First Hawaiian, Inc. Reports Second Quarter 2022 Financial Results and Declares Dividend

Jul 29th, 2022 12:00 EST

HONOLULU, July 29, 2022 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended June 30, 2022.

“I’m pleased to report that we had a very strong second quarter as the bank continued to perform well,” said Bob Harrison, Chairman, President and CEO. “We had good loan and deposit growth, credit quality remained excellent, and we successfully converted to our new core operating system.”

On July 27, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on September 2, 2022, to stockholders of record at the close of business on August 22, 2022.  

Second Quarter 2022 Highlights:

  • Net income of $59.4 million, or $0.46 per diluted share
  • Total loans and leases increased $371.0 million versus prior quarter.
  • Total deposits increased $331.0 million versus prior quarter
  • Net interest margin increased 18 basis points to 2.60%
  • Recorded a $1.0 million provision for credit losses
  • Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet

Total assets were $25.4 billion as of June 30, 2022, compared to $25.0 billion as of March 31, 2022.

Gross loans and leases were $13.3 billion as of June 30, 2022, an increase of $371.0 million, or 2.9%, from $12.9 billion as of March 31, 2022.

Total deposits were $22.6 billion as of June 30, 2022, an increase of $331.0 million, or 1.5%, from $22.3 billion as of March 31, 2022.  

Net Interest Income

Net interest income for the second quarter of 2022 was $145.1 million, an increase of $11.3 million, or 8.4%, compared to $133.9 million for the prior quarter.  

The net interest margin was 2.60% in the second quarter of 2022, an increase of 18 basis points compared to 2.42% in the prior quarter.

Provision Expense

During the quarter ended June 30, 2022, we recorded a $1.0 million provision for credit losses. In the quarter ended March 31, 2022, we recorded a $5.7 million negative provision for credit losses.

Noninterest Income

Noninterest income was $44.1 million in the second quarter of 2022, an increase of $2.7 million compared to noninterest income of $41.4 million in the prior quarter.     

Noninterest Expense

Noninterest expense was $109.2 million in the second quarter of 2022, an increase of $5.1 million compared to noninterest expense of $104.0 million in the prior quarter.

The efficiency ratio was 57.3% and 59.0% for the quarters ended June 30, 2022 and March 31, 2022, respectively.

Taxes

The effective tax rate was 25.0% for the quarters ended June 30, 2022 and March 31, 2022.

Asset Quality

The allowance for credit losses was $148.9 million, or 1.12% of total loans and leases, as of June 30, 2022, compared to $150.3 million, or 1.17% of total loans and leases, as of March 31, 2022. The reserve for unfunded commitments was $29.0 million as of June 30, 2022 and March 31, 2022. Net charge-offs were $2.3 million, or 0.07% of average loans and leases on an annualized basis, for the quarter ended June 30, 2022, compared to net charge-offs of $2.6 million, or 0.08% of average loans and leases on an annualized basis, for the quarter ended March 31, 2022. Total non-performing assets were $7.9 million, or 0.06% of total loans and leases and other real estate owned, on June 30, 2022, compared to total non-performing assets of $8.6 million, or 0.07% of total loans and leases and other real estate owned, on March 31, 2022.

Capital

Total stockholders' equity was $2.3 billion on June 30, 2022 and March 31, 2022.    

The tier 1 leverage, common equity tier 1 and total capital ratios were 7.54%, 11.98%, and 13.14%, respectively, on June 30, 2022, compared with 7.50%, 12.27% and 13.48%, respectively, on March 31, 2022.

The Company repurchased 0.3 million shares of common stock at a total cost of $7.0 million under the stock repurchase program in the second quarter. The average cost was $24.09 per share repurchased. Remaining buyback authority under the stock repurchase program was $68.0 million on June 30, 2022.

First Hawaiian, Inc.

First Hawaiian, Inc. (NASDAQ:FHB) is a bank holding company headquartered in Honolulu, Hawaii.  Its principal subsidiary, First Hawaiian Bank, founded in 1858 under the name Bishop & Company, is Hawaii’s oldest and largest financial institution with branch locations throughout Hawaii, Guam and 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 the Company’s website, www.fhb.com.

Conference Call Information

First Hawaiian will host a conference call to discuss the Company’s results today at 1:00 p.m. Eastern Time, 7:00 a.m. Hawaii Time.

Please note that the process for accessing the conference call has changed. Participants will need to click on the registration link provided below, register for the conference call, and then you will receive the dial-in number and a personalized PIN code.

To access the call by phone, please register via the following link: https://register.vevent.com/register/BI2ebfe69a17064bc89a14e15354a8e329, and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time.

A live webcast of the conference call, including a slide presentation, will be available at the following link: www.fhb.com/earnings. The archive of the webcast will be available at the same location.

