24 slides from First Hawaiian's earnings presentation, Apr 24, 2020
Slide 1: 1st Quarter 2020 Earnings Call
1st QUARTER 2020 EARNINGS CALL APRIL 24, 2020 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: FHB's COVID-19 Response
FHB’S COVID-19 RESPONSE ➢ Over 50% of employees able to work from home ➢ Social distancing practices for essential job functions unable to work from Caring For Our home Employees ➢ Temporarily closed 26, or 43%, of our branches and redeployed affected employees to augment areas experiencing higher v
Slide 4: Experienced and Well Prepared
EXPERIENCED AND WELL PREPARED ➢ Crisis-tested senior management team with an average of 28 years in banking industry ➢ Strong capital and liquidity positions ➢ Consistent risk management and underwriting philosophy ➢ 4 members of senior management team have served, or currently serve, as chief risk
Slide 5: Total Loans and Leases $13.4 BN
TOTAL LOANS AND LEASES $13.4 BN Other Consumer • Largest Hawaii-based lender Credit Card $223 mm $325 mm 2% • Balanced Portfolio 2% • 54% Commercial, 46% Consumer Consumer Auto • 80% Hawaii/Guam/Saipan, 20% Mainland $1,020 mm 8% • Commercial C&I $3,025 mm • Hawaii’s leading commercial bank with most
Slide 6: C&I Portfolio
C&I PORTFOLIO Diversified book % of Total Total As of 3/31/20 Loans and Balance (mm) Leases Auto Dealers $1,021 7.6% Real Estate and Rental/Leasing $398 3.0% Hospitality $168 1.3% Retail (ex Auto Dealers) $158 1.2% Construction Industry $143 1.1% Food Service $135 1.0% Transportation $120 0.9% All O
Slide 7: CRE
CRE Non-owner Occupied Owner Occupied Total % of Total Loans As of 3/31/20 Balance (mm) Balance (mm) Balance (mm) and Leases (LTV) (LTV) Retail (ex Auto Dealer) $563 4.2% $451 (61.1%) $112 (62.9%) Industrial $551 4.1% $327 (62.5%) $223(64.7%) Commercial and Office >= 5mm $521 3.9% $521 (64.0%) - Mul
Slide 8: Construction
CONSTRUCTION % of Total Loans and As of 3/31/20 Balance (mm) LTV Leases Multifamily $200 61.7% 1.5% Commercial and Office >= 5mm $52 59.8% 0.4% Industrial $37 61.4% 0.3% Retail (ex Auto Dealer) $16 67.3% 0.1% Commercial and Office < 5mm $15 62.1% 0.1% Hotel $9 49% 0.1% All Others $243 62% 1.8% Total
Slide 9: Total Exposure to Select Industries and Leveraged Lending
TOTAL EXPOSURE TO SELECT INDUSTRIES AND LEVERAGED LENDING % of CRE/ Total Total C&I As of 3/31/20 Con Loans Comments (mm) (mm) (mm) and Leases Hospitality and $546 $168 $378 4.1% • C&I: five investment grade global names Hotels • CRE: ~20 loans with WALTV of 53% Retail $737 $158 $579 5.3% • Top 10 C
Slide 10: Residential, HELOC and Consumer Loans
RESIDENTIAL, HELOC AND CONSUMER LOANS % of Total As of Balance Loans and Comments 3/31/20 (mm) Leases • 99.9% of Residential and Home Equity loans in Hawaii/Guam/Saipan • Weighted Average LTV: 64.4% Residential $3,673 27.5% • Weighted Average FICO: 764 (Super Prime: 73%, Prime: 16%) • Peak annual ne
Slide 11: Deferrals
DEFERRALS Temporary relief to bridge the disruption 19,000 • Proactive outreach started at the outset of consumers the mandatory “stay at home” and 600 businesses • Combination of on-line, call center and business banker outbound calling to offer 15% of payment relief to customers impacted by the co
Slide 12: Credit
