First Hawaiian : Q1 2024 – Earnings Conference Call Presentation

1st Quarter 2024 Earnings Call

April 26, 2024

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, 2023.

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Q1 2024 FINANCIAL HIGHLIGHTS1

	Q1 2024	Q4 2023
Net Income ($mm)	$54.2	$47.5
Diluted EPS	$0.42	$0.37
Net Interest Margin	2.91%	2.81%
Efficiency Ratio	62.2%	67.3%
ROA / ROATA2	0.90% / 0.94%	0.77% / 0.81%
ROE / ROATCE2	8.73% / 14.53%	7.94% /
13.66%
Tier 1 Leverage Ratio	8.80%	8.64%
CET1 Capital Ratio	12.55%	12.39%
Total Capital ratio	13.75%	13.57%
Dividend3	$0.26 / share	$0.26 / share

• Net income $54.2 mm
• • Includes $4.1 mm FDIC special assessment expense, or $3.1 mm net of taxes
• Total loans and leases decreased $33.3 mm
• Total deposits decreased $663.2 mm
• Cost of deposits: 1.65%
• Total cost of funds: 1.72%
• Net interest margin increased 10 bps
• Excellent credit quality. Recorded $6.3 mm provision expense
• Well capitalized: 12.55% CET1 ratio

• Declared $0.26 / share dividend

1. Comparisons to Q4 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 April 24, 2024. Payable May 31, 2024 to shareholders of record at close of business on May 20, 2024.

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Q1 2024 BALANCE SHEET HIGHLIGHTS

$ in millions		3/31/24		12/31/23
Assets
Cash and Cash	$	1,274.3	$	1,739.9
Equivalents1
Investment Securities		2,159.3		2,255.3
- AFS
Investment Securities		3,988.0		4,041.4
- HTM
Loans and Leases		14,320.2	14,353.5
Total Assets		24,279.2	24,926.5
Liabilities
Deposits		$20,669.5	$	21,332.7
Short-term borrowings		500.0		500.0
Total Stockholders'		2,513.8		2,486.1
Equity

1 Includes Cash and due from banks and Interest-bearing deposits in other banks

Q1 Highlights

• Continued to optimize balance sheet following Q4 securities sale

• 1. Reduced cash and equivalents by $465.6 mm
  1. Reduced public time deposits by $469.7 mm
• Investment portfolio duration was 5.8 yrs at 3/31/24
• Balance sheet remains strong
• 1. Continued to grow capital levels

1. Continue to maintain high liquidity levels o Loan/deposit ratio: 69%

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LOANS AND LEASES DOWN SLIGHTLY

Total Loans and Leases		Q1 '24 vs Q4 '23 Net Changes

($ billions)

Leasing

Home Equity

Consumer

C&I

Residential

CRE & Construction

			($ millions)
14.2	14.4	14.3
0.3	0.4	0.4		Construction
1.1	1.2	1.2
1.2	1.1	1.1
	2.2	2.2		C&I
2.3
				Leases
4.3	4.3	4.2		(0.8%) (9)
			(0.9%) (39)
5.0	5.2	5.3	(1.0%)	(41)
			(5.0%) (56)

72 (8.0%)

25 (1.1%)

14 (3.7%)

Home Equity

CRE

Residential

Consumer

Mar-23

Dec-23

Mar-24

Note: Segments may not sum to total due to rounding

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DEPOSITS DOWN $663 MM

REDUCED PUBLIC TIME DEPOSITS $470 MM

		Total Deposits
($ billions)
	21.3	21.3	20.7
Time	2.6	3.5	3.3
Money	3.8
Market	3.8
	4.1
Savings	6.2
	6.4
		6.3

Demand	8.7	7.6	7.0

	Mar-23	Dec-23	Mar-24
Quarterly Cost	82 bps	156bps	165 bps
of Deposits

Note: Segments may not sum to total due to rounding

Deposit Composition

($ billions)

