2017 ANNUA L R EPOR T
TA BLE O F CONT ENT S
1 FHI by the Numbers
2 CEO’s Report to Shareholders
5 Financial Highlights
6 Business Banking
8 Corporate Banking
10 Small Business Banking
12 Personal Banking
14 Wealth Management & Private Banking
16 Employee Volunteerism
18 Consolidated Statements of Income
19 Consolidated Balance Sheets
20 GAAP/Non-GAAP Reconciliation
21 Philanthropy
22 Senior Management Committee
24 Senior Officers
Boards of Directors (Inside Back Cover)
Shareholder Information (Back Cover)
1858 Bishop & Co.,
forerunner of First Hawaiian
Bank, is founded by
businessman Charles Reed
Bishop. His wife, Princess
Bernice Pauahi Bishop,
founded Kamehameha
Schools through her estate
in 1887.
First Hawaiian, Inc. (NASDAQ: FHB) is a bank holding
company headquartered in Honolulu, Hawai‘i. Its
principal subsidiary, First Hawaiian Bank, was founded
in 1858 as Bishop & Co., and today is Hawai‘i’s oldest
and largest financial institution with assets of $20.5
billion at December 31, 2017. The bank has 57 branches
throughout Hawai‘i, three in Guam and two in 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 www.fhb.com.
First Hawaiian’s Vision: To be the best relationship
bank in the markets we serve.
Our Mission: To grow an innovative and successful
bank that delivers excellent service and value to our
customers, cares for our employees like family and is
committed to the communities we serve.
Our Core Values:
CARING — Our employees have a caring spirit, a
sincere compassion, combined with the professional
capability to help customers, each other and
our communities.
CHA RA CTER — Our employees understand that our
bank was built upon and depends on the trust of our
customers, as well as trust among each other.
CO LLABORATION — We work together and support
each other in serving our customers and communities
while making the bank successful.
6
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*
4.5%
increase
of
Total
Assets
from 2016
($20.5 BILLION AT 12/31/2017)
No. 1
Largest among all
Hawai‘i banking
companies in loans,
deposits, assets
AT 12/31/17
1878 Bishop &
Co. builds this building
on Merchant Street as
its new headquarters.
The building is occupied
today by law offices.
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2,271
e m p l o y e e s
$17.6 billion
Deposits at 12/31/2017,
up 4.9% from 2016
6 2 B R A N C H E S o f
F I R S T H A W A I I A N B A N K
By th e
Numbers
*47.0%
2017 Core
Efficiency
Ratio
*Core net income excludes certain gains, expenses and one-time items.
Core efficiency ratio is the ratio of core noninterest expense to the
sum of core net interest income and core noninterest income. See
GAAP/Non-GAAP Reconciliation on Page 20 of this Annual Report for a
reconciliation of our core net income and the components of our core
efficiency ratio to comparable GAAP measures.
$2.5 billion
Stockholders’ equity
7
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1
$12.3 billionLoans at 12/31/2017, up 6.6% from 2016310 ATMs
C E O ’ S R E P O R T T O S H A R E H O L D E R S
As we approach our 160th anniversary,
Hawai‘i’s oldest banking company is
stronger than at any time in our history.
At the end of 2017, our first full year
as a newly public company, First
Hawaiian, Inc. set records for assets,
loans and deposits:
below the rate in every other state. State and University
of Hawai‘i economists forecast continued positive
expansion through at least 2020—albeit at a slower
rate—in visitor arrivals, visitor spending, real GDP and real
personal income.
} Assets, $20.5 billion, up 4.5% from 2016;
} Loans, $12.3 billion, up 6.6%;
} Deposits, $17.6 billion, up 4.9%.
Core net income was $230.4 million, up 6.1% over 2016
core net income.(1)
The Board of Directors declared a quarterly cash dividend
of $0.24 per share payable March 9, 2018, an increase of
9.1% from the dividend paid in December 2017.
We are the largest Hawai‘i-based bank in assets, loans,
deposits and core net income. A best-in-class community
institution, First Hawaiian has a track record of strong
organic growth in loans and deposits and excellent
expense management (best efficiency ratio of any bank
in the state) and credit quality. Year-end nonperforming
assets stood at 0.08% of total loans, well below peer U.S.
banks, a tribute to underwriting based on our longstanding
customer relationships and market knowledge.
Underlying our financial performance are two key drivers:
the continuing strength in the Hawai‘i economy and
our continued successful execution of our relationship
banking strategy.
The mainstay of the economy is, as always, tourism.
The perception of Hawai‘i as a safe place to visit and
a great travel experience led to a sixth consecutive
record year in the tourism sector. Visitor arrivals were
up 5% to 9.38 million and visitor expenditures rose 6%
to $16.78 billion. Planned increases in airlift by both
existing and new carriers help buoy economists’ optimism
for 2018.
On O‘ahu, residential real estate sales are strong, with
median prices increasing to record levels in 2017.
Relationship Strategy
Since 1995, our bank has consistently emphasized building
long-term, person-to-person customer relationships.
Bankers reach out proactively to understand each client’s
needs and offer tailored, holistic financial solutions.
Customers know their First Hawaiian bankers stand
by them through thick and thin, as exemplified by the
customer stories in this report. The relationship building
strategy and the talented bankers who execute it have
produced consistent corporate growth in good economic
times and bad, helping First Hawaiian become and remain
Hawai‘i’s largest bank.
Hawai‘i Economy
Our home state’s economy enjoyed its eighth consecutive
year of growth. At the end of 2017, the Hawai‘i
unemployment rate hit an all-time low of 2.0%, well
(1)Core net income excludes certain gains, expenses and
one-time items. See GAAP/Non-GAAP Reconciliation on
Page 20 of this Annual Report.
