3 rd QUARTER 2021 EARNINGS CALL 0 October 22, 2021 FORWARD-LOOKING STATEMENTS 1 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may", "might", "should", "could", "predict", "potential", "believe" ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-14585 FIRST HAWAIIAN, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 99-0156159 (State or Other Juri ...

Financial Performance - Net income for Q2 2021 was $86.7 million, compared to $57.7 million in Q1 2021[11] - Loans grew by $151 million (excluding PPP loans) in Q2 2021[11] - Deposits increased by $701 million in Q2 2021, with a 1 basis point decrease in the cost of deposits[11] - A $35 million release in provision expense was recorded due to excellent credit quality[11, 21] - The company repurchased $22.4 million of common stock[11] Key Ratios - Net Interest Margin (NIM) decreased to 2.46% in Q2 2021 from 2.55% in Q1 2021[11] - The Efficiency Ratio was 54.7% in Q2 2021, compared to 55.5% in Q1 2021[11] - Return on Average Assets (ROA) was 1.45% and Return on Average Tangible Assets (ROATA) was 1.51%[11] - CET1 Capital Ratio was 12.76%[11] Loan Portfolio - Total Loans decreased by $197 million[12] - CRE loans increased by $132 million (+3.9%)[12] - Construction loans increased by $115 million (+15.5%)[12] - Residential loans increased by $106 million (+2.8%)[12]

0 Investor Presentation May 2021 DISCLAIMER 1 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 reflect our views at such time 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 p ...

First Hawaiian, Inc. (NASDAQ:FHB) Q1 2021 Earnings Conference Call April 23, 2021 1:00 PM ET Company Participants Kevin Haseyama - Strategic Planning & IR Manager Robert Harrison - Chairman, President & CEO Ravi Mallela - EVP & CFO, Finance Group Ralph Mesick - Vice Chairman & Chief Risk Officer Conference Call Participants Ebrahim Poonawala - Bank of America Merrill Lynch Steven Alexopoulos - JPMorgan Chase & Co. Jackie Bohlen - KBW Andrew Liesch - Piper Sandler & Co. Jared Shaw - Wells Fargo Securities La ...

First Hawaiian, Inc. (NASDAQ:FHB) Q4 2020 Earnings Conference Call January 22, 2021 1:00 PM ET Corporate Participants Kevin Haseyama - Investor Relations Bob Harrison - Chairman, President and Chief Executive Officer Ravi Mallela - Chief Financial Officer Ralph Mesick - Chief Risk Officer Conference Call Participants Steven Alexopoulos - JPMorgan Ebrahim Poonawala - Bank of America Securities Jared Shaw - Wells Fargo Securities Jackie Bohlen - KBW Andrew Liesch - Piper Sandler Laurie Hunsicker - Compass Poi ...

4 th QUARTER 2020 EARNINGS CALL 0 January 22, 2021 FORWARD-LOOKING STATEMENTS 1 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may", "might", "should", "could", "predict", "potential", "believe" ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=Part%20I%20Financial%20Information) This section presents the unaudited interim consolidated financial statements, management's discussion and analysis of financial condition, and results of operations [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited interim consolidated financial statements, including income, comprehensive income, balance sheets, stockholders' equity, and cash flows, along with detailed notes on organization, accounting policies, and financial instruments [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) This table presents the consolidated statements of income, detailing interest income, interest expense, net interest income, provision for credit losses, net income, and earnings per share for specified periods | Metric (in thousands) | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Interest income | $141,927 | $170,181 | $441,078 | $516,560 | | Interest expense | $7,925 | $27,100 | $40,571 | $82,777 | | Net interest income | $134,002 | $143,081 | $400,507 | $433,783 | | Provision for credit losses | $5,072 | $— | $101,718 | $9,550 | | Net income | $65,101 | $74,199 | $124,015 | $216,556 | | Basic EPS | $0.50 | $0.56 | $0.95 | $1.62 | | Diluted EPS | $0.50 | $0.56 | $0.95 | $1.61 | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This table outlines the consolidated statements of comprehensive income, including net income and other comprehensive income components like changes in pensions and investment securities | Metric (in thousands) | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income | $65,101 | $74,199 | $124,015 | $216,556 | | Other comprehensive (loss) income, net of tax: | | Net change in pensions and other benefits | $— | $— | $(96) | $(594) | | Net change in investment securities | $(1,477) | $13,210 | $83,099 | $114,015 | | Total comprehensive income | $63,624 | $87,409 | $207,018 | $329,977 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) This table provides the consolidated balance sheets, detailing assets, liabilities, and stockholders' equity as of September 30, 2020, and December 31, 2019 | Metric (in thousands) | Sep 30, 2020 | Dec 31, 2019 | | :-------------------- | :----------- | :----------- | | **Assets:** | | | | Total assets | $22,310,701 | $20,166,734 | | Investment securities, at fair value | $5,692,883 | $4,075,644 | | Loans and leases | $13,499,969 | $13,211,650 | | Allowance for credit losses | $195,876 | $130,530 | | **Liabilities & Stockholders' Equity:** | | | | Total deposits | $18,897,762 | $16,444,994 | | Total liabilities | $19,576,767 | $17,526,476 | | Total stockholders' equity | $2,733,934 | $2,640,258 | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This table presents the consolidated statements of stockholders' equity, showing changes in total equity, net income, dividends, and other comprehensive income for the nine months ended September 30, 2020 | Metric (in thousands) | Balance as of Dec 31, 2019 | Nine Months Ended Sep 30, 2020 | | :-------------------- | :------------------------- | :----------------------------- | | Total Stockholders' Equity | $2,640,258 | $2,733,934 | | Net income | | $124,015 | | Cash dividends declared | | $(101,322) | | Other comprehensive income, net of tax | | $83,003 | | Cumulative-effect adjustment of a change in accounting principle, net of tax | $(12,517) | | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This table details the consolidated statements of cash flows, outlining net cash provided by operating, investing, and financing activities, and the net increase in cash and cash equivalents | Metric (in thousands) | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $100,937 | $171,067 | | Net cash (used in) provided by investing activities | $(1,923,317) | $667,110 | | Net cash provided by (used in) financing activities | $1,944,692 | $(497,797) | | Net increase in cash and cash equivalents | $122,312 | $340,380 | | Cash and cash equivalents at end of period | $816,329 | $1,344,017 | [Notes to Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed notes explaining the company's organization, accounting policies, and specific financial instrument details, including the impact of adopting new accounting standards [1. Organization and Basis of Presentation](index=11&type=section&id=1.