First Hawaiian, Inc. Reports First Quarter 2022 Financial Results and Declares Dividend

Rhea-AI Summary

First Hawaiian, Inc. (NASDAQ:FHB) reported a strong start to 2022 with a net income of $57.7 million or $0.45 per diluted share for Q1. Total deposits increased by $454.3 million, reaching $22.3 billion. However, total loans and leases decreased by $70.3 million to $12.9 billion, reflecting a decline in PPP loans. A quarterly dividend of $0.26 per share was declared, payable on June 3, 2022. The company recorded a negative provision for credit losses of $5.7 million and a net interest margin of 2.42%.

Positive

• Net income of $57.7 million for Q1 2022.
• Total deposits rose by $454.3 million, or 2.1%, compared to the prior quarter.
• Declared a quarterly dividend of $0.26 per share.

Negative

• Total loans and leases decreased by $70.3 million, or 0.5%.
• Decrease in net interest income by $3.5 million, or 2.5%.

HONOLULU, April 22, 2022 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended March 31, 2022.

“I’m pleased to report that we started 2022 with a strong quarter,” said Bob Harrison, Chairman, President and CEO. “We had good earnings and continued consumer and commercial deposit growth, and credit quality remained excellent.”

On April 20, 2022 the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on June 3, 2022 to stockholders of record at the close of business on May 23, 2022.

First Quarter 2022 Highlights:

• Net income of $57.7 million, or $0.45 per diluted share
• Total loans and leases decreased $70.3 million versus prior quarter. PPP loans decreased $110.3 million versus the prior quarter
• Total deposits increased $454.3 million versus prior quarter
• Recorded a $5.7 million negative provision for credit losses
• Board of Directors declared a quarterly dividend of $0.26 per share
  

Balance Sheet

Total assets were $25.0 billion as of March 31, 2022, unchanged from December 31, 2021.

Gross loans and leases were $12.9 billion as of March 31, 2022, a decrease of $70.3 million, or 0.5%, from $13.0 billion as of December 31, 2021.

Total deposits were $22.3 billion as of March 31, 2022, an increase of $454.3 million, or 2.1%, from $21.8 billion as of December 31, 2021.

Net Interest Income

Net interest income for the first quarter of 2022 was $133.9 million, a decrease of $3.5 million, or 2.5%, compared to $137.3 million for the prior quarter.

The net interest margin (NIM) was 2.42% in the first quarter of 2022, an increase of 4 basis points compared to 2.38% in the fourth quarter of 2021.

Provision Expense

During the quarter ended March 31, 2022, we recorded a $5.7 million negative provision for credit losses. In the quarter ended December 31, 2021, we did not record a provision for credit losses.

Noninterest Income

Noninterest income was $41.4 million in the first quarter of 2022, a decrease of $0.2 million compared to noninterest income of $41.6 million in the fourth quarter of 2021.

Noninterest Expense

Noninterest expense was $104.0 million in the first quarter of 2022, a decrease of $4.7 million compared to noninterest expense of $108.7 million in the fourth quarter of 2021.

The efficiency ratio was 59.0% and 60.5% for the quarters ended March 31, 2022 and December 31, 2021, respectively.

Taxes

The effective tax rate was 25.0% for the quarter ended March 31, 2022 and 18.7% for the quarter ended December 31, 2021.

Asset Quality

The allowance for credit losses was $150.3 million, or 1.17% of total loans and leases, as of March 31, 2022, compared to $157.3 million, or 1.21% of total loans and leases, as of December 31, 2021. The reserve for unfunded commitments was $29.0 million as of March 31, 2022, compared to $30.3 million as of December 31, 2021. Net charge-offs were $2.6 million, or 0.08% of average loans and leases on an annualized basis, for the quarter ended March 31, 2022, compared to net charge-offs of $6.2 million, or 0.19% of average loans and leases on an annualized basis, for the quarter ended December 31, 2021. Total non-performing assets were $8.6 million, or 0.07% of total loans and leases and other real estate owned, at March 31, 2022, compared to total non-performing assets of $7.3 million, or 0.06% of total loans and leases and other real estate owned, at December 31, 2021.

Capital

Total stockholders' equity was $2.3 billion at March 31, 2022, compared to $2.7 billion at December 31, 2021.

