2 0 1 8 A N N U A L R E P O R T
TA BLE O F CONT ENT S
1 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)
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
$20.7 billion at December 31, 2018. The bank has 55 branches
throughout Hawai‘i, three in Guam and two in Saipan. The bank
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.
ON THE COVER: The Tom Moffatt Waikīkī Shell in Honolulu,
September 15, 2018—As part of First Hawaiian’s 160th Anniversary
celebration, the bank sponsored the “Kapono & Friends Concert”
featuring the music of Henry Kapono, accompanied by Hawai‘i’s
most iconic musicians for an unforgettable evening under the stars
at the Waikīkī Shell for bank employees and the community.
Milestones: 160 Years Young,
And Fully Independent Again
The First Hawaiian story started 160 years ago when Honolulu
businessman Charles Reed Bishop founded Bishop & Co., the first
successful bank in Hawai‘i. Bishop & Co.’s ultimate successor company,
First Hawaiian, Inc. (First Hawaiian), is the parent of First Hawaiian Bank,
the largest and most profitable financial institution in Hawai‘i.
Since its founding in 1858, the company has grown and
thrived while operating within a monarchy, a republic,
a U.S. territory, and the 50th State. Twenty years ago,
we joined forces with global bank BNP Paribas (BNPP)
by merging with its California subsidiary, Bank of the
West. In 2001, First Hawaiian became a wholly owned
subsidiary of BNPP.
Then, in 2016, BNPP held an Initial Public Offering (IPO)
of our common stock with the intention of selling all of
its interest in First Hawaiian over time; we began the
process of making our bank a separate, standalone
company once again. That process accelerated in 2018
when three more BNPP secondary stock offerings
further reduced its ownership share. Those sales,
combined with First Hawaiian’s repurchase of nearly
4.8 million shares directly from BNPP, reduced its
ownership position from 62% to 18.4% as 2018 ended.
Early in 2019, BNPP made one final stock offering,
fully exiting its ownership in First Hawaiian’s common
stock and making us once again a fully independent
local bank.
Reaching this important milestone in our company’s
history has been a major undertaking requiring close
collaboration across the bank. We continued to perform
well during this transition, as our 2018 financial
results demonstrate.
As a result of its stock sales, the number of BNPP-
nominated directors on our nine-member board
decreased from five to two in 2018. The remaining
BNPP-nominated directors departed in early 2019.
Mahalo and merci to our friends at BNPP for their
strong support.
1
Robert S. Harrison
On January 23, 2019, First Hawaiian’s Board of Directors
increased our quarterly dividend by 8.3% to $0.26 per share,
the third dividend increase in the 29 months since our IPO.
These increases and our share repurchases demonstrate
our intent to distribute capital to our shareholders.
Including dividends and repurchases, our company has
returned $413.5 million to shareholders since the 2016
IPO—$262.8 million in 2018 alone.
High Rankings in 2018
First Hawaiian Bank placed ninth in “Best Banks in America
2018,” Forbes magazine’s ranking of the 100 largest publicly-
traded U.S. banks and thrifts based on their growth, credit
quality, and profitability.
First Hawaiian Bank also won the 2018 SBA Lender of the
Year—Category 1 award from the U.S. Small Business
Administration Hawai‘i District. It’s our second straight win.
For the seventh consecutive year, First Hawaiian Bank was
named one of the “Best Places to Work in Hawaii” by Hawaii
Business magazine.
2
We were the first Hawai‘i company
to win the ATD BEST Award
from the Association for Talent
Development, which has 36,000
members from 120 countries. The honor recognized
First Hawaiian Bank’s employee training programs for
Building talent. . . Enterprise-wide. . . Strategically driving
a. . . Talent development culture.
For the past 24 years, through nine consecutive
examination cycles, we earned the highest FDIC rating
(“Outstanding” ) for our performance under the Community
Reinvestment Act (CRA). This federal law encourages
banks to support the credit and financial service needs
of the entire community, including low- and moderate-
income neighborhoods.
Strategic Plan
The BEST award praised our successful programs to strengthen employee
engagement. A menu of training opportunities helps employees at all levels
broaden their knowledge and leadership skills, including year-long Advanced
Leaders’ and Emerging Leaders’ Programs.
Emphasis on employee engagement is just one facet of our Strategic Plan,
which sets our sights on: 1) being #1 in customer service among banks
in Hawai‘i; 2) being the best place to work among banks in Hawai‘i; and 3)
growing loans, deposits, wealth management revenue, and net income for the
benefit of all our stakeholders.