%20Organization%20and%20Basis%20of%20Presentation) First Hawaiian, Inc. is a bank holding company whose interim financial statements are prepared under GAAP, detailing key accounting policies and the adoption of the CECL approach in 2020 - FHI is a bank holding company, with FHB as its sole direct, wholly-owned subsidiary, offering a full suite of banking services to consumer and commercial customers[26](index=26&type=chunk) - The company adopted ASU No. 2016-13 (CECL) on January 1, 2020, which changed the credit loss accounting from an 'incurred loss' to an 'expected loss' model, requiring significant operational changes and resulting in a cumulative effect adjustment to retained earnings[54](index=54&type=chunk)[55](index=55&type=chunk) Impact of Adopting ASC Topic 326 (CECL) as of January 1, 2020 (in thousands) | Metric | Prior to Adjustment | Adjustment to Adopt | After Adoption of | | :-------------------------------------------------------- | :------------------ | :------------------ | :---------------- | | Allowance for Credit Losses - Loans and Leases | $130,530 | $770 | $131,300 | | Reserve for Unfunded Commitments | $600 | $16,300 | $16,900 | | Pretax Cumulative Effect Adjustment of a Change in Accounting Principle | | $17,070 | | | Cumulative-Effect Adjustment of a Change in Accounting Principle, Net of Tax | | $12,517 | | [2. Investment Securities](index=19&type=section&id=2.%20Investment%20Securities) The company's investment securities, primarily available-for-sale debt, are reported at fair value, showing significant increases in total securities and unrealized gains as of September 30, 2020 Available-for-Sale Securities (in thousands) | Category | Amortized Cost (Sep 30, 2020) | Fair Value (Sep 30, 2020) | Amortized Cost (Dec 31, 2019) | Fair Value (Dec 31, 2019) | | :-------------------------------------- | :---------------------------- | :------------------------ | :---------------------------- | :------------------------ | | U.S. Treasury and government agency debt securities | $142,368 | $144,956 | $29,832 | $29,888 | | Mortgage-backed securities | $1,830,788 | $1,875,985 | $786,968 | $792,410 | | Collateralized mortgage obligations | $3,611,400 | $3,671,942 | $3,162,166 | $3,151,897 | | Total available-for-sale securities | $5,584,556 | $5,692,883 | $4,080,663 | $4,075,644 | - Gross unrealized gains on investment securities were **$111.7 million** as of September 30, 2020, compared to **$19.0 million** as of December 31, 2019, primarily due to lower market interest rates[66](index=66&type=chunk)[73](index=73&type=chunk)[412](index=412&type=chunk) - The company held approximately **120,000 Visa Class B restricted shares** at a **$0 cost basis** as of September 30, 2020, and December 31, 2019, due to transfer restrictions and litigation uncertainty[79](index=79&type=chunk) [3. Loans and Leases](index=23&type=section&id=3.%20Loans%20and%20Leases) Total loans and leases increased to $13.5 billion, driven by commercial and industrial loans, with a significant portion pledged as collateral for borrowing capacity Loans and Leases Composition (in thousands) | Category | Sep 30, 2020 | Dec 31, 2019 | | :------------------------ | :----------- | :----------- | | Commercial and industrial | $3,170,262 | $2,743,242 | | Commercial real estate | $3,461,085 | $3,463,953 | | Construction | $662,871 | $519,241 | | Residential | $4,533,840 | $4,662,175 | | Consumer | $1,425,934 | $1,620,556 | | Lease financing | $245,977 | $202,483 | | Total loans and leases | $13,499,969 | $13,211,650 | - The increase in commercial and industrial loans was primarily due to **$920.2 million in PPP loans**, partially offset by decreases in Shared National Credits and dealer flooring portfolios[418](index=418&type=chunk) - Residential real estate loans totaling **$3.0 billion** were pledged to FHLB, and consumer, commercial and industrial, commercial real estate, and residential mortgage loans totaling **$1.8 billion** were pledged to FRB as of September 30, 2020[82](index=82&type=chunk) [4. Allowance for Credit Losses](index=25&type=section&id=4.%20Allowance%20for%20Credit%20Losses) The Allowance for Credit Losses significantly increased to $195.9 million due to higher expected credit losses from the COVID-19 pandemic, with loan modifications generally not classified as Troubled Debt Restructurings - The ACL increased by **$65.3 million (50%)** to **$195.9 million** as of September 30, 2020, from **$130.5 million** at December 31, 2019, primarily due to higher expected credit losses resulting from the COVID-19 pandemic's impact on Hawaii's economy[334](index=334&type=chunk)[473](index=473&type=chunk) - The reserve for unfunded commitments increased to **$24.6 million** as of September 30, 2020, from **$0.6 million** as of December 31, 2019, reflecting increased expected credit losses[352](index=352&type=chunk)[90](index=90&type=chunk) - Short-term loan modifications (e.g., payment deferrals, fee waivers) made in good faith due to COVID-19 are not required to be reported as TDRs under GAAP, as per the CARES Act and Interagency Statements[86](index=86&type=chunk)[454](index=454&type=chunk) Allowance for Credit Losses Rollforward (Nine Months Ended Sep 30, 2020, in thousands) | Category | Balance at Beginning of Period | Adoption of ASU No. 2016-13 | Charge-offs | Recoveries | Increase in Provision | Balance at End of Period | | :------------------------ | :----------------------------- | :-------------------------- | :---------- | :--------- | :-------------------- | :----------------------- | | Commercial and Industrial | $28,975 | $(16,105) | $(14,773) | $2,019 | $21,155 | $21,271 | | Commercial Real Estate | $22,325 | $10,559 | $(2,723) | $— | $21,572 | $51,733 | | Construction | $4,844 | $(1,803) | $(379) | $170 | $2,102 | $4,934 | | Lease Financing | $424 | $207 | $— | $— | $3,420 | $4,051 | | Residential Mortgage | $29,303 | $(2,793) | $(14) | $179 | $15,542 | $42,217 | | Home Equity Line | $9,876 | $(4,731) | $(8) | $146 | $2,318 | $7,601 | | Consumer | $34,644 | $15,575 | $(21,742) | $7,687 | $27,905 | $64,069 | | Unallocated | $139 | $(139) | $— | $— | $— | $— | | **Total** | **$130,530** | **$770** | **$(39,639)** | **$10,201** | **$94,014** | **$195,876** | [5. Mortgage Servicing Rights](index=36&type=section&id=5.