EX-99.1 6 a2230674zex-99_1.htm EX-99.1

Exhibit 99.1

 

FIRST HAWAIIAN, INC.

Unaudited Consolidated and Combined Financial Data

 

Financial Highlights

 

 

 

 

For the Three Months Ended

 

For the Year Ended

 

 

 

December 31, 

 

September 30,

 

December 31, 

 

December 31, 

 

(dollars in thousands except per share data)

 

2016

 

2016

 

2015

 

2016

 

2015

 

Operating Results:

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

131,250

 

$

122,683

 

$

116,222

 

$

491,672

 

$

461,325

 

Provision for loan and lease losses

 

3,900

 

2,100

 

2,500

 

8,600

 

9,900

 

Noninterest income

 

49,021

 

48,690

 

47,188

 

217,601

 

211,403

 

Noninterest expense

 

82,503

 

82,804

 

80,294

 

328,844

 

319,601

 

Net income

 

56,552

 

53,235

 

50,211

 

230,178

 

213,780

 

Basic earnings per share

 

0.41

 

0.38

 

0.36

 

1.65

 

1.53

 

Diluted earnings per share

 

0.41

 

0.38

 

0.36

 

1.65

 

1.53

 

Dividends declared per share

 

0.20

 

0.20

 

N/A

 

0.62

 

N/A

 

Dividend payout ratio

 

49.35

%

52.39

%

N/A

 

37.27

%

N/A

 

Supplemental Income Statement Data (non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

Core net interest income

 

$

131,250

 

$

122,683

 

$

116,222

 

$

491,672

 

$

456,489

 

Core noninterest income

 

47,505

 

48,690

 

46,582

 

190,357

 

188,197

 

Core noninterest expense

 

81,920

 

79,714

 

80,294

 

322,624

 

319,601

 

Core net income

 

56,001

 

55,177

 

49,834

 

217,111

 

196,315

 

Core basic earnings per share

 

$

0.40

 

$

0.40

 

$

0.36

 

$

1.56

 

$

1.41

 

Core diluted earnings per share

 

$

0.40

 

$

0.40

 

$

0.36

 

$

1.56

 

$

1.41

 

Performance Ratio:

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

2.99

%

2.87

%

2.71

%

2.88

%

2.78

%

Core net interest margin (non-GAAP)

 

2.99

%

2.87

%

2.71

%

2.88

%

2.75

%

Efficiency ratio

 

45.76

%

48.31

%

49.13

%

46.36

%

47.50

%

Core efficiency ratio (non-GAAP)

 

45.82

%

46.51

%

49.32

%

47.30

%

49.57

%

Return on average total assets

 

1.14

%

1.10

%

1.04

%

1.19

%

1.14

%

Core return on average total assets (non-GAAP)

 

1.13

%

1.14

%

1.03

%

1.12

%

1.05

%

Return on average tangible assets

 

1.20

%

1.16

%

1.09

%

1.26

%

1.20

%

Core return on average tangible assets (non-GAAP)

 

1.19

%

1.20

%

1.09

%

1.18

%

1.10

%

Return on average total stockholders’ equity

 

8.97

%

8.45

%

7.23

%

8.96

%

7.81

%

Core return on average total stockholders’ equity (non-GAAP)

 

8.88

%

8.76

%

7.17

%

8.45

%

7.18

%

Return on average tangible stockholders’ equity

 

14.88

%

14.02

%

11.31

%

14.64

%

12.28

%

Core return on average tangible stockholders’ equity (non-GAAP)

 

14.73

%

14.53

%

11.22

%

13.80

%

11.28

%

Average Balances:

 

 

 

 

 

 

 

 

 

 

 

Average loans and leases

 

$

11,531,684

 

$

11,261,710

 

$

10,613,863

 

$

11,175,213

 

$

10,297,834

 

Average earning assets

 

17,482,648

 

17,028,930

 

17,047,767

 

17,093,114

 

16,619,854

 

Average assets

 

19,778,918

 

19,314,668

 

19,208,603

 

19,334,653

 

18,785,701

 

Average deposits

 

16,861,525

 

16,392,125

 

15,795,021

 

16,275,811

 

15,319,238

 

Average shareholders’ equity

 

2,507,514

 

2,506,099

 