First Hawaiian Bank was the first local bank in Hawai‘i to offer voice banking
through Amazon’s Alexa, one example of using new digital technology
to enhance the customer experience of consumer, business, and wealth
management customers. For consumers, we continue to enhance our online
and mobile features which include mobile deposit capture, expedited bill
payment, personal financial management tools, snap-to-pay (taking a picture
of your bill and paying remotely), and biometric security (fingerprint and facial
recognition). The new online and mobile platform for commercial customers
supports multiple users, ACH and wire payments, exportable reports, and
improved security. The newly upgraded digital wealth management platforms
provide secure access to an individually tailored home page with critical
resources at our customers’ fingertips to better manage and achieve their
financial goals.
Our customer experience solution gives us real-time feedback from customers,
whether they interact with First Hawaiian Bank in person, online, or by phone.
This gives us a better insight into our customers’ experience, resulting in
deeper relationships, more leads, and customer satisfaction and net promoter
scores that far exceed industry averages.
Economic Expansion Continues
Thanks to another record tourism performance, Hawai‘i enjoyed its ninth
consecutive year of economic expansion in 2018. As the cycle matures, rates
of growth may taper off going forward, but both State government economists
and the University of Hawai‘i Economic Research Organization expect Hawai‘i’s
expansion to continue until at least 2021, with increases in GDP, visitor arrivals
and spending, real personal income, and jobs.
Over the first three quarters of 2018, the value of private building permits
and government contract awards rose, helping to fill the pipeline for future
construction work of all kinds. We at First Hawaiian believe an increase in housing
construction of all types—and especially workforce and affordable housing—
would benefit the industry and the social fabric.
Hawai‘i’s seasonally-adjusted unemployment rate has hovered at or below 2.5%
since early 2017. The year-end rate of 2.5% was among the three lowest state
unemployment rates in the nation.
Strong Loan Growth +
Higher Margin +
Strong Economy =
Record Earnings
Our record-setting financial
performance in 2018 was driven by
strong loan growth, higher net interest
margin, exceptional asset quality, and
durable economic strength in Hawai‘i,
where we are the clear banking market
leader. We remain the largest Hawai‘i
bank based on net income, assets,
loans, and deposits.
Net income was a record $264.4
million, up 43.9% from 2017, due in part
to a $47.6 million charge to net income
in 2017 as a result of that year’s tax
reform bill. In 2019, the bank completed
balance sheet restructuring transactions
that are expected to improve our
overall financial position. Core net
income(1) totaled $286.7 million, up 24%
from 2017.
Loans and leases reached a record
$13.1 billion, up 6.5%, thanks to
increases in commercial real estate,
residential real estate, consumer and
commercial and industrial lending.
Deposits totaled $17.2 billion, down
2.6% due to a planned $962 million
reduction in higher-cost government
agency time deposits.
Total assets were a record
$20.7 billion, up 0.7%.
Net interest margin expanded from
2017 by 17 basis points to 3.16%.
(1)Core net income excludes certain
gains, expenses and one-time items.
See GAAP/Non-GAAP Reconciliation on
Page 20 of this Annual Report.
3
The U.S. military remains a strong economic force in both
Hawai‘i and Guam; with O‘ahu hosting Pearl Harbor Naval
Shipyard, Army and Marine combat troops, and Pacific
headquarters for all service branches. U.S. defense spending
remains strong here due to our strategic location.
Despite headwinds caused by natural disasters (flooding, a
volcanic eruption, hurricane threats), the resilient tourism
industry posted its seventh straight record year. Visitor
arrivals were up 5.9% from 2017 to nearly 10 million, helped
by added airline seat capacity. Visitor expenditures rose 6.8%.
Philanthropy & Volunteerism
While our economy and diverse population are undoubted
strengths, human and social needs still need to be met.
First Hawaiian Bank and its employees play a leading role in
doing so:
} First Hawaiian Bank, the First Hawaiian Bank Foundation,
and our employees donated $4.25 million to about
400 non-profit organizations. We gave special help to
neighborhoods on Kaua‘i, East O‘ahu, and Hawai‘i Island
that were hit by devastating natural disasters.
} We again ranked #1 among Hawai‘i for-profit firms in the
2018 Most Charitable Companies list created by Hawaii
Business magazine. Our cash donation total was 75%
higher than that of the second-place company.
} To mark our 160th Anniversary, we donated $160,000 to
the Bernice Pauahi Bishop Museum, established in 1889
by our bank’s founder, Charles Reed Bishop, to honor
his late wife, Princess Pauahi, the last direct descendant
of King Kamehameha I.
} Our workforce and retirees donated a record of over
$821,000 to 32 charities in Hawai‘i, Guam, and Saipan
through our annual Kōkua Mai employee giving
campaign. For the third consecutive year, 99% of
employees contributed.