%20Mortgage%20Servicing%20Rights) Mortgage Servicing Rights are carried at the lower of cost or fair value, with net carrying value decreasing and amortization expense increasing for the periods ended September 30, 2020 Mortgage Servicing Rights (MSRs) (in thousands) | Metric | Sep 30, 2020 | Dec 31, 2019 | | :------------------------- | :----------- | :----------- | | Gross carrying amount | $66,415 | $63,480 | | Less: accumulated amortization | $55,493 | $50,812 | | Net carrying value | $10,922 | $12,668 | Changes in Amortized MSRs (in thousands) | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Balance at beginning of period | $11,595 | $14,573 | $12,668 | $16,155 | | Originations | $729 | $35 | $2,935 | $59 | | Amortization | $(1,402) | $(978) | $(4,681) | $(2,584) | | Balance at end of period | $10,922 | $13,630 | $10,922 | $13,630 | [6. Transfers of Financial Assets](index=38&type=section&id=6.%20Transfers%20of%20Financial%20Assets) The company pledges financial assets as collateral for various obligations, with total pledged assets increasing to $7.1 billion as of September 30, 2020 Carrying Amounts of Pledged Assets (in thousands) | Category | Sep 30, 2020 | Dec 31, 2019 | | :----------------------- | :----------- | :----------- | | Public deposits | $2,186,759 | $1,543,492 | | Federal Home Loan Bank | $2,952,644 | $2,928,581 | | Federal Reserve Bank | $1,808,164 | $953,169 | | ACH transactions | $124,906 | $155,360 | | Interest rate swaps | $54,425 | $43,296 | | Total | $7,126,898 | $5,623,898 | - The company uses bilateral agreements to pledge investment securities for public deposits and repurchase agreements, and loans as collateral for FHLB and FRB borrowing capacity[135](index=135&type=chunk) [7. Deposits](index=39&type=section&id=7.%20Deposits) Total deposits increased by $2.5 billion (15%) to $18.9 billion, with growth across all deposit types, reflecting increased liquidity in anticipation of PPP funding needs Deposits Composition (in thousands) | Category | Sep 30, 2020 | Dec 31, 2019 | | :------------------ | :----------- | :----------- | | Interest-bearing | $11,989,492 | $10,564,922 | | Noninterest-bearing | $6,908,270 | $5,880,072 | | Total deposits | $18,897,762 | $16,444,994 | - The increase in total deposits was primarily due to a **$1.0 billion** increase in demand deposit balances, a **$1.0 billion** increase in savings deposit balances, a **$324.2 million** increase in money market deposit balances, and a **$104.7 million** increase in time deposit balances, driven by anticipation of PPP funding needs[336](index=336&type=chunk)[486](index=486&type=chunk) [8. Short-Term Borrowings](index=40&type=section&id=8.%20Short-Term%20Borrowings) The company had no short-term borrowings as of September 30, 2020, following the maturity of FHLB advances, while maintaining substantial available borrowing capacity Short-Term Borrowings (in thousands) | Category | Sep 30, 2020 | Dec 31, 2019 | | :---------------------------- | :----------- | :----------- | | Short-term FHLB fixed-rate advances | $— | $400,000 | | Total short-term borrowings | $— | $400,000 | - As of September 30, 2020, the company had available borrowing capacity of **$2.0 billion** from the FHLB and **$1.0 billion** from the FRB[143](index=143&type=chunk) [9. Long-Term Borrowings](index=42&type=section&id=9.%20Long-Term%20Borrowings) Long-term borrowings remained stable at $200.0 million, primarily consisting of FHLB fixed-rate advances maturing between 2023 and 2024 with a weighted average interest rate of 2.73% Long-Term Borrowings (in thousands) | Category | Sep 30, 2020 | Dec 31, 2019 | | :----------------------- | :----------- | :----------- | | Finance lease | $10 | $19 | | FHLB fixed-rate advances | $200,000 | $200,000 | | Total long-term borrowings | $200,010 | $200,019 | - The FHLB fixed-rate advances have a weighted average interest rate of **2.73%** and maturity dates ranging from 2023 to 2024[145](index=145&type=chunk) [10. Accumulated Other Comprehensive Income (Loss)](index=42&type=section&id=10.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) Accumulated other comprehensive income (loss) significantly increased to $51.3 million, primarily driven by a net unrealized gain on investment securities Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax (in thousands) | Category | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :------------------------ | :----------------------------- | :----------------------------- | | Balance at beginning of period | $(31,749) | $(132,195) | | Other comprehensive (loss) income: | | | | Net change in pension and other benefits | $(96) | $(594) | | Net change in investment securities | $83,099 | $114,015 | | Balance at end of period | $51,254 | $(18,774) | - The significant increase in accumulated other comprehensive income was primarily due to a net unrealized gain in the fair value of investment securities of **$83.1 million** for the nine months ended September 30, 2020[153](index=153&type=chunk)[502](index=502&type=chunk) [11. Regulatory Capital Requirements](index=45&type=section&id=11.