2,756,977

 

2,568,219

 

2,735,786

 

Per Share of Common Stock:

 

 

 

 

 

 

 

 

 

 

 

Book value

 

$

17.75

 

$

18.09

 

$

19.63

 

$

17.75

 

$

19.63

 

Tangible book value

 

10.61

 

10.96

 

12.49

 

10.62

 

12.49

 

Market Value

 

 

 

 

 

 

 

 

 

 

 

Closing

 

34.82

 

26.86

 

N/A

 

34.82

 

N/A

 

High

 

35.47

 

27.97

 

N/A

 

35.47

 

N/A

 

Low

 

25.80

 

24.25

 

N/A

 

24.25

 

N/A

 

 



 

 

 

As of

 

As of

 

As of

 

 

 

December 31,

 

September 30,

 

December 31,

 

 

 

2016

 

2016

 

2015

 

Balance Sheet Data:

 

 

 

 

 

 

 

Loans and leases

 

$

11,520,378

 

$

11,396,555

 

$

10,722,030

 

Total assets

 

19,661,829

 

19,892,693

 

19,352,681

 

Total deposits

 

16,794,532

 

16,965,527

 

16,061,924

 

Total stockholders’ equity

 

2,476,485

 

2,523,963

 

2,736,941

 

 

 

 

 

 

 

 

 

Asset Quality Ratios:

 

 

 

 

 

 

 

Non-accrual loans and leases / total loans and leases

 

0.08

%

0.08

%

0.16

%

Allowance for loan and lease losses / total loans and leases

 

1.18

%

1.18

%

1.26

%

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

Common Equity Tier 1 Capital Ratio

 

12.75

%

12.48

%

15.31

%

Tier 1 Capital Ratio

 

12.75

%

12.48

%

15.31

%

Total Capital Ratio

 

13.85

%

13.59

%

16.48

%

Tier 1 Leverage Ratio

 

8.36

%

8.41

%

9.84

%

Total stockholders’ equity to total assets

 

12.60

%

12.69

%

14.14

%

Tangible stockholders’ equity to tangible assets (non-GAAP)

 

7.93

%

8.09

%

9.49

%

 

 

 

 

 

 

 

 

Non-Financial Data:

 

 

 

 

 

 

 

Number of branches

 

62

 

62

 

62

 

Number of ATMs

 

311

 

312

 

311

 

Number of Full-Time Equivalent Employees

 

2,179

 

2,197

 

2,157

 

 


 

Consolidated Statements of Income

 

 

 

 

Three Months Ended

 

For the Year Ended

 

 

 

December 31, 

 

September 30,

 

December 31, 

 

December 31, 

 

(dollars in thousands except per share amounts)

 

2016

 

2016

 

2015

 

2016

 

2015

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

Loans and lease financing

 

$

111,461

 

$

106,900

 

$

102,108

 

$

428,419

 

$

405,702

 

Available-for-sale securities

 

25,884

 

21,123

 

18,549

 

83,019

 

73,615

 

Other

 

968

 

1,311

 

1,450

 

7,082

 

4,529

 

Total interest income

 

138,313

 

129,334

 

122,107

 

518,520

 

483,846

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

7,048

 

6,632

 

5,844

 

26,650

 

22,314

 

Short-term borrowings and long-term debt

 

15

 

19

 

41

 

198

 

207

 

Total interest expense

 

7,063

 

6,651

 

5,885

 

26,848

 

22,521

 

Net interest income

 

131,250

 

122,683

 

116,222

 

491,672

 

461,325

 

Provision for loan and lease losses

 

3,900

 

2,100

 

2,500

 

8,600

 

9,900

 

Net interest income after provision for loan and lease losses

 

127,350

 

120,583

 

113,722

 

483,072

 

451,425

 

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

9,388

 

9,575

 

10,194

 

38,147

 

40,850

 

Credit and debit card fees

 

14,339

 

14,103

 

14,783

 

56,071

 

56,416

 

Other service charges and fees

 

8,446

 

8,768

 

8,990

 

35,355

 

38,641

 

Trust and investment services income

 

7,204

 

7,508

 

7,061

 

29,440

 

29,671

 

Bank-owned life insurance

 

1,758

 

7,115

 

2,679

 

15,021

 

9,976

 

