Investor Relations

Investor Menu

Press Release

First Hawaiian, Inc. Reports First Quarter 2022 Financial Results and Declares Dividend
PDF Version
Back

First Hawaiian, Inc. Reports First Quarter 2022 Financial Results and Declares Dividend

April 22, 2022 at 8:00 AM EDT

HONOLULU, April 22, 2022 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended March 31, 2022.

“I’m pleased to report that we started 2022 with a strong quarter,” said Bob Harrison, Chairman, President and CEO. “We had good earnings and continued consumer and commercial deposit growth, and credit quality remained excellent.”

On April 20, 2022 the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on June 3, 2022 to stockholders of record at the close of business on May 23, 2022.

First Quarter 2022 Highlights:

  • Net income of $57.7 million, or $0.45 per diluted share
  • Total loans and leases decreased $70.3 million versus prior quarter. PPP loans decreased $110.3 million versus the prior quarter
  • Total deposits increased $454.3 million versus prior quarter
  • Recorded a $5.7 million negative provision for credit losses
  • Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet

Total assets were $25.0 billion as of March 31, 2022, unchanged from December 31, 2021.

Gross loans and leases were $12.9 billion as of March 31, 2022, a decrease of $70.3 million, or 0.5%, from $13.0 billion as of December 31, 2021.

Total deposits were $22.3 billion as of March 31, 2022, an increase of $454.3 million, or 2.1%, from $21.8 billion as of December 31, 2021.

Net Interest Income

Net interest income for the first quarter of 2022 was $133.9 million, a decrease of $3.5 million, or 2.5%, compared to $137.3 million for the prior quarter.

The net interest margin (NIM) was 2.42% in the first quarter of 2022, an increase of 4 basis points compared to 2.38% in the fourth quarter of 2021.

Provision Expense

During the quarter ended March 31, 2022, we recorded a $5.7 million negative provision for credit losses. In the quarter ended December 31, 2021, we did not record a provision for credit losses.

Noninterest Income

Noninterest income was $41.4 million in the first quarter of 2022, a decrease of $0.2 million compared to noninterest income of $41.6 million in the fourth quarter of 2021.

Noninterest Expense

Noninterest expense was $104.0 million in the first quarter of 2022, a decrease of $4.7 million compared to noninterest expense of $108.7 million in the fourth quarter of 2021.

The efficiency ratio was 59.0% and 60.5% for the quarters ended March 31, 2022 and December 31, 2021, respectively.

Taxes

The effective tax rate was 25.0% for the quarter ended March 31, 2022 and 18.7% for the quarter ended December 31, 2021.

Asset Quality

The allowance for credit losses was $150.3 million, or 1.17% of total loans and leases, as of March 31, 2022, compared to $157.3 million, or 1.21% of total loans and leases, as of December 31, 2021. The reserve for unfunded commitments was $29.0 million as of March 31, 2022, compared to $30.3 million as of December 31, 2021. Net charge-offs were $2.6 million, or 0.08% of average loans and leases on an annualized basis, for the quarter ended March 31, 2022, compared to net charge-offs of $6.2 million, or 0.19% of average loans and leases on an annualized basis, for the quarter ended December 31, 2021. Total non-performing assets were $8.6 million, or 0.07% of total loans and leases and other real estate owned, at March 31, 2022, compared to total non-performing assets of $7.3 million, or 0.06% of total loans and leases and other real estate owned, at December 31, 2021.

Capital

Total stockholders' equity was $2.3 billion at March 31, 2022, compared to $2.7 billion at December 31, 2021.

The tier 1 leverage, common equity tier 1 and total capital ratios were 7.50%, 12.27% and 13.48%, respectively, at March 31, 2022, compared with 7.24%, 12.24% and 13.49%, respectively, at December 31, 2021.

The Company did not repurchase any shares in the first quarter.

First Hawaiian, Inc. 

First Hawaiian, Inc. (NASDAQ:FHB) is a bank holding company headquartered in Honolulu, Hawaii. Its principal subsidiary, First Hawaiian Bank, founded in 1858 under the name Bishop & Company, is Hawaii’s oldest and largest financial institution with branch locations throughout Hawaii, Guam and Saipan. The company offers a comprehensive suite of banking services to consumer and commercial customers including deposit products, loans, wealth management, insurance, trust, retirement planning, credit card and merchant processing services. Customers may also access their accounts through ATMs, online and mobile banking channels. For more information about First Hawaiian, Inc., visit the Company’s website, www.fhb.com.