2
During 2017:
} Recognizing our strong record in small business and
economic development loans, the U.S. Small Business
Administration (SBA) awarded First Hawaiian both the
Hawai‘i SBA Lender of the Year—Category 1 and the
SBA 504 Lender of the Year awards. This is the first time
a local bank has received both awards outright in a
single year.
} We invested in a new mortgage lending model, going
from a branch-based business to a mortgage loan
officer model.
} We opened our first branch on O‘ahu with a modern,
customer-centric open-floor concept. In the new Liliha
branch, the traditional teller counter has been replaced
by three “service pods,” creating a more personalized
experience for customers working with bank staff and
strengthening relationships with our customers.
} While brick-and-mortar branches continue to be a major
part of our relationship strategy, customers’ preferences
are changing the way they interact with the bank.
Supporting that trend, First Hawaiian Bank launched
enhanced mobile and online banking applications for
consumers and small businesses, providing a better
customer experience for their digital banking needs.
We appreciate the strong support of BNP Paribas, which
owned this company from 2001 until 2016, when it
announced its intent to sell 100% of its interest over time.
Following our Initial Public Offering of common stock in
August 2016 and a second offering in February 2017, BNP
Paribas owns 62% of First Hawaiian, Inc.
Employee Engagement
Our goal is to continue making First Hawaiian a desirable
place to work—a centerpiece of our success. One of the
ways we did this was raising our minimum employee
wage to $15. We also gave out $1,500 cash bonuses to
most employees.
At First Hawaiian, we want to do more than pay a
competitive wage; we want to foster innovation and
collaboration by employees, allowing individuals to make
a meaningful difference within our organization and
our community.
3
Robert S. Harrison
Employee engagement encompasses the spirit of our
workforce—how they go about their everyday roles as
well as how they feel about coming to work. Employee
engagement steps we have taken:
} Launched year-long Emerging Leaders and Advanced
Leaders Programs and graduated our first class.
} Expanded our “Strive” Online Learning Center, offering
both live and online classes.
} Employees collaborated with the University of Hawai‘i
and Hawai‘i Bankers Association to develop a universal
banker curriculum.
} Offered generous tuition reimbursement for career
education.
Such programs help employees become engaged with
our company, our customers, our community. A satisfied,
engaged workforce translates to less turnover than the
Hawai‘i industry average, which leads to better, long-
lasting customer relationships . . . and better profitability
for stockholders.
Getting Wet and Dirty for a Good Cause. Employee Community Care volunteers form an assembly line to move pōhaku (stones) to
restore the 600-year-old He‘eia fishpond in Windward O‘ahu.
Philanthropy
We give back to our communities because we know that
our company’s strength depends on the well-being of our
neighbors. In 2017, our bank, our employees and the First
Hawaiian Bank Foundation donated $4.2 million to more
than 400 nonprofits in the fields of health, education,
cultural support and social welfare.
Our employees have the same spirit of giving. Community
Care is a bank-sponsored program in which teams of
employees volunteer to help nonprofit organizations or
schools. Nearly 1,200 volunteers took part in one of 19
Community Care projects on seven islands.
They carried tons of rock and coral to restore an ancient
Hawaiian fishpond, spruced up housing for the homeless,
built garden beds for a charter school and assembled
Aloha Care packages for deployed U.S. Navy sailors. Our
Community Care teams cleaned beaches, a park and a
library, packed boxes for food banks and created a school
Fun Fair.
Six veteran members of our bank Board of Directors
retired in 2017: Paul Mullin Ganley, Warren H. Haruki, John
A. Hoag, Dr. Richard R. Kelley, Dee Jay A. Mailer and John K.
Tsui. Combined, they had 151 years of board service. We
shall miss their wise counsel, good humor and friendship.
Joining the board was Albert M. Yamada, retired Vice
Chairman with long tenure as a top bank executive.
Longtime bank Vice Chairmen Gary L. Caulfield and Robert
T. Fujioka, who together had 77 years in banking, retired
from Senior Management. Succeeding Fujioka on Senior
Management was Commercial Banking Group Executive
Vice President Lance A. Mizumoto.
Whether you are a stockholder of First Hawaiian, Inc.
or a client of its subsidiary, First Hawaiian Bank, we
appreciate your confidence in our management and in the
2,271 bankers who believe that, in building a customer
relationship—It All Starts with Yes.
Overall, bank employees put in nearly 13,000 hours
of community service volunteer time, saying “Yes” to
neighbors in need.
Aloha and mahalo,
Employees dug deep into their wallets, too. First
Hawaiian’s in-house employee fundraising campaign,
Kōkua Mai, raised a record $777,125 for dozens of
charitable agencies in Hawai‘i, Guam and Saipan. An
impressive 99% of our employees participated.
They are ambassadors of our core value—caring. We care
for our customers, for our community, for each other and
for our bank.
ROBERT S. HARR ISON
Chairman & Chief Executive Officer
4
FINANCIAL HIGHLIGHTS
F I R S T H A W A I I A N , I N C .
(dollars in thousands, except per share data)
(1) These amounts are Non-GAAP financial measuers. See GAAP/Non-GAAP Reconciliation on Page 20 of this Annual Report
for reconciliations of core net income, core basic earnings per share and core diluted earnings per share to comparable
GAAP measures.
(2) These ratios are Non-GAAP financial measures. For an explanation of how these ratios are computed, as well as a
reconciliation of the components of such ratios to comparable GAAP measures, see GAAP/Non-GAAP Reconciliation on
page 20 of this Annual Report, including Notes (1) through (4) in that section.
5
C O R E N E T I N C O M E (IN MILLIONS) (1)
2017 Core Net Income (Non-GAAP): $230.4 million
5-Year Compound Annual Growth Rate: 3.2%
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A S S E T S (IN BILLIONS)
)
Total Assets (12/31/17): $20.5 billion
5-Year Compound Annual Growth Rate: 4.3%
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D E P O S I T S (IN BILLIONS)
Total Deposits (12/31/17): $17.6 billion
5-Year Compound Annual Growth Rate: 6.4%
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1895 Samuel M.