%20Regulatory%20Capital%20Requirements) The company and its bank subsidiary remained 'well-capitalized' as of September 30, 2020, meeting all federal regulatory capital requirements with strong capital ratios Regulatory Capital Ratios | Capital Ratio | Sep 30, 2020 | Dec 31, 2019 | Minimum Requirement | Well-Capitalized Ratio | | :----------------------------- | :----------- | :----------- | :------------------ | :--------------------- | | Common equity tier 1 capital to risk-weighted assets | 12.22% | 11.88% | 4.50% | 6.50% | | Tier 1 capital to risk-weighted assets | 12.22% | 11.88% | 6.00% | 8.00% | | Total capital to risk-weighted assets | 13.47% | 12.81% | 8.00% | 10.00% | | Tier 1 capital to average assets (leverage ratio) | 7.91% | 8.79% | 4.00% | 5.00% | - The company and Bank were both classified as **'well-capitalized'** as of September 30, 2020, under bank regulatory capital guidelines, including the **2.5% capital conservation buffer**[162](index=162&type=chunk) [12. Derivative Financial Instruments](index=47&type=section&id=12.%20Derivative%20Financial%20Instruments) The company uses derivative contracts, mainly interest rate swaps, for risk management and customer accommodation, with significant notional amounts and positive fair values for non-hedging instruments Notional Amounts and Fair Values of Derivatives (in thousands) | Category | Notional Amount (Sep 30, 2020) | Asset Fair Value (Sep 30, 2020) | Liability Fair Value (Sep 30, 2020) | Notional Amount (Dec 31, 2019) | Asset Fair Value (Dec 31, 2019) | Liability Fair Value (Dec 31, 2019) | | :-------------------------------------- | :----------------------------- | :------------------------------ | :---------------------------------- | :----------------------------- | :------------------------------ | :---------------------------------- | | Derivatives designated as hedging instruments: | | | | | | | | Interest rate swaps | $22,825 | $— | $(1,423) | $23,190 | $— | $(682) | | Derivatives not designated as hedging instruments: | | | | | | | | Interest rate swaps | $2,976,810 | $159,873 | $— | $2,818,803 | $63,527 | $— | | Funding swap | $91,410 | $— | $(920) | $82,900 | $— | $(4,233) | | Interest rate caps and floors | $148,800 | $11 | $(11) | $— | $— | $— | | Foreign exchange contracts | $113 | $— | $— | $1,428 | $12 | $— | - The company pledged **$30.9 million** in financial instruments and **$23.5 million** in cash as collateral for interest rate swaps as of September 30, 2020[168](index=168&type=chunk) - The Visa derivative liability, classified as Level 3, was **$0.9 million** as of September 30, 2020, down from **$4.2 million** at December 31, 2019, reflecting payments made due to reductions in Visa Class B conversion rates[176](index=176&type=chunk)[221](index=221&type=chunk) [13. Commitments and Contingent Liabilities](index=51&type=section&id=13.%20Commitments%20and%20Contingent%20Liabilities) The company is involved in legal proceedings and has significant off-balance sheet financial instruments, including commitments to extend credit and letters of credit, totaling $6.2 billion Financial Instruments with Off-Balance Sheet Risk (in thousands) | Category | Sep 30, 2020 | Dec 31, 2019 | | :----------------------------- | :----------- | :----------- | | Commitments to extend credit | $6,060,807 | $5,907,690 | | Standby letters of credit | $180,910 | $181,412 | | Commercial letters of credit | $4,113 | $7,334 | - The company sells residential mortgage loans in the secondary market with non-recourse provisions but may be obligated to repurchase loans or reimburse investors under certain conditions related to representations and warranties[188](index=188&type=chunk)[505](index=505&type=chunk) - The company does not anticipate material losses from legal proceedings or guarantees related to mortgage loan repurchases[181](index=181&type=chunk)[509](index=509&type=chunk) [14. Revenue from Contracts with Customers](index=53&type=section&id=14.%20Revenue%20from%20Contracts%20with%20Customers) Revenue is recognized from customer contracts, primarily service charges and card fees, with most revenues recognized at a point in time and contract liabilities decreasing due to amortization Total Revenue by Segment (Three Months Ended Sep 30, 2020, in thousands) | Segment | Net Interest Income | Noninterest Income | Total Revenue | | :--------------- | :------------------ | :----------------- | :------------ | | Retail Banking | $102,803 | $24,649 | $127,452 | | Commercial Banking | $32,757 | $16,679 | $49,436 | | Treasury and Other | $(1,558) | $7,570 | $6,012 | | Total | $134,002 | $48,898 | $182,900 | Total Revenue by Segment (Nine Months Ended Sep 30, 2020, in thousands) | Segment | Net Interest Income | Noninterest Income | Total Revenue | | :--------------- | :------------------ | :----------------- | :------------ | | Retail Banking | $288,832 | $73,197 | $362,029 | | Commercial Banking | $100,265 | $52,530 | $152,795 | | Treasury and Other | $11,410 | $18,055 | $29,465 | | Total | $400,507 | $143,782 | $544,289 | - Contract liabilities, primarily from vendor signing bonuses, decreased by approximately **$0.6 million** for the nine months ended September 30, 2020, due to the passage of time[204](index=204&type=chunk) [15. Earnings per Share](index=58&type=section&id=15.%20Earnings%20per%20Share) Basic and diluted earnings per share decreased for both the three and nine months ended September 30, 2020, compared to the prior year, reflecting lower net income Earnings per Share (in thousands, except per share amounts) | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income | $65,101 | $74,199 | $124,015 | $216,556 | | Basic earnings per share | $0.50 | $0.56 | $0.95 | $1.62 | | Diluted earnings per share | $0.50 | $0.56 | $0.95 | $1.61 | | Basic weighted-average outstanding shares | 129,896,054 | 132,583,902 | 129,882,878 | 133,957,192 | | Diluted weighted-average outstanding shares | 130,085,534 | 132,877,769 | 130,129,690 | 134,231,762 | [16. Noninterest Income and Noninterest Expense](index=58&type=section&id=16.