} Our Community Care employee volunteer service
program aids non-profits which serve those most in
need. Nearly 1,000 employee volunteers worked more
than 7,000 hours on the bank’s 23 Community Care
projects, turning out on Saturday mornings to assist
schools, disaster victims, food banks, the Kahauiki
Village for homeless families, youth groups, and
environmental and health organizations.
Aloha & Mahalo
We bid farewell to the BNP Paribas-nominated directors
who left our board: Xavier Antiglio, Thibault Fulconis,
Gérard Gil, Jean-Milan Givadinovitch, Michael Shepherd, and
Michel Vial. In turn, prominent local business leaders—Faye
W. Kurren, Jenai S. Wall, and C. Scott Wo—were named
to the First Hawaiian, Inc. board, creating a majority of
independent directors. Faye, Jenai, and Scott continue to
serve on the First Hawaiian Bank board as well.
Also, Gen. Eric K. Shinseki retired from the bank’s board
and was succeeded by Mark Teruya. We thank all of these
former directors for their service and wise counsel.
Ravi Mallela, our new Chief Financial Officer, has joined
our Senior Management Committee. He brings extensive
corporate finance experience and expertise.
We celebrated our 160th anniversary in 2018 by promoting
“160 Years of Yes.” As we embark on this new chapter in our
bank’s history, we will continue to focus on strengthening
our customer relationships, delivering outstanding
customer experiences, and being the top bank in the
markets we serve. I am confident that the best is yet to
come in Year 161 and beyond.
Aloha,
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 amounts)
C O R E N E T I N C O M E (IN MILLIONS) (1)
2018 Core Net Income (Non-GAAP): $286.7 million
5-Year Compound Annual Growth Rate: 6.9%
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A S S E T S (IN BILLIONS)
Total Assets (12/31/18): $20.7 billion
5-Year Compound Annual Growth Rate: 3.9%
$20
$18
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$14
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D E P O S I T S (IN BILLIONS)
Total Deposits (12/31/18): $17.2 billion
5-Year Compound Annual Growth Rate: 4.8%
$18
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(1) These amounts are Non-GAAP financial measures. See GAAP/Non-GAAP Reconciliation on Page 20 of this Annual Report
for reconciliations of core net income, core basic earnings per share and core diluted earnings per share to comparable GAAP measures.
(2) These ratios are Non-GAAP financial measures. For an explanation of how these ratios are computed, as well as a reconciliation of the components of such ratios to comparable
GAAP measures, see GAAP/Non-GAAP Reconciliation on page 20 of this Annual Report, including Notes (1) through (4) in that section.
5
Year Ended December 31,20182017INCOME STATEMENT DATAInterest income$ 646,051$ 570,768Interest expense79,73341,964Net interest income566,318528,804Provision for loan and lease losses22,18018,500Net interest income after provision for loan and lease losses544,138510,304Noninterest income178,993205,605Noninterest expense364,953347,554Income before provision for income taxes358,178368,355Provision for income taxes93,784184,673Net income$ 264,394$ 183,682Core adjustments (Non-GAAP)(1)22,31746,684Core net income (Non-GAAP)(1)$ 286,711$ 230,366Core basic earnings per share (Non-GAAP)(1)$ 2.09$ 1.65Core diluted earnings per share (Non-GAAP)(1)$ 2.09$ 1.65Basic weighted-average outstanding shares136,945,134139,560,305Diluted weighted-average outstanding shares137,111,420139,656,993OTHER FINANCIAL INFO / PERFORMANCE RATIOSNet interest margin3.16%2.99%Core net interest margin (Non-GAAP)(2)3.16%2.99%Efficiency ratio48.96%47.32%Core efficiency ratio (Non-GAAP)(2)46.59%47.02%Return on average total assets1.31%0.92%Core return on average total assets (Non-GAAP)(2)1.42%1.16%Return on average total stockholders’ equity10.76%7.24%Core return on average total stockholders’ equity (Non-GAAP)(2)11.67%9.08%BALANCE SHEET DATALoans and leases$ 13,076,623$ 12,277,925Allowance for loan and lease losses141,718137,253lnterest-bearing deposits in other banks606,801667,560Investment securities4,498,3425,234,658Goodwill995,492995,492Total assets20,695,67820,549,461Total deposits17,150,06817,612,122Total liabilities18,170,83918,016,910Total stockholders’ equity2,524,8392,532,551Book value per share18.7218.14ASSET QUALITY RATIOSNon-performing loans and leases / total loans and leases0.05%0.08%Allowance for loan and lease losses / total loans and leases1.08%1.12%Net charge-offs / average total loans and leases0.14%0.14%CAPITAL RATIOSCommon Equity Tier 1 capital ratio11.97%12.45%Tier 1 capital ratio11.97%12.45%Total capital ratio12.99%13.50%Tier 1 leverage ratio8.72%8.52%Total stockholders’ equity to total assets12.20%12.32%Tangible stockholders’ equity to tangible assets 7.76%7.86% 6
B U S I N E S S B A N K I N G
Roy’s Restaurants and
Hawai‘i Food & Wine Festival
Roy and Denise Yamaguchi, Founders
HO N O LULU , O ‘A H U
“As a young chef, I was inspired to create dishes that
reflected my roots in Japan and Hawai‘i. I opened my first
Roy’s in Honolulu in 1988, and today we have more than
30 restaurants from Japan to the East Coast.
