First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Investor Presentation (February 2017)
22 slides from First Hawaiian's investor presentation, Feb 8, 2017
Slide 1: Disclaimer: Forward-Looking Statements
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: Best-in-Class Franchise: Company Overview
R:79 G:129 B:189 Best-in-Class Franchise 2 Company Overview Financial Overview – FY 2016 ($ billions) Balance Sheet Assets $19.7 Deposits 16.8 Loans 11.5 Tangible Common Equity 1.5 Core Operating(1) NIM 2.88% Non-Interest Income / Total Revenue 27.9 Efficiency Ratio 47.3 ROATA(2) 1.18 ROATCE(2) 13.8
Slide 3: 4Q 2016 Highlights
4Q 2016 HIGHLIGHTS Solid Earnings Net income of $56.6mm, or $0.41 per diluted share Core net income(1) of $56.0mm, or $0.40 per diluted share Increased dividend by 10% to $0.22 per share; 4Q payout ratio of 54.3%³ Good Growth, Strong Balance Sheet Loan and lease growth of $124 million, or 1.1%, in 4
Slide 4: Full Suite of Products and Services
Full Suite of Products and Services 4 Largest commercial lender in Hawaii 55 commercial bankers(2) Relationship-based lending Primary focus on Hawaii, California C&I, leases, auto dealer flooring, CRE, and C&D Strong relationships with proven local real estate developers $12.1bn of AUA and 48 financ
Slide 5: Leading Market Share
Leading Market Share #1 Deposit Market Share in Hawaii Since 2004 — Top 50 bank by total deposits in the United States(1) 5 Market Statistics Footprint Primary Markets (92% of Deposits) Secondary Markets Market Branches Deposits ($bn) % of Total FHB Market Share Rank Total Hawaii 57 14.9 92.4 36.6 1
Slide 6: Hawaii is an Attractive Market with Strong Economic Backdrop
R:79 G:129 B:189 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 G
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 ~97% 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: 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 8 CAGR: 6.3% Deposits: $16.8bn 4Q16 Deposit Cost: 0.16% Cost of Deposits 0.87% 1.52% 1.92% 1.19% 0.63% 0.38% 0.30% 0.25% 0.21% 0.16% 0.14%
Slide 9: 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 9 Well positioned to serve clients during the financial crisis CAGR: 6.1% Loans: $11.5bn 4Q16 Loan Yield: 3.85% Loans / Deposits 70% 71% 72% 84% 78% 79% 69% 70% 70% 68% 67% 69%
Slide 10: 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 10 Year Ended December 31, Year Ended December 31, Year Ended December 31, Year Ended December 31, Source: SNL Financial as of 31-Jan-17 N
Slide 11: Highly Efficient Cost Structure
R:79 G:129 B:189 Highly Efficient Cost Structure First Hawaiian has built a culture focused on prudent expense management 11 Source: SNL Financial as of 31-Jan-17 Note: Public U.S. Banks with $10-$50bn of Assets as of 31-Dec-15. (1) FHB ratios shown as core. Core excludes certain gains, expenses and
Slide 12: Sustained, Consistent Track Record of Strong Profitability
High quality customer relationships driving consistent growth through improved penetration and cross-selling Rebalanced investment portfolio for better utilization of liquidity Well-positioned for rising interest rate environment with annual net interest income estimated to increase 4.5% with +100bp
Slide 13: Attractive Shareholder Distribution Opportunity
R:79 G:129 B:189 Attractive Shareholder Distribution Opportunity 13 Source: SNL Financial as of 31-Jan-17 Note: Public U.S. Banks with $10-$50bn of Assets as of 31-Dec-15. Totals may not sum due to rounding. (1) Dividends and share repurchases are subject to approval of FHB’s board of directors and
Slide 14: Our Forward Strategy
Our Forward Strategy Organically grow loan and deposit market share Leverage our brand, community presence and relationship banking strategy Drive increased cross-selling Utilize full service product offering and strong relationships Address changing customer needs and capitalize on market opportuni
Slide 15: A Differentiated Story
A Differentiated Story 15 First Hawaiian delivers excellent service and value to its customers while maintaining best-in-class performance Clear Leader in Attractive Markets Differentiated Service Offering Balance Sheet at Scale with History of Steady Growth Well-Diversified Loan Portfolio Strong Cr
Slide 16: A Differentiated Story
>» ADIFFERENTIATED STORY First Hawaiian, Inc. First Hawaiian, Inc. Growing, Low-Cost Core Deposit Franchise Best-in-Class Expense Management ‘Superior Profitability Across Various Metrics Robust Cay Position with Attra tribution Potential First Hawaiian delivers excellent service and value to its cu
Slide 17: Hawaii Banks have a Significant Deposit Advantage
Hawaii Banks have a Significant Deposit Advantage Hawaii-based banks have historically maintained a meaningful deposit pricing advantage vs. broader U.S. banks While that spread has shrunk in the current low rate environment, the unique structure of the Hawaii banking market combined with a communit
Slide 18: 4Q 2016 Financial Results
4Q 2016 Financial Results 18 Balance Sheet Core Income Statement¹ Core Operating Metrics¹ Credit / Capital 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 nonint
Slide 19: GAAP to Non-GAAP Reconciliations
GAAP to non-gaap reconciliations 19 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 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 20 Note: Totals may not sum due to rounding. (1) Annualized for the three and nine month periods. As of and for the Twelve Months Ended December 31, As of and for the Three Months Ended (Dollars in millions, except per share data) 2016 2015 2014 2013 2012 2011 Decembe
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 21 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 22: GAAP to Non-GAAP Reconciliation
» GAAP TO NON-GAAP RECONCILIATION @A First Hawaiian, nc. For the Fiacl Year Ended December 3, Thee tons Ende December September —_ June — September mos a015 oe __zona__nora__aas bate sua0ie_aat0ie dost HoT MOIS SUS «SOO «STS OS aS siza7 sims ‘Accounting Change (ASC 310 Agus) = = a) 5 5 5 5 é 5 ty Bu
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