Damon acquires all
shares of Bishop’s bank.
After Damon’s death,
his estate remained
the bank’s largest
shareholder until its
2001 sale to
BNP Paribas.
Year Ended December 31,20172016INCOME STATEMENT DATAInterest income$ 570,768$ 518,520Interest expense41,96426,848Net interest income528,804491,672Provision for loan and lease losses18,5008,600Net interest income after provision for loan and lease losses510,304483,072Noninterest income205,605226,037Noninterest expense347,554337,280Income before provision for income taxes368,355371,829Provision for income taxes184,673141,651Net income$ 183,682$ 230,178Core adjustments (Non-GAAP)(1)46,684(13,067Core net income (Non-GAAP)(1)$ 230,366$ 217,111Core basic earnings per share (Non-GAAP)(1)$ 1.65$ 1.56Core diluted earnings per share (Non-GAAP)(1)$ 1.65$ 1.56Basic weighted-average outstanding shares139,560,305139,487,762Diluted weighted-average outstanding shares139,656,993139,492,608OTHER FINANCIAL INFO / PERFORMANCE RATIOSCore net interest margin (Non-GAAP)(2)2.99%2.88%Core efficiency ratio (Non-GAAP)(2)47.02%47.94%Core return on average total assets (Non-GAAP)(2)1.16%1.12%Core return on average total stockholders’ equity (Non-GAAP)(2)9.08%8.45%BALANCE SHEET DATALoans and leases$ 12,277,925$ 11,520,378Allowance for loan and lease losses137,253135,494lnterest-bearing deposits in other banks667,560798,231Investment securities5,234,6585,077,514Goodwill995,492995,492Total assets20,549,46119,661,829Total deposits17,612,12216,794,532Total liabilities18,016,91017,185,344Total stockholders’ equity2,532,5512,476,485Book value per share18.1417.75ASSET QUALITY RATIOSNon-performing loans and leases / total loans and leases0.08%0.08%Allowance for loan and lease losses / total loans and leases1.12%1.18%Net charge-offs (recoveries) / average total loans and leases0.14%0.08%CAPITAL RATIOSCommon Equity Tier 1 capital ratio12.45%12.75%Tier 1 capital ratio12.45%12.75%Total capital ratio13.50%13.85%Tier 1 leverage ratio8.52%8.36%Total stockholders’ equity to total assets12.32%12.60%Tangible stockholders’ equity to tangible assets 7.86%7.93% B U S I N E S S
B A N K I N G
6
77
BOWERS + KUBOTA
CONSULTING
Brian Bowers, P.E., CCM &
Dexter Kubota, P.E.
Waipahu, O‘ahu
In 2006, Brian Bowers and Dexter Kubota were
shocked when their application for a construction
loan for their architectural firm met with resistance
from their former bank. Dexter reached out to a
classmate who worked at First Hawaiian Bank.
“I reached out on a Friday; by Monday we had a
meeting with Ray Ono and Joanne Arizumi. This
was our first time meeting them. We didn’t have
any accounts with First Hawaiian. After talking
with us, within an hour, First Hawaiian gave us a
$3.3 million loan commitment," recalls Kubota.
“The speed in which they said ‘Yes’ to us was
incredible. Without First Hawaiian, we would not
have been able to build our new headquarters.
Today, it’s home to about 200 employees.”
“First Hawaiian Bank has been a great partner for
us,” added Bowers. “We were never asked to move
our business and personal loans over. We did that
on our own because it was the right thing to do.
First Hawaiian believed in our potential. We were
treated as a valued customer, even though we
weren’t even a customer yet. The bank is here to
help us so we can focus on growing our business.”
Today, Bowers + Kubota is the second largest
architectural firm in the state with projects in
Hawai‘i and throughout the Pacific.
1925 The Bank of
Bishop & Co. Ltd. moves
into this new structure it
built at Bishop and King
Streets. It was called the
Damon Building in honor
of Samuel M. Damon,
who died the year before.
77
C O R P O R A T E
B A N K I N G
8
99
KAMEHAMEHA SCHOOLS
Livingston "Jack" Wong,
Chief Executive Officer
Honolulu, O‘ahu
“Our pilina (relationship) with First Hawaiian Bank
dates back to the 19th century, starting with the
bank’s founder, Charles Reed Bishop, whose
wife, Princess Bernice Pauahi Bishop, founded
Kamehameha Schools in 1887. To this day,
Mr. Bishop’s business log is still kept in the bank’s
founder’s room—and his original desk still sits
in our Heritage Center at Kapālama. That strong
connection and our shared commitment to the
community have been there, unbroken, since
the 1800s.
“At Kamehameha Schools, we have kuleana
(responsibility) to manage our endowment in a
globally connected way; the bank helps us do that.
But just as important, our work is in every part of
our community, just as First Hawaiian is. Together,
we need to understand what drives each region and
community, so that we can serve our customers.
“First Hawaiian supports our ability to go from local,
to national, to global and back in approaching our
work—just as we teach our haumāna (students) to
do. Our bank helps us navigate that chain with ease.
“In Kaka‘ako, we’re dealing with residential units and
affordable housing—issues that affect people. We
have to think about how to help finance them, to
understand the market and build relationships with
developers and buyers. The bank helps us do all of
that well.
“Like First Hawaiian, we organize our work and
our efforts around what's best for our community.
That’s what makes us great partners.”
1941 Following Pearl
Harbor attack, Bishop National
Bank helps U.S. government
burn $200 million in currency
at Aiea sugar mill. Bills were
replaced by wartime currency
overprinted with “HAWAII” so
money would not fall into
enemy hands if Islands were
invaded.