“First Hawaiian Bank has always been a part of our success,
helping us achieve bigger goals and better results.
Restaurant financing is notoriously difficult, but our banker
at the time, Steve Williams, went to bat for our first loan
and vouched for us. That means a lot, especially as a
business owner.
“Since then, we’ve done a lot of banking with First Hawaiian
— and only with First Hawaiian. Today, our banker is
Bob Harrison, the CEO at First Hawaiian, and he has
championed Roy’s from the very beginning. He listens to
every idea and gives us honest, valuable advice, to ensure
that Roy’s Restaurants is at the top of its game.
“When we created the Hawai‘i Food and Wine Festival, we
were passionate about developing a non-profit with a
goal to put a spotlight on Hawai‘i and give back to our
community and State. The bank understood our vision and
helped us achieve our goal.
“First Hawaiian has been a presenting sponsor since 2015
and we couldn’t ask for a better partner. Thanks to the
bank’s support, we’ve been able to raise money for the
Hawai‘i Agricultural Foundation, Kapi‘olani Community
College, Culinary Institute of the Pacific, and other
organizations, all in support of our community.
“At the end of the day, personal relationships count more
than anything else. That’s why we first chose to work with
and continue to choose First Hawaiian every day. Having
that kind of communication, trust and honesty with your
bank is a real gift. You can’t buy that.”
– Roy and Denise Yamaguchi
7
8
C O R P O R A T E B A N K I N G
HPM Building Supply
Michael Fujimoto, Executive Chairman
Jason Fujimoto, President & CEO
HI LO , HA WA I ‘I I S LA ND
“HPM Building Supply has been building homes on Hawai‘i
for nearly a century, ever since my great-grandfather,
Kametaro Fujimoto, founded the business in Hilo in 1921.
In addition to being a multigenerational company, we’re
also employee owned.
“After 60 years together, First Hawaiian Bank has become
part of our family. We know they will be there for us
during good times and bad. That is why relationships
mean the world to us.
“When building activity declined during the Great Recession,
our business struggled. It was one of the most challenging
times in HPM’s long history. First Hawaiian trusted our
management team, stood by us and increased our short-
term financing, allowing us to ride out the recession and
expand the business geographically. It was an act of loyalty
and faith that we will always be grateful for.
“Now that our business has grown, First Hawaiian provided
us with everything we needed to take advantage of our
success. We were able to resize our portfolio of services
to meet the changing needs of our business over time.
We now work with the bank on short-term and mid-term
financing, merchant services, a corporate card program
— it’s not uncommon for us to be in touch with our First
Hawaiian team on a daily basis.
“Serving on First Hawaiian’s board of directors has helped
me get to know their leaders and understand their values.
Above all, they are committed to being a relationship bank,
and it shows in every interaction and decision we make.
“As a customer, I know that First Hawaiian makes me
feel like more than just a number or statistic. They
understand HPM’s business, our character, who we are
as businesspeople and individuals. That’s the kind of
personal relationship we value most.”
– Michael Fujimoto
99
value most.”
10
S M A L L B U S I N E S S B A N K I N G
Salvage Public
Joseph Serrao and Nāpali Souza, Owners
K AI M UK Ī , O‘ AHU
“We started Salvage Public as a way to create and share
stories from our past. Our name and clothing designs are
our way of salvaging different experiences and memories
from childhood.
“At first, we were just experimenting with artwork and
typography and making graphic T-shirts. As we started
to grow the business and made the transition from
our corporate jobs to build this new brand, we became
First Hawaiian customers through our old friend,
Ryan Woodward.
“Ryan knew us, and more importantly, he believed in
what we were doing. To have that support from our bank
was huge, especially in the beginning when you are just
starting out.
“In our second year, we expanded into Japan and had to
develop two collections at once. We got a line of credit
through Ryan and it became a turning point in our
relationship with First Hawaiian. Here, we had a banker
who treated our venture seriously and came through for
us during a time when we were looking to grow.
“That level of service has kept us as a customer these past
few years, starting with Ryan and continuing with our
current banker, Greg Hackler. Our relationship with Greg is
very much like a friendship. As a small business, our needs
are always changing, but Greg keeps us top of mind and
lets us know when new opportunities come up.
