UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Item 7.01 Regulation FD Disclosure.
First Hawaiian, Inc. (the “Company”), the holding company for First Hawaiian Bank, is furnishing with this Current Report on Form 8-K a copy of an investor presentation that it intends to use for any investor meetings or related interactions during the months of November and December in fiscal year 2023. A copy of the presentation also will be posted to the Company’s website (www.fhb.com) in the Investor Relations section.
Pursuant to Regulation FD, the presentation materials are furnished as Exhibit 99.1. The information in this Item 7.01 and Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
| (d) | Exhibits |
| Exhibit No. | Description |
| 99.1 | Presentation Materials |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FIRST HAWAIIAN, INC. | ||
| Date: November 13, 2023 | By: |
/s/Robert S. Harrison |
| Robert S. Harrison | ||
| Chairman of the Board, President and Chief Executive Officer | ||
| (Principal Executive Officer) | ||
Exhibit 99.1
0 Investor Presentation November / December, 2023
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 views at such time with respect to, among other things, future events and our financial performance. These statements are often, but not always , m ade through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continu e,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” “annualized,” and “outlook,” or the negative version of these w ord s or other comparable words or phrases of a future or forward - looking nature. These forward - looking statements are not historical facts an d are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by m ana gement, and any such forward - looking statements are subject to risks, assumptions, estimates and uncertainties that are difficult to pre dict. Actual results may prove to be materially different from the results expressed or implied by the forward - looking statements. Factors th at could cause our actual results to differ materially from those described in the forward - looking statements, including (without limitation) t he domestic and global economic environment and capital market conditions and other risk factors, can be found in our SEC filings, including, bu t not limited to, our Annual Report on Form 10 - K for the year ended December 31, 2022, and our Quarterly Reports on Form 10 - Q for the quarters end ed March 31, June 30, and September 30, 2023, which are available on our website (www.fhb.com) and the SEC’s website (www.sec.go v). Any forward - looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or re view any forward - looking statement, whether as a result of new information, future developments or otherwise, except as required by appli cable law. Use of Non - GAAP Financial Measures The information provided herein includes certain non - GAAP financial measures. We believe that these measures provide useful inf ormation about our operating results and enhance the overall understanding of our past performance and future performance. Although t hes e non - GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytic al tools and should not be considered in isolation or as a substitute for analysis of our results or financial condition as reported under GA AP. Investors should consider our performance and financial condition as reported under GAAP and all other relevant information when assess ing our performance or financial condition. The reconciliation of such measures to the comparable GAAP figures are included in the a ppe ndix of this presentation. Other References to “we,” “us,” “our,” “FHI,” “FHB,” “Company,” and “First Hawaiian” refer to First Hawaiian, Inc. and its consolid ate d subsidiaries. 1