%20Noninterest%20Income%20and%20Noninterest%20Expense) This section details net periodic benefit cost for pension and postretirement plans, which decreased in 2020, and reports operating and variable lease income Net Periodic Benefit Cost (in thousands) | Component | Three Months Ended Sep 30, 2020 (Pension) | Three Months Ended Sep 30, 2019 (Pension) | Nine Months Ended Sep 30, 2020 (Pension) | Nine Months Ended Sep 30, 2019 (Pension) | | :------------------------- | :---------------------------------------- | :---------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Service cost | $— | $18 | $— | $52 | | Interest cost | $1,639 | $2,044 | $4,881 | $6,132 | | Expected return on plan assets | $(1,206) | $(1,195) | $(3,594) | $(3,585) | | Prior service credit | $— | $— | $— | $— | | Recognized net actuarial loss (gain) | $1,474 | $1,564 | $4,332 | $4,692 | | Total net periodic benefit cost | $1,907 | $2,431 | $5,619 | $7,291 | - The company recognized operating lease income of **$1.6 million** and variable lease income of **$1.4 million** for the three months ended September 30, 2020[211](index=211&type=chunk) [17. Fair Value](index=60&type=section&id=17.%20Fair%20Value) Financial instruments are measured at fair value using a three-level hierarchy, with most available-for-sale securities and derivatives classified as Level 2, and certain items as Level 3 due to unobservable inputs - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1 prices), and Level 3 (unobservable inputs requiring significant management judgment)[213](index=213&type=chunk) - All available-for-sale securities are classified as Level 2, and most derivatives are classified as Level 2, utilizing market observable inputs[219](index=219&type=chunk)[220](index=220&type=chunk) - The Visa derivative liability and collateral-dependent loans are classified as Level 3 due to the use of significant unobservable inputs such as potential future changes in conversion rate, expected term, and growth rate of Visa Class A common shares[222](index=222&type=chunk)[223](index=223&type=chunk)[235](index=235&type=chunk) Assets and Liabilities Recorded at Fair Value on a Recurring Basis (Sep 30, 2020, in thousands) | Category | Level 1 | Level 2 | Level 3 | Total | | :-------------------------------------- | :------ | :---------- | :------ | :---------- | | **Assets:** | | | | | | U.S. Treasury and government agency debt securities | $— | $144,956 | $— | $144,956 | | Mortgage-backed securities | $— | $1,875,985 | $— | $1,875,985 | | Collateralized mortgage obligations | $— | $3,671,942 | $— | $3,671,942 | | Other assets (derivative assets) | $— | $159,884 | $— | $159,884 | | **Liabilities:** | | | | | | Other liabilities (derivative liabilities) | $— | $(1,434) | $(920) | $(2,354) | | **Total** | **$—** | **$5,851,333** | **$(920)** | **$5,850,413** | [18. Reportable Operating Segments](index=69&type=section&id=18.%20Reportable%20Operating%20Segments) The company operates through Retail Banking, Commercial Banking, and Treasury and Other segments, with segment reporting restated in 2019 to align deposit balances and update cost allocation assumptions - The company's operating segments are Retail Banking, Commercial Banking, and Treasury and Other, with internal management processes for performance evaluation and resource allocation[242](index=242&type=chunk) - In 2019, segment operating profits were restated to align deposit balances within the business segment that directly manages them, affecting net interest income, provision for credit losses, noninterest income, and net income[247](index=247&type=chunk)[380](index=380&type=chunk) Business Segment Net Income (in thousands) | Segment | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :----------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Retail Banking | $50,962 | $53,552 | $105,026 | $159,040 | | Commercial Banking | $21,595 | $24,659 | $33,213 | $70,788 | | Treasury and Other | $(7,456) | $(4,012) | $(14,224) | $(13,272) | | Total | $65,101 | $74,199 | $124,015 | $216,556 | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=74&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial condition and results, highlighting the COVID-19 pandemic's impact on net income, credit losses, liquidity, capital, and critical accounting policies [Cautionary Note Regarding Forward-Looking Statements](index=74&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) The report contains forward-looking statements subject to inherent uncertainties and risks, including economic conditions and the COVID-19 pandemic, cautioning against undue reliance - The report contains forward-looking statements based on current expectations, estimates, and projections, which are subject to inherent uncertainties and risks, including the geographic concentration of business, economic conditions, and the impact of the COVID-19 pandemic[258](index=258&type=chunk)[259](index=259&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, as actual results may differ materially due to various factors, and the company does not undertake to update them except as required by law[258](index=258&type=chunk)[262](index=262&type=chunk) [Company Overview](index=76&type=section&id=Company%20Overview) First Hawaiian, Inc. is a bank holding company owning First Hawaiian Bank, founded in 1858, operating through Retail Banking, Commercial Banking, and Treasury and Other segments - First Hawaiian, Inc. (FHI) is a bank holding company that owns First Hawaiian Bank (FHB), which was founded in 1858 and operates through three segments: Retail Banking, Commercial Banking, and Treasury and Other[263](index=263&type=chunk) [Basis of Presentation](index=76&type=section&id=Basis%20of%20Presentation) The unaudited interim consolidated financial statements are prepared in accordance with GAAP for interim financial information and Form 10-Q instructions, reflecting normal recurring adjustments - The unaudited interim consolidated financial statements are prepared in accordance with GAAP for interim financial information and Form 10-Q instructions, reflecting normal recurring adjustments[266](index=266&type=chunk) [Recent Developments regarding COVID-19 and the Hawaii and Global Economy](index=76&type=section&id=Recent%20Developments%20regarding%20COVID-19%20and%20the%20Hawaii%20and%20Global%20Economy) The COVID-19 pandemic severely impacted global and Hawaii economies, leading to increased unemployment, government interventions, and adverse effects on the company's operations, credit risk, and net interest margin - The U.S. economy entered a pandemic-driven recession, with the national unemployment rate increasing to **14.7%** in April 2020 before decreasing to **7.9%** in September 2020[270](index=270&type=chunk) - Hawaii's economy, heavily dependent on tourism, experienced