Exhibit 99.1
0 Investor Presentation September 2020
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 refl ect our views at such time with respect to, among other things, future events and our financial performance. These statements are of ten , 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 these words or other comparable words or phrases of a future or forward - looking nature. These forward - looking statem ents are not historical facts and are based on current expectations, estimates and projections about our industry, management’s be lie fs and certain assumptions made by management, and any such forward - looking statements are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Actual results may prove to be materially different from the results expressed o r i mplied by the forward - looking statements. Factors that could cause our actual results to differ materially from those described in the forward - looking statements can be found in our SEC filings, including, but not limited to, our Annual Report on Form 10 - K for the year ended Dec ember 31, 2019, and our Quarterly Report on Form 10 - Q for the quarter ended March 31, 2020, which are available on our website (www.fhb.com) and the SEC’s website (www.sec.gov). 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 review any forward - looking statement, whether as a result of new information , future developments or otherwise, except as required by applicable law. Use of Non - GAAP Financial Measures The information provided herein includes certain non - GAAP financial measures. We believe that these core measures provide usefu l information about our operating results and enhance the overall understanding of our past performance and future performance. Although these non - GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitat ions as analytical tools and should not be considered in isolation or as a substitute for analysis of our results or financial con dit ion as reported under GAAP. Investors should consider our performance and financial condition as reported under GAAP and all other relevant information when assessing our performance or financial condition. The reconciliation of such measures to the comparable GAA P figures are included in the appendix 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
Q2 2020 HIGHLIGHTS (1) ROATA and ROATCE are non GAAP financial measures. A reconciliation of average tangible assets and average tangible stockhold ers ’ equity to the comparable GAAP measurements is provided in the appendix of this slide presentation. (2) Declared on July 22, 2020. Payable September 4, 2020 to shareholders of record at close of business on August 24, 2020. 2 • Well - capitalized with 11.86% CET1 ratio • CET1 ratio increased 21 bp from Q1 • Strong liquidity position • Modified US Liquidity Coverage Ratio: 167% • Pre - Tax, Pre - Provision Income: $82.0mm • Declared $0.26 / share dividend » Strong capital and liquidity positions » 21 bp increase in CET1 ratio » 50% reduction in cost of deposits Q2 2020 Net Income ($mm) $20.0 Diluted Earnings Per Share $0.15 Net Interest Margin 2.58% Efficiency Ratio 52.7% ROA / ROATA 1 0.36% / 0.38% ROE / ROATCE 1 2.99% / 4.74% Tier 1 Leverage Ratio CET 1 Capital Ratio Total Capital ratio 7.75% 11.86% 13.11% Dividend 2 $0.26 / share
LOAN DEFERRALS MAJORITY OF LOANS ARE RETURNING TO PAYMENT Total Deferred Loans 1 Balance ($ mm) Count Commercial and Industrial 931 1,433 Commercial Real Estate 1,179 434 Construction 66 40 Lease Financing 11 61 Sub - Total Commercial 2,187 1,968 Residential Mortgage 565 1,322 Consumer 276 17,898 Sub - Total Consumer 840 19,220 Grand Total 3,027 21,188 » Worked with all commercial customers who went on deferral » Over 95% of borrowers have returned to payment or indicated they intend to return to payment at end of deferral » Review resulted in 14% of commercial loans on deferral being downgraded to criticized levels » 91% of consumer loan borrowers whose deferrals have ended have returned to payment » Deferrals have ended for ~$153 mm » Residential mortgage loans are on six - month deferrals Update as of 7/21/20 Balance ($ mm) Original Deferral Balance 3,027 Commercial: >95% returned to payment or plan on returning to payment (2,078) Consumer: 91% of loans that have ended deferrals and are back on payment (139) Remaining Loans on Deferral or Seeking Additional Relief 810 Residential Mortgage (6 month deferral) (565) Remaining Loans on Deferral or Seeking Additional Relief (ex Res mtg) 245 3 » Of the original $3 bn of loans that went on deferral, ~$810 mm remain on deferral or are seeking additional relief (6.3% of loans ex PPP) » Excluding residential mortgage loans, ~$245 mm remain on deferral or are seeking additional relief (1.9% of loans ex PPP) Note: Totals may not sum due to rounding 1 All loans flagged as on COVID - 19 deferral as of 6/30/20
ASSET QUALITY TRENDS HIGHER DOWNGRADES AND CHARGE OFFS BASED ON PORTFOLIO REVIEW 4 0 20 40 60 80 100 Jun-20 Mar-20 Dec-19 Provision and NCO Provision Net Charge Off 0 20 40 60 80 100 Jun-20 Mar-20 Dec-19 NPA and 90 Past Due 0 200 400 600 800 1,000 Jun-20 Mar-20 Dec-19 Commercial Criticized Assets Special Mention Classified 0 20 40 60 80 100 Jun-20 Mar-20 Dec-19 30 - 89 Past Due ($ millions) ($ millions) ($ millions) ($ millions)
COMMERCIAL RISK RATING EVOLUTION SINCE PANDEMIC Risk Rating C&I ($ 000’s) % CRE ($ 000’s) % Const. ($ 000’s) % Lease ($ 000’s) % Total ($ 000’s) % Pass 3,039,942 89% 3,011,228 88% 535,591 87% 207,303 87% 6,794,064 88% Special Mention 188,332 6% 345,639 10% 17,980 3% 24,538 10% 576,489 8% Substandard 89,453 3% 66,123 2% 3,909 1% 6,446 3% 165,931 2% Other 105,981 3% 509 0% 60,455 10% 0 0% 166,945 2% Total 3,423,708 100% 3,423,499 100% 617,935 100% 238,287 100% 7,703,429 100% Pass 88% Special Mention 8% Substandard 2% Other 2% Post - COVID 6/30/20 Pass 93% Special Mention 3% Substandard 1% Other 3% Pre - COVID 3/31/20 5 As of 6/30/20
