First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Investor Presentation (November 2022)
23 slides from First Hawaiian's investor presentation, November 2022
Slide 1: Investor Presentation
Investor Presentation November 2022 0
Slide 2: Disclaimer
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 reflect our vi
Slide 3: Q3 2022 Financial Highlights
Q3 2022 FINANCIAL HIGHLIGHTS1 • Net income $69.0 mm Q3 2022 Q2 2022 Net Income ($mm) $69.0 $59.4 • Grew total loans and leases $438 mm Diluted EPS $0.54 $0.46 • Total deposits declined $510 mm, 24 bp cost of Net Interest Margin 2.93% 2.60% deposits Efficiency Ratio 54.0% 57.3% • Net interest margin
Slide 4: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS $ in thousands 9/30/22 6/30/22 Comments Assets • Excess cash and investment portfolio runoff Int-bearing Deposits used to fund loan growth in Q3 $ 657.6 $ 1,254.0 in Other Banks Investment • Loans and leases grew $438 mm, 3,289.2 3,967.7 or 3.3% in Q3 Securities - AFS Invest
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS 1 Strong, Consistent Financial Performance 2 Leading Position In Attractive Markets 3 Experienced Leadership Team 4 High Quality Balance Sheet 5 Proven Through The Cycle Performance 6 Well-Capitalized With Attractive Dividend 4
Slide 6: Strong Performer in Attractive Market
STRONG PERFORMER IN ATTRACTIVE MARKET Branch Presence Financial Overview – 3Q 2022 YTD ($ billions) 51 branches Market Cap $ 3.3 Loans $ 13.7 Kauai Assets $ 24.9 Deposits $ 22.1 Efficiency Oahu ROATCE(2) ROATA(2) Ratio Niihau Molokai Honolulu Maui 18.3% 1.2% 56.6% 15.5% 1.0% 54.7% Lanai Saipan Kahoo
Slide 7: Fundamental Strengths of Hawaii's Economy
DESPITE NEAR-TERM CHALLENGES, THE FUNDAMENTAL STRENGTHS OF HAWAII’S ECONOMY REMAIN INTACT Hawaii GDP by Industry (2019)(1) Fundamental Strengths • Attractive destination for domestic and Visitor spending is ~19% of Hawaii GDP(2) international travelers • Attractive alternative for travelers concerne
Slide 8: Strong Performance Through the Cycle
STRONG PERFORMANCE THROUGH THE CYCLE Consistent Deposit Growth ($bn) Steady, Balanced Loan Growth ($bn) 3Q22 Cost of Deposits: 0.24% $13.7 $22.1 $6.5 $9.1 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 3Q22 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 3Q22 Through the Cyc
Slide 9: Consistent Track Record of Strong Profitability
CONSISTENT TRACK RECORD OF STRONG PROFITABILITY Pre-Tax, Pre-Provision Earnings ($mm)(1) Stable Earnings Drivers $ 450 $ 380$ 387$ 380$ 395$ 365 ▪ Dominant loan and deposit positions in attractive $ 400 $ 359$ 365$ 357$ 355$ 353 markets $ 350 $ 310 $ 300 $ 250 $ 247 ▪ Consistent underwriting standar
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 NCOs / Average Loans NPAs + 90s / Loans + OREO 1.50% 3.50% 3.05% 1.05% 3.00% 1.00% 2.50% 0.73% 2.00% 1.50% 0.50% 0.21% 0.10% 1.00% 0.39% 0
Slide 11: Well-Capitalized with an Attractive Dividend
WELL-CAPITALIZED WITH AN ATTRACTIVE DIVIDEND Robust Capital Position Attractive Dividend Yield(1)(2) 4.0% Tier 2 14.9% NCT1 2.8% CET 1 2.0 % 12.9% 0.6 % 1.1 % First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets 12.3 % 11.8 % Capital Management Approach ▪ Retain sufficient earnings to sup
Slide 12: Appendix
Appendix Pi es (A First Hawaiian, Inc.