Conference Call Information

First Hawaiian will host a conference call to discuss the Company’s results today at 1:00 p.m. Eastern Time, 7:00 a.m. Hawaii Time. To access the call, participants should dial (844) 452-2942 (US/Canada), or (574) 990-9846 (International) ten minutes prior to the start of the call and enter the conference ID: 6391237. A live webcast of the conference call, including a slide presentation, will be available at the following link: www.fhb.com/earnings. The archive of the webcast will be available at the same location. A telephonic replay of the conference call will be available two hours after the conclusion of the call until 4:30 p.m. (Eastern Time) on April 29, 2022. The replay can be accessed dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID: 6391237.

Forward-Looking Statements
This press release 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. These statements are often, but not always, made through the use of words or phrases such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized” and “outlook”, or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Further, statements about the potential effects of the COVID-19 pandemic on our businesses and financial results and conditions may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, there can be no assurance that actual results will not prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements, including (without limitation) the risks and uncertainties associated with the ongoing impacts of COVID-19, the domestic and global economic environment and capital market conditions and other risk factors. For a discussion of some of these risks and important factors that could affect our future results and financial condition, see our U.S. Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2021.

Use of Non-GAAP Financial Measures
Return on average tangible stockholders’ equity, return on average tangible assets and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We compute our return on average tangible stockholders’ equity as the ratio of net income to average tangible stockholders’ equity, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total stockholders’ equity. We compute our return on average tangible assets as the ratio of net income to average tangible assets, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total assets. We compute our tangible stockholders’ equity to tangible assets as the ratio of tangible stockholders’ equity to tangible assets, each of which we calculate by subtracting (and thereby effectively excluding) the value of our goodwill. We believe that these measurements are useful for investors, regulators, management and others to evaluate financial performance and capital adequacy relative to other financial institutions. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results or financial condition as reported under GAAP.   Investors should consider our performance and capital adequacy as reported under GAAP and all other relevant information when assessing our performance and capital adequacy.

Table 12 at the end of this document provides a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.

Investor Relations Contact:
Kevin Haseyama, CFA
(808) 525-6268
khaseyama@fhb.com

 Media Contact:
Lindsay Chambers
(808) 525-6254
lchambers@fhb.com


                     
Financial Highlights   Table 1
    For the Three Months Ended  
    March 31,    December 31,    March 31,   
(dollars in thousands, except per share data)   2022      2021      2021  
Operating Results:                    
Net interest income   $ 133,872   $ 137,327   $ 129,158  
Provision for credit losses     (5,747 )   —     —  
Noninterest income     41,380     41,573     43,868  
Noninterest expense     104,042     108,749     96,306  
Net income     57,719     57,022     57,693  
Basic earnings per share     0.45     0.45     0.44  
Diluted earnings per share     0.45     0.44     0.44  
Dividends declared per share     0.26     0.26     0.26  
Dividend payout ratio     57.78 %   59.09 %   59.09 %
Performance Ratios(1):                    
Net interest margin     2.42 %     2.38 %   2.55 %
Efficiency ratio     59.04 %     60.50 %   55.53 %
Return on average total assets     0.93 %     0.88 %   1.02 %
Return on average tangible assets (non-GAAP)     0.97 %     0.92 %   1.07 %
Return on average total stockholders' equity     9.19 %     8.46 %   8.58 %
Return on average tangible stockholders' equity (non-GAAP)     15.08 %     13.47 %   13.51 %
Average Balances:                    
Average loans and leases   $ 12,819,612   $ 12,814,316   $ 13,242,270  
Average earning assets     22,463,209     23,100,445     20,476,149  
Average assets     25,080,453     25,650,505     22,944,699  
Average deposits     21,960,819     22,246,577     19,503,067  
Average stockholders' equity     2,547,865     2,675,513     2,727,701  
Market Value Per Share:                    
Closing     27.89     27.33     27.37  
High     31.16     30.14     30.80  
Low     26.93     25.17     23.14  
                     
    As of   As of   As of  
    March 31,    December 31,    March 31,   
(dollars in thousands, except per share data)   2022   2021   2021  
Balance Sheet Data:                    
Loans and leases   $ 12,891,743   $ 12,961,999   $ 13,300,289  
Total assets     25,042,720     24,992,410     23,497,596  
Total deposits     22,270,430     21,816,146     20,133,681  
Long-term borrowings     —     —     200,010  
Total stockholders' equity     2,285,149     2,656,912     2,683,630  
                     
Per Share of Common Stock:                    
Book value   $ 17.90   $ 20.84   $ 20.68  
Tangible book value (non-GAAP)(2)     10.10     13.03     13.01  
                     