ALLOWANCE FOR CREDIT LOSS PROVISION INCORPORATES COVID - 19 IMPACT ($ in 000’s) C&I CRE Const Lease Mortgage Home Equity Consumer Total 3/31/20 ACL 20,884 42,838 8,824 851 30,021 6,556 56,039 166,013 Charge - offs (13,974) (2,723) (379) - (14) 0 (8,907) (25,997) Recoveries 100 - 30 - 17 8 2,456 2,611 Provision 14,289 13,007 (3,199) 2,986 3,850 1,071 17,489 49,493 6/30/20 ACL 21,299 53,122 5,276 3,837 33,874 7,635 67,077 192,120 % of Total ACL 11.1% 27.7% 2.7% 2.0% 17.6% 4.0% 34.9% 100% Total Loan Balance 3,423,708 3,423,499 617,935 238,287 3,691,950 876,491 1,492,160 13,764,030 Asset Ratio (w/ PPP) 0.62% 1.55% 0.85% 1.61% 0.92% 0.87% 4.50% 1.40% Q2 provisions reflect weaker economic outlook and downgrades in commercial portfolio We continue to hold a qualitative overlay for consumer loans based on default expectation not imbedded in the model Cumulative increase in allowance and reserve for unfunded of $84.2 million or 64% over year end 2019 allowance Net of PPP loans, coverage is about 1.5% of loans 6 Rollforward of the Allowance for Credit Losses
INVESTMENT HIGHLIGHTS 7 Strong, Consistent Financial Performance Leading Position In Attractive Market Experienced Leadership Team High Quality Balance Sheet Proven Through The Cycle Performance Well - Capitalized With Attractive Dividend 1 2 3 4 5 6
NALs / Loans 52.0% 52.7% FHB Top Quartile 7.1% 11.0% FHB Top Quartile STRONG PERFORMER IN ATTRACTIVE MARKET 8 Branch Presence Financial Overview – 2Q 2020 YTD ($ billions) Source: Public filings and S&P Global Market Intelligence as of 25 - Aug - 2020 Note: Financial data as of 30 - Jun - 2020. Market data as of 31 - Aug - 2020. NIM change based on change from 4Q15 – 2Q20. (1) Top quartile is based on public banks $10 – $50bn in assets constituted as of 31 - Dec - 2019; excludes merger targets. (2) FHB ratios shown as core. Core operating measures exclude certain gains, expenses and one - time items. See annual and quarterly n on - GAAP reconciliation of core net income, core net interest income, core noninterest income and core noninterest expense in the appendix. (3) Core efficiency ratio is a non - GAAP financial measure. We compute our core efficiency ratio as the ratio of core noninterest exp ense to the sum of core net interest income and core noninterest income. Reconciliation of the components of our core efficiency ratio to comparable GAAP measures are provided in the appendix. (4) 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. (5) Dividend yield based on dividend paid in 2Q 2020 and closing market price as of 31 - Aug - 2020. Company Highlights x Oldest and largest Hawaii - based bank x Full service community bank with complete suite of products & services x #1 deposit market share in Hawaii since 2004 x Largest Hawaii - based lender x $15.6 bn assets under administration as of 2Q20 x Proven through the cycle and outstanding operating performance Efficiency Ratio (2), (3) ROATCE (2), (4) Dividend Yield (5) Maui Kahoolawe Lanai Oahu Kauai Niihau Honolulu Hawaii Island Molokai 6.30% 5.20% FHB Top Quartile 0.24% 0.33% FHB Top Quartile Market Cap $2.1 Loans $ 13.8 Assets $ 23.0 Deposits $ 19.4 Guam Saipan (1) (1) (1) (1) FHB Top Quartile 28 bps 38 bps Cost of Deposits (1) 0.6% 1.0% FHB Top Quartile ROATA (2), (4) (1) 58 branches
DESPITE NEAR - TERM CHALLENGES, THE FUNDAMENTAL STRENGTHS OF HAWAII’S ECONOMY REMAIN INTACT 9 • 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 • Over 42k active duty personnel stationed in Hawaii with over 60k dependents (3) • Almost 20k civilian employees (3) • Estimated total defense spending in Hawaii in 2018: $7.2 bn (3) Government 20% Real Estate 20% Residential RE 23% Other 15% Transportation & Warehousing 5% Entertainment 10% Professiona l 9 % Construction 6% Retail Trade 7 % Healthcare & Education 8% Hawaii GDP by Industry (2019) (1) Visitor spending is ~19% of Hawaii GDP (2) (1) US Bureau of Economic Analysis (2) Based on $17.9bn of 2019 visitor spending according to Hawaii Department of Business, Economic Development and Tourism. Fundamental Strengths (3) Hawaiidefenseeconomy.org
EXPERIENCED LEADERSHIP TEAM 10 LEADERSHIP TEAM ROBERT HARRISON Chairman, President & Chief Executive Officer ▪ Joined First Hawaiian Bank in 1996. Named Chief Executive Officer in January 2012 and Chairman of First Hawaiian Bank in May 2014. Served as Chief Operating Officer of First Hawaiian Bank from December 2009 to January 2012 and as its President from December 2009 to May 2015. He was named Vice Chairman in 2007 and served as the bank’s Chief Risk Officer from 2006 to 2009. ▪ 31 years of industry experience. ALAN ARIZUMI Vice Chairman, Wealth Management Group ▪ Joined First Hawaiian Bank in 1983. Has served in current capacity since 2014. Over 35 years of industry experience. Past positions include Chief Risk Officer. RALPH MESICK Vice Chairman & Chief Risk Officer, Risk Management Group ▪ Joined First Hawaiian Bank in 2012. Over 30 years of industry experience. Has served in current capacity since 2016. LANCE MIZUMOTO Vice Chairman and Chief Lending Officer, Wholesale Banking Group ▪ Re - joined First Hawaiian Bank in 2017. Previously with the bank from 1996 - 2005. Over 35 years of industry experience. MITCHELL NISHIMOTO Vice Chairman and Head of Retail Banking Group ▪ Joined First Hawaiian Bank in 1986. Past positions included Chief Risk Officer and Region Manager for Kapiolani and Maui regions. GINA ANONUEVO EVP & Chief Compliance Officer, Corporate Compliance Division ▪ Joined First Hawaiian Bank in 2006. Former FDIC Examiner with over 20 years industry experience. Has served in current capacity since 2011. NEILL CHAR EVP, Commercial Banking Group ▪ Joined First Hawaiian Bank in 2001. Over 26 years of industry experience. CHRIS DODS EVP, Digital Banking & Marketing Group ▪ Joined First Hawaiian Bank in 2007. Over 13 years of industry experience. RAVI MALLELA EVP, Chief Financial Officer, Finance Group ▪ Joined First Hawaiian Bank in 2018. Over 16 years of industry experience. IRIS MATSUMOTO EVP, Human Resources Division ▪ Joined First Hawaiian Bank in 1998. Over 30 years of experience in human resources. Has served in current capacity since 2008. JOEL RAPPOPORT EVP , General Counsel & Corporate Secretary, Legal & Corporate Services Division ▪ Joined First Hawaiian Bank in 2017. Over 31 years industry experience.