an unprecedented increase in unemployment, reaching **15.1%** in September 2020, compared to **2.7%** in September 2019, due to mandatory quarantines and stay-at-home orders[273](index=273&type=chunk) - The Federal Reserve cut the federal funds rate to **0.00%-0.25%** and implemented quantitative easing, while the U.S. government enacted fiscal stimulus measures like the CARES Act and PPP to counteract economic disruption[277](index=277&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk) - The company strategically closed **26 branch locations** temporarily, with **four** becoming permanent, and expects continued adverse economic conditions, increased credit risk, and reduced net interest margin due to low interest rates and PPP participation[287](index=287&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) [Selected Financial Data](index=85&type=section&id=Selected%20Financial%20Data) This table presents selected financial highlights, including net interest income, provision for credit losses, net income, EPS, net interest margin, and key balance sheet figures for specified periods Financial Highlights (in thousands, except per share data) | Metric (in thousands) | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net interest income | $134,002 | $143,081 | $400,507 | $433,783 | | Provision for credit losses | $5,072 | $— | $101,718 | $9,550 | | Noninterest income | $48,898 | $49,980 | $143,782 | $145,825 | | Noninterest expense | $91,629 | $93,466 | $279,545 | $279,379 | | Net income | $65,101 | $74,199 | $124,015 | $216,556 | | Basic EPS | $0.50 | $0.56 | $0.95 | $1.62 | | Diluted EPS | $0.50 | $0.56 | $0.95 | $1.61 | | Net interest margin | 2.70% | 3.19% | 2.79% | 3.22% | | Efficiency ratio | 50.01% | 48.41% | 51.32% | 48.20% | | Return on average total assets | 1.16% | 1.45% | 0.76% | 1.42% | | Total assets (Sep 30, 2020 / Dec 31, 2019) | $22,310,701 | | $22,310,701 | $20,166,734 | | Total deposits (Sep 30, 2020 / Dec 31, 2019) | $18,897,762 | | $18,897,762 | $16,444,994 | | Total stockholders' equity (Sep 30, 2020 / Dec 31, 2019) | $2,733,934 | | $2,733,934 | $2,640,258 | [Financial Highlights](index=90&type=section&id=Financial%20Highlights) Net income decreased significantly due to increased provision for credit losses and lower net interest income, while total assets and deposits grew, and capital ratios remained strong - Net income decreased by **$9.1 million (12%)** to **$65.1 million** for the three months ended September 30, 2020, and by **$92.5 million (43%)** to **$124.0 million** for the nine months ended September 30, 2020, primarily due to a **$92.2 million** increase in the Provision for credit losses[317](index=317&type=chunk)[324](index=324&type=chunk) - Net interest income decreased by **$9.1 million (6%)** for the three months and **$33.3 million (8%)** for the nine months ended September 30, 2020, with net interest margin declining by **49 basis points** and **43 basis points**, respectively, due to lower yields[319](index=319&type=chunk)[326](index=326&type=chunk) - The Allowance for Credit Losses (ACL) increased by **$65.3 million (50%)** to **$195.9 million** as of September 30, 2020, representing **1.45%** of total loans and leases, up from **0.99%** at December 31, 2019, reflecting higher expected credit losses due to COVID-19[334](index=334&type=chunk) - Total loans and leases increased by **$288.3 million (2%)** to **$13.5 billion**, and total deposits increased by **$2.5 billion (15%)** to **$18.9 billion** as of September 30, 2020[333](index=333&type=chunk)[336](index=336&type=chunk) [Analysis of Results of Operations](index=95&type=section&id=Analysis%20of%20Results%20of%20Operations) The company's operations were impacted by lower interest rates and higher credit loss provisions, resulting in decreased net interest income and mixed changes in noninterest income and expense - Net interest income (fully taxable-equivalent basis) decreased by **$8.8 million (6%)** for the three months and **$32.9 million (8%)** for the nine months ended September 30, 2020, primarily due to lower yields on loans and investment securities, partially offset by lower deposit funding costs[342](index=342&type=chunk)[348](index=348&type=chunk) - The Provision for credit losses increased to **$5.1 million** for the three months and **$101.7 million** for the nine months ended September 30, 2020, from nil and **$9.55 million** respectively in 2019, driven by expected credit losses from COVID-19[352](index=352&type=chunk) - Noninterest income decreased by **$1.1 million (2%)** for the three months and **$2.0 million (1%)** for the nine months ended September 30, 2020. Key changes include decreases in credit and debit card fees and service charges, partially offset by increases in other noninterest income[356](index=356&type=chunk)[357](index=357&type=chunk)[358](index=358&type=chunk)[365](index=365&type=chunk) - Total noninterest expense decreased by **$1.8 million (2%)** for the three months and increased by **$0.2 million (less than 1%)** for the nine months ended September 30, 2020, with notable changes in card rewards program expense (decrease) and contracted services/equipment expense (increase)[367](index=367&type=chunk)[370](index=370&type=chunk)[372](index=372&type=chunk)[375](index=375&type=chunk) [Analysis of Business Segments](index=109&type=section&id=Analysis%20of%20Business%20Segments) Retail Banking and Commercial Banking segments experienced decreased net income due to higher credit loss provisions and lower net interest income, while Treasury and Other saw an increased net loss - Retail Banking net income decreased by **$2.6 million (5%)** for the three months and **$54.0 million (34%)** for the nine months ended September 30, 2020, mainly due to increased provision for credit losses and decreased net interest income[383](index=383&type=chunk)[386](index=386&type=chunk) - Commercial Banking net income decreased by **$3.1 million (12%)** for the three months and **$37.6 million (53%)** for the nine months ended September 30, 2020, primarily due to increased provision for credit losses and decreased net interest income[389](index=389&type=chunk)[390](index=390&type=chunk) - Treasury and Other segment's net loss increased by **$3.4 million (86%)** for