99
S M A L L B U S I N E S S
B A N K I N G
10
1111
AINA HAINA PET HOSPITAL
Dr. Allen Takayama &
Cathy Takayama
Kaimukī, O‘ahu
“First Hawaiian has always been our family’s bank.
We’ve been customers for over 40 years. My dad
started Aina Haina Pet Hospital, Inc. in 1965 and we
moved to our Kaimukī location in 2009. We are a
locally owned, family-run veterinary clinic. My wife,
Cathy, and her sister, Diane, take care of the front
office while Dr. Nicole Tsutahara, our Vet Techs,
and I focus on caring for our patients.
“First Hawaiian is like family to us. Lois Tojio was
our banker before she retired and we now enjoy
working with May Nishijima, whom we have
known for years. They understand our business
and provide a level of service that can’t be beat.
Through the years, they have helped us when
we needed construction loans to expand our
business and have helped us with our mortgage
and personal loans too. Our Wealth Advisor, Chieh
Fu Lu, is a trusted advisor for our entire family,
including my parents. It’s nice to be able to pick up
the phone and talk to May or Chieh whenever we
have any questions.
“It’s really a one-stop shop kind of bank. With First
Hawaiian, I have everything I need for my business
and my family.”
— Dr. Allen Takayama, DVM
1962 The First
National Bank of Hawaii
builds state’s first
“skyscraper” (18 stories)
behind Damon Building.
1111
PERSONAL
B A N K I N G
12
1313
CARISSA MOORE
Pro Surfer
3-Time World Champion
Honolulu, O‘ahu
“My grandmother and my dad help me considerably
with my finances. That way I can focus on surfing
and doing my best in the water. It’s definitely a
team effort to keep everything organized and safe
and up to date. They both bank with First Hawaiian,
so it was only natural that I did as well.
“My grandmother introduced me to her banker,
Paula Kaneshiro, who helped us set up my account
in 2004 when I was in intermediate school. It’s
been important for me to build my own banking
relationship with Paula and now Greg Sitar.
“I travel on tour 6 months out of the year. Paula
has been super helpful when I need to do wire
transfers and Greg always makes certain my credit
card functions when I’m travelling internationally.
It’s nice to have that level of service and trust
in a bank.
“I’ve been surfing since I was 4 or 5 years old
and just completed my eighth year on the
championship tour. I’m so grateful for the
opportunity to do what I love. Win or lose, what
matters the most in life is being with the one that
you love, spending time with family and sharing
laughs with good friends.”
1969 Name changed
for last time to First
Hawaiian Bank. New
marketing slogan, “The
Bank that Says Yes.”
1313
W E A L T H
M A N A G E M E N T
A N D P R I V A T E
B A N K I N G
14
1515
HAUNANI LEMN &
SCOTT NUNOKAWA
Waikapū, Maui
“When Scott and I left our demanding jobs to form
our own real estate development and construction
company, friends and family thought we were
more than a little crazy. Our timing seemed ill-
advised since we’d recently welcomed home twins
to join our 5-year-old son.
“For nearly 20 years, First Hawaiian Bank has
been a part of our team as we steadily expanded
our business while keeping our focus on family
and community. The bank has provided us
with an array of services—commercial banking,
wealth management, life insurance, credit cards,
residential mortgage loans.
“Our Private Banking experts have always been at
the hub of these services. In our business, they
help us assist other families achieve their own
dreams of home ownership. In our private lives,
knowing their assistance is just a phone call away
allows us greater freedom to be active in the family
activities that make our life special—band trips,
coaching sports, scouting mentorship, science
fairs, speech tournaments, drama performances,
campouts, and sendoffs to college.
“Our Private Banking team, including Stephen Brock,
Vicky Taylor, Scott Tanaka, Neill Char, and Kim Choy,
make us feel a part of a much bigger family and
help simplify our crazy, complicated, hectic lives.
Mahalo FHB Private Banking!”
— Haunani Lemn
1991 First Hawaiian
acquires First Interstate
Bank of Hawaii,
followed by 1993
acquisition of Pioneer
Federal Savings Bank.
1515
“The Aloha Care packages we made will go to the 100
youngest sailors aboard the USS Chafee. Aboard ship
a lot of people don’t have much family support. They
don’t get a lot of care packages. Packages like the
ones we sent provide a reminder of home and an
important break from routine.”
Raoul Magana, FHB Bank Vice President (standing, above left),
who organized the project for Chafee sailors, is also a lieutenant
commander in the U.S. Navy Reserve. He was activated and deployed
to Afghanistan shortly after the project.
“Thanks, First Hawaiian Bank, from the bottom of our
hearts. It’s awesome to see 100-plus bankers giving
their time on a Saturday, wading through the water,
lugging coral and lava rock to restore the wall and
backbone of He‘eia Fishpond. This fishpond was built
800 years ago by community members. The heavy work
by First Hawaiian volunteers will help make sure it lasts
another 800.”
Keli‘i Kotubetey
Assistant Executive Director, Paepae o He‘eia
“First Hawaiian’s paint-and-cleanup project at Mā‘ili Land
Transitional Housing helps homeless families who had
been living on the beach. Mā‘ili Land helps them get into
permanent housing, earn a GED, find a job. It gives you
goose bumps to see lives improve—especially the keiki.
Without volunteers, Mā‘ili Land wouldn't be possible.
First Hawaiian believes in the community; they get their
hands dirty to help.”
Terry Walsh
CEO/President, Catholic Charities Hawai’i
“The impact of their employees’ volunteerism is a
testament to the corporate culture at First Hawaiian
Bank, which engages its employees with the wider
community. I was blown away by how many First
Hawaiian people came out on a Saturday, giving their
time and sweat to a small school like ours.”
