First Hawaiian : Q3 2023 – Earnings Conference Call Presentation

3rd Quarter 2023 Earnings Call

October 27, 2023

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. 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. 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 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, 2022 , and our Quarterly Report on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023.

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Q3 2023 FINANCIAL HIGHLIGHTS1

	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 / ROATA2	0.93% / 0.97%	1.01%	/ 1.05%
ROE / ROATCE2	9.76% / 16.84%	10.68%	/ 18.57%
Tier 1 Leverage Ratio	8.45%	8.30%
CET1 Capital Ratio	12.21%	12.05%
Total Capital ratio	13.38%	13.17%
Dividend3	$0.26 / share	$0.26	/ share

• 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

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

BALANCE SHEET HIGHLIGHTS

$ in millions		9/30/23		6/30/23
Assets
Cash and Cash	$	1,213.4	$	558.1
Equivalents1
Investment Securities		2,722.7		2,909.4
- AFS
Investment Securities		4,104.1		4,180.4
- HTM
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'		2,351.0		2,359.7
Equity

Comments

• Solid balance sheet with strong capital levels

1. Cash and cash equivalents elevated at end of quarter in anticipation of public deposit outflows

1. Loan/deposit ratio: 67%

• 1. $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

3

LOANS AND LEASES FLAT IN Q3

Total Loans and Leases

Q3 '23 vs Q2 '23 Net Changes

($ billions)

Leasing Home Equity

Consumer

C&I

Residential

13.7	14.4	14.3
0.3	0.3
0.3
1.1	1.2
1.0	1.2	1.2
1.2
2.0	2.2	2.1

4.3	4.3	4.3

($ millions)

CRE

Home Equity

Leases

(-0.3%) (14)

(-2.4%) (28)

(-3.1%) (29)

(-3.9%) (86)

97 (+2.3%)

29 (+2.6%)

0 (0.0%) Residential Consumer

Construction

C&I

CRE & Construction

4.9

5.2

5.3

Sep-22Jun-23Sep-23

Q3 Highlights

• C&I balance decline due to declines in dealer flooring, seasonal line payoffs, and loan payoffs
• Construction balances lower due to expected paydowns of completed projects, partially offset by additional draws on ongoing projects
  o About $150 million of completed construction loans moved to CRE

Note: Segments may not sum to total due to rounding

4

GREW TOTAL DEPOSITS $433 MM, OR 2.1%

($ billions)

22.1

Time 1.9

Money

Total Deposits

21.121.5

3.33.7

Deposit Composition

($ billions)

2.4

9.8

Market

4.2

9.4

3.83.9

Savings 6.7

Demand 9.3

Sep-22

Quarterly Cost	24 bps
of Deposits

5.86.0

8.27.9

Jun-23Sep-23

111 bps

140 bps

Retail

Commercial

Public

Q3 Highlights

• $433 mm, or 2.1%, increase in total deposits

1. $332 mm increase in retail and commercial deposits

1. Growth split 28%/72% between retail and commercial

1. $102 mm increase in public deposits

• 1. $28 mm decrease in public time deposits
• 140 bp cost of deposits, up 29 bp from Q2

Note: Segments may not sum to total due to rounding

5

$2.8 MM DECREASE IN NET INT INCOME, 5 BP DECREASE IN NIM

210.0
205.0
195.0200.0	Net Interest Income and Net Interest Margin
190.0
185.0
180.0
($ millions)
175.0
170.0	162.7	159.9	157.1
165.0
160.0
155.0
150.0
145.0
140.0
135.0
130.0
125.0
120.0
115.0
110.0
105.0
100.0
95.0	2.93%	2.91%
90.0	2.86%
85.0
80.0
75.0
70.0
65.0
60.0
55.0
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
	Q3 22		Q2 23	Q3 23

5.00%
4.90%
4.80%	Q2 '23 - Q3 '23 NIM Walk
4.70%
4.60%
4.50%
4.40%
4.30%
4.20%
4.10%
4.00%
3.90%
3.80%
3.70%
3.60%
3.50%
3.40%
3.30%
3.20%
3.10%
3.00%
2.90%
2.80%
2.70%
2.60%
2.50%
2.40%
2.30%
2.20%
2.10%
2.00%
1.90%
1.80%		Comments
1.70%
1.60%
1.50%
1.40%
1.30%	• Decrease in Q3 NIM less than anticipated as deposit
1.20%
1.10%		cost increase slowed
1.00%
		o Stabilization of deposit balances in Q3 enabled us to
		pay down higher cost public time deposits

6

NONINTEREST INCOME AND EXPENSE

Noninterest Income

($ millions)

45.9	47.3	46.1

Q3 22

Q2 23

Q3 23

Noninterest Expense

125.0	($ millions)	120.9
120.0	119.4
115.0	113.3
110.0
105.0
100.0		58.0%	58.3%
	54.0%
95.0

90.0

85.0

80.0

75.0

	Q3 22	Q2 23				Q3 23
		Nonint Expense				Efficiency Ratio

• BOLI income $1.4 mm lower than prior quarter due to higher interest rates

• Approximately $850 thousand of Q3 expenses related to recent natural disasters in Maui and Guam

7

ASSET QUALITY

($ millions)

($ millions)

 YTD NCO Rate - Annualized YTD NCO/Avg Loans and Leases

 Includes OREO and 90+ days past due is comprised of accruing loans

($ millions)

($ millions)

 TLL - Total Loans and Leases

 30-89 days past due is comprised of accruing and non-accruing loans

8

ALLOWANCE FOR CREDIT LOSS

RESERVE LEVELS CONTINUE TO PROVIDE FOR UNCERTAINTY

• The ACL / Total Loans and Leases increased to 1.08%.
• The increase in the reserve reflects the possibility of credit losses on Maui related to the wildfires.

Rollforward of the On-Balance Sheet Allowance for Credit Losses

						Home
($ in 000's)	C&I	CRE	Const	Lease	Mortgage	Equity	Consumer	Total
6/30/2023	13,810	39,887	9,871	1,447	32,803	11,806	38,957	148,581
Charge-offs	-784	-	-	-	-	-	-3,665	-4,449
Recoveries	2,637	-	-	-	53	303	1,746	4,739
Provision	-1,963	3,911	333	263	4,143	-682	-81	5,924
9/30/2023	13,700	43,798	10,204	1,710	36,999	11,427	36,957	154,795
% of Total ACL	8.9%	28.3%	6.6%	1.1%	23.9%	7.3%	23.9%	100.0%
Total Loan Balance	2,101,442	4,387,751	885,112	332,515	4,303,924	1,167,388	1,154,203	14,332,335
ACL/Total LL	0.65%	1.00%	1.15%	0.51%	0.86%	0.98%	3.20%	1.08%

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