Q3 2023 FINANCIAL HIGHLIGHTS 1 (1) Comparisons to Q2 2023 (2) ROATA and ROATCE are non - GAAP financial measures. A reconciliation of average tangible assets and average tangible stockholders ’ equity to the comparable GAAP measurements is provided in the appendix of this slide presentation. (3) Declared on October 18, 2023. Payable December 1, 2023 to shareholders of record at close of business on November 20, 2023. 2 • Net income $58.2 mm • Total loans and leases declined $30.5 mm • Total deposits increased $433.3 mm • Cost of deposits: 1.40% • Total cost of funds: 1.49% • Net interest margin declined 5 bps • Excellent credit quality. Recorded $7.5 mm provision expense • Well capitalized: 12.21% CET1 ratio • Declared $0.26 / share dividend Q3 2023 Q2 2023 Net Income ($mm) $58.2 $62.4 Diluted EPS $0.46 $0.49 Net Interest Margin 2.86% 2.91% Efficiency Ratio 58.3% 58.0% ROA / ROATA 2 0.93% / 0.97% 1.01% / 1.05% ROE / ROATCE 2 9.76% / 16.84% 10.68% / 18.57% Tier 1 Leverage Ratio CET1 Capital Ratio Total Capital ratio 8.45% 12.21% 13.38% 8.30% 12.05% 13.17% Dividend 3 $0.26 / share $0.26 / share
BALANCE SHEET HIGHLIGHTS 3 $ in millions 9/30/23 6/30/23 Assets Cash and Cash Equivalents 1 $ 1,213.4 $ 558.1 Investment Securities - AFS 2,722.7 2,909.4 Investment Securities - HTM 4,104.1 4,180.4 Loans and Leases 14,332.3 14,362.8 Total Assets 24,912.5 24,511.6 Liabilities Deposits $21,511.5 $21,078.2 Short - term borrowings 500.0 - Long - term borrowings - 500.0 Total Stockholders’ Equity 2,351.0 2,359.7 Comments • Solid balance sheet with strong capital levels o Cash and cash equivalents elevated at end of quarter in anticipation of public deposit outflows o Loan/deposit ratio: 67% o $8.3 bn of available liquidity at 9/30/23 • Investment portfolio duration remained stable at 5.5 yrs at 9/30/23 1 Includes Cash and due from banks and Interest - bearing deposits in other banks
MAUI UPDATE 1 MAUI REAL ESTATE - SECURED LOANS $ million (9/30/23) Lahaina Kula All Other Areas Maui Total CRE 23.7 7.2 357.7 388.5 Construction 0.3 0.0 47.5 47.8 Residential 1 st position (includes HELOCS behind FHB 1 st ) 57.2 21.0 990.4 1,068.6 Subordinate position 3.6 2.8 99.8 106.2 Total 84.7 31.0 1,495.3 1,611.1 COMMENTS • Lahaina and Kula were the primary populated areas impacted by wildfires. • Fire insurance on residential mortgages required and force - placed if necessary. • Expect modest expenses attributable to Maui fire recovery and restoration. • FHB has no loans outstanding to the electric utility. • Relief program included the waiver of ATM fees, and loan payment deferral and late payment fee waivers. MAUI REAL ESTATE - SECURED LOAN LOCATIONS MAUI C&I COMMITMENTS $ million (9/30/23) Maui - based firms 14.8 MAUI CONSUMER LOANS $ million (9/30/23) Direct and Indirect Auto 68.8 Credit Card 12.8 All Other Consumer 11.2 Lahaina Kula
INVESTMENT HIGHLIGHTS 5 Strong, Consistent Financial Performance Leading Position In Attractive Markets Experienced Leadership Team High Quality Balance Sheet Proven Through The Cycle Performance Well - Capitalized With Attractive Dividend 1 2 3 4 5 6
NALs / Loans 56.9% 57.0% FHB Peer Median 18.7% 14.2% FHB Peer Median STRONG PERFORMER IN ATTRACTIVE MARKET 6 Branch Presence Financial Overview – 3Q 2023 ($ billions) Source: Public filings and S&P Global Capital IQ as of 03 - Nov - 2023 Note: Financial data as of 30 - Sep - 2023. Market data as of 03 - Nov - 2023. (1) Peer median is based on public banks $10 – $50bn in assets constituted as of 31 - Dec - 2022; excludes merger targets. (2) ROATA (Return On Average Tangible Assets) and ROATCE (Return on Average Tangible Common Equity) are non - GAAP financial measures. A reconciliation to the comparable FHB GAAP measures is provided in the appendix. (3) Dividend yield based on dividend paid in 3Q 2023 and closing market price as of 03 - Nov - 2023. (4) Deposit market share based on FDIC data as of 30 - Jun - 2023. (5) Annualized for the nine months ended September 30, 2023 (6) For the nine months ended September 30, 2023 Company Highlights x Oldest and largest Hawaii - based bank x Full - service community bank with