The tier 1 leverage, common equity tier 1 and total capital ratios were 7.50%, 12.27% and 13.48%, respectively, at March 31, 2022, compared with 7.24%, 12.24% and 13.49%, respectively, at December 31, 2021.

The Company did not repurchase any shares in the first quarter.

First Hawaiian, Inc.

First Hawaiian, Inc. (NASDAQ:FHB) is a bank holding company headquartered in Honolulu, Hawaii. Its principal subsidiary, First Hawaiian Bank, founded in 1858 under the name Bishop & Company, is Hawaii’s oldest and largest financial institution with branch locations throughout Hawaii, Guam and Saipan. The company offers a comprehensive suite of banking services to consumer and commercial customers including deposit products, loans, wealth management, insurance, trust, retirement planning, credit card and merchant processing services. Customers may also access their accounts through ATMs, online and mobile banking channels. For more information about First Hawaiian, Inc., visit the Company’s website, www.fhb.com.

Conference Call Information

First Hawaiian will host a conference call to discuss the Company’s results today at 1:00 p.m. Eastern Time, 7:00 a.m. Hawaii Time. To access the call, participants should dial (844) 452-2942 (US/Canada), or (574) 990-9846 (International) ten minutes prior to the start of the call and enter the conference ID: 6391237. A live webcast of the conference call, including a slide presentation, will be available at the following link: www.fhb.com/earnings. The archive of the webcast will be available at the same location. A telephonic replay of the conference call will be available two hours after the conclusion of the call until 4:30 p.m. (Eastern Time) on April 29, 2022. The replay can be accessed dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID: 6391237.

Forward-Looking Statements
This press release 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. Further, statements about the potential effects of the COVID-19 pandemic on our businesses and financial results and conditions may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us. 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 ongoing impacts of COVID-19, 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, 2021.

Use of Non-GAAP Financial Measures
Return on average tangible stockholders’ equity, 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 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 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.   Investors should consider our performance and capital adequacy as reported under GAAP and all other relevant information when assessing our performance and capital adequacy.

Table 12 at the end of this document provides a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.

Investor Relations Contact: Kevin Haseyama, CFA (808) 525-6268 khaseyama@fhb.com

Media Contact: Lindsay Chambers (808) 525-6254 lchambers@fhb.com

Financial Highlights		Table 1
		For the Three Months Ended
		March 31,			December 31,			March 31,
(dollars in thousands, except per share data)		2022			2021			2021
Operating Results:
Net interest income		$	133,872		$	137,327		$	129,158
Provision for credit losses			(5,747	)		—			—
Noninterest income			41,380			41,573			43,868
Noninterest expense			104,042			108,749			96,306
Net income			57,719			57,022			57,693
Basic earnings per share			0.45			0.45			0.44
Diluted earnings per share			0.45			0.44			0.44
Dividends declared per share			0.26			0.26			0.26
Dividend payout ratio			57.78	%		59.09	%		59.09	%
Performance Ratios(1):
Net interest margin			2.42	%		2.38	%		2.55	%
Efficiency ratio			59.04	%		60.50	%		55.53	%
Return on average total assets			0.93	%		0.88	%		1.02	%
Return on average tangible assets (non-GAAP)			0.97	%		0.92	%		1.07	%
Return on average total stockholders' equity			9.19	%		8.46	%		8.58	%
Return on average tangible stockholders' equity (non-GAAP)			15.08	%		13.47	%		13.51	%
Average Balances:
Average loans and leases		$	12,819,612		$	12,814,316		$	13,242,270
Average earning assets			22,463,209			23,100,445			20,476,149
Average assets			25,080,453			25,650,505			22,944,699
Average deposits			21,960,819			22,246,577			19,503,067
Average stockholders' equity			2,547,865			2,675,513			2,727,701
Market Value Per Share:
Closing			27.89			27.33			27.37
High			31.16			30.14			30.80
Low			26.93			25.17			23.14
		As of			As of			As of
		March 31,			December 31,			March 31,
(dollars in thousands, except per share data)		2022			2021			2021
Balance Sheet Data:
Loans and leases		$	12,891,743		$	12,961,999		$	13,300,289
Total assets			25,042,720			24,992,410			23,497,596
Total deposits			22,270,430			21,816,146			20,133,681
Long-term borrowings			—			—			200,010
Total stockholders' equity			2,285,149			2,656,912			2,683,630
Per Share of Common Stock:
Book value		$	17.90		$	20.84		$	20.68
Tangible book value (non-GAAP)(2)			10.10			13.03			13.01
Asset Quality Ratios:
Non-accrual loans and leases / total loans and leases			0.07	%		0.05	%		0.07	%
Allowance for credit losses for loans and leases / total loans and leases			1.17	%		1.21	%		1.51	%
Capital Ratios:
Common Equity Tier 1 Capital Ratio			12.27	%		12.24	%		12.82	%
Tier 1 Capital Ratio			12.27	%		12.24	%		12.82	%
Total Capital Ratio			13.48	%		13.49	%		14.07	%
Tier 1 Leverage Ratio			7.50	%		7.24	%		7.90	%
Total stockholders' equity to total assets			9.13	%		10.63	%		11.42	%
Tangible stockholders' equity to tangible assets (non-GAAP)			5.36	%		6.92	%		7.50	%
Non-Financial Data:
Number of branches			51			54			54
Number of ATMs			298			299			297
Number of Full-Time Equivalent Employees			2,022			2,036			2,090