Slide 13: Full Suite of Products and Services
FULL SUITE OF PRODUCTS AND SERVICES First Hawaiian is a full-service community bank focused on building relationships with our customers Commercial Lending Consumer Lending • Largest commercial lender in Hawaii • Services provided to individuals and small • 58 commercial bankers(2) to mid-sized busi
Slide 14: A Leader in Hawaii
A LEADER IN HAWAII The banking market in Hawaii is dominated by local banks, with the top 4 banks accounting for ~93% of deposits Branches 51 51 38 27 FTEs 2,042 2,115 1,061 764 Assets ($bn) 24.9 23.1 9.3 7.3 Loans ($bn) 13.7 13.3 5.7 5.4 Deposits ($bn) 22.1 20.9 8.3 6.6 YTD 3Q 2022 ROATCE 18.3%(1)
Slide 15: Balance Sheet Well Positioned to Benefit from Rising Rates
BALANCE SHEET WELL POSITIONED TO BENEFIT FROM RISING RATES 33 bp NIM increase in Q3 Well Positioned for Rising Rates 3.79 % • Approximately $5.4 bn, or 39% of the loan portfolio, 3.66 % reprices within 90 days 3.57 % • Well-structured investment portfolio with limited 3.18 % extension risk 3.19 %3.1
Slide 16: Solid, Low-Cost Core Deposit Base
SOLID, 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 Deposit Portfolio Composition YTD Deposit Changes Public Time 2% Time 8% of Total ▪ Year-to-date through 9/30/22, total deposits grew by 7%
Slide 17: 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 Expect mid-to-high single digit loan growth (ex PPP) in 2022 Balanced Loan Portfolio (as of 9/30/22) Loan Portfolio Highlights (as of 9/30/22) Other Consumer Loans: $13.7 bn $11
Slide 18: Demonstrated History of Disciplined Expense Management
DEMONSTRATED HISTORY OF DISCIPLINED EXPENSE MANAGEMENT Well Managed Noninterest Expense ($mm) Noninterest Expense / Average Assets CAGR: 2.7% 3.50% $ 406 2.96% $ 348 $ 365 $ 370 $ 368 3.00% 2.84%2.84% $ 312 $ 302 $ 297 $ 304 $ 327 $ 337 $ 327 2.69% 2.61% 2.53%2.46% 56.5%56.6% 2.39%2.36% 2.50% 2.19%
Slide 19: Asset Quality
ASSET QUALITY CONTINUED STRONG CREDIT PERFORMANCE • 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 18
Slide 20: Hawaii Banks Have a Significant Deposit Advantage
HAWAII BANKS HAVE A SIGNIFICANT DEPOSIT ADVANTAGE Hawaii banks experience more favorable deposit behavior across all rate cycles; Hawaii banks experienced a deposit beta(¹) of ~34% vs. ~47% for broader U.S. banks during the last rising rate cycle 6.00 % 5.50 % 5.25 % 5.00 % 4.50 % 4.00 % 3.50 % 3.32
Slide 21: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS We present pre-tax, pre-provision earnings on an adjusted basis as a non-GAAP financial measure. We believe that the presentation of this non-GAAP financial measure helps identify underlying trends in our business from period to period that could otherwise be distort
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, September 30, (dollars in thousands, except per share amounts) 2022 2022 2021 2022 2021 Income Statement Data: Net income $ 69,018 $ 59,360 $ 64,279 $ 186,097 $ 208,713 Average t
Slide 23: GAAP to Non-GAAP Reconciliation - Annual
GAAP TO NON-GAAP RECONCILIATION - ANNUAL As of and for the Twelve Months Ended December 31, (Dollars in millions, YTD except per share data) 9/30/22 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Net Income $186.1 $265.7 $185.8 $ 284.4 $ 264.4 $ 183.7 $230.2 $213.8 $216.7 $214.5 $211.1 $199.
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