Asset Quality Ratios:                    
Non-accrual loans and leases / total loans and leases     0.07 %     0.05 %   0.07 %
Allowance for credit losses for loans and leases / total loans and leases     1.17 %     1.21 %   1.51 %
                     
Capital Ratios:                    
Common Equity Tier 1 Capital Ratio      12.27 %     12.24 %   12.82 %
Tier 1 Capital Ratio     12.27 %     12.24 %   12.82 %
Total Capital Ratio     13.48 %     13.49 %   14.07 %
Tier 1 Leverage Ratio     7.50 %     7.24 %   7.90 %
Total stockholders' equity to total assets     9.13 %     10.63 %   11.42 %
Tangible stockholders' equity to tangible assets (non-GAAP)     5.36 %     6.92 %   7.50 %
                     
Non-Financial Data:                    
Number of branches     51     54     54  
Number of ATMs     298     299     297  
Number of Full-Time Equivalent Employees     2,022     2,036     2,090  
  1. Except for the efficiency ratio, amounts are annualized for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021.

  2. Tangible book value is a non-GAAP financial measure. We compute our tangible book value as the ratio of tangible stockholders’ equity to shares outstanding. Tangible stockholders’ equity is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our total stockholders’ equity. For a reconciliation to the most directly comparable GAAP financial measure, see Table 12, GAAP to Non-GAAP Reconciliation.
                   
Consolidated Statements of Income   Table 2
    For the Three Months Ended
    March 31,    December 31,    March 31, 
(dollars in thousands, except per share amounts)   2022   2021   2021
Interest income                  
Loans and lease financing   $ 103,732     $ 111,865     $ 110,939
Available-for-sale securities     32,107       28,393       23,146
Other     782       1,051       491
Total interest income     136,621       141,309       134,576
Interest expense                  
Deposits     2,749       3,216       4,056
Short-term and long-term borrowings     —       766       1,362
Total interest expense     2,749       3,982       5,418
Net interest income     133,872       137,327       129,158
Provision for credit losses     (5,747 )     —       —
Net interest income after provision for credit losses     139,619       137,327       129,158
Noninterest income                  
Service charges on deposit accounts     7,501       7,171       6,718
Credit and debit card fees     14,850       16,266       14,551
Other service charges and fees     9,654       9,196       8,846
Trust and investment services income     8,883       8,895       8,492
Bank-owned life insurance     (417 )     2,851       2,389
Other     909       (2,806 )     2,872
Total noninterest income     41,380       41,573       43,868
Noninterest expense                  
Salaries and employee benefits     48,226       45,982       43,936
Contracted services and professional fees     17,147       14,603       17,188
Occupancy     7,410       8,074       7,170
Equipment     5,977       6,317       5,491
Regulatory assessment and fees     2,224       2,557       2,034
Advertising and marketing     2,028       1,579       1,591
Card rewards program     6,883       7,471       4,835
Other     14,147       22,166       14,061
Total noninterest expense     104,042       108,749       96,306
Income before provision for income taxes     76,957       70,151       76,720
Provision for income taxes     19,238       13,129       19,027
Net income   $ 57,719     $ 57,022     $ 57,693
Basic earnings per share   $ 0.45     $ 0.45     $ 0.44
Diluted earnings per share   $ 0.45     $ 0.44     $ 0.44
Basic weighted-average outstanding shares     127,556,242       127,893,011       129,933,104
Diluted weighted-average outstanding shares     128,121,126       128,512,257       130,589,878


                   
Consolidated Balance Sheets   Table 3
    March 31,    December 31,    March 31, 
(dollars in thousands)   2022
   2021
   2021
Assets                  
Cash and due from banks   $ 274,022     $ 246,716     $ 278,994  
Interest-bearing deposits in other banks     1,352,138       1,011,753       983,816  
Investment securities, at fair value (amortized cost: $8,733,170 as of March 31, 2022, $8,560,733 as of December 31, 2021 and $6,708,431 as of March 31, 2021)     8,062,384       8,428,032       6,692,479  
Loans held for sale     —       538       9,390  
Loans and leases     12,891,743       12,961,999       13,300,289  
Less: allowance for credit losses     150,280       157,262       200,366  
Net loans and leases     12,741,463       12,804,737       13,099,923  
                   