Source: Public filings and S&P Global Market Intelligence as of 25 - Aug - 2020 Note: Financial data as of 30 - Jun - 2020. $10 – $50bn banks constituted as of 31 - Dec - 2019; excludes merger targets. (1) FHB ratios shown as core. Core excludes certain gains, expenses and one - time items. See annual and quarterly non - GAAP reconcilia tions of core net income, core net interest income, core noninterest income and core noninterest expense used to calculate core ratios in the appendix. (2) ROATCE (return on average tangible common equity) is a non - GAAP financial measure. A reconciliation to the comparable FHB GAAP measure is provided in the appendix. 12.0% 18.1% 7.1% 8.8% 14.8% 7.3% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% '11 '12 '13 '14 '15 '16 '17 '18 '19 2Q20 46.7% 50.2% 52.0% 61.7% 63.9% 57.3% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% '11 '12 '13 '14 '15 '16 '17 '18 '19 2Q20 STRONG PERFORMANCE THROUGH THE CYCLE 11 Through the Cycle Credit Performer Strong Expense Mgmt. Culture (1) Consistent Record of Profitability (1) Consistent Deposit Growth ($ bn ) Steady, Balanced Loan Growth ($ bn ) $9.1 $19.4 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 2Q20 $6.5 $13.8 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 2Q20 NPAs + 90s / Loans + OREO Efficiency Ratio ROATCE (2) 2Q20 Cost of Deposits: 0.19% First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets 0.16% 0.63% 0.32% 0.41% 3.13% 0.64% 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 2Q20 YTD YTD
0.21% 0.73% 0.44% 0.11% 1.18% 0.14% 0.00% 0.50% 1.00% 1.50% '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 2Q20 PROVEN, CONSISTENT, AND CONSERVATIVE CREDIT RISK MANAGEMENT Strong through the cycle credit performance driven by conservative approach to credit risk management 12 Year Ended December 31 0.16% 0.63% 0.32% 0.42% 3.13% 0.64% 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 2Q20 As of December 31 1.43% 1.40% 1.14% 2.10% 1.43% 0.50% 1.00% 1.50% 2.00% 2.50% '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 2Q20 71.4x 5.9x 3.2x 2.4x '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 2Q20 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 25 - Aug - 2020 Note: Financial data as of 30 - Jun - 2020. $10 – $50bn banks constituted as of 31 - Dec - 2019; excludes merger targets. NCOs / Average Loans NPAs + 90s / Loans + OREO Reserves / Loans Reserves / Non - Accrual Loans 75.0x 30.0x 20.0x 10.0x 40.0x YTD
1.39% 1.30% 1.31% 1.22% 1.10% 1.18% 1.22% 1.49% 1.51% 0.58% 0.87% 1.03% 1.05% 1.09% 1.05% 1.10% 1.07% 1.40% 1.37% 0.67% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2Q20 CONSISTENT TRACK RECORD OF STRONG PROFITABILITY 13 Source: Public filings and S&P Global Market Intelligence, as of 25 - Aug - 2020 Note: Financial data as of 30 - Jun - 2020. $10 – $50bn banks constituted as of 31 - Dec - 2019; excludes merger targets. (1) FHB measures shown as core. Core excludes certain gains, expenses and one - time items. See annual and quarterly non - GAAP reconcil iations of core net income, core net interest income, core noninterest income and core noninterest expense used to calculate core ratios in the appendix. (2) ROATA (return on average tangible assets) and ROATCE (return on average tangible common equity) are non - GAAP financial measures. A reconciliation to the comparable FHB GAAP measures is provided in the appendix. 12.0% 11.8% 12.3% 11.8% 11.3% 13.8% 14.9% 19.6% 18.1% 7.1% 9.4% 11.4% 11.9% 11.7% 11.8% 12.2% 11.4% 15.3% 14.8% 7.3% 4.0% 8.0% 12.0% 16.0% 20.0% 24.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2Q20 Year Ended December 31 Consistent Core Earnings ($mm) (1) ROATA (1),(2) Stable Earnings Drivers ROATCE (1),(2) Year Ended December 31 Consistent Earnings Peer Leading Profitability First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets $ 198 $ 197 $ 205 $ 202 $ 196 $ 217 $ 230 $ 287 $ 292 $ 59 2011 2012 2013 2014 2015 2016 2017 2018 2019 2Q20 Year Ended December 31 ▪ Leading loan and deposit position in attractive market ▪ Demonstrated history of disciplined expense management ▪ Consistent underwriting standards with proven performance through the credit cycle YTD YTD YTD
6.3% 4.0% First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets WELL CAPITALIZED WITH AN ATTRACTIVE DIVIDEND 14 Source: Public filings and S&P Global Market Intelligence as of 25 - Aug - 2020 Note: Financial data as of 30 - Jun - 2020. $10 – $50bn banks constituted as of 31 - Dec - 2019, excludes merger targets. Percentages m ay 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 2Q 2020 paid dividend and market data as of 31 - Aug - 2020. Robust Capital Position Attractive Dividend Yield (1)(2) Capital Management Approach 11.9 % 11.6 % 1.3 % 2.2 % 13.1% 14.3% FHI 2Q20 Public U.S. Banks with $10-$50bn of Assets Tier 2 NCT1 CET 1 Tier 1 Leverage 7.8% 9.4% ▪ Retain sufficient earnings to support growth and maintain strong capital levels ▪ Held dividend at $0.26/share in Q2 ▪ Suspended share repurchase program in Q1 2020 ▪ At June 30, 2020, First Hawaiian Inc. had $365 million of capital over and above the amount required to remain “well capitalized,” including the capital conservation buffer.