complete suite of products & services x Largest combined deposit base in Hawaii, Guam and Saipan (4) x Largest Hawaii - based lender x $18.2 bn assets under administration as of 3Q23 x Proven through the cycle and outstanding operating performance Efficiency Ratio (6) ROATCE (2,5) Dividend Yield (3) Maui Kahoolawe Lanai Oahu Kauai Niihau Honolulu Hawaii Island Molokai 0.10% 0.35% FHB Peer Median Market Cap $2.5 Loans $ 14.3 Assets $ 24.9 Deposits $ 21.5 Guam Saipan (1) (1) (1) (1) 111 bps 149 bps FHB Peer Median Cost of Deposits (5) (1) 1.1% 1.1% FHB Peer Median ROATA (2,5) (1) 50 branches 5.4% 3.9% FHB Peer Median (1)
HAWAII IS AN ATTRACTIVE MARKET WITH STRONG ECONOMIC FUNDAMENTALS 7 • Attractive destination for domestic and international travelers • Attractive alternative for travelers concerned about international travel • Well - developed visitor industry infrastructure • High quality medical care • Strategically important • Headquarters of US Indo - Pacific Command and regional component commands: Army, Navy, Air Force, Marines • Estimated total defense spending in Hawaii in 2022: $8.8bn (3) • Defense spending is 8.9% of state GDP (3) • Over 48.5k active duty and Reserve personnel stationed in Hawaii (3) • 20k civilian employees (3) Government 20% Real Estate 21% Residential RE 23% Other 13% Transportation & Warehousing 5% Entertainment 11% Professiona l 9 % Construction 6% Retail Trade 8 % Healthcare & Education 8% Hawaii GDP by Industry (2022) (1) Visitor spending is ~19% of Hawaii GDP (2) (1) US Bureau of Economic Analysis (2) Based on $19.3bn of 2022 visitor spending according to Hawaii Department of Business, Economic Development and Tourism. Fundamental Strengths (3) defenseeconomy.hawaii.gov
$9.1 $21.5 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 22 3Q23 Source: Public filings and S&P Global Capital IQ as of 03 - Nov - 2023 Note: Financial data as of 30 - Sep - 2023. $10 – $50bn banks constituted as of 31 - Dec - 2022; excludes merger targets. (1) ROATCE (Return on Average Tangible Common Equity) is a non - GAAP financial measure. A reconciliation to the comparable FHB GAAP measure is provided in the appendix. 12.1% 18.1% 18.7% 10.4% 14.2% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 22.0% '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 3Q23 46.5% 56.9% 61.4% 57.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 3Q23 STRONG PERFORMANCE THROUGH THE CYCLE 8 Through the Cycle Credit Performer Strong Expense Mgmt. Culture Strong Profitability Consistent Deposit Growth ($ bn ) Steady, Balanced Loan Growth ($ bn ) $6.5 $14.3 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 3Q23 NPAs + 90s / Loans + OREO Efficiency Ratio ROATCE (1) 3Q23 Cost of Deposits: 1.40% First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets 0.16% 0.60% 0.13% 0.40% 3.10% 0.44% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 3Q23 YTD YTD
$359 $365 $357 $355 $353 $380 $387 $380 $395 $365 $310 $353 $268 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 3Q23 1.40% 1.47% 0.89% 1.06% 0.91% 1.39% 1.03% 1.07% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 3Q23 CONSISTENT TRACK RECORD OF STRONG PROFITABILITY 9 Source: Public filings and S&P Global Capital IQ, as of 03 - Nov - 2023 Note: Financial data as of 30 - Sep - 2023. $10 – $50bn banks constituted as of 31 - Dec - 2022; excludes merger targets. (1) Pre - Tax, Pre - Provision Earnings, ROATA (Return On Average Tangible Assets) and ROATCE (Return On Average Tangible Common Equity) are non - GAAP financial measures. A reconciliation to the comparable FHB GAAP measures is provided in the appendix. 12.1% 18.1% 10.9% 18.7% 10.4% 15.3% 11.4% 14.2% 4.0% 8.0% 12.0% 16.0% 20.0% 24.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 3Q23 Pre - Tax, Pre - Provision Earnings ($mm) (1) ROATA (1) Stable Earnings Drivers ROATCE (1) Year Ended December 31 Consistent PTPP Earnings Consistent History of Strong Profitability First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets Year Ended December 31 ▪ Dominant loan and deposit positions in attractive markets ▪ Consistent underwriting standards with proven performance through the credit cycle ▪ Demonstrated history of disciplined expense management Year Ended December 31 YTD YTD YTD