Investment securities gains (losses) net

 

1,516

 

30

 

(2,672

)

27,277

 

12,321

 

Other

 

6,370

 

1,591

 

6,153

 

16,290

 

23,528

 

Total noninterest income

 

49,021

 

48,690

 

47,188

 

217,601

 

211,403

 

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

40,471

 

42,106

 

43,243

 

169,233

 

170,233

 

Contracted services and professional fees

 

12,221

 

10,430

 

10,467

 

45,345

 

42,663

 

Occupancy

 

5,125

 

4,870

 

2,649

 

20,116

 

16,975

 

Equipment

 

4,777

 

4,192

 

4,850

 

16,912

 

15,836

 

Regulatory assessment and fees

 

4,103

 

3,546

 

2,366

 

12,972

 

9,490

 

Advertising and marketing

 

1,309

 

1,769

 

1,444

 

6,127

 

5,472

 

Card rewards program

 

4,770

 

4,512

 

5,773

 

15,513

 

17,687

 

Other

 

9,727

 

11,379

 

9,502

 

42,626

 

41,245

 

Total noninterest expense

 

82,503

 

82,804

 

80,294

 

328,844

 

319,601

 

Income before provision for income taxes

 

93,868

 

86,469

 

80,616

 

371,829

 

343,227

 

Provision for income taxes

 

37,316

 

33,234

 

30,405

 

141,651

 

129,447

 

Net income

 

$

56,552

 

$

53,235

 

$

50,211

 

$

230,178

 

$

213,780

 

Basic earnings per share

 

$

0.41

 

$

0.38

 

$

0.36

 

$

1.65

 

$

1.53

 

Diluted earnings per share

 

$

0.41

 

$

0.38

 

$

0.36

 

$

1.65

 

$

1.53

 

Dividends declared per share

 

$

0.20

 

$

0.20

 

$

 

$

0.62

 

$

 

Basic weighted-average outstanding shares

 

139,530,654

 

139,500,542

 

139,459,620

 

139,487,762

 

139,459,620

 

Diluted weighted-average outstanding shares

 

139,546,875

 

139,503,558

 

139,459,620

 

139,492,608

 

139,459,620

 

 


 

Consolidated Balance Sheets

 

 

 

 

December 31, 

 

September 30,

 

December 31, 

 

(dollars in thousands)

 

2016

 

2016

 

2015

 

Assets

 

 

 

 

 

 

 

Cash and due from banks

 

$

253,827

 

$

371,622

 

$

300,096

 

Interest-bearing deposits in other banks

 

798,231

 

804,198

 

2,350,099

 

Investment securities

 

5,077,514

 

5,363,696

 

4,027,265

 

Loans and leases

 

11,520,378

 

11,396,555

 

10,722,030

 

Less: allowance for loan and lease losses

 

135,494

 

135,025

 

135,484

 

Net loans and leases

 

11,384,884

 

11,261,530

 

10,586,546

 

 

 

 

 

 

 

 

 

Premises and equipment, net

 

300,788

 

302,059

 

305,104

 

Other real estate owned and repossessed personal property

 

329

 

854

 

154

 

Accrued interest receivable

 

41,971

 

37,107

 

34,215

 

Bank-owned life insurance

 

429,209

 

432,031

 

424,545

 

Goodwill

 

995,492

 

995,492

 

995,492

 

Other intangible assets

 

16,809

 

17,554

 

21,435

 

Other assets

 

362,775

 

306,550

 

307,730

 

Total assets

 

$

19,661,829

 

$

19,892,693

 

$

19,352,681

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

Interest-bearing

 

$

10,801,915

 

$

11,164,989

 

$

10,730,095

 

Noninterest-bearing

 

5,992,617

 

5,800,538

 

5,331,829

 

Total deposits

 

16,794,532

 

16,965,527

 

16,061,924

 

Short-term borrowings

 

9,151

 

9,151

 

216,151

 

Long-term debt

 

41

 

41

 

48

 

Retirement benefits payable

 

132,904

 

139,567

 

133,910

 

Other liabilities

 

248,716

 

254,444

 

203,707

 

Total liabilities

 

17,185,344

 

17,368,730

 

16,615,740

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

Net investment

 

 

 

2,788,200

 