“With First Hawaiian, we feel like we’re part of a community.
We go to the branch right down the street almost every
day to make deposits. But we also have an online platform
we can access when we need to. The convenience and
service works on a variety of levels. It feels like we have
more people looking out for us—like ‘ohana.”
– Joseph Serrao and Nāpali Souza
11
12
P E R S O N A L B A N K I N G
Kai Lenny
Professional Waterman, Eight-Time Stand-Up
Paddleboard World Champion
P Ā‘ I A, MA UI
“I was named for the ocean, and it’s where I feel most at
home. Today I’m lucky enough to make my living on the
water as a professional athlete, participating in big-wave
surfing, stand-up paddleboarding, windsurfing, kitesurfing,
and other competitions around the world.
“Ever since I rode my first wave at age four, it seems like
First Hawaiian Bank has been right there with me. When
I was a little kid, I was part of a program that gave me an
“ambassadorship” with the bank. I even have old photos
with the FHB logo on one of my first boards!
“When I turned 15 and needed a credit card to survive
traveling on my own, I officially became a customer. My
dad had such a good relationship with the bank that it
was an easy choice — they felt like family already.
“From the moment I opened my first account, I’ve been
impressed with First Hawaiian’s service and flexibility. They
make sure I have everything I need to get across the globe
and back. You never know when you’ll run into an issue in
another country and need to access your accounts quickly.
It helps to know I can call First Hawaiian anytime, even
with a 12-hour time difference, and have someone on the
other line.
“I’ve always felt it was the only bank I want to work with
because they go above and beyond in everything they
do. As I’ve grown, they’ve helped me with loans and other
accounts, with exceptional service and integrity. Walking
into the branch, I love the family atmosphere — there’s a
lot of talk story. First Hawaiian is a part of my ‘ohana, they
support me and want to see me succeed.”
13
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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
Henry Kapono Foundation
Henry and Lezlee Kapono, Founders
HO N O LULU , O ‘A H U
“All I ever wanted to do was play music. Music has been
such a big part of my life, from singing in church as a kid,
to being a part of Cecilio & Kapono, to performing today.
It gives me an opportunity to share my experience with
people and make them feel good.
“Lezlee and I met while volunteering for a non-profit
organization, and eventually became business partners
and life partners. In 2001, we opened Kapono’s, a
restaurant and music venue at Aloha Tower. We both had
personal banking relationships with First Hawaiian, which
naturally evolved into a business banking relationship with
our banker, Greg Sitar.
“When the restaurant struggled during the first couple
of years, we expected to have problems working with
our bank, but our relationship with Greg instead grew
stronger. He regularly sat down with us and helped
us figure out what we needed to do to overcome the
obstacles we were facing. He saw that we were passionate
about what we were doing and gave us the support and
options to organize the loan, allowing us to leverage our
strengths and be successful.
“With FHB we were able to grow our business into new
opportunities like the Henry Kapono Foundation. Greg saw
the work we were doing in the community and suggested
we think about starting a foundation to support local arts,
culture and music, something we successfully launched in
2018. He’s always helping us think about the next chapter
in our lives.
“Our relationship came full circle for First Hawaiian’s 160th
Anniversary. First Hawaiian helped produce ‘The Songs
of C&K’ commemorative album and sponsored Kapono
& Friends concerts on O‘ahu and Maui. A portion of the
proceeds from the album and concerts benefits our
foundation so we can help others the way First Hawaiian
helped us. Thanks to FHB and Greg, we know the best is
yet to come."
– Henry Kapono
15
C A R I N G f o r C O M M U N I T Y
Giving back can take many forms.
In celebration of First Hawaiian Bank’s 160th
Anniversary, employees set out to volunteer
in 160 different ways in 2018.
16
C A R I N G f o r C O M M U N I T Y
Some chose to take the field as volunteer soccer coaches, others spent
time tutoring students or serving on non-profit boards. On their own time,
many First Hawaiian employees found ways to make a difference within
their community.
Other employees lent a helping hand through the bank’s employee volunteer
program, Community Care. With Community Care events on O‘ahu, Maui,
Kaua‘i, Hawai‘i Island, Saipan and Guam, every employee had a chance
to participate.
Nearly 1,000 employees came out to 23 Community Care events in 2018,
working side-by-side to beautify schools and the new Kahauiki Village
community, help families in need, and support local causes. They packed food
and clothes for those affected by the volcano and hurricane disasters. They
got their hands dirty planting trees, painting classrooms, and even waded
through knee-deep water to rebuild a historic fishpond wall at He‘eia.