0.21% 0.73% 0.06% 0.10% 0.95% 0.12% 0.00% 0.50% 1.00% 1.50% '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 3Q23 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 0.16% 0.63% 0.13% 0.39% 3.10% 0.44% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% As of December 31 1.43% 1.08% 1.18% 1.97% 1.13% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 71.4x 10.6x 3.7x 3.5x As of December 31 As of December 31 First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets Source: Public filings and SNL Financial, available as of 03 - Nov - 2023 Note: Financial data as of 30 - Sep - 2023. $10 – $50bn banks constituted as of 31 - Dec - 2022; excludes merger targets. NCOs / Average Loans NPAs + 90s / Loans + OREO Reserves / Loans Reserves / Non - Accrual Loans 75.0x 20.0x 10.0x YTD
WELL - CAPITALIZED WITH AN ATTRACTIVE DIVIDEND 11 Source: Public filings and S&P Global Capital IQ as of 03 - Nov - 2023 Note: Financial data as of 30 - Sep - 2023. $10 – $50bn banks constituted as of 31 - Dec - 2022, excludes merger targets. Percentages ma y not total due to rounding. (1) Dividends and share repurchases are subject to approval of FHI’s board of directors, future capital needs and regulatory appr ov als. (2) Dividend yield (MRQ) based on 3Q 2023 paid dividend and market data as of 03 - Nov - 2023. Robust Capital Position Attractive Dividend Yield (1)(2) Capital Management Approach 12.2 % 12.2 % 0.5 % 1.2 % 1.9 % 13.4% 14.6% FHI 3Q23 Public U.S. Banks with $10-$50bn of Assets Tier 2 NCT1 CET 1 Tier 1 Leverage 8.5% 10.0% ▪ Retain sufficient earnings to support loan growth and maintain strong capital levels ▪ Return excess capital through dividends and share repurchases ▪ Stock repurchase authorization for up to $40mm of common stock during 2023 ▪ Held dividend at $0.26/share in 3Q 2023 ▪ No shares repurchased YTD through 9/30/23 5.4% 3.9% First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets
12 APPENDIX
FULL SUITE OF PRODUCTS AND SERVICES 13 • Largest commercial lender in Hawaii • 56 commercial bankers (2) • Relationship - based lending • Primary focus on Hawaii, additional focus on California • C&I, leases, auto dealer flooring, CRE, and C&D • Strong relationships with proven local real estate developers • $18.2 bn (3) of AUA and 35 financial advisors (2) • Personal services include financial planning, insurance, trust, estate, and private banking • Institutional services include investment management, retirement plan administration, and custody • Mutual funds provided by Bishop Street Capital Management • 33.5% deposit market share in Hawaii (1) • Retail deposit products offered through branch, online, mobile, and direct channels • Commercial deposits, treasury and cash management products • Hawaii state and municipal relationships Commercial Lending Wealth Management Deposits • Services provided to individuals and small to mid - sized businesses • Full service branches, online and mobile channels • Exclusively in - footprint focus • First mortgages, home equity, indirect auto financing, and other consumer loans Consumer Lending • Leading credit card issuer among Hawaii banks • Approximately 158,000 accounts with more than $2.3bn annual spend (2) • Consumer, small businesses, and commercial cards • Issuer of M asterCard Credit Cards • Largest merchant processor in Hawaii • Spans Hawaii, Guam and Saipan • Over 4,000 terminals processed ~38.4 mm transactions in 2022 • Relationships with all major U.S. card companies and select foreign cards Merchant Processing First Hawaiian is a full - service community bank focused on building relationships with our customers (1) Source: FDIC as of 30 - Jun - 2023 (2) As of 31 - Dec - 2022 (3) As of 30 - Sep - 2023
