FHB · First Hawaiian, Inc.

Management Discussion of Financial Condition and Results of Operations

First Hawaiian, Inc. reported net income of $67.8 million for Q1 FY2026, up 14.4% from $59.2 million in Q1 FY2025. This growth reflects both improved operating leverage and favorable tax outcomes: the decrease in the provision for income taxes was primarily due to an increase in tax credits. Diluted earnings per share rose to $0.55, a 17.0% increase year-over-year, aligning with the underlying net income trend and consistent with the Company’s capital return discipline.

Net cash provided by operating activities totaled $159.7 million, a significant increase from $36.7 million in the prior-year quarter. While higher net income contributed meaningfully, the change also reflects timing-related movements in accruals and other liabilities — consistent with normal operational cadence rather than structural shifts. The Company continues to manage liquidity and funding within established risk parameters, guided by its interest rate risk management objective to support net interest income while maintaining adequate funding and liquidity.

Credit and market risk remain central to the Company’s risk framework. Management identifies credit risk, market risk, liquidity risk management, capital management, and operational risk as the most prominent exposures. Commercial real estate lending in Hawaii continues to be shaped by structural constraints — including limited supply at commercially attractive locations, long development timelines, and heightened sensitivity to interest rate changes. In response, the Company maintains a qualitative overlay in its allowance for credit losses to address potential macroeconomic impacts, while monitoring broader factors such as economic uncertainty, inflation, and geopolitical instability that influence expected credit losses.