1. Except for the efficiency ratio, amounts are annualized for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021.
   
   
2. Tangible book value is a non-GAAP financial measure. We compute our tangible book value as the ratio of tangible stockholders’ equity to shares outstanding. Tangible stockholders’ equity is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our total stockholders’ equity. For a reconciliation to the most directly comparable GAAP financial measure, see Table 12, GAAP to Non-GAAP Reconciliation.

Consolidated Statements of Income		Table 2
		For the Three Months Ended
		March 31,				December 31,				March 31,
(dollars in thousands, except per share amounts)		2022				2021				2021
Interest income
Loans and lease financing		$	103,732			$	111,865			$	110,939
Available-for-sale securities			32,107				28,393				23,146
Other			782				1,051				491
Total interest income			136,621				141,309				134,576
Interest expense
Deposits			2,749				3,216				4,056
Short-term and long-term borrowings			—				766				1,362
Total interest expense			2,749				3,982				5,418
Net interest income			133,872				137,327				129,158
Provision for credit losses			(5,747	)			—				—
Net interest income after provision for credit losses			139,619				137,327				129,158
Noninterest income
Service charges on deposit accounts			7,501				7,171				6,718
Credit and debit card fees			14,850				16,266				14,551
Other service charges and fees			9,654				9,196				8,846
Trust and investment services income			8,883				8,895				8,492
Bank-owned life insurance			(417	)			2,851				2,389
Other			909				(2,806	)			2,872
Total noninterest income			41,380				41,573				43,868
Noninterest expense
Salaries and employee benefits			48,226				45,982				43,936
Contracted services and professional fees			17,147				14,603				17,188
Occupancy			7,410				8,074				7,170
Equipment			5,977				6,317				5,491
Regulatory assessment and fees			2,224				2,557				2,034
Advertising and marketing			2,028				1,579				1,591
Card rewards program			6,883				7,471				4,835
Other			14,147				22,166				14,061
Total noninterest expense			104,042				108,749				96,306
Income before provision for income taxes			76,957				70,151				76,720
Provision for income taxes			19,238				13,129				19,027
Net income		$	57,719			$	57,022			$	57,693
Basic earnings per share		$	0.45			$	0.45			$	0.44
Diluted earnings per share		$	0.45			$	0.44			$	0.44
Basic weighted-average outstanding shares			127,556,242				127,893,011				129,933,104
Diluted weighted-average outstanding shares			128,121,126				128,512,257				130,589,878