Forward-Looking StatementsThis press release 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. Further, statements about the potential effects of the COVID-19 pandemic on our businesses and financial results and conditions may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, there can be no assurance that actual results will not prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements, including (without limitation) the risks and uncertainties associated with the ongoing impacts of COVID-19, the domestic and global economic environment and capital market conditions and other risk factors. For a discussion of some of these risks and important factors that could affect our future results and financial condition, see our U.S. Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

Use of Non-GAAP Financial MeasuresReturn on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We believe that these measurements are useful for investors, regulators, management and others to evaluate financial performance and capital adequacy relative to other financial institutions. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results or financial condition as reported under GAAP. Investors should consider our performance and capital adequacy as reported under GAAP and all other relevant information when assessing our performance and capital adequacy.

Table 14 at the end of this document provides a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.

Investor Relations Contact: Kevin Haseyama, CFA(808) 525-6268[email protected]Media Contact:Lindsay Chambers(808) 525-6254[email protected]

                 
Financial Highlights Table 1
  For the Three Months Ended For the Six Months Ended  
  June 30,  March 31,  June 30,  June 30,  
(dollars in thousands, except per share data) 2022    2022    2021 2022    2021 
Operating Results:                
Net interest income $ 145,147 $133,872  $131,481  $ 279,019  $260,639  
Provision for credit losses   1,000  (5,747)  (35,000)   (4,747)  (35,000) 
Noninterest income   44,137  41,380   49,371    85,517   93,239  
Noninterest expense   109,175  104,042   99,388    213,217   195,694  
Net income   59,360  57,719   86,741    117,079   144,434  
Basic earnings per share   0.46  0.45   0.67    0.92   1.11  
Diluted earnings per share   0.46  0.45   0.67    0.91   1.11  
Dividends declared per share   0.26  0.26   0.26    0.52   0.52  
Dividend payout ratio   56.52% 57.78 % 38.81 %  57.14 % 46.85 %
Performance Ratios(1):                
Net interest margin   2.60%   2.42 % 2.46 %  2.51 %   2.50 %
Efficiency ratio   57.33%   59.04 % 54.74 %  58.15 %   55.12 %
Return on average total assets   0.94%   0.93 % 1.45 %  0.94 %   1.24 %
Return on average tangible assets (non-GAAP)(2)   0.98%   0.97 % 1.51 %  0.98 %   1.30 %
Return on average total stockholders' equity   10.52%   9.19 % 12.92 %  9.82 %   10.75 %
Return on average tangible stockholders' equity (non-GAAP)(2)   18.79%   15.08 % 20.51 %  16.76 %   16.99 %
Average Balances:                
Average loans and leases $ 13,058,558 $12,819,612  $13,205,086  $ 12,939,745  $13,223,575  
Average earning assets   22,520,605  22,463,209   21,539,264    22,492,066   21,010,643  
Average assets   25,250,176  25,080,453   24,015,065    25,165,783   23,482,839  
Average deposits   22,401,558  21,960,819   20,638,015    22,182,406   20,073,676  
Average stockholders' equity   2,262,654  2,547,865   2,691,966    2,404,471   2,709,735  
Market Value Per Share:                
Closing   22.80  27.89   28.34    22.80   28.34  
High   28.44  31.16   29.85    31.16   30.80  
Low   21.49  26.93   24.75    21.49   23.14  

              
  As of As of As of As of 
  June 30,  March 31,  December 31,  June 30,  
(dollars in thousands, except per share data) 2022 2022 2021 2021 
Balance Sheet Data:             
Loans and leases $ 13,262,781 $12,891,743 $12,961,999 $13,103,785 
Total assets   25,377,533  25,042,720  24,992,410  24,246,328 
Total deposits   22,601,454  22,270,430  21,816,146  20,835,115 
Long-term borrowings        200,000 
Total stockholders' equity   2,252,611  2,285,149  2,656,912  2,731,341 
              
Per Share of Common Stock:             
Book value $ 17.67 $17.90 $20.84 $21.17 
Tangible book value (non-GAAP)(2)   9.86  10.10  13.03  13.45 
              
Asset Quality Ratios:             
Non-accrual loans and leases / total loans and leases   0.06%   0.07% 0.05% 0.07%
Allowance for credit losses for loans and leases / total loans and leases   1.12%   1.17% 1.21% 1.29%
              
Capital Ratios:             
Common Equity Tier 1 Capital Ratio    11.98%   12.27% 12.24% 12.76%
Tier 1 Capital Ratio   11.98%   12.27% 12.24% 12.76%
Total Capital Ratio   13.14%   13.48% 13.49% 14.01%
Tier 1 Leverage Ratio   7.54%   7.50% 7.24% 7.68%
Total stockholders' equity to total assets   8.88%   9.13% 10.63% 11.26%
Tangible stockholders' equity to tangible assets (non-GAAP)(2)   5.16%   5.36% 6.92% 7.47%
              
Non-Financial Data:             
Number of branches   51  51  54  54 
Number of ATMs   297  298  299  294 
Number of Full-Time Equivalent Employees   2,021  2,022  2,036  2,087 

(1) Except for the efficiency ratio, amounts are annualized for the three and six months ended June 30, 2022 and 2021 and the three months ended March 31, 2022.
   