Common stock ($0.01 par value; authorized 300,000,000 shares; issued and outstanding 139,530,654 shares as of both December 31, 2016 and September 30, 2016 and 139,459,620 shares as of December 31, 2015)

 

1,395

 

1,395

 

 

Additional paid-in capital

 

2,484,251

 

2,482,679

 

 

Retained earnings

 

78,850

 

50,204

 

 

Accumulated other comprehensive loss, net

 

(88,011

)

(10,315

)

(51,259

)

Total stockholders’ equity

 

2,476,485

 

2,523,963

 

2,736,941

 

Total liabilities and stockholders’ equity

 

$

19,661,829

 

$

19,892,693

 

$

19,352,681

 

 


 

Use of Non-GAAP Financial Measures

 

We present net interest income, noninterest income, noninterest expense, net income, earnings 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 corresponding 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 expenses, gains and other items included in our operating results. We believe that these core measures provide useful information about our operating results and enhance the overall understanding of our past performance and future performance.  Investors should consider our performance and financial condition as reported under GAAP and all other relevant information when assessing our performance or financial condition.

 

Core net interest margin, core return on average total assets and core return on average total stockholders’ equity are non-GAAP financial measures. We compute our core net interest margin as the ratio of core net interest income to average earning assets.  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 stockholders’ equity as the ratio of core net income to average stockholders’ equity.

 

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

 

The following tables provide a reconciliation of these non-GAAP financial measures with their most closely related GAAP measures.

 


 

GAAP to Non-GAAP Reconciliation

 

 

 

 

As of and for the Three Months Ended

 

As of and for the Year Ended

 

 

 

December 31, 

 

September 30,

 

December 31, 

 

December 31, 

 

(dollars in thousands, except per share data)

 

2016

 

2016

 

2015

 

2016

 

2015

 

Net income

 

$

56,552

 

$

53,235

 

$

50,211

 

$

230,178

 

$

213,780

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total stockholders’ equity

 

$

2,507,514

 

$

2,506,099

 

$

2,756,977

 

$

2,568,219

 

$

2,735,786

 

Less: average goodwill

 

995,492

 

995,492

 

995,492

 

995,492

 

995,492

 

Average tangible stockholders’ equity

 

$

1,512,022

 

$

1,510,607

 

$

1,761,485

 

$

1,572,727

 

$

1,740,294

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

$

2,476,485

 

$

2,523,963

 

$

2,736,941

 

$

2,476,485

 

$

2,736,941

 

Less: goodwill

 

995,492

 

995,492

 

995,492

 

995,492

 

995,492

 

Tangible stockholders’ equity

 

$

1,480,993

 

$

1,528,471

 

$

1,741,449

 

$

1,480,993

 

$

1,741,449

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total assets

 

$

19,778,918

 

$

19,314,668

 

$

19,208,603

 

$

19,334,653

 

$

18,785,701

 

Less: average goodwill

 

995,492

 

995,492

 

995,492

 

995,492

 

995,492

 

Average tangible assets

 

$

18,783,426

 

$

18,319,176

 

$

18,213,111

 

$

18,339,161

 

$

17,790,209

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

19,661,829

 

$

19,892,693

 

$

19,352,681

 

$

19,661,829

 

$

19,352,681

 

Less: goodwill

 

995,492

 

995,492

 

995,492

 

995,492

 

995,492

 

Tangible assets

 

$

18,666,337

 

$

18,897,201

 

$

18,357,189

 

$

18,666,337

 

$

18,357,189

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted-average shares outstanding

 

139,530,654

 

139,500,542

 

139,459,620

 

139,487,762

 

139,459,620

 

Diluted weighted-average shares outstanding

 

139,546,875

 

139,503,558

 

139,459,620

 

139,492,608

 

139,459,620

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average total stockholders’ equity(a)

 

8.97

%  

8.45

%

7.23

%

8.96

%  

7.81

%

Return on average tangible stockholders’ equity (non-GAAP)(a)

 

14.88

%  

14.02

%

11.31

%

14.64

%  

12.28

%

 

 

 

 

 

 

 

 

 

 

 

 

Return on average total assets(a)

 

1.14

%  

1.10

%

1.04

%

1.19

%  

1.14

%

Return on average tangible assets (non-GAAP)(a)

 