In addition to putting in thousands of hours of volunteer service, our
employees showed their generosity in other ways. The annual Kōkua Mai
employee giving campaign raised over $821,000 for 32 charities in 2018. For
the third straight year, 99% of our 2,200 First Hawaiian team members chose
to participate, reflecting a deep commitment to community giving.
Even retired First Hawaiian bankers continued to live the bank’s culture of
caring, with more than 200 retirees donating $88,000 to support Kōkua Mai.
Caring for community is deeply ingrained in First Hawaiian’s core values. It’s a
proud tradition our employees continue today by donating their time, talents
and resources to the communities we serve.
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 and long-term borrowings
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
Other-than-temporary impairment (OTTI) losses on
available-for-sale debt 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,
2018
2017
$ 529,877
$ 462,675
107,123
9,051
646,051
72,976
6,757
79,733
566,318
22,180
544,138
32,036
65,716
38,316
31,324
9,217
(24,085
)
26,469
178,993
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
167,162
163,086
49,775
27,330
17,714
14,217
4,813
24,860
59,082
364,953
358,178
93,784
45,011
23,485
17,247
14,907
6,191
23,363
54,264
347,554
368,355
184,673
$ 264,394
$ 183,682
22,317
46,684
$ 286,711
$ 230,366
$ 2.09
$ 1.65
Core diluted earnings per share (Non-GAAP)(1)
$ 2.09
$ 1.65
Basic weighted-average outstanding shares
Diluted weighted-average outstanding shares
136,945,134
137,111,420
139,560,305
139,656,993
Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, 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 .
(dollars in thousands)
A S S E T S
Year Ended December 31,
2018
2017
L O A N S A N D L E A S E S (I N BI LLI ON S)
Total Loans & Leases (12/31/18): $13.1 billion
5-Year Compound Annual Growth Rate: 6.5%
Cash and due from banks
$ 396,836
$ 367,084
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
Mortgage servicing rights
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
Long-term borrowings
Retirement benefits payable
Other liabilities
Total liabilities
Stockholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss, net
Treasury stock
606,801
4,498,342
13,076,623
141,718
12,934,905
304,996
751
48,920
446,076
995,492
16,155
446,404
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
$ 20,695,678
$ 20,549,461
$ 11,142,127
$ 11,485,269
6,007,941
17,150,068
600,026
127,909
292,836
6,126,853
17,612,122
34
134,218
270,536
18,170,839
18,016,910
1,397
2,495,853
291,919
(132,195
)
(132,135
)
1,396
2,488,643
139,177
)
(96,383
)
(282
$13
$12
$11
$10
$9
$8
$7
$6
$5
$4
$3
$2
$1
.
1
3
1
$
.
3
2
1
$
.
5
1
1
$
.
7
0
1
$
.
0
0
1
$
.
5
9
$
3
1
0
2
4
1
0
2
5
1
0
2
6
1
0
2
7
1
0
2
8
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
As of 12/31/18
13%
Consumer
34%
Residential
Real Estate
24%
Commercial
28%
Commercial
Real Estate
Total stockholders’ equity
2,524,839
2,532,551
1% Other
Total liabilities and stockholders’ equity
$ 20,695,678
$ 20,549,461
Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, for the Consolidated
Financial Statements, including Report of Independent Registered Public Accounting Firm, thereon.
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
OTTI losses on available-for-sale debt securities
Gains on sale of real estate and other assets
Core noninterest income (Non-GAAP)
Noninterest expense
Loss on litigation settlement(a)
One-time items(b), (c)
Core noninterest expense (Non-GAAP)
Net income
OTTI losses on available-for-sale debt securities
Gains on sale of real estate and other assets
Loss on litigation settlement(a)
One-time items(c)
Tax reform bill
Tax adjustments(d)
Total core adjustments
Core net income (Non-GAAP)
Basic earnings per share
Diluted earnings per share
Year Ended December 31,
2018
2017
$ 566,318
$ 528,804
$ 566,318
$ 528,804
$ 178,993
$ 205,605
24,085
—
—
(6,922
)
$ 203,078
$ 198,683
$ 364,953
$ 347,554
(4,125
)
(2,267
)
358,561
—
(5,457
)
342,097
$ 264,394
$ 183,682
24,085
—
4,125
2,267
—
(8,160
)
22,317
—
(6,922
)
—
5,457
47,598
551
46,684
$ 286,711
$ 230,366
$ 1.93
$ 1.32
$ 1.93
$ 1.32
Core basic earnings per share (Non-GAAP)
$ 2.09
$ 1.65
Core diluted earnings per share (Non-GAAP)
$ 2.09
$ 1.65
Basic weighted-average outstanding shares
$ 136,945,134
$ 139,560,305
Diluted weighted-average outstanding shares
$ 137,111,420
$ 139,656,993
(a) The Company reached an agreement in principle to resolve a putative class action lawsuit alleging that the Bank improperly charged certain overdraft fees.