Premises and equipment, net     315,766       318,448       319,949  
Other real estate owned and repossessed personal property     —       175       —  
Accrued interest receivable     61,561       63,158       69,879  
Bank-owned life insurance     471,401       471,819       468,927  
Goodwill     995,492       995,492       995,492  
Mortgage servicing rights     7,650       8,302       10,869  
Other assets     760,843       643,240       567,878  
Total assets   $ 25,042,720     $ 24,992,410     $ 23,497,596  
Liabilities and Stockholders' Equity                  
Deposits:                  
Interest-bearing   $ 12,504,821     $ 12,422,283     $ 11,958,606  
Noninterest-bearing     9,765,609       9,393,863       8,175,075  
Total deposits     22,270,430       21,816,146       20,133,681  
Long-term borrowings     —       —       200,010  
Retirement benefits payable     134,323       134,491       143,736  
Other liabilities     352,818       384,861       336,539  
Total liabilities     22,757,571       22,335,498       20,813,966  
                   
Stockholders' equity                  
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 140,875,595 / 127,686,307 shares as of March 31, 2022, issued/outstanding: 140,581,715 / 127,502,472 shares as of December 31, 2021 and issued/outstanding: 140,455,180 / 129,749,890 shares as of March 31, 2021)     1,409       1,406       1,405  
Additional paid-in capital     2,530,795       2,527,663       2,517,048  
Retained earnings     628,642       604,534       497,418  
Accumulated other comprehensive loss, net     (517,502 )     (121,693 )     (43,435 )
Treasury stock (13,189,288 shares as of March 31, 2022, 13,079,243 shares as of December 31, 2021 and 10,705,290 shares as of March 31, 2021)     (358,195 )     (354,998 )     (288,806 )
Total stockholders' equity     2,285,149       2,656,912       2,683,630  
Total liabilities and stockholders' equity   $ 25,042,720     $ 24,992,410     $ 23,497,596  


                                                   
Average Balances and Interest Rates                                               Table 4
    Three Months Ended   Three Months Ended   Three Months Ended  
    March 31, 2022   December 31, 2021   March 31, 2021  
    Average   Income/   Yield/   Average   Income/   Yield/   Average   Income/   Yield/  
(dollars in millions)   Balance   Expense   Rate   Balance   Expense   Rate   Balance   Expense   Rate  
Earning Assets                                                  
Interest-Bearing Deposits in Other Banks   $ 1,138.3   $ 0.6   0.20 %   $ 2,074.5   $ 0.8   0.15 % $ 938.7   $ 0.2   0.10 %
Available-for-Sale Investment Securities                                                  
Taxable     7,800.3     29.2   1.50     7,515.2     25.8   1.37     5,949.9     22.1   1.49  
Non-Taxable     636.7     3.6   2.32     615.3     3.3   2.14     278.0     1.3   1.80  
Total Available-for-Sale Investment Securities     8,437.0     32.8   1.56     8,130.5     29.1   1.43     6,227.9     23.4   1.50  
Loans Held for Sale     1.2     —   2.02     1.0     —   1.35     9.2     0.1   2.46  
Loans and Leases(1)                                                  
Commercial and industrial     1,973.1     14.6   3.01     2,084.0     21.1   4.01     3,026.7     20.4   2.74  
Commercial real estate     3,632.2     25.8   2.88     3,572.9     26.0   2.89     3,385.2     24.9   2.98  
Construction     766.9     5.7   3.03     806.6     6.3   3.09     746.8     5.8   3.16  
Residential:                                                  
Residential mortgage     4,111.0     34.8   3.38     4,014.9     34.9   3.48     3,696.1     34.7   3.76  
Home equity line     891.6     5.5   2.48     864.4     5.5   2.52     822.0     5.7   2.80  
Consumer     1,218.6     15.6   5.19     1,241.3     16.3   5.22     1,323.7     17.7   5.43  
Lease financing     226.2     1.9   3.42     230.2     1.9   3.27     241.8     1.8   3.02  
Total Loans and Leases     12,819.6     103.9   3.27     12,814.3     112.0   3.48     13,242.3     111.0   3.39  
Other Earning Assets     67.1     0.2   1.31     80.1     0.3   1.27     58.0     0.3   1.79  
Total Earning Assets(2)     22,463.2     137.5   2.47     23,100.4     142.2   2.45     20,476.1     135.0   2.66  
Cash and Due from Banks     292.1               282.2               294.0            
Other Assets     2,325.2               2,267.9               2,174.6            
Total Assets   $ 25,080.5             $ 25,650.5             $ 22,944.7            
                                                   