Consolidated Balance Sheets		Table 3
		March 31,				December 31,				March 31,
(dollars in thousands)		2022				2021				2021
Assets
Cash and due from banks		$	274,022			$	246,716			$	278,994
Interest-bearing deposits in other banks			1,352,138				1,011,753				983,816
Investment securities, at fair value (amortized cost: $8,733,170 as of March 31, 2022, $8,560,733 as of December 31, 2021 and $6,708,431 as of March 31, 2021)			8,062,384				8,428,032				6,692,479
Loans held for sale			—				538				9,390
Loans and leases			12,891,743				12,961,999				13,300,289
Less: allowance for credit losses			150,280				157,262				200,366
Net loans and leases			12,741,463				12,804,737				13,099,923
Premises and equipment, net			315,766				318,448				319,949
Other real estate owned and repossessed personal property			—				175				—
Accrued interest receivable			61,561				63,158				69,879
Bank-owned life insurance			471,401				471,819				468,927
Goodwill			995,492				995,492				995,492
Mortgage servicing rights			7,650				8,302				10,869
Other assets			760,843				643,240				567,878
Total assets		$	25,042,720			$	24,992,410			$	23,497,596
Liabilities and Stockholders' Equity
Deposits:
Interest-bearing		$	12,504,821			$	12,422,283			$	11,958,606
Noninterest-bearing			9,765,609				9,393,863				8,175,075
Total deposits			22,270,430				21,816,146				20,133,681
Long-term borrowings			—				—				200,010
Retirement benefits payable			134,323				134,491				143,736
Other liabilities			352,818				384,861				336,539
Total liabilities			22,757,571				22,335,498				20,813,966
Stockholders' equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 140,875,595 / 127,686,307 shares as of March 31, 2022, issued/outstanding: 140,581,715 / 127,502,472 shares as of December 31, 2021 and issued/outstanding: 140,455,180 / 129,749,890 shares as of March 31, 2021)			1,409				1,406				1,405
Additional paid-in capital			2,530,795				2,527,663				2,517,048
Retained earnings			628,642				604,534				497,418
Accumulated other comprehensive loss, net			(517,502	)			(121,693	)			(43,435	)
Treasury stock (13,189,288 shares as of March 31, 2022, 13,079,243 shares as of December 31, 2021 and 10,705,290 shares as of March 31, 2021)			(358,195	)			(354,998	)			(288,806	)
Total stockholders' equity			2,285,149				2,656,912				2,683,630
Total liabilities and stockholders' equity		$	25,042,720			$	24,992,410			$	23,497,596

Average Balances and Interest Rates																								Table 4
		Three Months Ended								Three Months Ended								Three Months Ended
		March 31, 2022								December 31, 2021								March 31, 2021
		Average			Income/			Yield/		Average			Income/			Yield/		Average			Income/			Yield/
(dollars in millions)		Balance			Expense			Rate		Balance			Expense			Rate		Balance			Expense			Rate
Earning Assets
Interest-Bearing Deposits in Other Banks		$	1,138.3		$	0.6		0.20	%	$	2,074.5		$	0.8		0.15	%	$	938.7		$	0.2		0.10	%
Available-for-Sale Investment Securities
Taxable			7,800.3			29.2		1.50			7,515.2			25.8		1.37			5,949.9			22.1		1.49
Non-Taxable			636.7			3.6		2.32			615.3			3.3		2.14			278.0			1.3		1.80
Total Available-for-Sale Investment Securities			8,437.0			32.8		1.56			8,130.5			29.1		1.43			6,227.9			23.4		1.50
Loans Held for Sale			1.2			—		2.02			1.0			—		1.35			9.2			0.1		2.46
Loans and Leases(1)
Commercial and industrial			1,973.1			14.6		3.01			2,084.0			21.1		4.01			3,026.7			20.4		2.74
Commercial real estate			3,632.2			25.8		2.88			3,572.9			26.0		2.89			3,385.2			24.9		2.98
Construction			766.9			5.7		3.03			806.6			6.3		3.09			746.8			5.8		3.16
Residential:
Residential mortgage			4,111.0			34.8		3.38			4,014.9			34.9		3.48			3,696.1			34.7		3.76
Home equity line			891.6			5.5		2.48			864.4			5.5		2.52			822.0			5.7		2.80
Consumer			1,218.6			15.6		5.19			1,241.3			16.3		5.22			1,323.7			17.7		5.43
Lease financing			226.2			1.9		3.42			230.2			1.9		3.27			241.8			1.8		3.02
Total Loans and Leases			12,819.6			103.9		3.27			12,814.3			112.0		3.48			13,242.3			111.0		3.39
Other Earning Assets			67.1			0.2		1.31			80.1			0.3		1.27			58.0			0.3		1.79
Total Earning Assets(2)			22,463.2			137.5		2.47			23,100.4			142.2		2.45			20,476.1			135.0		2.66
Cash and Due from Banks			292.1								282.2								294.0
Other Assets			2,325.2								2,267.9								2,174.6
Total Assets		$	25,080.5							$	25,650.5							$	22,944.7
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings		$	6,668.4		$	0.5		0.03	%	$	7,086.0		$	0.8		0.04	%		5,975.1		$	0.6		0.04	%
Money Market			4,048.9			0.5		0.05			4,048.3			0.5		0.05			3,530.0			0.4		0.05
Time			1,748.5			1.7		0.39			1,819.0			1.9		0.42			2,288.5			3.0		0.53
Total Interest-Bearing Deposits			12,465.8			2.7		0.09			12,953.3			3.2		0.10			11,793.6			4.0		0.14
Long-Term Borrowings			—			—		—			110.9			0.8		2.74			200.0			1.4		2.76
Total Interest-Bearing Liabilities			12,465.8			2.7		0.09			13,064.2			4.0		0.12			11,993.6			5.4		0.18
Net Interest Income					$	134.8							$	138.2							$	129.6
Interest Rate Spread								2.38	%							2.33	%							2.48	%
Net Interest Margin								2.42	%							2.38	%							2.55	%
Noninterest-Bearing Demand Deposits			9,495.0								9,293.3								7,709.5
Other Liabilities			571.8								617.5								513.9
Stockholders' Equity			2,547.9								2,675.5								2,727.7
Total Liabilities and Stockholders' Equity		$	25,080.5							$	25,650.5							$	22,944.7

1. Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
   
   
2. Interest income includes taxable-equivalent basis adjustments of $1.0 million, $0.9 million and $0.4 million for the three months ended March 31, 2022, December 31, 2021, and March 31, 2021, respectively.

Analysis of Change in Net Interest Income											Table 5
		Three Months Ended March 31, 2022
		Compared to December 31, 2021
(dollars in millions)		Volume				Rate				Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks		$	(0.4	)		$	0.2			$	(0.2	)
Available-for-Sale Investment Securities
Taxable			1.0				2.4				3.4
Non-Taxable			—				0.3				0.3
Total Available-for-Sale Investment Securities			1.0				2.7				3.7
Loans and Leases
Commercial and industrial			(1.2	)			(5.3	)			(6.5	)
Commercial real estate			—				(0.2	)			(0.2	)
Construction			(0.4	)			(0.2	)			(0.6	)
Residential:
Residential mortgage			0.9				(1.0	)			(0.1	)
Home equity line			0.1				(0.1	)			—
Consumer			(0.5	)			(0.2	)			(0.7	)
Lease financing			(0.1	)			0.1				—
Total Loans and Leases			(1.2	)			(6.9	)			(8.1	)
Other Earning Assets			(0.1	)			—				(0.1	)
Total Change in Interest Income			(0.7	)			(4.0	)			(4.7	)
Change in Interest Expense:
Interest-Bearing Deposits
Savings			(0.1	)			(0.2	)			(0.3	)
Time			(0.1	)			(0.1	)			(0.2	)
Total Interest-Bearing Deposits			(0.2	)			(0.3	)			(0.5	)
Long-Term Borrowings			(0.4	)			(0.4	)			(0.8	)
Total Change in Interest Expense			(0.6	)			(0.7	)			(1.3	)
Change in Net Interest Income		$	(0.1	)		$	(3.3	)		$	(3.4	)

Analysis of Change in Net Interest Income											Table 6
		Three Months Ended March 31, 2022
		Compared to March 31, 2021
(dollars in millions)		Volume				Rate				Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks		$	0.1			$	0.3			$	0.4
Available-for-Sale Investment Securities
Taxable			6.9				0.2				7.1
Non-Taxable			1.9				0.4				2.3
Total Available-for-Sale Investment Securities			8.8				0.6				9.4
Loans Held for Sale			(0.1	)			—				(0.1	)
Loans and Leases
Commercial and industrial			(7.7	)			1.9				(5.8	)
Commercial real estate			1.8				(0.9	)			0.9
Construction			0.1				(0.2	)			(0.1	)
Residential:
Residential mortgage			3.8				(3.7	)			0.1
Home equity line			0.5				(0.7	)			(0.2	)
Consumer			(1.4	)			(0.7	)			(2.1	)
Lease financing			(0.1	)			0.2				0.1
Total Loans and Leases			(3.0	)			(4.1	)			(7.1	)
Other Earning Assets			—				(0.1	)			(0.1	)
Total Change in Interest Income			5.8				(3.3	)			2.5
Change in Interest Expense:
Interest-Bearing Deposits
Savings			—				(0.1	)			(0.1	)
Money Market			0.1				—				0.1
Time			(0.6	)			(0.7	)			(1.3	)
Total Interest-Bearing Deposits			(0.5	)			(0.8	)			(1.3	)
Long-Term Borrowings			(0.7	)			(0.7	)			(1.4	)
Total Change in Interest Expense			(1.2	)			(1.5	)			(2.7	)
Change in Net Interest Income		$	7.0			$	(1.8	)		$	5.2