1.3

9.3

10.1

Retail

Commercial

Public

Q1 Highlights

• $663 mm, or 3.1%, decrease in total deposits

1. $213 mm decrease in retail and commercial deposits

1. $142 mm increase in retail deposits

• 1. $355 mm decrease in commercial deposits o $450 mm decrease in public deposits
     o $470 mm decrease in public time deposits
• 165 bp cost of deposits
• 34% noninterest bearing / total deposit ratio

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$2.6 MM INCREASE IN NET INT INCOME 10 BP INCREASE IN NIM

210.0
205	Net Interest Income and Net Interest Margin
200
195
190($.0millions)
185.0
180.0	167.2
175.0
170.0
165.0			151.8	154.4
160.0
155.0
150.0
145.0
140.0
135.0
130.0
125.0
120.0
115.0
110.0
105.0	3.11%
100.0
95.0				2.91%
90.0			2.81%
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
	Q1 23	Q4 23	Q1 24

5.00%
4.90%	Q4 '23 - Q1 '24 NIM Walk
4.80%
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%		Q1 Highlights
1.80%
1.70%
1.60%
1.50%• Net interest margin increased 10 bps in Q1
1.40%	o Increase in NIM largely due to change in balance
1.30%
1.20%	sheet mix
1.10%
1.00%	o Increase due to asset repricing largely offset by
		deposit cost increase

• 1. Non-recurringitems added 3 bps to Q1 NIM
• Total cost of funds: 1.72%

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NONINTEREST INCOME AND EXPENSE

Noninterest Income

($ millions)

Non-recurring

58.3

49.07.451.4

2.0

50.949.4

Q1 23

Q4 23

Q1 24

• Noninterest income includes:
• • $2 mm insurance proceeds related to Lahaina fire

Noninterest Expense

($ millions)

			142.3	Non-recurring
						128.8
118.6	23.6	4.1
			118.7	124.7
			67.3%	62.2%
54.5%

	Q1 23	Q4 23				Q1 24
		Nonint Expense				Efficiency Ratio

• Noninterest expense includes:
• • $4.1 mm FDIC special assessment

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ASSET QUALITY REMAINS STRONG

($ millions)

($ millions)

▪ YTD NCO Rate - Annualized YTD NCO/Avg Loans and Leases	▪ Includes OREO and 90+ days past due accruing loans
($ millions)	($ millions)

24.4(1)

▪ TLL - Total Loans and Leases	▪ 30-89 days past due is comprised of accruing and non-accruing loans
(1) 24.4MM Classified loan paid-off in full in April. 17 bp impact on Classified / TLL
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ratio.

ALLOWANCE FOR CREDIT LOSS

RESERVE LEVELS CONTINUE TO PROVIDE FOR UNCERTAINTY

• The Asset ACL / Total Loans and Leases increased 3 basis points to 1.12%.
• We recorded a $0.79 mm release on the reserve for unfunded commitment.

Rollforward of the On-Balance Sheet Allowance for Credit Losses

						Home
($ in 000's)	C&I	CRE	Const	Lease	Mortgage	Equity	Consumer	Total
12/31/2023	14,956	43,944	10,392	1,754	36,880	11,728	36,879	156,533
Charge-offs	-909	-	-	-	-	-	-4,854	-5,763
Recoveries	211	-	-	-	30	44	1,689	1,974
Provision	2,829	-418	2,049	731	-120	-325	2,346	7,092
3/31/2024	17,087	43,526	12,441	2,485	36,790	11,447	36,060	159,836
% of Total ACL	10.7%	27.2%	7.8%	1.5%	23.0%	7.2%	22.6%	100.0%
Total Loan Balance	2,189,875	4,301,300	972,517	394,009	4,242,502	1,165,778	1,054,227	14,320,208
ACL/Total LL	0.78%	1.01%	1.28%	0.63%	0.87%	0.98%	3.42%	1.12%

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