15 Appendix
FULL SUITE OF PRODUCTS AND SERVICES 16 • Largest commercial lender in Hawaii • 57 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 • $15.6 bn of AUA (3) and 37 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 • #1 deposit market share in Hawaii (34.3%) (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 178,000 accounts with more than $2.3bn annual spend (2) • Consumer, small businesses, and commercial cards • Issuer of both Visa and M asterCard Credit Cards • Largest merchant processor in Hawaii • Spans Hawaii, Guam and Saipan • Over 5,500 terminals processed ~46.9mm transactions in 2019 • 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 - 2019 (2) As of 31 - Dec - 2019 (3) As of 30 - Jun - 2020
$ 135 $ 140 $ 141 $ 141 $ 144 $ 145 $ 146 $ 143 $ 140 $ 139 $ 128 3.29 % 3.47 % 3.58 % 3.61 % 3.77 % 3.85 % 3.88 % 3.79 % 3.66 % 3.57 % 2.84 % 0.31 % 0.35 % 0.40 % 0.47 % 0.48 % 0.56 % 0.57 % 0.54 % 0.44 % 0.38 % 0.19 % 2.99 % 3.13 % 3.18 % 3.11 % 3.23 % 3.23 % 3.25 % 3.19 % 3.15 % 3.12 % 2.58 % – % 0.50 % 1.00 % 1.50 % 2.00 % 2.50 % 3.00 % 3.50 % 4.00 % 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Net Int Inc. Earning Asset Yield Cost of Deposits NIM MANAGING NIM THROUGH A CHALLENGING INTEREST RATE ENVIRONMENT 17 Opportunities to Manage Funding Costs ▪ Active repricing of high - cost commercial and consumer deposit accounts following recent rate cuts helped partially offset rate cut impact on asset yields ▪ Cost of deposits declined 19 basis points to 19 basis points in 2Q 2020 ▪ Public time deposit rates expected to track decline in market rates ▪ Hawaii banks experience more favorable deposit behavior than national banks across all rate cycles (see slide 24) ▪ $400mm of FHLB fixed - rate advances with a weighted average rate of 2.84% matured at the end of 2Q and beginning of 3Q 2020, providing additional opportunity to reduce funding costs 150 bps of Fed Rate Cuts in Q1 and Significant Excess Liquidity Negatively Impacted Q2 NIM
$8.9 $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 $19.4 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 2Q20 Demand 36% Money Market 17% Savings 25% Time 10% 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: $19.4bn 2Q20 Deposit Cost: 0.19% Year Ended December 31 Deposit Portfolio Composition Consistent Deposit Growth ($bn) Best - in - Class Cost of Deposits 0.87 % 1.92 % 0.28 % 1.71 % 3.02 % 0.54 % – % 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 2Q20 First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets Year Ended December 31 Source: Public filings and S&P Global Market Intelligence, as of 25 - Aug - 2020 Note: Financial data as of 30 - Jun - 2020. $10 – $50bn banks constituted as of 31 - Dec - 2019; excludes merger targets. ~12% of Total Deposits are Public Deposits Public Savings 4% $1.5 bn reduction in Public Time Deposits in 2018 and 2019 Public Time 8% ▪ In 2018 and 2019 we reduced the balance of public time deposits as part of our balance sheet optimization strategy ▪ Increase in balance of public time deposits in Q2 2020 was to fund line draws and pre - fund PPP loans ▪ Public time deposits represented cost efficient matched - funding Management of Public Time Deposits YTD 18
$6.4 $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 $13.8 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 2Q20 STEADY ORGANIC GROWTH AND BALANCED LOAN PORTFOLIO Steady through the cycle organic loan growth and balanced loan portfolio 19 Well positioned to serve clients during the financial crisis Loans: $13.8bn 2Q20 Loan Yield: 3.52% Loans / Deposits 71% 72% 84% 78% 79% 69% 70% 70% 68% 67% 69% 70% 76% 80% 71% Year Ended December 31, Balanced Loan Portfolio (as of 6/30/20) Steady Loan Growth ($bn) Note: Financial data as of 30 - Jun - 2020 ▪ Largest Hawaii - based lender ▪ Balanced Portfolio ▪ 56% Commercial, 44% Consumer ▪ 82% Hawaii/Guam/Saipan, 18% Mainland ▪ Commercial ▪ Hawaii’s leading commercial bank with most experienced lending team. ▪ Average commercial loan officer experience > 25 years ▪ 68% Hawaii/Guam/Saipan, 32% Mainland ▪ $1.1 bn Shared National Credit portfolio ▪ Participating in SNC lending for over 20 years ▪ 30% Hawaii - based, 70% Mainland ▪ Leading SBA lender Hawaii ▪ SBA Lender of the Year (Category 1) 2017, 2018, 2019 ▪ Leveraged SBA experience to quickly launch PPP program and process over 6,000 loans for approximately $ 942 mm in principal balances ▪ Consumer ▪ Primarily a Prime and Super Prime lender ▪ 90% of portfolio collateralized ▪ Financing consumer auto loans for over 40 years C&I $3,424 mm 25% CRE $3,423 mm 25% Construction $618 mm 5% Leasing $238 mm 2% Residential $3,692 mm 27% Home Equity $876 mm 6% Consumer Auto $999 mm 7% Credit Card $303 mm 2% Other Consumer $190 mm 1% Loan Portfolio Highlights (as of 6/30/20)