In connection with the anticipated settlement agreement, the Company recorded an expense of approximately $4.1 million during the year ended December 31, 2018.
(b) Adjustments that are not material to our financial results have not been presented for certain periods.
(c) One-time items for the year ended December 31, 2018 included the loss on our funding swap as a result of a decrease in the conversion rate of our Visa Class B
restricted shares sold in 2016 as well as public offering-related costs. One-time items for the year ended December 31, 2017 included salaries and benefits stemming
from the Tax Act and public offering-related costs.
(d) Represents the adjustments to net income, tax effected at the Company's effective tax rate for the respective period, exclusive of one-time Tax Act 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.
Note (5): Core basic earnings per share and core diluted earnings per share are computed by dividing core net income by the weighted average number of common shares
outstanding for the period and, in the case of core diluted earnings per share, assuming conversion of potentially dilutive common stock equivalents.
20
P H I L A N T H R O P Y
"We owe our longevity and
success to First Hawaiian’s
many leaders."
“At Child and Family Service, our mission is strengthening
families and fostering the healthy development of children.
We work with the whole family—from twinkle to wrinkle,
from keiki to kūpuna—providing a foundation of support
and human services to people dealing with the toughest
issues on the island.
“Family is who we are, and the people we work with become
a part of our family, too. There’s a strong connection of
‘ohana on both sides.
“As we celebrate our 120th anniversary, we’re reminded of
how special and rare it is to have a banking relationship
that's lasted longer than a century. We’re grateful that our
partnership with First Hawaiian Bank has made it possible
for us to serve the people of Hawai‘i all these years.
“We owe our longevity and success to First Hawaiian’s
many leaders. They’ve served on our board, offered their
expertise, and built a relationship that allows us to do our
best work. First Hawaiian Bank has established a tradition
of supporting us that continues to this day.
First Hawaiian Bank Senior Vice President and Team Leader Lisa
Tomihama (left) with CFS President and CEO Karen Tan.
“Their former CEO, the late John Bellinger, organized the
First Hawaiian Bank Leadership Cup golf fundraiser back
in 1984, which has raised $3.4 million over 31 years. The
generosity of First Hawaiian employees through the bank’s
Kōkua Mai giving campaign is also a tremendous source
of support for the work at CFS. It’s not just the actions of
the bank as a whole, but the personal generosity of their
employees, that makes our relationship so meaningful.
“When the news first came out about the devastating
impact of the lava flow on the Big Island, we got a call
from First Hawaiian. Their leaders were concerned about
the community and wanted to support our effort with a
$50,000 donation to provide direct relief to families in need,
especially for our keiki.
“That demonstrates the level of care and commitment First
Hawaiian has for Hawai‘i. They don't wait to be asked. It’s
a very special perspective for a bank to have, but First
Hawaiian is more than a bank. It’s an organization that puts
community first.”
— Karen Tan, President & CEO, Child & Family Service
21
SENIOR MANAGEMENT
22
LEFT TO RIGHT:
Ravi Mallela
Executive Vice President & Chief Financial Officer
Iris Y. Matsumoto
Executive Vice President, Human Resources Division
Alan H. Arizumi
Vice Chairman, Wealth Management Group
Mitchell E. Nishimoto
Vice Chairman, Retail Banking Group
Robert S. Harrison
Chairman & Chief Executive Officer
Christopher L. Dods
Executive Vice President, Digital Banking
& Marketing Group
Joel E. Rappoport
Executive Vice President, General Counsel &
Corporate Secretary
Lance A. Mizumoto
Vice Chairman & Chief Lending Officer
Ralph M. Mesick
Vice Chairman & Chief Risk Officer
Gina O.W. Anonuevo
Executive Vice President & Chief Compliance Officer
Eric K. Yeaman
President & Chief Operating Officer
23
SENIOR OFFICERS
First Hawaiian Bank
EXECUTIVE
VICE PRESID ENTS
Tony K.F. Au
Consumer Banking 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
Daniel A. Nishikawa
Commercial Real Estate 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
James K. Bourgeois
Data Management Department
Sharon S. Brown
Community Relations Division
Martha L. Camacho
Leeward O‘ahu Region
Derek A. Chang
Corporate Banking Division
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
Financial Planning & Analysis