the three months and **$1.0 million (7%)** for the nine months ended September 30, 2020, driven by higher net interest expense and provision for credit losses[395](index=395&type=chunk)[396](index=396&type=chunk) [Analysis of Financial Condition](index=113&type=section&id=Analysis%20of%20Financial%20Condition) The company maintained strong liquidity and capital, with increased loans (driven by PPP) and deposits, while the Allowance for Credit Losses significantly rose due to COVID-19 impacts - Cash and cash equivalents were **$0.8 billion**, and available-for-sale investment securities were **$5.7 billion** as of September 30, 2020, providing substantial liquidity[402](index=402&type=chunk) - Total loans and leases increased by **$288.3 million (2%)** to **$13.5 billion**, primarily due to **$920.2 million in PPP loans**[417](index=417&type=chunk) - The Allowance for Credit Losses (ACL) increased by **$65.3 million (50%)** to **$195.9 million**, representing **1.45%** of total loans and leases, reflecting the adverse economic impact of COVID-19[473](index=473&type=chunk) - Total deposits increased by **$2.5 billion (15%)** to **$18.9 billion**, and short-term borrowings were reduced to **zero** as of September 30, 2020[486](index=486&type=chunk)[487](index=487&type=chunk) - The company remained **'well capitalized'** with a Common Equity Tier 1 capital ratio of **12.22%** and total stockholders' equity increasing by **$93.7 million (4%)** to **$2.7 billion**[498](index=498&type=chunk)[502](index=502&type=chunk) [Off-Balance Sheet Arrangements and Guarantees](index=142&type=section&id=Off-Balance%20Sheet%20Arrangements%20and%20Guarantees) The company holds interests in unconsolidated VIEs and is exposed to guarantees from residential mortgage loan sales, but management believes the associated risks are not material - The company holds interests in several unconsolidated VIEs, primarily low-income housing tax credit investments, but is not deemed the primary beneficiary[504](index=504&type=chunk) - Guarantees arise from selling residential mortgage loans to Fannie Mae or Freddie Mac, which may require repurchase if underwriting or documentation standards are not met. The unpaid principal balance of loans sold was **$2.3 billion** as of September 30, 2020[505](index=505&type=chunk) - Management believes the exposure from repurchase requests related to representation and warranty provisions and servicing activities is not material due to historical levels and loss trends[509](index=509&type=chunk) [Contractual Obligations](index=144&type=section&id=Contractual%20Obligations) The company's contractual obligations have not materially changed since December 31, 2019 - The company's contractual obligations have not materially changed since December 31, 2019[510](index=510&type=chunk) [Future Application of Accounting Pronouncements](index=144&type=section&id=Future%20Application%20of%20Accounting%20Pronouncements) Information on the expected impact of recently issued but not yet adopted accounting pronouncements is available in Note 1 of the consolidated financial statements - Information on the expected impact of recently issued but not yet adopted accounting pronouncements is available in Note 1 of the consolidated financial statements[511](index=511&type=chunk) [Risk Governance and Quantitative and Qualitative Disclosures About Market Risk](index=144&type=section&id=Risk%20Governance%20and%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages credit, market, liquidity, capital, and operational risks, with market risk primarily assessed through net interest income simulation analysis for interest rate sensitivity - The company's most prominent risk exposures are credit risk, market risk, liquidity risk management, capital management, and operational risk[512](index=512&type=chunk) - Credit risk is managed through well-defined underwriting criteria, account administration standards, and active portfolio diversification across obligor, industry, product, and geographic locations[513](index=513&type=chunk) - Market risk, primarily interest rate risk, is measured using net interest income simulation analysis, which projects net interest income will benefit from higher interest rates and be less sensitive to lower interest rates[523](index=523&type=chunk)[528](index=528&type=chunk)[532](index=532&type=chunk) Estimated Changes in Net Interest Income from Interest Rate Shifts (12 months subsequent to Sep 30, 2020) | Change in Interest Rates (basis points) | Ramp Change in Net Interest Income | Immediate Change in Net Interest Income | | :-------------------------------------- | :--------------------------------- | :-------------------------------------- | | +100 | 5.9% | 11.2% | | +50 | 3.0% | 5.7% | | (50) | (1.7)% | (2.9)% | | (100) | (2.4)% | (3.8)% | [Critical Accounting Policies](index=152&type=section&id=Critical%20Accounting%20Policies) The Allowance for Credit Losses determination is a critical accounting estimate, relying on credit risk ratings, macroeconomic forecasts, and quantitative models under the CECL methodology - The ACL determination is a critical accounting estimate, relying on credit risk ratings, estimates of future cash flows, estimated loss rates, and quantitative/qualitative evaluations of macroeconomic factors and trends[545](index=545&type=chunk) - The CECL methodology utilizes a **one-year** reasonable and supportable forecast period, with an immediate reversion to the mean approach for contractual periods beyond this horizon[550](index=550&type=chunk) - Qualitative adjustments to the forecast period, based on factors like employment, visitor arrivals, and real estate prices, are highly subjective and involve significant management judgment[551](index=551&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=155&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section refers to the detailed quantitative and qualitative disclosures about market risk provided in the 'Risk Governance' section of Management's Discussion and Analysis - Quantitative and qualitative disclosures about market risk are discussed in detail within the 'Risk Governance and Quantitative and Qualitative Disclosures About Market Risk' section of the MD&A[555](index=555&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=155&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management evaluated the effectiveness of disclosure controls and procedures as of September 30, 2020, concluding they were effective with no material changes in internal control over financial reporting - The company's disclosure controls and procedures were deemed **effective** as of September 30, 2020, following an evaluation by the CEO and CFO[555](index=555&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2020[555](index=555&type=chunk) [PART II. OTHER INFORMATION](index=155&type=section&id=Part%20II.