TOTAL EXPOSURE TO SELECT INDUSTRIES AND LEVERAGED LENDING 20 As of 6/30/20 Total (mm) C&I (mm) CRE/ Const (mm) % of Total Loans and Leases Comments Hospitality and Hotels $537 $162 $375 3.9% • 21% Rcvd Pay Deferral, Includes $57 mm PPP loans Retail (ex auto ) $701 $227 $474 5.1% • 33% Rcvd Pay Deferral, Includes $60 mm PPP loans Auto Related $991 $979 $12 7.2% • 85% Rcvd Pay Deferral, Includes $64 mm PPP loans Transportation $133 $133 - 1.0% • 13% Rcvd Pay Deferral, Includes $36 mm PPP loans Food Service $207 $207 - 1.5% • 14% Rcvd Pay Deferral, Includes $111 mm PPP loans Leveraged (High Risk C&I) $125 $125 0.9% • 11% Rcvd Pay Deferral, Includes $9 mm PPP loans • Little or no direct exposure to entertainment, energy or nursing homes
46.7% 46.8% 46.4% 47.9% 50.2% 47.9% 47.0% 46.6% 47.6% 52.0% 61.7% 63.0% 63.9% 62.8% 61.4% 60.0% 58.3% 56.4% 56.2% 57.3% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2Q20 First Hawaiian, Inc. Public U.S. Banks with $10-$50bn of Assets 2.04% 1.87% 1.78% 1.74% 1.74% 1.71% 1.72% 1.77% 1.81% 1.77% 2.98% 2.99% 2.91% 2.74% 2.71% 2.54% 2.52% 2.47% 2.38% 2.36% 1.50% 2.00% 2.50% 3.00% 3.50% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2Q20 DEMONSTRATED HISTORY OF DISCIPLINED EXPENSE MANAGEMENT 21 Source: Public filings and S&P Global Market Intelligence, as of 25 - Aug - 2020 Note: Financial data as of 30 - Jun - 2020. $10 – $50bn banks constituted as of 31 - Dec - 2019; excludes merger targets. (1) FHB measures shown as core. Core excludes certain gains, expenses and one - time items. See annual and quarterly non - GAAP reconcil iations of core net income, core net interest income, core noninterest income and core noninterest expense used to calculate core ratios in the appendix. (2) Core efficiency ratio is a non - GAAP financial measure. We compute our core efficiency ratio as the ratio of core noninterest exp ense to the sum of core net interest income and core noninterest income. Reconciliation of the components of our core efficiency ratio to comparable GAAP measures are provided in the appendi x. Year Ended December 31, Year Ended December 31, Noninterest Expense / Average Assets (1) Well Managed Core Noninterest Expense ($mm) (1),(2) Efficiency Ratio (1),(2) 2020 Expense Outlook • 2019 core expenses plus ~6% • Loss of $6.5mm reimbursement: 1.8% • Inflation: 2% - 3% • Technology investments: 1% - 2% • Currently reviewing opportunities for expense reductions in light of anticipated changes in activity levels $ 312 $ 301 $ 296 $ 304 $ 327 $ 331 $ 342 $ 359 $ 368 $ 188 46.7% 46.8% 46.4% 47.9% 50.2% 47.9% 47.0% 46.6% 47.6% 52.0% '11 '12 '13 '14 '15 '16 '17 '18 19 2Q20 Core Noninterest Expense Core Efficiency Ratio CAGR: 2.1% Year Ended December 31, YTD YTD YTD
THE LEADER IN HAWAII 22 The banking market in Hawaii is dominated by local banks, with the top 4 banks accounting for ~92% of deposits Sources: S&P Global Market Intelligence, FDIC, SEC and company filings. Company filings used for peers where available, othe rwi se regulatory data used. Note: Financial data as of 30 - Jun - 2020. (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) FHB ROATCE and ROATA shown as core. Core excludes certain expenses, gains and one - time items. See reconciliation of core net inc ome to the comparable FHB GAAP measure in the appendix. (3) Deposit market share based on FDIC data as of 30 - Jun - 2019. Branches 58 67 43 35 FTEs 2,100 2,112 1,099 833 Assets ($bn) 23.0 19.8 8.0 6.6 Loans ($bn) 13.8 11.8 5.4 5.0 Deposits ($bn) 19.4 17.4 7.1 5.8 YTD 2Q 2020 ROATCE 7.1% (1),(2) 11.4% 9.7% 6.8% YTD 2Q 2020 ROATA 0.58% (1),(2) 0.79% 0.80% 0.59% Loan Portfolio Deposit Portfolio Hawaii Deposits 3 Rank #1 #2 #3 #4 Share 34.3% 32.2% 14.0% 11.1 % Commercial Commercial RE Residential RE Consumer & Other Transaction Accounts Savings / MMDA Time Deposits 13% 25% 29% 27% 11% 16% 25% 34% 14% 5 % 19% 18% 43% 15% 10% 22% 25% 33% 10% 18% 36% 46% 10% 51% 39% 6 % 85% 9% 16% 13% 71% 6% HELOC
HAWAII BANKS HAVE A SIGNIFICANT DEPOSIT ADVANTAGE 23 Source: SNL Financial 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 (2Q04) to peak (3Q07); one quarter lag. (2) Includes First Hawaiian, Bank of Hawaii, American Savings, Central Pacific, Territorial Bancorp, Hawaii National. 2Q20 cost o f deposits based on publicly available company reported information. (3) Includes all U.S. bank holding companies excluding Hawaii - based banks. Hawaii banks experience more favorable deposit behavior across all rate cycles; Hawaii banks experienced a deposit beta ( ¹ ) of ~34% vs. ~47% for broader U.S. banks during the last rising rate cycle 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 Hawaii Banks² U.S. Banks³ Fed Funds 30bps Current Funding Advantage 3.34 % 1.98 % 5.25 % 136bps Funding Advantage 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0.06% 0.49% 0.19%