Kapono Ciotti
CEO, Head of School,
Wai‘alae Elementary Public Charter School
16
C A R I N G f o r
C O M M U N I T Y
"I was blown away by how many bank
volunteers came out to help."
Nearly 120 First Hawaiian bankers toted 15 tons of
rock and coral—hand to hand, rock by rock and bucket
by bucket—to help restore the walls of the ancient
Hawaiian fishpond at He’eia.
As Saturday dawn peeked over the Wai‘anae Range,
140 First Hawaiian volunteers were already working
up a sweat painting and sprucing up Mā‘ili Land, a
transitional housing program for homeless families.
Thanks to First Hawaiian volunteers who dug, weeded,
planted and poured concrete, Wai‘alae Elementary
Public Charter School students have new garden beds
for their “outdoor classroom,” where they learn how to
live closer to the ‘aina (land).
And 100 young sailors deployed aboard the destroyer
USS Chafee had a mail-call surprise—Aloha Care
packages of snacks, magazines and handwritten notes
from bank volunteers.
These were just four of the 19 projects completed by
First Hawaiian’s Community Care employee volunteer
program during 2017. Hundreds of bank volunteers put
in nearly 13,000 hours on Community Care projects and
helping community development organizations make
neighborhoods better.
Employees cleaned beaches and helped raise funds for
nonprofits. Created warm blankets for the sick. Packed
boxes for food banks. Collected school supplies for
needy kids. And created a Fun Fair for youngsters.
Along the way, they lived one of First Hawaiian’s Core
Values: “Caring . . . a caring spirit, a sincere compassion,
combined with the professional capability to help
customers, each other and our communities.”
1994 Dynamite
implosion levels bank’s
headquarters. High-rise
and neighboring Damon
Building were razed to
make way for 30-story
First Hawaiian Center.
17
CONSOLIDATED STATEMENTS OF INCOME
F I R S T H A W A I I A N , I N C .
(dollars in thousands except per share amounts)
I N T E R E S T I N C O M E
Loans and lease financing
Available-for-sale securities
Other
Total interest income
I N T E R E S T E X P E N S E
Deposits
Short-term borrowings and long-term debt
Total interest expense
Net interest income
Provision for loan and lease losses
Net interest income after provision for loan and lease losses
N O N I N T E R E S T I N C O M E
Service charges on deposit accounts
Credit and debit card fees
Other service charges and fees
Trust and investment services income
Bank-owned life insurance
Net gains on investment securities
Other
Total noninterest income
N O N I N T E R E S T E X P E N S E
Salaries and employee benefits
Contracted services and professional fees
Occupancy
Equipment
Regulatory assessment and fees
Advertising and marketing
Card rewards program
Other
Total noninterest expense
Income before provision for income taxes
Provision for income taxes
Net income
Core adjustments (Non-GAAP)(1)
Core net income (Non-GAAP)(1)
Core basic earnings per share (Non-GAAP)(1)
Year Ended December 31,
2017
2016
$ 462,675
$ 428,419
102,272
5,821
570,768
41,944
20
41,964
528,804
18,500
510,304
35,807
64,049
34,063
30,485
13,283
—
27,918
205,605
83,019
7,082
518,520
26,650
198
26,848
491,672
8,600
483,072
37,392
65,262
35,355
29,440
15,021
27,277
16,290
226,037
175,351
169,233
45,011
23,485
17,247
14,907
6,191
23,363
41,999
347,554
368,355
184,673
45,345
21,606
16,912
12,972
6,127
22,459
42,626
337,280
371,829
141,651
$ 183,682
$ 230,178
46,684
(13,067
)
$ 230,366
$ 217,111
$ 1.65
$ 1.56
Core diluted earnings per share (Non-GAAP)(1)
$ 1.65
$ 1.56
Basic weighted-average outstanding shares
139,560,305
139,487,762
Diluted weighted-average outstanding shares
139,656,993
139,492,608
Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 for the Consolidated Financial Statements,
including Report of Independent Registered Public Accounting Firm, thereon.
(1) Core net income excludes certain gains, expenses and one-time items. See GAAP/Non-GAAP Reconciliation on page 20 of this Annual Report
for reconciliations of core net income, core basic earnings per share and core diluted earnings per share to comparable GAAP measures.
18
CONSOLIDATED BALANCE SHEETS
F I R S T H A W A I I A N , I N C .
Cash and due from banks
$ 367,084
$ 253,827
Year Ended December 31,
2017
2016
L O A N S A N D L E A S E S (I N BI LLI ON S)
Total Loans & Leases (12/31/17): $12.3 billion
5-Year Compound Annual Growth Rate: 6.4%
(dollars in thousands)
A S S E T S
Interest-bearing deposits in other banks
Investment securities
Loans and leases
Less: allowance for loan and lease losses
Net loans and leases
Premises and equipment, net
Other real estate owned and
repossessed personal property
Accrued interest receivable
Bank-owned life insurance
Goodwill
Other intangible assets
Other assets
Total assets
L I A B I L I T I E S A N D S T O C K H O L D E R S ’ E Q U I T Y
Deposits:
Interest-bearing
Noninterest-bearing
Total deposits
Short-term borrowings
Long-term debt
Retirement benefits payable
Other liabilities
Total liabilities
Stockholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss, net
Treasury stock
667,560
5,234,658
12,277,925
137,253
12,140,672
289,215
329
47,987
438,010
995,492
13,196
355,258
798,231
5,077,514
11,520,378
135,494
11,384,884
300,788
329
41,971
429,209
995,492
16,809
362,775
$ 20,549,461
$ 19,661,829
$ 11,485,269
$ 10,801,915
6,126,853
17,612,122
—
34
134,218
270,536
5,992,617
16,794,532
9,151
41
132,904
248,716
$12
$11
$10
$9
$8
$7
$6
$5
$4
$3
$2
$1
.
8
2
2
1
$
.
2
5
1
1
$
.