Interest-Bearing Liabilities                                                  
Interest-Bearing Deposits                                                  
Savings   $ 6,668.4   $ 0.5   0.03 %   $ 7,086.0   $ 0.8   0.04 %   5,975.1   $ 0.6   0.04 %
Money Market     4,048.9     0.5   0.05     4,048.3     0.5   0.05     3,530.0     0.4   0.05  
Time     1,748.5     1.7   0.39     1,819.0     1.9   0.42     2,288.5     3.0   0.53  
Total Interest-Bearing Deposits     12,465.8     2.7   0.09     12,953.3     3.2   0.10     11,793.6     4.0   0.14  
Long-Term Borrowings     —     —   —     110.9     0.8   2.74     200.0     1.4   2.76  
Total Interest-Bearing Liabilities     12,465.8     2.7   0.09     13,064.2     4.0   0.12     11,993.6     5.4   0.18  
Net Interest Income         $ 134.8             $ 138.2             $ 129.6      
Interest Rate Spread               2.38 %               2.33 %             2.48 %
Net Interest Margin               2.42 %               2.38 %             2.55 %
Noninterest-Bearing Demand Deposits     9,495.0               9,293.3               7,709.5            
Other Liabilities     571.8               617.5               513.9            
Stockholders' Equity     2,547.9               2,675.5               2,727.7            
Total Liabilities and Stockholders' Equity   $ 25,080.5             $ 25,650.5             $ 22,944.7            
  1. Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.

  2. Interest income includes taxable-equivalent basis adjustments of $1.0 million, $0.9 million and $0.4 million for the three months ended March 31, 2022, December 31, 2021, and March 31, 2021, respectively.


                   
Analysis of Change in Net Interest Income                 Table 5
    Three Months Ended March 31, 2022
    Compared to December 31, 2021
(dollars in millions)   Volume   Rate   Total
Change in Interest Income:                  
Interest-Bearing Deposits in Other Banks   $ (0.4 )   $ 0.2     $ (0.2 )
Available-for-Sale Investment Securities                  
Taxable     1.0       2.4       3.4  
Non-Taxable     —       0.3       0.3  
Total Available-for-Sale Investment Securities     1.0       2.7       3.7  
Loans and Leases                  
Commercial and industrial     (1.2 )     (5.3 )     (6.5 )
Commercial real estate     —       (0.2 )     (0.2 )
Construction     (0.4 )     (0.2 )     (0.6 )
Residential:                  
Residential mortgage     0.9       (1.0 )     (0.1 )
Home equity line     0.1       (0.1 )     —  
Consumer     (0.5 )     (0.2 )     (0.7 )
Lease financing     (0.1 )     0.1       —  
Total Loans and Leases     (1.2 )     (6.9 )     (8.1 )
Other Earning Assets     (0.1 )     —       (0.1 )
Total Change in Interest Income     (0.7 )     (4.0 )     (4.7 )
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings     (0.1 )     (0.2 )     (0.3 )
Time     (0.1 )     (0.1 )     (0.2 )
Total Interest-Bearing Deposits     (0.2 )     (0.3 )     (0.5 )
Long-Term Borrowings     (0.4 )     (0.4 )     (0.8 )
Total Change in Interest Expense     (0.6 )     (0.7 )     (1.3 )
Change in Net Interest Income   $ (0.1 )   $ (3.3 )   $ (3.4 )


                   
Analysis of Change in Net Interest Income                 Table 6
    Three Months Ended March 31, 2022
    Compared to March 31, 2021
(dollars in millions)   Volume   Rate   Total
Change in Interest Income:                  
Interest-Bearing Deposits in Other Banks   $ 0.1     $ 0.3     $ 0.4  
Available-for-Sale Investment Securities                  
Taxable     6.9       0.2       7.1  
Non-Taxable     1.9       0.4       2.3  
Total Available-for-Sale Investment Securities     8.8       0.6       9.4  
Loans Held for Sale     (0.1 )     —       (0.1 )
Loans and Leases                  
Commercial and industrial     (7.7 )     1.9       (5.8 )
Commercial real estate     1.8       (0.9 )     0.9  
Construction     0.1       (0.2 )     (0.1 )
Residential:                  
Residential mortgage     3.8       (3.7 )     0.1  
Home equity line     0.5       (0.7 )     (0.2 )
Consumer     (1.4 )     (0.7 )     (2.1 )
Lease financing     (0.1 )     0.2       0.1  
Total Loans and Leases     (3.0 )     (4.1 )     (7.1 )
Other Earning Assets     —       (0.1 )     (0.1 )
Total Change in Interest Income     5.8       (3.3 )     2.5  
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings     —       (0.1 )     (0.1 )
Money Market     0.1       —       0.1  
Time     (0.6 )     (0.7 )     (1.3 )
Total Interest-Bearing Deposits     (0.5 )     (0.8 )     (1.3 )
Long-Term Borrowings     (0.7 )     (0.7 )     (1.4 )
Total Change in Interest Expense     (1.2 )     (1.5 )     (2.7 )
Change in Net Interest Income   $ 7.0     $ (1.8 )   $ 5.2  