Loans and Leases									Table 7
		March 31,			December 31,			March 31,
(dollars in thousands)		2022			2021			2021
Commercial and industrial:
Commercial and industrial excluding Paycheck Protection Program loans		$	1,817,346		$	1,870,657		$	1,962,672
Paycheck Protection Program loans			106,188			216,442			1,158,764
Total commercial and industrial			1,923,534			2,087,099			3,121,436
Commercial real estate			3,759,980			3,639,623			3,396,233
Construction			708,300			813,969			739,271
Residential:
Residential mortgage			4,153,824			4,083,367			3,715,676
Home equity line			918,101			876,608			805,746
Total residential			5,071,925			4,959,975			4,521,422
Consumer			1,204,834			1,229,939			1,283,779
Lease financing			223,170			231,394			238,148
Total loans and leases		$	12,891,743		$	12,961,999		$	13,300,289

Deposits									Table 8
		March 31,			December 31,			March 31,
(dollars in thousands)		2022			2021			2021
Demand		$	9,765,609		$	9,393,863		$	8,175,075
Savings			6,812,758			6,612,775			6,141,161
Money Market			3,990,225			4,033,070			3,642,604
Time			1,701,838			1,776,438			2,174,841
Total Deposits		$	22,270,430		$	21,816,146		$	20,133,681

Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More									Table 9
		March 31,			December 31,			March 31,
(dollars in thousands)		2022			2021			2021
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial Loans:
Commercial and industrial		$	707		$	718		$	593
Commercial real estate			727			727			937
Construction			—			—			579
Lease financing			75			—			—
Total Commercial Loans			1,509			1,445			2,109
Residential Loans:
Residential mortgage			7,092			5,637			6,999
Total Residential Loans			7,092			5,637			6,999
Total Non-Accrual Loans and Leases			8,601			7,082			9,108
Other Real Estate Owned			—			175			—
Total Non-Performing Assets		$	8,601		$	7,257		$	9,108
Accruing Loans and Leases Past Due 90 Days or More
Commercial Loans:
Commercial and industrial		$	591		$	740		$	1,365
Commercial real estate			—			—			1,054
Construction			—			—			89
Total Commercial Loans			591			740			2,508
Residential Loans:
Residential mortgage			13			987			—
Home equity line			2,252			3,681			4,975
Total Residential Loans			2,265			4,668			4,975
Consumer			1,588			1,800			2,024
Total Accruing Loans and Leases Past Due 90 Days or More		$	4,444		$	7,208		$	9,507
Restructured Loans on Accrual Status and Not Past Due 90 Days or More		$	32,590		$	34,893		$	39,831
Total Loans and Leases		$	12,891,743		$	12,961,999		$	13,300,289

Allowance for Credit Losses		Table 10
		For the Three Months Ended
		March 31,				December 31,				March 31,
(dollars in thousands)		2022				2021				2021
Balance at Beginning of Period		$	157,262			$	161,246			$	208,454
Loans and Leases Charged-Off
Commercial Loans:
Commercial and industrial			(706	)			(4,432	)			(963	)
Commercial real estate			—				—				(66	)
Total Commercial Loans			(706	)			(4,432	)			(1,029	)
Residential Loans:
Residential mortgage			—				(534	)			(98	)
Home equity line			(43	)			(107	)			—
Total Residential Loans			(43	)			(641	)			(98	)
Consumer			(4,109	)			(3,250	)			(6,541	)
Total Loans and Leases Charged-Off			(4,858	)			(8,323	)			(7,668	)
Recoveries on Loans and Leases Previously Charged-Off
Commercial Loans:
Commercial and industrial			53				244				215
Commercial real estate			14				9				3
Construction			—				100				166
Total Commercial Loans			67				353				384
Residential Loans:
Residential mortgage			16				15				17
Home equity line			28				28				24
Total Residential Loans			44				43				41
Consumer			2,148				1,743				2,655
Total Recoveries on Loans and Leases Previously Charged-Off			2,259				2,139				3,080
Net Loans and Leases Charged-Off			(2,599	)			(6,184	)			(4,588	)
Provision for Credit Losses - Loans and Leases			(4,383	)			2,200				(3,500	)
Balance at End of Period		$	150,280			$	157,262			$	200,366
Average Loans and Leases Outstanding		$	12,819,612			$	12,814,316			$	13,242,270
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)			0.08		%		0.19		%		0.14		%
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding			1.17		%		1.21		%		1.51		%
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases			17.47x				22.21x				22.00x