2
7
0
1
$
.
3
0
0
1
$
3
5
9
$
.
2
0
9
$
.
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
6
1
0
2
7
1
0
2
D I V E R S I F I E D
L O A N & L E A S E P O R T F O L I O
13%
Consumer
33%
Residential
Real Estate
26%
Commercial
27%
Commercial
Real Estate
18,016,910
17,185,344
1% Other
1,396
2,488,643
139,177
(96,383
)
(282
)
1,395
2,484,251
78,850
)
(88,011
—
Total stockholders’ equity
2,532,551
2,476,485
Total liabilities and stockholders’ equity
$ 20,549,461
$ 19,661,829
Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 for the Consolidated
Financial Statements, including Report of Independent Registered Public Accounting Firm, thereon.
1996 First Hawaiian moves into new
corporate headquarters—First Hawaiian
Center, state’s tallest building at 428 feet,
11½ inches. It’s designed to sway lightly
in heavy winds.
19
GAAP/NON-GAAP RECONCILIATION
We present net interest income, noninterest income, noninterest expense, net income, earnings per share and the
related ratios described below, on an adjusted, or ‘‘core,’’ basis, each a Non-GAAP financial measure. These core
measures exclude from the corresponding GAAP measure the impact of certain items that we do not believe are
representative of our financial results. We believe that the presentation of these Non-GAAP financial measures
helps identify underlying trends in our business from period to period that could otherwise be distorted by the
effect of certain expenses, gains and other items included in our operating results. We believe that these core
measures provide useful information about our operating results and enhance the overall understanding of our
past performance and future performance. Investors should consider our performance and financial condition as
reported under GAAP and all other relevant information when assessing our performance or financial condition.
Non-GAAP measures have limitations as analytical tools and investors should not consider them in isolation or as
a substitute for analysis of our financial results or financial condition as reported under GAAP. The following table
provides a reconciliation of net interest income, noninterest income, noninterest expense and net income to their
“core” Non-GAAP financial measures:
(dollars in thousands except per share data)
Net interest income
Core net interest income (Non-GAAP)
Noninterest income
Gains on sale of securities
Gains on sale of Visa stock
Gains on sale of real estate and other assets
Core noninterest income (Non-GAAP)
Noninterest expense
One-time items(a)
Core noninterest expense (Non-GAAP)
Net income
Gains on sale of securities
Gains on sale of stock (Visa/MasterCard)
Gains on sale of real estate and other assets
One-time items(b)
Tax reform bill
Tax adjustments(c)
Total core adjustments
Core net income (Non-GAAP)
Year Ended December 31,
2017
2016
$ 528,804
$ 491,672
$ 528,804
$ 491,672
$ 205,605
$ 226,037
—
—
-6,922
-4,566
-22,678
—
$ 198,683
$ 198,793
$ 347,554
$ 337,280
-5,457
342,097
-6,220
331,060
$ 183,682
$ 230,178
—
—
-6,922
5,457
47,598
551
46,684
-4,566
-22,678
—
6,220
—
7,957
-13,067
$ 230,366
$ 217,111
Core basic earnings per share (Non-GAAP)
$ 1.65
$ 1.56
Core diluted earnings per share (Non-GAAP)
$ 1.65
$ 1.56
(a) Adjustments that are not material to our financial results have not been presented for certain periods.
(b) One-time items include salaries and benefits stemming from the Tax Cuts and Jobs Act and initial public offering related costs.
(c) Represents the adjustments to net income, tax effected at the Company’s effective tax rate for the respective period, exclusive of one-time tax reform bill expense.
Note (1): Core net interest margin is a Non-GAAP financial measure. We compute our core net interest margin as the ratio of core net interest income to average
earning assets. For a reconciliation to the most directly comparable GAAP financial measure for core net interest income, see GAAP/Non-GAAP Reconciliation above.
Note (2): Core efficiency ratio is a Non-GAAP financial measure. We compute our core efficiency ratio as the ratio of core noninterest expense to the sum of core net
interest income and core noninterest income. For a reconciliation to the most directly comparable GAAP financial measure for core noninterest expense, core net
interest income and core noninterest income, see GAAP/Non-GAAP Reconciliation above.
Note (3): Core return on average total assets is a Non-GAAP financial measure. We compute our core return on average total assets as the ratio of core net income
to average total assets. For a reconciliation to the most directly comparable GAAP financial measure for core net income, see GAAP/Non-GAAP Reconciliation above.
Note (4): Core return on average total stockholders’ equity is a Non-GAAP financial measure. We compute our core return on average total stockholders’ equity as
the ratio of core net income to average total stockholders’ equity. For a reconciliation to the most directly comparable GAAP financial measure for core net income,
see GAAP/Non-GAAP Reconciliation above.
20
P H I L A N T H R O P Y
"We know First Hawaiian is
in our corner"
“Rehabilitation Hospital of the Pacific (REHAB), the only
inpatient medical rehabilitation facility in Hawai‘i, is in the
business of helping people rebuild their lives and return
home. We were able to complete our recent renovations
with the support of First Hawaiian and its foundation. In
addition to helping us with funding, First Hawaiian’s senior
managers have devoted countless hours to leadership on
the REHAB Board of Directors.”
— REHAB President & CEO Dr. Timothy J. Roe, MD, MBA
As Hawai‘i’s oldest bank, First Hawaiian has an
especially strong sense of aloha for the communities
we serve. REHAB Hospital is among more than 400
nonprofits which benefited from our generosity in 2017.
All told, the bank, our employees and First Hawaiian
Bank Foundation made philanthropic contributions
totaling $4.2 million to schools, hospitals and other
charitable organizations in Hawai‘i, Guam and Saipan
to support education, health care, human services
and the arts.
Our employees donated a record $777,125 to our
11-year-old Kōkua Mai in-house drive which helps
dozens of charities. From tellers to vice presidents to
senior management, 99% of employees participated.