A LEADER IN HAWAII 14 The banking market in Hawaii is dominated by local banks, with the top 4 banks accounting for ~93% of deposits (2) Sources: FDIC, SEC and company filings. Company filings and public information used for peers where available, otherwise reg ula tory data used. Note: Financial data as of 30 - Sep - 2023. (1) ROATCE (return on average tangible common equity) and ROATA (return on average tangible assets) are non - GAAP financial measures. Reconciliations to the comparable FHB GAAP measures are provided in the appendix. (2) Deposit market share based on FDIC data as of 30 - Jun - 2023 Branches 50 51 35 27 FTEs 2,087 1,919 989 731 Assets ($bn) 24.9 23.5 9.7 7.6 Loans ($bn) 14.3 13.9 6.2 5.5 Deposits ($bn) 21.5 20.8 8.2 6.9 YTD 2023 ROATCE (1) 18.7% 15.8% 16.4% 12.3% YTD 2023 ROATA (1) 1.06% 0.78% 0.70% 0.78% Loan Portfolio Deposit Portfolio Hawaii Deposits 2 Balance ($bn) $19.4 $19.4 $8.2 $6.8 Share 33.5% 33.5% 14.2% 11.8 % Commercial Commercial RE Residential RE Consumer & Other Transaction Accounts Savings / MMDA Time Deposits 10% 15% 37% 30% 10% 11% 29% 34% 16% 5 % 10% 26% 48% 11% 12% 10% 29% 35% 14% 17% 37% 46% 13% 46% 41% 7% 80% 13% 20% 48% 32% 8% HELOC
WELL POSITIONED FOR HIGHER FOR LONGER RATE ENVIRONMENT 15 5 bp NIM decrease in Q3 Well - Matched Balance Sheet • Approximately $6.0 bn, or 42% of the loan portfolio, reprices within 90 days • Well - structured investment portfolio with limited extension risk • Stable, low - cost deposit base • Hawaii has experienced lower deposit costs and had a lower deposit beta in previous rate cycles $128 $134 $135 $129 $131 $133 $137 $134 $145 $163 $172 $167 $ 160 $ 157 2.84 % 2.86 % 2.83 % 2.66 % 2.55 % 2.44 % 2.45 % 2.47 % 2.68 % 3.18 % 3.67 % 3.97 % 4.16 % 4.35 % 0.19 % 0.13 % 0.11 % 0.08 % 0.07 % 0.06 % 0.06 % 0.05 % 0.08 % 0.24 % 0.52 % 0.82 % 1.11 % 1.40 % 2.58 % 2.70 % 2.71 % 2.55 % 2.46 % 2.36 % 2.38 % 2.42 % 2.60 % 2.93 % 3.15 % 3.11 % 2.91 % 2.86 % 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Net Int Inc. Earning Asset Yield Cost of Deposits NIM Q2 ‘23 – Q3 ‘23 NIM Walk
$9.1 $9.4 $10.2 $10.5 $12.2 $12.9 $13.6 $14.7 $16.1 $16.8 $17.6 $17.2 $16.4 $19.2 $21.8 $21.7 $21.5 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 3Q23 Demand 35% Money Market 18% Savings 25% Time 11% 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 Deposits: $21.5 bn 3Q23 Cost of Deposits: 1.40% Year Ended December 31 Deposit Portfolio Composition (as of 9/30/23) Consistent Deposit Growth ($bn) Best - in - Class Cost of Deposits 0.87 % 1.92 % 1.11 % 1.71 % 3.02 % 1.49 % – % 0.50 % 1.00 % 1.50 % 2.00 % 2.50 % 3.00 % 3.50 % '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 3Q23 YTD First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets Year Ended December 31 Source: Public filings and S&P Global Capital IQ, as of 03 - Nov - 2023 Note: Financial data as of 30 - Sep - 2023. $10 – $50bn banks constituted as of 31 - Dec - 2022; excludes merger targets. 11% of Total Deposits are Public Deposits Public Savings 3% Reduced Public Time Deposits by $1.5 bn in 2018 and 2019 Public Time 6% Deposits Well - Balanced Between Retail and Commercial 16 Public Demand 2% 9.8 9.4 2.4 Retail Commercial Public ($ billions) at 9/30/23
$6.5 $7.9 $8.0 $8.3 $8.3 $9.0 $9.5 $10.0 $10.7 $11.5 $12.3 $13.1 $13.2 $13.3 $13.0 $14.1 $14.3 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 3Q23 STEADY ORGANIC GROWTH AND BALANCED LOAN PORTFOLIO Steady through the cycle organic loan growth and balanced loan portfolio Expect low to mid - single digit loan growth in 2023 17 Well - positioned to serve clients during the financial crisis Loans: $14.3 bn 3Q23 Loan Yield: 5.4% Loans / Deposits 84% 78% 79% 69% 70% 70% 68% 67% 69% 70% 76% 80% 69% 59% 62% 65% 67% Year Ended December 31, Balanced Loan Portfolio (as of 9/30/23) Steady Loan Growth ($bn) Note: Financial data as of 30 - Sep - 2023 ▪ Largest Hawaii - based lender ▪ Balanced Portfolio ▪ 54% Commercial, 46% Consumer ▪ 76 % Hawaii/Guam/Saipan, 24% Mainland ▪ Commercial ▪ Hawaii’s leading commercial bank with most experienced lending team. ▪ Average commercial loan officer experience > 25 years ▪ 56 % Hawaii/Guam/Saipan, 44% Mainland ▪ $ 1,731 mm Shared National Credit portfolio ▪ Participating in SNC lending for over 20 years ▪ 23 % Hawaii - based, 77% Mainland ▪ Leading SBA lender Hawaii ▪ SBA Lender of the Year (Category 1) 2017, 2018, 2019, and 2021 ▪ Leveraged SBA experience to quickly launch PPP program ▪ Originated over 10k PPP loans for over $1.4bn in principal balances in 2020 and 2021 ▪ Consumer ▪ Primarily a Prime and Super Prime lender ▪ ~90% of portfolio collateralized ▪ Financing consumer auto loans for over 40 years C&I $2,101 mm 15% CRE $4,388 mm 31% Construction $885 mm 6% Leasing $333 mm 2% Residential $4,304 mm 30% Home Equity $1,167 mm 8% Consumer Auto $737 mm 6% Credit Card $314 mm 2% Other Consumer $103 mm 1% Loan Portfolio Highlights (as of 9/30/23) Sold $409 mm SNC loans in 2019 Note: Percentages shown may not total to 100% due to rounding
$312 $302 $297 $304 $327 $337 $348 $365 $370 $368 $406 $440 $359 46.5% 45.3% 45.4% 46.1% 48.1% 47.0% 47.3% 49.0% 48.4% 50.1% 56.5% 55.2% 56.9% '11 '12 '13 '14 '15 '16 '17 '18 19 '20 '21 '22 3Q23 Noninterest Expense Efficiency Ratio 46.5% 45.3% 45.4% 46.1% 48.1% 47.0% 47.3% 49.0% 48.4% 50.1% 56.5% 55.2% 56.9% 61.4% 60.0% 62.5% 62.5% 61.8% 60.0% 58.4% 56.0% 55.7% 55.9% 57.0% 54.7% 57.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 3Q23 First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets 2.04% 1.88% 1.78% 1.74% 1.74% 1.74% 1.74% 1.80% 1.82% 1.68% 1.66% 1.76% 1.94% 3.00% 2.96% 2.86% 2.69% 2.63% 2.52% 2.45% 2.39% 2.33% 2.18% 2.00% 2.01% 2.06% 1.50% 2.00% 2.50% 3.00% 3.50% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 3Q23 DEMONSTRATED HISTORY OF DISCIPLINED EXPENSE MANAGEMENT 18 Source: Public filings and S&P Global Capital IQ, as of 03 - Nov - 2023 Note: Financial data as of 30 - Sep - 2023. $10 – $50bn banks constituted as of 31 - Dec - 2022; excludes merger targets. Year Ended December 31 Year Ended December 31 Noninterest Expense / Average Assets Well Managed Noninterest Expense ($mm) Efficiency Ratio • Maintained expense discipline during pandemic • Very little expense growth from 2018 - 2020 • Increase in 2022 expenses driven by core system conversion expenses and new core system ongoing operating costs • Increase in 2023 expenses includes impact of industry - wide impact of increase in FDIC assessment fee, estimated to be $4 - $5 mm • FDIC special assessment to replenish deposit insurance fund expected to be a late 2023 / early 2024 event CAGR: 3.2% Year Ended December 31, YTD YTD YTD
ASSET QUALITY 19 ▪ 30 - 89 days past due is comprised of accruing and non - accruing loans ▪ TLL - Total Loans and Leases ▪ YTD NCO Rate - Annualized YTD NCO/Avg Loans and Leases ▪ Includes OREO and 90+ days past due is comprised of accruing loans ($ millions) ($ millions) ($ millions) ($ millions)
COMMERCIAL REAL ESTATE 20 As of 9/30/23 (In $ Millions) The CRE portfolio continues to be well diversified across property types, well - secured with a weighted average LTV of 59.5% and criticized rate of 2.2%. • Office exposure in CRE represents approximately 5.5% of total loans and leases. • Despite enduring a prolonged period of high vacancy, hotel loans continue to perform well, reflecting the quality of sponsorship and underlying collateral. • Retail properties are primarily comprised of grocery - anchored and smaller convenience formats. • The Bank continues to monitor the CRE book, focusing attention on investor real estate, construction/development and office. Property Type Balances % of Balances Weighted Average LTV % Criticized Office 783 17.9% 59.8% 1.7% Hotel 400 9.1% 53.7% 0.0% Retail 777 17.7% 62.1% 1.5% Multi - family 920 21.0% 55.9% 5.4% Industrial 642 14.6% 58.4% 2.7% Dealer Related 448 10.2% 69.2% 0.0% Other 418 9.5% 59.5% 0.6% Total 4,388 100.0% 59.5% 2.2%