1. Annualized for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021.

Loans and Leases by Year of Origination and Credit Quality Indicator																											Table 11
																							Revolving
																							Loans
																							Converted
		Term Loans																		Revolving			to Term
		Amortized Cost Basis by Origination Year																		Loans			Loans
																				Amortized			Amortized
(dollars in thousands)		2022			2021			2020			2019			2018			Prior			Cost Basis			Cost Basis			Total
Commercial Lending
Commercial and Industrial
Risk rating:
Pass		$	158,853		$	483,473		$	98,061		$	184,897		$	79,810		$	166,075		$	594,007		$	31,048		$	1,796,224
Special Mention			2,876			356			3,898			3,983			52			5,594			1,601			867			19,227
Substandard			—			337			1,296			1,776			13,251			757			15,877			138			33,432
Other (1)			4,028			10,510			6,171			6,450			3,516			1,664			42,312			—			74,651
Total Commercial and Industrial			165,757			494,676			109,426			197,106			96,629			174,090			653,797			32,053			1,923,534
Commercial Real Estate
Risk rating:
Pass			240,807			682,346			351,893			523,735			471,899			1,291,495			77,724			14,752			3,654,651
Special Mention			—			—			—			47,897			473			39,064			696			—			88,130
Substandard			—			—			—			—			1,757			15,280			4			—			17,041
Other (1)			—			—			—			—			—			158			—			—			158
Total Commercial Real Estate			240,807			682,346			351,893			571,632			474,129			1,345,997			78,424			14,752			3,759,980
Construction
Risk rating:
Pass			6,160			167,645			118,526			136,209			112,919			89,172			19,470			—			650,101
Special Mention			—			—			—			244			705			353			—			—			1,302
Substandard			—			—			—			—			357			827			—			—			1,184
Other (1)			7,871			29,932			5,774			2,957			3,922			4,435			822			—			55,713
Total Construction			14,031			197,577			124,300			139,410			117,903			94,787			20,292			—			708,300
Lease Financing
Risk rating:
Pass			3,913			31,974			57,192			45,698			8,813			69,286			—			—			216,876
Special Mention			—			479			2,672			1,360			12			20			—			—			4,543
Substandard			—			—			270			123			15			1,343			—			—			1,751
Total Lease Financing			3,913			32,453			60,134			47,181			8,840			70,649			—			—			223,170
Total Commercial Lending		$	424,508		$	1,407,052		$	645,753		$	955,329		$	697,501		$	1,685,523		$	752,513		$	46,805		$	6,614,984