CREDIT CECL Impact on ACL and Reserve for Unfunded Commitments Combined Allocation ($ in 000’s) C&I 17% Consumer 31% CRE 21% Home Equity 7% Construction Residential 7% 16% • Cumulative increase of $52.1 million, or 40%, over year end 2019 • “Day One” adoption reflected in a one-time adjustment to ca
Slide 13: Q1 2020 Highlights
Q1 2020 HIGHLIGHTS ➢ Adopted Current Expected Credit ➢ Strong capital and liquidity Loss (“CECL”) methodology positions Q1 2020 Key Metrics • Strong liquidity position Net Income ($mm) $38.9 • Modified US Liquidity Coverage Ratio: 149% Diluted Earnings Per Share $0.30 • Strong asset quality Net Inte
Slide 14: 1.3% Growth in Loans and Leases
1.3% GROWTH IN LOANS AND LEASES Total Loans and Leases Q1 ‘20 vs Q4 ‘19 Net Change ($ billions) ($ millions) C&I 282.1 (+10.3%) 13.2 13.2 13.4 Construction 52.8 (+10.2%) 0.1 0.2 0.2 Leasing 0.9 0.9 0.9 Home Equity Leasing 34.1 (+16.9%) 1.7 1.6 1.6 Consumer (-0.2%) (1.5) Home Equity (-1.5%) (50.9) CR
Slide 15: 6 Basis Point Decrease in Deposit Costs
6 BASIS POINT DECREASE IN DEPOSIT COSTS Total Deposits Public Deposits ($ billions) ($ billions) 1.72 1.63 17.0 1.56 1.57 16.8 1.48 16.4 1.28 0.54 0.56 0.64 0.64 2.9 0.65 1.01 2.9 2.5 Time 0.62 0.51 Money 1.18 1.00 0.99 0.92 3.1 3.1 Market 0.83 3.2 0.66 0.50 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19
Slide 16: 3 BP Decline in Net Interest Margin
3 BP DECLINE IN NET INTEREST MARGIN 200.0 195.0 3.70% 190.0 185.0 180.0 Net Interest Income and Net Interest Margin 3.60% Q1 2020 Q4 2019 175.0 170.0 ($ millions) 165.0 Reported NIM 3.12% 3.15% 160.0 3.50% 155.0 150.0 145.1 Premium adjustment 0.02 0.03 145.0 139.6 138.7 3.40% 140.0 135.0 NIM after a
Slide 17: Noninterest Income/Expense
NONINTEREST INCOME/EXPENSE Noninterest Income Noninterest Expense 100.0 125.0% ($ millions) 96.5 49.2 100.0% 92.6 47.1 46.7 91.1 75.0% 48.2% 48.9% 51.3% 50.0% 25.0% 75.0 0.0% Q1 19 Q4 19 Q1 20 Q1 19 Q4 19 Q1 20 Quarter over Quarter changes were driven by: Quarter over Quarter changes were driven by:
Slide 18: Questions
QUESTIONS 17
Slide 19: Appendix
> AP Pp EN D IX fA First Hawaiian, Inc. 18
Slide 20: Summary Income Statement
SUMMARY INCOME STATEMENT Quarter ended ($ in millions except per share data) 3/31/20 12/31/19 3/31/19 Net interest income $ 138.7 $ 139.6 $ 145.1 Provision for loan and lease losses 41.2 4.3 5.7 Noninterest income 49.2 46.7 47.1 Noninterest expense 96.5 91.1 92.6 Pre-tax income 50.2 91.0 93.9 Tax ex
Slide 21: Selected Balance Sheet Items
SELECTED BALANCE SHEET ITEMS As of ($ in millions except per share data) 3/31/20 12/31/19 3/31/19 Selected Assets Investment securities $ 4,058.5 $ 4,075.6 $ 4,485.7 Loans and leases 13,380.3 13,211.7 13,197.5 Total assets 20,755.9 20,166.7 20,441.1 Selected Liabilities and Stockholders’ Equity Tota
Slide 22: 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 23: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION For the Three Months Ended March 31, December 31, March 31, (dollars in thousands, except per share amounts) 2020 2019 2019 Income Statement Data: Net income $ 38,865 $ 67,836 $ 69,924 Core net income $ 38,803 $ 71,250 $ 72,052 Average total stockholders' equity $ 2,6
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION For the Three Months Ended March 31, December 31, March 31, (dollars in thousands, except per share amounts) 2020 2019 2019 Net interest income $ 138,683 $ 139,619 $ 145,089 Core net interest income (non-GAAP) $ 138,683 $ 139,619 $ 145,089 Noninterest income $ 49,228