Also, bank employees regularly donate time as board
members of dozens of nonprofits.
“First Hawaiian helps us to be our patients’ safety net. Our
longstanding relationship helps serve as a foundation for
REHAB. We know First Hawaiian is in our corner.”
— Dr. Timothy J. Roe, MD, MBA
2001 First Hawaiian,
through its parent,
becomes a subsidiary
of BNP Paribas, one of
the world’s largest and
strongest banks with
operations in over
70 countries.
21
SENIOR MANAGEMENT
Christopher L. Dods
Executive Vice President,
Consumer Banking &
Marketing Group
Mitchell E. Nishimoto
Executive Vice President,
Retail Banking Group
Gina O.W. Anonuevo
Executive Vice President &
Alan H. Arizumi
Vice Chairman, Wealth
Robert S. Harrison
Chairman & Chief
Chief Compliance Officer
Management Group
Executive Officer
22
Eric K. Yeaman
President & Chief
Operating Officer
Iris Y. Matsumoto
Executive Vice
President, Human
Resources Division
Ralph M. Mesick
Executive Vice
Lance A. Mizumoto
Executive Vice
Joel E. Rappoport
Executive Vice President,
President & Chief Risk
President, Commercial
General Counsel &
Officer
Banking Group
Corporate Secretary
2016 First Hawaiian,
Inc. made its Initial Public
Offering (IPO) of shares at
Nasdaq. BNP Paribas, which
has announced plans to
sell all its stock over time,
currently owns 62% of First
Hawaiian, Inc. shares.
23
Alyssa S.N. Hostelley
Business Services Division
Bryan I. Shigezawa
Treasury & Investment Division
SENIOR OFFICERS
First Hawaiian Bank
EXECUTIVE
VICE PRESID ENTS
Tony K.F. Au
Residential Real Estate Division
Derek A. Baughman
Enterprise Technology
Management
Neill A. Char
Private Banking Division and
Wealth Advisory Division
Michael A. Coates
Enterprise Operations
Services Division
Dawn Hofmann
Corporate Banking Division
Keethe T. Koyanagi
Chief Credit Officer
James W. Mills
Service Delivery Division
Curt T. Otaguro
Digital Banking Division
SENIOR VICE PR ES IDEN TS
Benjamin K. Akana
Dealer Division
Joanne H. Arizumi
Main Banking Region
Darlene N. Blakeney
Corporate Banking Division
Joyce W. Borthwick
Residential Real Estate Division
Sharon S. Brown
Community Relations Division
Martha L. Camacho
Waipahu Area
Paula C.H. Chang
Dealer Division
Darrick J.M. Ching
Consumer Branch Banking
Division
Song H. Choi
Marketing Communications
Division
Shirley M. Durham
Enterprise Operations
Services Division
Jerome K. Fukuhara
Management Reporting &
Analysis Division
Glenn T. Goya
Makiki Area
Calvin K. Hangai
Controller
Bradford L. Harrison
Wealth Advisory Division
Kevin S. Haseyama
President’s Office
Gregory S. Hester
IT Division
Jeffrey N.M. Higashi
Pearlridge Area
Gregg M. Hirano
Card Services Division
Theresa A. Hirata
Wealth Management
Service Center
Shigeo Hone
Japan Business Development
David A. Honma
Hawai‘i Region Office
Stephen E.K. Kaaa
Waikīkī Area
Leland K. Kahawai
Kahului Branch
Brian M. Kakihara
Maui Region Office
James S. Kaneshiro
Enterprise Operations
Services Division
Kent R. Lau
Main Banking Region
Tricia K.F. Lee
Corporate Compliance Division
George C.K. Leong, Jr.
Commercial Real Estate Division
Kenneth L. Miller
Institutional Advisory Services
Jody J. Mukaigawa
Kapi‘olani Banking Region
Candice Y. Naito
O‘ahu Region
Conrado Figueroa
Western Region Dealer Center
Lea M. Nakamura
Risk Management Group
Paulette L. Franklin
Credit Administration Division
Vernon Y. Nakamura
Credit Administration Division
John S. Fujimoto
Controller’s Division
Cameron W. Nekota
Bank Properties Division
24
Michael T. Nishida
Enterprise Information Security
Jeffrey S. Ventura
Windward Area
Daniel A. Nishikawa
Commercial Real Estate Division
Glenn N. Wachi
Kapi‘olani Banking Region
Todd T. Nitta
Corporate Banking Division
Wesley M. Wakamura
Kapi‘olani Banking Region
Todd D. Noia
Credit Administration Division
Derek M.S. Wong
Credit Products Department
Glen R. Okazaki
Service Delivery Division
Kendall J.H. Wong
Kalihi Area
Anna Ono
Audit Division
Vernon Y.C. Wong
Wealth Advisory Division
Carol M. Ono
Human Resources Division
Brian K. Yamase
Kaua‘i Region Office
Mark F. Oyadomori
Wealth Advisory Division
Eric B. Yee
Private Banking Division
David K. Rair
Legal & Corporate Services
Division
Sherri Y. Yim
Management Reporting &
Analysis Division
Joyce Y. Sakai
Commercial Real Estate Division
Eliza E. Young
Credit Department
Alethea A. Seto
Sales, Service & Retail Training
Division
Guy J. Shindo
Commercial Real Estate Division
Gregory J. Sitar
Kāhala Area
Susan A. Strong
Omni Channel Center
Wayne K. Suehiro
University Area
Lynn M. Takahashi
Private Banking Division
Mark S. Taylor
Risk Analysis Division
Michael G. Taylor
Wealth Advisory Division
Robert N. Taylor
Risk Management Group
Elizabeth L. Tom
Private Banking Division
Lisa A. Tomihama
Main Banking Region
Michael A. Tottori
Wealth Advisory Division
Jaylene S.L. Tsukayama
Digital Banking Division
Edward G. Untalan
Guam & CNMI Region Office
First Hawaiian
Leasing, Inc.
