First Hawaiian, Inc. · NASDAQ:FHB
First Hawaiian — Q4 2020 Earnings Presentation
19 slides from First Hawaiian's earnings presentation, Jan 22, 2021
Slide 1: 4th Quarter 2020 Earnings Call
4th QUARTER 2020 EARNINGS CALL January 22, 2021 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: Q4 2020 Highlights
Q4 2020 HIGHLIGHTS1 ➢ Increases in net interest income ➢ Lower noninterest expenses and noninterest income ➢ 1 bp increase in NIM • Slight increase in net interest income Q4 2020 Q3 2020 • 9.6% increase in noninterest income Net Income ($mm) $61.7 $65.1 • 3.8% decrease in noninterest expenses Dilute
Slide 4: Asset Quality: Well-Positioned Coming into 2021
ASSET QUALITY WELL-POSITIONED COMING INTO 2021 • 90 past due comprised of accruing loans • 30-89 past due comprised of accruing and non-accruing loans Note: TLL - Total Loans and Leases 3
Slide 5: Allowance for Credit Loss
ALLOWANCE FOR CREDIT LOSS PROVISION INCREASED DUE TO CONTINUED UNCERTAINTY Q4 provisions reflect a weak but unchanged economic view with relatively few changes in the risk composition of the portfolio. We continue to hold a qualitative overlay for loans based on default expectations not imbedded in
Slide 6: Commercial Risk Rating
COMMERCIAL RISK RATING COMPOSITION BY LOAN TYPE As of 12/31/2020 ($ mm) Risk Rating C&I CRE Const. Lease Total Pass 2,685,883 89% 3,100,309 91% 667,354 91% 234,933 95% 6,688,479 90% Special Mention 164,897 6% 226,905 7% 15,104 2% 4,099 2% 411,005 6% Substandard 75,273 2% 64,964 2% 3,891 1% 6,379 3%
Slide 7: Deferrals and Modifications
DEFERRALS AND MODIFICATIONS REPERFORMANCE RATES REMAIN STRONG Subsequent COVID Returned Original Deferrals & Deferrals & to Pay Deferrals Delinquent As of 12/31/20 ($ mm) Mods Mods1 ($ mm) ($ mm) ($ mm) ($ mm) Commercial and Industrial 888 881 3 4 2 Commercial Real Estate 1,151 1,076 6 66 3 Construc
Slide 8: PPP Loans Down by $119MM
PPP LOANS DOWN BY $119MM Total Loans and Leases Q4 ‘20 vs Q3 ‘20 Net Change ($ billions) ($ millions) Construction 73 (+11.0%) 13.2 13.5 13.3 Leasing Residential 21 (+0.6%) 0.2 0.2 0.2 0.9 Home Equity 0.9 0.8 (-2.7%) (23) Home Equity 1.4 Consumer 1.6 1.4 (-1.0%) (32) C&I (ex PPP) 3.2 (-2.0%) (68) CR
Slide 9: $330 MM Increase in Deposits, Basis Point Drop in Cost of Deposits
$330 MM INCREASE IN DEPOSITS 2 BASIS POINT DROP IN COST OF DEPOSITS Total Deposits Public Deposits ($ billions) ($ billions) 18.9 19.2 2.39 2.3 1.63 0.86 1.76 1.65 2.6 Time 1.57 16.4 1.48 1.28 0.64 1.01 0.64 1.08 Money 0.65 1.17 2.5 3.3 0.62 3.4 Market 0.51 1.53 0.83 0.99 0.92 0.66 0.50 0.68 0.48 3.
Slide 10: One Basis Point Increase in NIM
ONE BASIS POINT INCREASE IN NIM 200.0 5.00% 195.0 4.90% 190.0 4.80% 185.0 4.70% 180.0 Net Interest Income and Net Interest Margin 4.60% 175.0 4.50% 170.0 ($ millions) 4.40% 165.0 4.30% 160.0 4.20% 155.0 4.10% 150.0 4.00% Q4 Highlights 145.0 139.6 3.90% 140.0 134.0 135.2 3.80% 135.0 3.70% 130.0 3.60%
Slide 11: Noninterest Income Up, Noninterest Expense Down $3.5 MM
NONINTEREST INCOME UP ON INCREASED TRANSACTIONS AND 1X ITEMS, NONINTEREST EXPENSE DOWN $3.5 MM Noninterest Income Noninterest Expense 100.0 125.0% 53.6 ($ millions) ($ millions) 100.0% 48.9 91.1 91.6 46.7 75.0% 88.1 48.9% 50.0% 46.6% 50.0% 25.0% 75.0 0.0% Q4 19 Q3 20 Q4 20 Q4 19 Q3 20 Q4 20 Nonint E
Slide 12: Annual Expenses Have Remained Relatively Flat Over the Last 3 Years
ANNUAL EXPENSES HAVE REMAINED RELATIVELY FLAT OVER THE LAST 3 YEARS Annual Noninterest Expense • Reported expenses have only grown at a ($ millions) 0.37% CAGR the last two years 370.4 367.7 • 2020 expenses were $2.8 million lower 365.0 than 2019 expenses • 2020 expenses came in well below original
Slide 13: Questions
QUESTIONS 12
Slide 14: Appendix
> AP Pp EN D IX fA First Hawaiian, Inc. 13
Slide 15: Summary Income Statement
SUMMARY INCOME STATEMENT Quarter ended ($ in millions except per share data) 12/31/20 9/30/20 12/30/19 Net interest income $ 135.2 $ 134.0 $ 139.6 Provision for credit losses 20.0 5.1 4.3 Noninterest income 53.6 48.9 46.7 Noninterest expense 88.1 91.6 91.1 Pre-tax income 80.7 86.2 91.0 Tax expense 1
Slide 16: Selected Balance Sheet Items
SELECTED BALANCE SHEET ITEMS As of ($ in millions except per share data) 12/31/20 9/30/20 12/31/19 Selected Assets Investment securities $ 6,071.4 $ 5,692.9 $ 4,075.6 Loans and leases 13,279.1 13,500.0 13,211.7 Total assets 22,662.8 22,310.7 20,166.7 Selected Liabilities and Stockholders’ Equity Tot
Slide 17: 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 18: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION For the Three Months Ended For the Year Ended December 31, September 30, December 31, December 31, (dollars in thousands, except per share amounts) 2020 2020 2019 2020 2019 Income Statement Data: Net income $ 61,739 $ 65,101 $ 67,836 $ 185,754 $ 284,392 Core net incom
Slide 19: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION For the Three Months Ended For the Year Ended December 31, September 30, December 31, December 31, (dollars in thousands, except per share amounts) 2020 2020 2019 2020 2019 Net interest income $ 135,227 $ 134,002 $ 139,619 $ 535,734 $ 573,402 Core net interest income