                   
Loans and Leases                 Table 7
    March 31,    December 31,    March 31, 
(dollars in thousands)   2022      2021      2021
Commercial and industrial:                  
Commercial and industrial excluding Paycheck Protection Program loans   $ 1,817,346   $ 1,870,657   $ 1,962,672
Paycheck Protection Program loans     106,188     216,442     1,158,764
Total commercial and industrial     1,923,534     2,087,099     3,121,436
Commercial real estate     3,759,980     3,639,623     3,396,233
Construction     708,300     813,969     739,271
Residential:                  
Residential mortgage     4,153,824     4,083,367     3,715,676
Home equity line     918,101     876,608     805,746
Total residential     5,071,925     4,959,975     4,521,422
Consumer     1,204,834     1,229,939     1,283,779
Lease financing     223,170     231,394     238,148
Total loans and leases   $ 12,891,743   $ 12,961,999   $ 13,300,289


                   
Deposits                 Table 8
    March 31,    December 31,    March 31, 
(dollars in thousands)   2022      2021      2021
Demand   $ 9,765,609   $ 9,393,863   $ 8,175,075
Savings     6,812,758     6,612,775     6,141,161
Money Market     3,990,225     4,033,070     3,642,604
Time     1,701,838     1,776,438     2,174,841
Total Deposits   $ 22,270,430   $ 21,816,146   $ 20,133,681


                   
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More                 Table 9
    March 31,    December 31,    March 31, 
(dollars in thousands)   2022      2021      2021
Non-Performing Assets                  
Non-Accrual Loans and Leases                  
Commercial Loans:                  
Commercial and industrial   $ 707   $ 718   $ 593
Commercial real estate     727     727     937
Construction     —     —     579
Lease financing     75     —     —
Total Commercial Loans     1,509     1,445     2,109
Residential Loans:                  
Residential mortgage     7,092     5,637     6,999
Total Residential Loans     7,092     5,637     6,999
Total Non-Accrual Loans and Leases     8,601     7,082     9,108
Other Real Estate Owned     —     175     —
Total Non-Performing Assets   $ 8,601   $ 7,257   $ 9,108
                   
Accruing Loans and Leases Past Due 90 Days or More                  
Commercial Loans:                  
Commercial and industrial   $ 591   $ 740   $ 1,365
Commercial real estate     —     —     1,054
Construction     —     —     89
Total Commercial Loans     591     740     2,508
Residential Loans:                  
Residential mortgage     13     987     —
Home equity line     2,252     3,681     4,975
Total Residential Loans     2,265     4,668     4,975
Consumer     1,588     1,800     2,024
Total Accruing Loans and Leases Past Due 90 Days or More   $ 4,444   $ 7,208   $ 9,507
                   
Restructured Loans on Accrual Status and Not Past Due 90 Days or More   $ 32,590   $ 34,893   $ 39,831
Total Loans and Leases   $ 12,891,743   $ 12,961,999   $ 13,300,289


                     
Allowance for Credit Losses   Table 10
    For the Three Months Ended  
    March 31,    December 31,    March 31,   
(dollars in thousands)   2022   2021      2021     
Balance at Beginning of Period   $ 157,262     $ 161,246     $ 208,454    
Loans and Leases Charged-Off                    
Commercial Loans:                    
Commercial and industrial     (706 )     (4,432 )     (963 )  
Commercial real estate     —       —       (66 )  
Total Commercial Loans     (706 )     (4,432 )     (1,029 )  
Residential Loans:                    
Residential mortgage     —       (534 )     (98 )  
Home equity line     (43 )     (107 )     —    
Total Residential Loans     (43 )     (641 )     (98 )  
Consumer     (4,109 )     (3,250 )     (6,541 )  
Total Loans and Leases Charged-Off     (4,858 )     (8,323 )     (7,668 )  
Recoveries on Loans and Leases Previously Charged-Off                    
Commercial Loans:                    
Commercial and industrial     53       244       215    
Commercial real estate     14       9       3    
Construction     —       100       166    
Total Commercial Loans     67       353       384    
Residential Loans:                    
Residential mortgage     16       15       17    
Home equity line     28       28       24    
Total Residential Loans     44       43       41    
Consumer     2,148       1,743       2,655    
Total Recoveries on Loans and Leases Previously Charged-Off     2,259       2,139       3,080    
Net Loans and Leases Charged-Off     (2,599 )     (6,184 )     (4,588 )  
Provision for Credit Losses - Loans and Leases     (4,383 )     2,200       (3,500 )  
Balance at End of Period   $ 150,280     $ 157,262     $ 200,366    
Average Loans and Leases Outstanding   $ 12,819,612     $ 12,814,316     $ 13,242,270    
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)     0.08   %     0.19   %   0.14   %
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding     1.17   %     1.21   %   1.51   %
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases     17.47x     22.21x     22.00x  
  1. Annualized for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021.