GAAP TO NON - GAAP RECONCILIATIONS We present net interest income, noninterest income, noninterest expense, efficiency ratio, net income, basic and diluted earn ing s per share and the related ratios described below, on an adjusted, or ‘‘core,’’ basis, each a non - GAAP financial measure. These core measures exclude from the cor responding GAAP measure the impact of certain items that we do not believe are representative of our financial results. We believe that the presentation of these non - GAAP financial measures helps identify underlying trends in our business from period to period that could otherwise be distorted by the effect of certain e xpe nses, gains and other items included in our operating results. We believe that these core measures provide useful information about our operating results and enhance th e overall understanding of our past performance and future performance. Investors should consider our performance and financial condition as reported under GAAP an d all other relevant information when assessing our performance or financial condition. Core efficiency ratio, core return on average total assets and core return on average total stockholders’ equity are non - GAAP fi nancial measures. We compute our core efficiency ratio as the ratio of core noninterest expense to the sum of core net interest income and core noninterest in com e. We compute our core return on average total assets as the ratio of core net income to average total assets. We compute our core return on average total st ock holders’ equity as the ratio of core net income to average total stockholders’ equity. Return on average tangible stockholders’ equity, core return on average tangible stockholders’ equity, return on average tang ibl e assets, core return on average tangible assets and tangible stockholders’ equity to tangible assets and tangible book value per share are non - GAAP financial me asures. We compute our return on average tangible stockholders’ equity as the ratio of net income to average tangible stockholders’ equity, which is calculate d b y subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total stockholders’ equity. We compute our core return on average tangible stockholders’ equity as the ratio of core net income to average tangible stockholders’ equity, which is calculated by subtracting (and thereby eff ect ively 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 ave rag e total assets. We compute our core return on average tangible assets as the ratio of core net income to average tangible assets. We compute our average tangible st ockholders’ equity to average tangible assets as the ratio of average tangible stockholders’ equity to average tangible assets, each of which we calculate by subtracting (and thereby effectively excluding) the value of our goodwill. We compute our tangible book value per share as the ratio of tangible stockholders’ equ ity to outstanding shares. We believe that these measurements are useful for investors, regulators, management and others to evaluate financial performance and capital ade quacy relative to other financial institutions. Although these non - GAAP financial measures are frequently used by stakeholders in the evaluation of a company, the y 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 u nde r GAAP. The following tables provide a reconciliation of these non - GAAP financial measures with their most directly comparable GAAP meas ures. 24
GAAP TO NON - GAAP RECONCILIATION 25 ( 1) Annualized for the three months and six months ended June 30, 2020 and 2019 and three months ended March 31, 2020. (dollars in thousands, except per share amounts) Income Statement Data: Net income $ 20,049 $ 38,865 $ 72,433 $ 58,914 $ 142,357 Core net income $ 20,204 $ 38,803 $ 72,612 $ 59,007 $ 144,664 Average total stockholders' equity $ 2,697,775 $ 2,660,811 $ 2,610,565 $ 2,679,293 $ 2,575,775 Less: average goodwill 995,492 995,492 995,492 995,492 995,492 Average tangible stockholders' equity $ 1,702,283 $ 1,665,319 $ 1,615,073 $ 1,683,801 $ 1,580,283 Average total assets $ 22,341,654 $ 20,313,304 $ 20,390,273 $ 21,327,479 $ 20,442,266 Less: average goodwill 995,492 995,492 995,492 995,492 995,492 Average tangible assets $ 21,346,162 $ 19,317,812 $ 19,394,781 $ 20,331,987 $ 19,446,774 Return on