1.20

%  

1.16

%

1.09

%

1.26

%  

1.20

%

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity to total assets

 

12.60

%  

12.69

%

14.14

%

12.60

%  

14.14

%

Tangible stockholders’ equity to tangible assets (non-GAAP)

 

7.93

%  

8.09

%

9.49

%

7.93

%  

9.49

%

 

 

 

 

 

 

 

 

 

 

 

 

Average stockholders’ equity to average assets

 

12.68

%

12.98

%

14.35

%

13.28

%  

14.56

%

Tangible average stockholders’ equity to tangible average assets (non-GAAP)

 

8.05

%

8.25

%

9.67

%

8.58

%  

9.78

%

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

17.75

 

$

18.09

 

$

19.63

 

$

17.75

 

$

19.63

 

Tangible book value per share (non-GAAP)

 

$

10.61

 

$

10.96

 

$

12.49

 

$

10.62

 

$

12.49

 

 


(a)  Annualized for the three months ended December 31, 2016, September 30, 2016 and December 31, 2015.

 


 

GAAP to Non-GAAP Reconciliation

 

 

 

 

For the Three Months Ended

 

For the Year Ended

 

 

 

December 31, 

 

September 30,

 

December 31, 

 

December 31, 

 

(dollars in thousands, except per share data)

 

2016

 

2016

 

2015

 

2016

 

2015

 

Net interest income

 

$

131,250

 

$

122,683

 

$

116,222

 

$

491,672

 

$

461,325

 

Early loan termination(a)

 

 

 

 

 

(4,836

)

Core net interest income (non-GAAP)

 

$

131,250

 

$

122,683

 

$

116,222

 

$

491,672

 

$

456,489

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

$

49,021

 

$

48,690

 

$

47,188

 

$

217,601

 

$

211,403

 

Gain on sale of securities

 

(1,516

)

 

4,737

 

(4,566

)

(7,737

)

Gain on sale of stock (Visa/MasterCard)

 

 

 

(2,065

)

(22,678

)

(4,584

)

Gain on sale of other assets

 

 

 

(1,287

)

 

(3,414

)

Other adjustments(a),(b)

 

 

 

(1,991

)

 

(7,471

)

Core noninterest income (non-GAAP)

 

$

47,505

 

$

48,690

 

$

46,582

 

$

190,357

 

$

188,197

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

82,503

 

$

82,804

 

$

80,294

 

$

328,844

 

$

319,601

 

One-time items(c)

 

(583

)

(3,090

)

 

(6,220

)

 

Core noninterest expense (non-GAAP)

 

$

81,920

 

$

79,714

 

$

80,294

 

322,624

 

$

319,601

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

56,552

 

$

53,235

 

$

50,211

 

$

230,178

 

$

213,780

 

Early loan termination

 

 

 

 

 

(4,836

)

Gain on sale of securities

 

(1,516

)

 

4,737

 

(4,566

)

(7,737

)

Gain on sale of stock (Visa/MasterCard)

 

 

 

(2,065

)

(22,678

)

(4,584

)

Gain on sale of other assets

 

 

 

(1,287

)

 

(3,414

)

Other adjustments(b)

 

 

 

(1,991

)

 

(7,471

)

One-time items(c)

 

583

 

3,090

 

 

6,220

 

 

Tax adjustments (d)

 

382

 

(1,148

)

229

 

7,957

 

10,577

 

Total core adjustments

 

(551

)

1,942

 

(377

)

(13,067

)

(17,465

)

Core net income (non-GAAP)

 

$

56,001

 

$

55,177

 

$

49,834

 

$

217,111

 

$

196,315

 

Core basic earnings per share (non-GAAP)

 

$

0.40

 

$

0.40

 

$

0.36

 

$

1.56

 

$

1.41

 

Core diluted earnings per share (non-GAAP)

 

$

0.40

 

$

0.40

 

$

0.36

 

$

1.56

 

$

1.41

 

 


(a)    Adjustments that are not material to our financial results have not been presented for certain periods.

(b)    Other adjustments include a one-time MasterCard signing bonus and a recovery of an investment that was previously written down.

(c)    One-time items include initial public offering related costs.

(d)    Represents the adjustments to net income, tax effected at the Company’s effective tax rate for the respective period.