COMMERCIAL & INDUSTRIAL 21 As of 9/30/23 (In $ Millions) Industries deemed to exhibit higher volatility represent a modest amount of total C&I exposure and dealer related credits represent about 29% of total C&I inclusive of $465 million in flooring balances. Property Type Balances % of Balances % Criticized Auto Dealers 611 29.1% 0.0% Retail - 0.0% 0.0% Hospitality/Hotel 74 3.5% 0.4% Food Service 48 2.3% 4.6% Transportation 51 2.4% 2.6% Other 1,317 62.7% 4.0% Total 2,101 100.00% 2.7%
CONSTRUCTION 22 As of 9/30/23 (In $ Millions) The construction book is largely centered in rental and for - sale housing. Property Type Balances % of Balances Weighted Average LTV % Criticized Office 67 7.6% 46.8% 0.0% Hotel 50 5.7% 49.5% 0.0% Retail 23 2.6% 58.0% 0.0% Multi - family 433 48.9% 55.7% 0.0% Industrial 84 9.5% 50.5% 0.8% Dealer Related 96 10.8% 83.7% 0.0% Other 132 14.9% 58.2% 0.1% Total 885 100.0% 57.6% 0.1%
HAWAII BANKS HAVE A SIGNIFICANT DEPOSIT ADVANTAGE 23 Source: S&P Global and the Federal Reserve website (1) Deposit beta is defined as the change in deposit costs as a percentage of the change in Fed Funds over a particular period. D ep osit cost uses starting point (1Q22) to current (2Q23). (2) Includes First Hawaiian, Bank of Hawaii, American Savings, Central Pacific, Territorial Bancorp, Hawaii National. 2Q23 cost o f deposits based on publicly available company reported information. (3) Includes all U.S. bank holding companies excluding Hawaii - based banks. 2Q23 cost of deposits based on publicly available compan y reported information. Hawaii banks experience more favorable deposit behavior across all rate cycles; Hawaii banks experienced a deposit beta ( ¹ ) of ~18% vs. ~27% for broader U.S. banks during the current rising rate cycle 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 0.94 % 1.47 % 4.99 % 0.00 % 0.50 % 1.00 % 1.50 % 2.00 % 2.50 % 3.00 % 3.50 % 4.00 % 4.50 % 5.00 % 5.50 % 6.00 % 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Hawaii Banks² U.S. Banks³ Fed Funds 53bps Current Funding Advantage 3.32 % 2.01 % 5.25 % 131 bps Funding Advantage
GAAP TO NON - GAAP RECONCILIATIONS Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share, tangible stockholders’ equity to tangible assets and pre - tax, pre - provision earnings are non - GAAP financial measures. 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 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 tangible book value per share as the ratio of tangible stockholders’ equity to outstanding shares. Tangible stockholders’ equity is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our total stockholders’ equity. 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. Pre - tax, pre - provision earnings are calculated by subtracting (and thereby effectively excluding) the provision for credit losses from our income before provision for income taxes. 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. The following tables provide a reconciliation of these non - GAAP financial measures with their most directly comparable GAAP measures. 24
GAAP TO NON - GAAP RECONCILIATION 25 ( 1) Annualized for the three and nine months months ended September 30, 2023 and 2022, and three months ended June 30, 2023. (dollars in thousands) Income Statement Data: Net income $ 58,221 $ 62,442 $ 69,018 $ 187,481 $ 186,097 Average total stockholders' equity $ 2,367,422 $ 2,344,285 $ 2,267,152 $ 2,337,292 $ 2,358,195 Less: average goodwill 995,492 995,492 995,492 995,492 995,492 Average tangible stockholders' equity $ 1,371,930 $ 1,348,793 $ 1,271,660 $ 1,341,800 $ 1,362,703 Average total assets $ 24,727,893 $ 24,821,486 $ 24,957,042 $ 24,699,826 $ 25,095,438 Less: average goodwill 995,492 995,492 995,492 995,492 995,492 Average tangible assets $ 23,732,401 $ 23,825,994 $ 23,961,550 $ 23,704,334 $ 