average total stockholders' equity(1) 2.99 % 5.87 % 11.13 % 4.42 % 11.15 % Core return on average total stockholders' equity (non-GAAP)(1) 3.01 % 5.87 % 11.16 % 4.43 % 11.33 % Return on average tangible stockholders' equity (non-GAAP)(1) 4.74 % 9.39 % 17.99 % 7.04 % 18.17 % Core return on average tangible stockholders' equity (non-GAAP)(1) 4.77 % 9.37 % 18.03 % 7.05 % 18.46 % Return on average total assets(1) 0.36 % 0.77 % 1.42 % 0.56 % 1.40 % Core return on average total assets (non-GAAP)(1) 0.36 % 0.77 % 1.43 % 0.56 % 1.43 % Return on average tangible assets (non-GAAP)(1) 0.38 % 0.81 % 1.50 % 0.58 % 1.48 % Core return on average tangible assets (non-GAAP)(1) 0.38 % 0.81 % 1.50 % 0.58 % 1.50 % 2020 2020 2019 2020 2019 For the Three Months Ended For the Six Months Ended June 30, March 31, June 30, June 30, Balance Sheet Data: Total stockholders' equity $ 2,701,897 $ 2,664,685 $ 2,640,258 $ 2,659,441 Less: goodwill 995,492 995,492 995,492 995,492 Tangible stockholders' equity $ 1,706,405 $ 1,669,193 $ 1,644,766 $ 1,663,949 Total assets $ 22,993,715 $ 20,755,891 $ 20,166,734 $ 20,526,367 Less: goodwill 995,492 995,492 995,492 995,492 Tangible assets $ 21,998,223 $ 19,760,399 $ 19,171,242 $ 19,530,875 Shares outstanding 129,866,898 129,827,968 129,928,479 133,508,212 Total stockholders' equity to total assets 11.75 % 12.84 % 13.09 % 12.96 % 7.76 % 8.45 % 8.58 % 8.52 % Book value per share $ 20.81 $ 20.52 $ 20.32 $ 19.92 Tangible book value per share (non-GAAP) $ 13.14 $ 12.86 $ 12.66 $ 12.46 As of As of As of As of June 30, March 31, December 31, June 30, 2020 2020 2019 2019 Tangible stockholders' equity to tangible assets (non-GAAP)
GAAP TO NON - GAAP RECONCILIATION 26 1) One - time items for all periods shown included nonrecurring offering costs 2) Represents the adjustments to net income, tax effected at the Company’s effective tax rate for the respective period. (dollars in thousands, except per share amounts) Net interest income $ 127,822 $ 138,683 $ 145,613 $ 266,505 $ 290,702 Core net interest income (non-GAAP) $ 127,822 $ 138,683 $ 145,613 $ 266,505 $ 290,702 Noninterest income $ 45,656 $ 49,228 $ 48,773 $ 94,884 $ 95,845 Losses (gains) on sale of securities 211 (85) (21) 126 2,592 Core noninterest income (non-GAAP) $ 45,867 $ 49,143 $ 48,752 $ 95,010 $ 98,437 Noninterest expense $ 91,450 $ 96,466 $ 93,290 $ 187,916 $ 185,913 One-time items (1) — — (261) — (522) Core noninterest expense (non-GAAP) $ 91,450 $ 96,466 $ 93,029 $ 187,916 $ 185,391 Net income $ 20,049 $ 38,865 $ 72,433 $ 58,914 $ 142,357 Losses (gains) on sale of securities 211 (85) (21) 126 2,592 One-time noninterest expense items (1) — — 261 — 522 Tax adjustments (2) (56) 23 (61) (33) (807) Total core adjustments 155 (62) 179 93 2,307 Core net income (non-GAAP) $ 20,204 $ 38,803 $ 72,612 $ 59,007 $ 144,664 Basic earnings per share $ 0.15 $ 0.30 $ 0.54 $ 0.45 $ 1.06 Diluted earnings per share $ 0.15 $ 0.30 $ 0.54 $ 0.45 $ 1.06 Efficiency ratio 52.70 % 51.33 % 47.99 % 51.99 % 48.09 % Core basic earnings per share (non-GAAP) $ 0.16 $ 0.30 $ 0.54 $ 0.45 $ 1.07 Core diluted earnings per share (non-GAAP) $ 0.16 $ 0.30 $ 0.54 $ 0.45 $ 1.07 Core efficiency ratio (non-GAAP) 52.64 % 51.35 % 47.86 % 51.97 % 47.64 % 2020 2020 2019 2020 2019 For the Three Months Ended For the Six Months Ended June 30, March 31, June 30, June 30,
GAAP TO NON - GAAP RECONCILIATION - ANNUAL 27 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) 2019 2018 2017 2016 2015 2014 2013 2012 2011 Net Income $ 284.4 $ 264.4 $ 183.7 $230.2 $213.8 $216.7 $214.5 $211.1 $199.7 Basic EPS $2.14 $1.93 $1.32 $1.65 $1.53 $1.55 $1.54 $1.68 $1.80 Diluted EPS $2.13 $1.93 $1.32 $1.65 $1.53 $1.55 $1.54 $1.68 $1.80 Core Net Income $291.8 $286.7 $230.4 $217.1 $196.3 $201.6 $205.0 $196.7 $198.0 Average Total Stockholders’ Equity $ 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 Average Tangible Stockholders’ Equity $ 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 2,640.3 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 Tangible Stockholders’ Equity $ 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 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 Average Tangible Assets $ 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 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 Tangible Assets $ 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 10.90% 10.76% 7.24% 8.96% 7.81% 8.03% 8.04% 7.92% 7.56% Core Return on Average Total Stockholder’s Equity (non - GAAP) 11.18% 11.67% 9.08% 8.45% 7.18% 7.47% 7.68% 7.38% 7.50% Return on Average Tangible Stockholders’ Equity (non - GAAP) 17.62% 18.08% 11.91% 14.64% 12.28% 12.72% 12.83% 12.65% 12.14% Core Return on Average Tangible Stockholder’s Equity (non - GAAP) 18.08% 19.61% 14.93% 13.80% 11.28% 11.84% 12.26% 11.79% 12.04% Return on Average Total Assets 1.40% 1.31% 0.92% 1.19% 1.14% 1.24% 1.29% 1.31% 1.31% Core Return on Average Total Assets (non - GAAP) 1.44% 1.42% 1.16% 1.12% 1.05% 1.15% 1.23% 1.22% 1.30% Return on Average Tangible Assets (non - GAAP) 1.47% 1.37% 0.97% 1.26% 1.20% 1.31% 1.37% 1.40% 1.40% Core Return on Average Tangible Assets (non - GAAP) 1.51% 1.49% 1.22% 1.18% 1.10% 1.22% 1.31% 1.30% 1.39%