                                                       
Loans and Leases by Year of Origination and Credit Quality Indicator     Table 11
                                              Revolving      
                                              Loans      
                                              Converted      
    Term Loans   Revolving   to Term      
    Amortized Cost Basis by Origination Year   Loans   Loans      
                                        Amortized   Amortized      
(dollars in thousands)   2022   2021   2020   2019   2018   Prior   Cost Basis   Cost Basis   Total
Commercial Lending                                                      
Commercial and Industrial                                                      
Risk rating:                                                      
Pass   $ 158,853   $ 483,473   $ 98,061   $ 184,897   $ 79,810   $ 166,075   $ 594,007   $ 31,048   $ 1,796,224
Special Mention     2,876     356     3,898     3,983     52     5,594     1,601     867     19,227
Substandard     —     337     1,296     1,776     13,251     757     15,877     138     33,432
Other (1)     4,028     10,510     6,171     6,450     3,516     1,664     42,312     —     74,651
Total Commercial and Industrial     165,757     494,676     109,426     197,106     96,629     174,090     653,797     32,053     1,923,534
                                                       
Commercial Real Estate                                                      
Risk rating:                                                      
Pass     240,807     682,346     351,893     523,735     471,899     1,291,495     77,724     14,752     3,654,651
Special Mention     —     —     —     47,897     473     39,064     696     —     88,130
Substandard     —     —     —     —     1,757     15,280     4     —     17,041
Other (1)     —     —     —     —     —     158     —     —     158
Total Commercial Real Estate     240,807     682,346     351,893     571,632     474,129     1,345,997     78,424     14,752     3,759,980
                                                       
Construction                                                      
Risk rating:                                                      
Pass     6,160     167,645     118,526     136,209     112,919     89,172     19,470     —     650,101
Special Mention     —     —     —     244     705     353     —     —     1,302
Substandard     —     —     —     —     357     827     —     —     1,184
Other (1)     7,871     29,932     5,774     2,957     3,922     4,435     822     —     55,713
Total Construction     14,031     197,577     124,300     139,410     117,903     94,787     20,292     —     708,300
                                                       
Lease Financing                                                      
Risk rating:                                                      
Pass     3,913     31,974     57,192     45,698     8,813     69,286     —     —     216,876
Special Mention     —     479     2,672     1,360     12     20     —     —     4,543
Substandard     —     —     270     123     15     1,343     —     —     1,751
Total Lease Financing     3,913     32,453     60,134     47,181     8,840     70,649     —     —     223,170
                                                       
Total Commercial Lending   $ 424,508   $ 1,407,052   $ 645,753   $ 955,329   $ 697,501   $ 1,685,523   $ 752,513   $ 46,805   $ 6,614,984


                                                       
                                              Revolving      
                                              Loans      
                                              Converted      
    Term Loans   Revolving   to Term      
    Amortized Cost Basis by Origination Year   Loans   Loans      
(continued)                                       Amortized   Amortized      
(dollars in thousands)   2022   2021   2020   2019   2018   Prior   Cost Basis   Cost Basis   Total
Residential Lending                                                      
Residential Mortgage                                                      
FICO:                                                      
740 and greater   $ 185,434   $ 1,096,789   $ 615,500   $ 264,419   $ 183,368   $ 1,012,447   $ —   $ —   $ 3,357,957
680 - 739     26,812     128,172     72,766     44,872     25,913     159,950     —     —     458,485
620 - 679     3,088     13,196     12,304     5,995     5,021     39,145     —     —     78,749
550 - 619     —     2,267     1,570     720     731     8,847     —     —     14,135
Less than 550     2,116     228     60     —     82     4,098     —     —     6,584
No Score (3)     6,550     15,806     7,676     13,968     17,545     56,444     —     —     117,989
Other (2)     18,485     30,872     16,042     9,704     10,810     32,600     43     1,369     119,925
Total Residential Mortgage     242,485     1,287,330     725,918     339,678     243,470     1,313,531     43     1,369     4,153,824
                                                       
