First Hawaiian, Inc. (NASDAQ:FHB) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 05:00 pm ET


First Hawaiian, Inc. (NASDAQ:FHB) Q3 2018 Earnings Conference Call Transcript


Loading Event

Loading Transcript


Good day, ladies and gentlemen, and welcome to the First Hawaiian Q3 2018 Earnings Conference Call. At this time all participants are in a listen-only-mode. Later we will conduct a question and answer session and instructions will follow at that time. (Operator Instructions)

I would now like to introduce your host for today's call, Kevin Haseyama, you may begin.

Kevin Haseyama

Thank you, Tawanda, and thank you, everyone, for joining us as we review our financial results for the third quarter of 2018. With me today are Bob Harrison, Chairman and CEO; Eric Yeaman, President and COO; Ralph Mesick, Chief Risk Officer; and joining us for the first time is Ravi Mallela, CFO and Treasurer.

We have prepared a slide presentation that we will refer to in our remarks today. The presentation is available for downloading and viewing on our website at in the Investor Relations section.

(Forward Looking Cautionary Statements)

We'll also discuss certain non-GAAP financial measures. The appendix to this presentation contains reconciliations of these non-GAAP financial measures to comparable GAAP measures.

And now I'll turn the call over to Bob, who'll provide you with the third quarter highlights, starting on slide three.

Robert Harrison

Thanks, Kevin. Hello, everyone, and thank you for joining us today as we report on our third quarter results. This was a good quarter as we had solid core financial performance, strong loan production, made significant progress reducing public deposits, controlled our expenses and maintained excellent asset quality. We were able to overcome large unexpected prepayments and a temporary excess liquidity situation that pressured the margin. In addition, BNP Paribas completed two additional stock offerings, which combined with our share repurchase, brought their ownership in First Hawaiian down to 18.4%.

Our core profitability measures remained strong with the core return on average tangible assets of 1.45% and our core return on average tangible common equity of 19.6%, and we remain on track to meet our full year core efficiency ratio guidance of approximately 48%. Yesterday, our Board of Directors declared a $0.24 per share dividend, payable on December 7 to shareholders of record at the close of business on November 26.

Turning to slide four. BNP Paribas made significant progress towards reducing their ownership stake in First Hawaiian during the quarter. They completed two offerings and First Hawaiian executed a share repurchase from BNPP in conjunction with one of the offerings, resulting in a decrease of their ownership interest from 48.8% to 18.4%. As a result of these transactions, the number of BNPP nominated directors went from five to two, stepping down from the board were Jean-Milan Givadinovitch, Xavier Antiglio and Michael Shepherd. We'd like to thank them for their service to the board.

We're also pleased to have three prominent members of the local business community, Faye Kurren, Jenai Wall and Scott Wo joined the board as independent directors. All three will continue to serve on the First Hawaiian Bank Board. Six of our nine directors are now independent. Additionally, as of August 1, BNP stopped