24,099,946 Return on average total stockholders' equity(1) 9.76 % 10.68 % 12.08 % 10.72 % 10.55 % Return on average tangible stockholders' equity (non-GAAP)(1) 16.84 % 18.57 % 21.53 % 18.68 % 18.26 % Return on average total assets(1) 0.93 % 1.01 % 1.10 % 1.01 % 0.99 % Return on average tangible assets (non-GAAP)(1) 0.97 % 1.05 % 1.14 % 1.06 % 1.03 % (dollars in thousands, except per share amounts) Balance Sheet Data: Total stockholders' equity $ 2,351,009 $ 2,359,738 $ 2,269,005 $ 2,200,651 Less: goodwill 995,492 995,492 995,492 995,492 Tangible stockholders' equity $ 1,355,517 $ 1,364,246 $ 1,273,513 $ 1,205,159 Total assets $ 24,912,524 $ 24,511,566 $ 24,577,223 $ 24,870,272 Less: goodwill 995,492 995,492 995,492 995,492 Tangible assets $ 23,917,032 $ 23,516,074 $ 23,581,731 $ 23,874,780 Shares outstanding 127,609,934 127,608,037 127,363,327 127,357,680 Total stockholders' equity to total assets 9.44 % 9.63 % 9.23 % 8.85 % Tangible stockholders' equity to tangible assets (non-GAAP) 5.67 % 5.80 % 5.40 % 5.05 % Book value per share $ 18.42 $ 18.49 $ 17.82 $ 17.28 Tangible book value per share (non-GAAP) $ 10.62 $ 10.69 $ 10.00 $ 9.46 September 30, June 30, December 31, September 30, 2023 2023 2022 2022 As of As of As of As of For the Three Months Ended For the Nine Months Ended September 30, June 30, September 30, September 30, 2023 2023 2022 2023 2022
GAAP TO NON - GAAP RECONCILIATION - ANNUAL 26 Note: Totals may not sum due to rounding. As of and for the Twelve Months Ended December 31, (Dollars in millions, except per share data) 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 Net Income $265.7 $265.7 $185.8 $ 284.4 $ 264.4 $ 183.7 $230.2 $213.8 $216.7 $214.5 $211.1 $199.7 Average Total Stockholders’ Equity $2,321.6 $2,708.4 $2,698.9 $ 2,609.4 $ 2,457.8 $ 2,538.3 $2,568.2 $2,735.8 $2,698.4 $2,667.4 $2,664.2 $2,640.6 Less: Average Goodwill 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 Average Tangible Stockholders’ Equity $1,362.1 $1,712.9 $1,703.4 $ 1,613.9 $ 1,462.3 $ 1,542.8 $1,572.7 $1,740.3 $1,702.9 $1,672.0 $1,668.7 $1,645.1 Total Stockholders’ Equity 2,269.0 2,656.9 2,744.1 2,640.3 2,524.8 2,532.6 2,476.5 2,736.9 2,675.0 2,651.1 2,654.2 2,677.4 Less: Goodwill 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 Tangible Stockholders’ Equity $1,273.5 $1,661.4 $1,748.6 $ 1,644.8 $ 1,529.3 $ 1,537.1 $1,481.0 $1,741.4 $1,679.5 $1,655.6 $1,658.7 $1,681.9 Average Total Assets 24,964.4 24,426.3 21,869.1 20,325.7 20,247.1 19,942.8 19,334.7 18,785.7 17,493.2 16,653.6 16,085.7 15,246.8 Less: Average Goodwill 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 Average Tangible Assets $23,968.9 $23,430.8 $20,873.6 $ 19,330.2 $ 19,251.6 $ 18,947.3 $18,339.2 $17,790.2 $16,497.7 $15,658.1 $15,090.2 $14,251.3 Total Assets 24,577.2 24,992.4 22,662.8 20,166.7 20,695.7 20,549.5 19,661.8 19,352.7 18,133.7 17,118.8 16,646.7 15,839.4 Less: Goodwill 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 995.5 Tangible Assets $23,581.7 $23,996.9 $21,667.3 $ 19,171.2 $ 19,700.2 $ 19,554.0 $18,666.3 $18,357.2 $17,138.2 $16,123.3 $15,651.2 $14,843.9 Return on Average Total Stockholders’ Equity 11.44% 9.81% 6.88% 10.90% 10.76% 7.24% 8.96% 7.81% 8.03% 8.04% 7.92% 7.56% Return on Average Tangible Stockholders’ Equity (non - GAAP) 20.03% 15.51% 10.91% 17.62% 18.08% 11.91% 14.64% 12.28% 12.72% 12.83% 12.65% 12.14% Return on Average Total Assets 1.06% 1.09% 0.85% 1.40% 1.31% 0.92% 1.19% 1.14% 1.24% 1.29% 1.31% 1.31% Return on Average Tangible Assets (non - GAAP) 1.11% 1.13% 0.89% 1.47% 1.37% 0.97% 1.26% 1.20% 1.31% 1.37% 1.40% 1.40% Income Before Provision for Income Taxes $351.2 $ 349.0 $ 243.7 $ 381.7 $ 358.2 $ 368.4 $ 371.8 $ 343.2 $ 344.2 $ 344.5 $ 329.8 $ 316.4 Provision For Credit Losses 1.4 (39.0) 121.7 13.8 22.2 18.5 8.6 9.9 11.1 12.2 34.9 42.1 Pre - Tax, Pre - Provision Earnings (Non - GAAP) $352.6 $ 310.0 $ 365.4 $ 395.5 $ 380.4 $ 386.9 $ 380.4 $ 353.1 $ 355.3 $ 356.7 $ 364.7 $ 358.5