Home Equity Line                                                      
FICO:                                                      
740 and greater     —     —     —     —     —     —     705,570     1,892     707,462
680 - 739     —     —     —     —     —     —     147,290     3,202     150,492
620 - 679     —     —     —     —     —     —     39,370     2,129     41,499
550 - 619     —     —     —     —     —     —     10,310     1,426     11,736
Less than 550     —     —     —     —     —     —     1,482     494     1,976
No Score (3)     —     —     —     —     —     —     4,936     —     4,936
Total Home Equity Line     —     —     —     —     —     —     908,958     9,143     918,101
Total Residential Lending     242,485     1,287,330     725,918     339,678     243,470     1,313,531     909,001     10,512     5,071,925
                                                       
Consumer Lending                                                      
FICO:                                                      
740 and greater     60,821     145,550     74,436     68,970     46,731     24,261     112,298     217     533,284
680 - 739     26,319     87,933     50,976     48,120     28,498     18,340     68,407     647     329,240
620 - 679     6,222     39,016     19,677     25,307     16,453     14,473     30,462     1,038     152,648
550 - 619     292     7,159     7,314     11,776     8,904     8,485     10,352     1,129     55,411
Less than 550     53     2,003     3,445     5,732     2,939     3,089     3,166     471     20,898
No Score (3)     280     458     9     53     35     52     35,063     337     36,287
Other (2)     502     4,247     363     1,691     4     2,181     68,078     —     77,066
Total Consumer Lending     94,489     286,366     156,220     161,649     103,564     70,881     327,826     3,839     1,204,834
                                                       
Total Loans and Leases   $ 761,482   $ 2,980,748   $ 1,527,891   $ 1,456,656   $ 1,044,535   $ 3,069,935   $ 1,989,340   $ 61,156   $ 12,891,743
  1. Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score.

  2. Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating.

  3. No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.


                     
GAAP to Non-GAAP Reconciliation   Table 12
    For the Three Months Ended  
    March 31,    December 31,    March 31,   
(dollars in thousands, except per share amounts)   2022       2021      2021     
Income Statement Data:                    
Net income   $ 57,719   $ 57,022   $ 57,693  
                     
Average total stockholders' equity   $ 2,547,865   $ 2,675,513   $ 2,727,701  
Less: average goodwill     995,492     995,492     995,492  
Average tangible stockholders' equity   $ 1,552,373   $ 1,680,021   $ 1,732,209  
                     
Average total assets   $ 25,080,453   $ 25,650,505   $ 22,944,699  
Less: average goodwill     995,492     995,492     995,492  
Average tangible assets   $ 24,084,961   $ 24,655,013   $ 21,949,207  
                     
Return on average total stockholders' equity(1)     9.19 %     8.46 %   8.58 %
Return on average tangible stockholders' equity (non-GAAP)(1)     15.08 %     13.47 %   13.51 %
                     
Return on average total assets(1)     0.93 %     0.88 %   1.02 %
Return on average tangible assets (non-GAAP)(1)     0.97 %     0.92 %   1.07 %
                     


                   
    As of   As of   As of  
    March 31,    December 31,    March 31,   
(dollars in thousands, except per share amounts)   2022      2021      2021  
Balance Sheet Data:                    
Total stockholders' equity   $ 2,285,149   $ 2,656,912   $ 2,683,630  
Less: goodwill     995,492     995,492     995,492  
Tangible stockholders' equity   $ 1,289,657   $ 1,661,420   $ 1,688,138  
                     
Total assets   $ 25,042,720   $ 24,992,410   $ 23,497,596  
Less: goodwill     995,492     995,492     995,492  
Tangible assets   $ 24,047,228   $ 23,996,918   $ 22,502,104  
                     
Shares outstanding     127,686,307     127,502,472     129,749,890  
                     
Total stockholders' equity to total assets     9.13 %     10.63 %   11.42 %
Tangible stockholders' equity to tangible assets (non-GAAP)     5.36 %     6.92 %   7.50 %
                     
Book value per share   $ 17.90   $ 20.84   $ 20.68  
Tangible book value per share (non-GAAP)   $ 10.10   $ 13.03   $ 13.01  
  1. Annualized for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021.

Primary Logo

Source: First Hawaiian, Inc.