%20Other%20Information) This section contains other information, including legal proceedings, risk factors, exhibits, and signatures related to the company's financial reporting [ITEM 1. LEGAL PROCEEDINGS](index=155&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in various legal proceedings incidental to its business but does not expect any to have a material adverse effect on its financial position or operations - The company is not currently party to any legal proceedings expected to have a **material adverse effect** on its business, financial condition, or results of operations[556](index=556&type=chunk) [ITEM 1A. RISK FACTORS](index=155&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section refers to previously disclosed risk factors, noting no material changes beyond additional factual information in the current report - There are no material changes to the company's risk factors from those disclosed in its 2019 Annual Report on Form 10-K and Q1 2020 Quarterly Report on Form 10-Q, except for additional factual information in this report[557](index=557&type=chunk) [ITEM 6. EXHIBITS](index=156&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including certifications from the Chief Executive Officer and Chief Financial Officer, and XBRL-related documents - The exhibit index includes certifications from the CEO and CFO (pursuant to Rules 13a-14(a) and 18 U.S.C. Section 1350) and various XBRL (eXtensible Business Reporting Language) documents[560](index=560&type=chunk) [Signatures](index=157&type=section&id=Signatures) The report is duly signed on behalf of First Hawaiian, Inc. by its Chairman, President, CEO, and CFO as of November 2, 2020 - The report was signed by Robert S. Harrison, Chairman of the Board, President and Chief Executive Officer, and Ravi Mallela, Chief Financial Officer, on November 2, 2020[563](index=563&type=chunk)[564](index=564&type=chunk)

Financial Data and Key Metrics Changes - The third quarter pretax pre-provision net revenue increased by 11.3% over the second quarter to $91.3 million [11] - Net interest income rose to $134 million, a $6.2 million increase from the prior quarter [31] - Noninterest income was $48.9 million, $3.2 million higher than the previous quarter [33] - The total cost of deposits declined by six basis points to 13 basis points, contributing to a 12 basis point improvement in net interest margin [12] Business Line Data and Key Metrics Changes - Period-end loans and leases decreased by $264 million or 1.9% to $13.5 billion [28] - Consumer and commercial deposits increased by $166 million, while public deposits decreased by $630 million [30] - Mortgage loan originations exceeded $300 million in the quarter, driven by low rates and an active residential real estate market [29] Market Data and Key Metrics Changes - The unemployment rate in Hawaii remained high at 15.1% in September, but the reopening of the economy and the pre-travel testing program initiated on October 15 are expected to aid recovery [8][18] - Visitor arrivals to Hawaii ranged from 2,000 to 4,000 per day following the reopening, which is crucial for the tourism-dependent economy [8] Company Strategy and Development Direction - The company is focusing on careful balance sheet management and improving asset quality while navigating the challenges posed by the pandemic [11] - The bank has begun reopening branches, with four branches remaining closed permanently, and has launched an online mortgage origination portal [9][10] - The strategy includes managing higher-risk credits and supporting borrowers through the PPP loan forgiveness process [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook on the economy, indicating that it is still early days for recovery in Hawaii, particularly for the tourism sector [34] - The economic forecast projects local unemployment to average in the low teens, with a 12% drop in real GDP expected for 2020 [18] - Management remains comfortable with the current allowance for credit loss, despite uncertainties in the consumer segment [50][55] Other Important Information - The provision for credit loss was $5.1 million for the quarter, significantly down from $55.4 million in Q2, reflecting improved asset quality [15] - The bank has a qualitative overlay amounting to about 20% of the reserve, primarily attributed to COVID-19 [19] Q&A Session Summary Question: How did the visitor numbers compare to initial expectations? - Management indicated that expectations were low, and the gradual increase in visitors allows for adjustments in processes as the holiday season approaches [36] Question: What supports the net interest margin guidance for Q4? - Management noted potential pressures on the asset side but indicated that lower interest expenses and a slight reduction in deposit costs could stabilize the net interest margin [38][40] Question: Is the worst of credit costs behind? - Management expressed that while they are comfortable with the current allowance, uncertainties remain, particularly regarding consumer credit performance [55] Question: What drove the strong credit results this quarter? - Management highlighted that the return to payment has been better than expected, aided by government stimulus, and they are monitoring the consumer segment closely [51][58] Question: What is the status of the PPP forgiveness process? - Management reported that they have submitted over 100 applications but have not yet received feedback, indicating that the process is still ongoing and complex [72]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-14585 FIRST HAWAIIAN, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 99-0156159 (State or Other Juri ...