Division
Glenn T. Goya
Makiki Banking Center
Calvin K. Hangai
Controller
Bradford L. Harrison
Wealth Advisory Division
Jason H. Haruki
Institutional Advisory Services
Kevin S. Haseyama
Finance Group
Gregory S. Hester
IT Division
Jeffrey N.M. Higashi
Pearlridge Banking Center
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
Alyssa S.N. Hostelley
Business Services Division
Stephen E.K. Kaaa
Waikīkī Banking Center
Leland K. Kahawai
Kaua‘i Region Office
Courtney S. Kajikawa
Personal Trust Division
Brian M. Kakihara
Maui Region Office
James S. Kaneshiro
Enterprise Operations
Services Division
Mark D. Kobayashi
Core Platform Conversion
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
Conrado Figueroa
Western Region Dealer Center
Jody J. Mukaigawa
Kapi‘olani Banking Region
Paulette L. Franklin
Credit Administration Division
Candice Y. Naito
Metro O‘ahu Region
John S. Fujimoto
Controller’s Division
24
Steven R. Nakahara
Credit Administration Division
Jeffrey S. Ventura
East O‘ahu/Windward Region
Lea M. Nakamura
Treasury & Investment Division
Glenn N. Wachi
Kapi‘olani Banking Region
Vernon Y. Nakamura
Kalihi Banking Center
Wesley M. Wakamura
Kapi‘olani Banking Region
Cameron W. Nekota
Bank Properties Division
Derek M.S. Wong
Credit Originations Department
Michael T. Nishida
Enterprise Information Security
Kendall J.H. Wong
Kalihi Banking Center
Todd T. Nitta
Corporate Banking Division
Vernon Y.C. Wong
Wealth Advisory Division
Todd D. Noia
Commercial Real Estate Division
Eric B. Yee
Private Banking Division
Glen R. Okazaki
Service Delivery Division
Terence C.Y. Yeh
Credit Administration Division
Anna Ono
Audit Division
Carol M. Ono
Human Resources Division
Mark F. Oyadomori
Wealth Advisory Division
David K. Rair
Legal & Corporate Services
Division
Joyce Y. Sakai
Commercial Real Estate Division
Alethea A. Seto
Sales, Service & Retail Training
Division
Gregory J. Sitar
Kāhala Banking Center
Susan A. Strong
Omni Channel Center
Wayne K. Suehiro
University Banking Center
Lynn M. Takahashi
Private Banking Division
Mark S. Taylor
Core Platform Conversion
Michael G. Taylor
Wealth Advisory Division
Robert N. Taylor
Enterprise Risk
Elizabeth L. Tom
Private Banking Division
Lisa A. Tomihama
Main Banking Region
Michael A. Tottori
Wealth Advisory Division
Jaylene S.L. Tsukayama
Call Center
Edward G. Untalan
Guam & CNMI Region Office
Sherri Y. Yim
Financial Planning & Analysis
Division
Eliza E. Young
Credit Department
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 Corporation
Kenneth L. Miller
Chairman, Chief Executive
Officer, Chief Investment Officer
and Director of Equity
Jennifer C.M. Carias
President
Ryan S. Ushijima
Senior Vice President and
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 3 )
O ‘ A H U ( 3 3 )
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 0 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
F I R S T H A W A I I A N B A N K
Kailua-Kona
Kailua-Kona
H A W A I ‘ I ( 7 )
H A W A I ‘ I ( 7 )
S A I P A N ( 2 )
S A I P A N ( 2 )
Hilo
Hilo
BOARDS O F DIRECTORS
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.
W. Allen Doane
Chairman and Chief Executive Officer (Retired),
Alexander & Baldwin, Inc.
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
Walter A. Dods, Jr.
Chairman and Chief Executive Officer (Retired),
First Hawaiian Bank
Leighton S.L. Mau
President and Chief Operating Officer,
Waikiki Business Plaza, Inc.
Michael K. Fujimoto
Executive Chairman,
HPM Building Supply
Robert S. Harrison
Chairman and Chief Executive Officer,
First Hawaiian Bank
Robert P. Hiam
President and Chief Executive
Officer (Retired),
Hawaii Medical Service Association
Donald G. Horner
Partner,
Malu Investments
Mark K. Teruya
Chairman, President and Chief
Executive Officer,
Armstrong Produce, Ltd.
Allen B. Uyeda
Chief Executive Officer (Retired),
First Insurance Company of Hawaii, Ltd.
Jenai S. Wall
Chairman and Chief Executive Officer,
Foodland Super Market, Ltd.
C. Scott Wo
Owner/Executive Team,
C. S. Wo & Sons, Ltd.
FSC
MEMBER FDIC
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 2018:
Eric K. Shinseki
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:
C ARING — Our employees have a caring spirit, a
sincere compassion, combined with the professional
capability to help customers, each other and
our communities.
C HA RAC TE R — Our employees understand that
our bank was built upon and depends on the trust of
our customers, as well as trust among each other.
C OLLABORATION — We work together and
support each other in serving our customers and
communities while making the bank successful.
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, 2018 filed
with the Securities and Exchange Commission.