GAAP TO NON - GAAP RECONCILIATION - ANNUAL 28 Note: Totals may not sum due to rounding. (1) Noninterest income and expenses prior to 2017 have been revised from the amounts previously reported to reflect the reclassif ica tions described in the footnote to Table 1 of the fourth quarter 2017 earnings release. (2) Adjustments that are not material to our financial results have not been presented for certain periods. (3) Other adjustments include a one - time MasterCard signing bonus and a recovery of an investment that was previously written down. (4) One - time items for the year ended December 31, 2019 included a nonrecurring payment to a former executive of the Company pursuan t to the Bank’s Executive Change - in - Control Retention Plan, nonrecurring offering costs and the loss on our funding swap as a re sult of a 2019 decrease in the conversion rate of our Visa Class B restricted shares sold in 2016. One - time items for the year ended December 31, 2018 included public company transition - related costs, the loss on our funding swap as a result of a 2018 decrease in the co nversion rate of the aforementioned Visa Class B restricted shares and nonrecurring offering costs. One - time items for the year - ended December 31, 2 017 included salaries and benefits stemming from the Tax Act, nonrecurring offering costs and public company transition - related costs. One - time items for the year - ended December 31, 2016 included public company transition - related costs and nonrecurring offering costs. (5) Represents the adjustments to net income, tax effected at the Company’s effective tax rate, exclusive of one - time tax reform bil l expense, for the respective period. For the Fiscal Year Ended December 31, (Dollars in millions, except per share data) 2019 2018 2017 2016 2015 2014 2013 2012 2011 Net Interest Income $ 573.4 $ 566.3 $ 528.8 $491.7 $461.3 $443.8 $439.0 $447.5 $470.0 Accounting Change (ASC 310 Adjustment) – – – – – – (4.3) – – Early Buyout on Lease – – – – – (3.1) – – – Early Loan Termination (2) – – – – (4.8) – – – – Core Net Interest Income (Non - GAAP) $ 573.4 $ 566.3 $ 528.8 $491.7 $456.5 $440.7 $434.7 $447.5 $470.0 Noninterest Income (1) $ 192.5 $ 179.0 $ 205.6 $226.0 $219.1 $216.0 $214.4 $219.1 $200.2 OTTI Losses on Available - For - Sale Securities – 24.1 – – – – – – – Gain on Sale of Securities 2.7 – – (4.6) (7.7) – (0.2) (16.7) (1.7) Gain on Sale of Stock (Visa/MasterCard) 4.5 – – (22.7) (4.6) (20.8) (11.1) – – Gain on Sale of Bank Properties – – (6.9) – (3.4) – (0.4) (6.4) – Other Adjustments (2),(3) – – – – (7.5) – – – (0.9) Core Noninterest Income (Non - GAAP) $199.7 $203.1 $198.7 $198.8 $195.9 $195.1 $202.7 $196.0 $197.6 Noninterest Expense (1) $ 370.4 $ 365.0 $ 347.6 $337.3 $327.3 $304.4 $296.7 $301.9 $311.7 Loss on Litigation Settlement – (4.1) – – – – – – – Non - Recurring Items (4) (2.8) (2.3) (5.5) (6.2) – – (0.7) (0.7) – Core Noninterest Expense (Non - GAAP) $ 367.6 $ 358.6 $ 342.1 $331.1 $327.3 $304.4 $296.0 $301.2 $311.7 Net Income $ 284.4 $ 264.4 $ 183.7 $230.2 $213.8 $216.7 $214.5 $211.1 $199.7 OTTI Losses on Available - For - Sale Debt Securities – 24.1 – – – – – – – Accounting Change (ASC 310 Adjustment) – – – – – – (4.3) – – Early Buyout on Lease – – – – – (3.1) – – – Early Loan Termination – – – – (4.8) – – – – Loss (Gain) on Sale of Securities 2.7 – – (4.6) (7.7) – (0.2) (16.7) (1.7) Loss (Gain) on Sale of Stock (Visa/MasterCard) 4.5 – – (22.7) (4.6) (20.8) (11.1) – – Gain on Sale of Real Estate – – (6.9) – (3.4) – (0.4) (6.4) – Loss on Litigation Settlement – 4.1 – – – – – – – Other Adjustments (2),(3) – – – – (7.5) – – – (0.9) Non - Recurring Items (4) 2.8 2.3 5.5 6.2 – – 0.7 0.7 – Tax reform Bill – – 47.6 – – – – – – Tax Adjustments (5) (2.6) (8.2) 0.6 8.0 10.6 8.9 5.8 8.1 1.0 Total Core Adjustments 7.4 22.3 46.7 (13.1) (17.5) (15.0) (9.5) (14.3) (1.7) Core Net Income (Non - GAAP) $ 291.8 $ 286.7 $ 230.4 $217.1 $196.3 $201.6 $205.0 $196.7 $198.0 Core Basic EPS (Non - GAAP) $ 2.14 $ 2.09 $ 1.65 $1.56 $1.41 $1.45 $1.47 $1.57 $1.79 Core Diluted EPS (Non - GAAP) $ 2.13 $ 2.09 $ 1.65 $1.56 $1.41 $1.45 $1.47 $1.57 $1.79