Robert S. Harrison
Chairman
Lance A. Mizumoto
Chief Executive Officer
Darlene N. Blakeney
President
Brian Y.C. Lau
Senior Vice President
Bishop Street Capital
Management
Kenneth L. Miller
Chairman, Chief Executive
Officer, Chief Investment Officer
& Director of Equity
Jennifer C.M. Carias
President
Ryan S. Ushijima
Senior Vice President &
Chief Compliance Officer
First Hawaiian Bank
Foundation
Robert S. Harrison
Chairman
Walter A. Dods, Jr.
Chairman Emeritus
Sharon S. Brown
President
K A U A ‘ I ( 7 )
K A U A ‘ I ( 7 )
Lihu‘e
Lihu‘e
O ‘ A H U ( 3 4 )
O ‘ A H U ( 3 4 )
Kailua
Kailua
Honolulu
Honolulu
W
W
N
N
S
S
E
E
M A U I ( 7 )
M A U I ( 7 )
Lāna‘i City
Lāna‘i City
Wailuku
Wailuku
L Ā N A ‘ I ( 1 )
L Ā N A ‘ I ( 1 )
G U A M ( 3 )
G U A M ( 3 )
Hagatna
Hagatna
T H E 6 2 B R A N C H E S o f
T H E 6 2 B R A N C H E S o f
H A W A I ‘ I ( 8 )
H A W A I ‘ I ( 8 )
S A I P A N ( 2 )
S A I P A N ( 2 )
F I R S T H A W A I I A N B A N K
F I R S T H A W A I I A N B A N K
Hilo
Hilo
BOARDS O F DIRECTORS
Kailua-Kona
Kailua-Kona
Robert S. Harrison
Chairman and Chief Executive Officer,
First Hawaiian Bank
Allen B. Uyeda
Chief Executive Officer (Retired),
First Insurance Company of Hawaii, Ltd.
First Hawaiian, Inc. Board of Directors
First Hawaiian Bank Board of Directors
Robin K. Campaniano
President and Chief Executive
Officer (Retired),
AIG Hawaii Insurance Company
Matthew J. Cox
Chairman and Chief Executive Officer,
Matson, Inc.
Robert P. Hiam
President and Chief Executive
Officer (Retired),
Hawaii Medical Service Association
W. Allen Doane
Chairman and Chief Executive Officer (Retired),
Alexander & Baldwin, Inc.
Donald G. Horner
Partner,
Malu Investments
Walter A. Dods, Jr.
Chairman and Chief Executive Officer (Retired),
First Hawaiian Bank
David C. Hulihee
Chairman and President,
Royal Contracting Company, Ltd.
Bert T. Kobayashi, Jr.
Senior Partner,
Kobayashi, Sugita & Goda
Faye W. Kurren
President and Chief Executive
Officer (Retired),
Hawaii Dental Service
Leighton S. L. Mau
President and Chief Operating Officer,
Waikiki Business Plaza, Inc.
Michael Shepherd
Chairman,
BNP Paribas USA, Inc., BancWest
Corporation, and Bank of the West
Eric K. Shinseki
General,
U.S. Army (Retired)
Michael K. Fujimoto
Chairman and Chief Executive Officer,
HPM Building Supply
Thibault Fulconis
Vice Chairman,
BancWest Corporation
Chief Operating Officer and Vice Chairman,
Bank of the West
Gérard Gil
President,
GSG Consulting
Senior Advisor (Retired),
BNP Paribas
Jean-Milan Givadinovitch
Head of Op.RISK Framework
Design and Strategy,
BNP Paribas
FSC
MEMBER FDIC
Michel Vial
Head of Group Strategy and Development,
BNP Paribas
Jenai S. Wall
Chairman and Chief Executive Officer,
Foodland Super Market, Ltd.
Craig Scott Wo
Owner/Executive Team,
C. S. Wo & Sons, Ltd.
Albert M. Yamada
Vice Chairman, Chief Administrative Officer
and Secretary (Retired),
First Hawaiian Bank
Eric K. Yeaman
President and Chief Operating Officer,
First Hawaiian Bank
Directors who retired
during 2017:
Paul Mullin Ganley
Warren H. Haruki
John A. Hoag
Dr. Richard R. Kelley
Dee Jay A. Mailer
John K. Tsui
S H A R E H O L D E R I N F O R M A T I O N
CORPORATE HEADQUARTERS
First Hawaiian, Inc.
999 Bishop Street, Honolulu, Hawai‘i 96813
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company LLC,
6201 15th Avenue, Brooklyn, NY 11219
help@astfinancial.com
COMMON STOCK LISTING: FHB
The common stock of First Hawaiian, Inc. is traded on the Nasdaq
Global Select Market under the ticker symbol FHB.
INQUIRIES
Shareholders with questions about stock transfer services
or share holdings may contact American Stock Transfer & Trust
Company LLC, by calling (800) 937-5449, visiting www.astfinancial.
com, or via email at help@astfinancial.com. Beneficial stockholders
with shares held by a broker in the name of a brokerage house
should contact their broker.
Investor Relations Contact:
Kevin Haseyama
(808) 525-6268 | ir@fhb.com
Media Contact:
Susan Kam
(808) 525-6254 | skam@fhb.com
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This Annual Report 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. Although
we believe that the expectations reflected in these forward-
looking statements are reasonable as of the date made, actual
results may prove to be materially different from the results
expressed or implied by the forward-looking statements. For a
discussion of some of the risks and important factors that could
affect our future results and financial condition, see our Annual
Report on Form 10-K for the Year Ended December 31, 2017 filed
with the Securities and Exchange Commission.