																							Revolving
																							Loans
																							Converted
		Term Loans																		Revolving			to Term
		Amortized Cost Basis by Origination Year																		Loans			Loans
(continued)																				Amortized			Amortized
(dollars in thousands)		2022			2021			2020			2019			2018			Prior			Cost Basis			Cost Basis			Total
Residential Lending
Residential Mortgage
FICO:
740 and greater		$	185,434		$	1,096,789		$	615,500		$	264,419		$	183,368		$	1,012,447		$	—		$	—		$	3,357,957
680 - 739			26,812			128,172			72,766			44,872			25,913			159,950			—			—			458,485
620 - 679			3,088			13,196			12,304			5,995			5,021			39,145			—			—			78,749
550 - 619			—			2,267			1,570			720			731			8,847			—			—			14,135
Less than 550			2,116			228			60			—			82			4,098			—			—			6,584
No Score (3)			6,550			15,806			7,676			13,968			17,545			56,444			—			—			117,989
Other (2)			18,485			30,872			16,042			9,704			10,810			32,600			43			1,369			119,925
Total Residential Mortgage			242,485			1,287,330			725,918			339,678			243,470			1,313,531			43			1,369			4,153,824
Home Equity Line
FICO:
740 and greater			—			—			—			—			—			—			705,570			1,892			707,462
680 - 739			—			—			—			—			—			—			147,290			3,202			150,492
620 - 679			—			—			—			—			—			—			39,370			2,129			41,499
550 - 619			—			—			—			—			—			—			10,310			1,426			11,736
Less than 550			—			—			—			—			—			—			1,482			494			1,976
No Score (3)			—			—			—			—			—			—			4,936			—			4,936
Total Home Equity Line			—			—			—			—			—			—			908,958			9,143			918,101
Total Residential Lending			242,485			1,287,330			725,918			339,678			243,470			1,313,531			909,001			10,512			5,071,925
Consumer Lending
FICO:
740 and greater			60,821			145,550			74,436			68,970			46,731			24,261			112,298			217			533,284
680 - 739			26,319			87,933			50,976			48,120			28,498			18,340			68,407			647			329,240
620 - 679			6,222			39,016			19,677			25,307			16,453			14,473			30,462			1,038			152,648
550 - 619			292			7,159			7,314			11,776			8,904			8,485			10,352			1,129			55,411
Less than 550			53			2,003			3,445			5,732			2,939			3,089			3,166			471			20,898
No Score (3)			280			458			9			53			35			52			35,063			337			36,287
Other (2)			502			4,247			363			1,691			4			2,181			68,078			—			77,066
Total Consumer Lending			94,489			286,366			156,220			161,649			103,564			70,881			327,826			3,839			1,204,834
Total Loans and Leases		$	761,482		$	2,980,748		$	1,527,891		$	1,456,656		$	1,044,535		$	3,069,935		$	1,989,340		$	61,156		$	12,891,743

1. Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score.
   
   
2. Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating.
   
   
3. No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.

GAAP to Non-GAAP Reconciliation		Table 12
		For the Three Months Ended
		March 31,			December 31,			March 31,
(dollars in thousands, except per share amounts)		2022			2021			2021
Income Statement Data:
Net income		$	57,719		$	57,022		$	57,693
Average total stockholders' equity		$	2,547,865		$	2,675,513		$	2,727,701
Less: average goodwill			995,492			995,492			995,492
Average tangible stockholders' equity		$	1,552,373		$	1,680,021		$	1,732,209
Average total assets		$	25,080,453		$	25,650,505		$	22,944,699
Less: average goodwill			995,492			995,492			995,492
Average tangible assets		$	24,084,961		$	24,655,013		$	21,949,207
Return on average total stockholders' equity(1)			9.19	%		8.46	%		8.58	%
Return on average tangible stockholders' equity (non-GAAP)(1)			15.08	%		13.47	%		13.51	%
Return on average total assets(1)			0.93	%		0.88	%		1.02	%
Return on average tangible assets (non-GAAP)(1)			0.97	%		0.92	%		1.07	%

		As of			As of			As of
		March 31,			December 31,			March 31,
(dollars in thousands, except per share amounts)		2022			2021			2021
Balance Sheet Data:
Total stockholders' equity		$	2,285,149		$	2,656,912		$	2,683,630
Less: goodwill			995,492			995,492			995,492
Tangible stockholders' equity		$	1,289,657		$	1,661,420		$	1,688,138
Total assets		$	25,042,720		$	24,992,410		$	23,497,596
Less: goodwill			995,492			995,492			995,492
Tangible assets		$	24,047,228		$	23,996,918		$	22,502,104
Shares outstanding			127,686,307			127,502,472			129,749,890
Total stockholders' equity to total assets			9.13	%		10.63	%		11.42	%
Tangible stockholders' equity to tangible assets (non-GAAP)			5.36	%		6.92	%		7.50	%
Book value per share		$	17.90		$	20.84		$	20.68
Tangible book value per share (non-GAAP)		$	10.10		$	13.03		$	13.01

1. Annualized for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021.

FAQ

What were First Hawaiian's earnings for Q1 2022?

First Hawaiian reported a net income of $57.7 million, or $0.45 per diluted share.

When is the dividend payable for First Hawaiian, Inc.?

The dividend of $0.26 per share will be payable on June 3, 2022.

Did First Hawaiian experience any changes in its loan portfolio for Q1 2022?

Yes, total loans and leases decreased by $70.3 million compared to the prior quarter.

How much did First Hawaiian's total deposits increase in Q1 2022?

Total deposits increased by $454.3 million, reaching $22.3 billion.

What was the net interest margin for First Hawaiian in Q1 2022?

The net interest margin was 2.42%.