(2) Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We compute our return on average tangible assets as the ratio of net income to average tangible assets, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total assets. We compute our return on average tangible stockholders’ equity as the ratio of net income to average tangible stockholders’ equity, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total stockholders’ equity. We compute our tangible book value per share as the ratio of tangible stockholders’ equity to outstanding shares. Tangible stockholders’ equity is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our total stockholders’ equity. We compute our tangible stockholders’ equity to tangible assets as the ratio of tangible stockholders’ equity to tangible assets, each of which we calculate by subtracting (and thereby effectively excluding) the value of our goodwill. For a reconciliation to the most directly comparable GAAP financial measure, see Table 14, GAAP to Non-GAAP Reconciliation.

                
Consolidated Statements of Income Table 2
  For the Three Months Ended For the Six Months Ended
  June 30,  March 31,  June 30,  June 30, 
(dollars in thousands, except per share amounts) 2022 2022 2021 2022 2021
Interest income               
Loans and lease financing $ 111,916  $103,732  $110,919  $ 215,648  $221,858 
Available-for-sale investment securities   16,643   32,107   24,637    48,750   47,783 
Held-to-maturity investment securities   18,289          18,289    
Other   2,896   782   666    3,678   1,157 
Total interest income   149,744   136,621   136,222    286,365   270,798 
Interest expense               
Deposits   4,597   2,749   3,363    7,346   7,419 
Short-term and long-term borrowings        1,378      2,740 
Total interest expense   4,597   2,749   4,741    7,346   10,159 
Net interest income   145,147   133,872   131,481    279,019   260,639 
Provision for credit losses   1,000   (5,747)  (35,000)   (4,747)  (35,000)
Net interest income after provision for credit losses   144,147   139,619   166,481    283,766   295,639 
Noninterest income               
Service charges on deposit accounts   6,843   7,501   6,632    14,344   13,350 
Credit and debit card fees   17,056   14,850   16,746    31,906   31,297 
Other service charges and fees   9,018   9,654   10,303    18,672   19,149 
Trust and investment services income   8,759   8,883   8,707    17,642   17,199 
Bank-owned life insurance   (859)  (417)  3,104    (1,276)  5,493 
Investment securities (losses) gains, net        102      102 
Other   3,320   909   3,777    4,229   6,649 
Total noninterest income   44,137   41,380   49,371    85,517   93,239 
Noninterest expense               
Salaries and employee benefits   49,902   48,226   45,982    98,128   89,918 
Contracted services and professional fees   18,617   17,147   16,516    35,764   33,704 
Occupancy   7,334   7,410   7,314    14,744   14,484 
Equipment   7,754   5,977   6,362    13,731   11,853 
Regulatory assessment and fees   2,301   2,224   1,826    4,525   3,860 
Advertising and marketing   1,994   2,028   1,469    4,022   3,060 
Card rewards program   7,285   6,883   6,262    14,168   11,097 
Other   13,988   14,147   13,657    28,135   27,718 
Total noninterest expense   109,175   104,042   99,388    213,217   195,694 
Income before provision for income taxes   79,109   76,957   116,464    156,066   193,184 
Provision for income taxes   19,749   19,238   29,723    38,987   48,750 
Net income $ 59,360  $57,719  $86,741  $ 117,079  $144,434 
Basic earnings per share $ 0.46  $0.45  $0.67  $ 0.92  $1.11 
Diluted earnings per share $ 0.46  $0.45  $0.67  $ 0.91  $1.11 
Basic weighted-average outstanding shares   127,672,244   127,556,242   129,392,339    127,614,564   129,661,228 
Diluted weighted-average outstanding shares   128,014,777   128,121,126   129,828,847    128,108,630   130,164,762 

             
Consolidated Balance Sheets Table 3
  June 30,  March 31,  December 31,  June 30, 
(dollars in thousands) 2022  2022  2021  2021 
Assets            
Cash and due from banks $ 279,629  $274,022  $246,716  $347,861 
Interest-bearing deposits in other banks   1,254,047   1,352,138   1,011,753   1,558,437 
Investment securities:            
Available-for-sale, at fair value (amortized cost: $4,267,809 as of June 30, 2022, $8,733,170 as of March 31, 2022, $8,560,733 as of December 31, 2021 and $6,951,153 as of June 30, 2021)   3,967,746   8,062,384   8,428,032   6,953,930 
Held-to-maturity, at amortized cost (fair value: $3,910,780 as of June 30, 2022 and nil as of March 31, 2022, December 31, 2021 and June 30, 2021)   4,093,215          
Loans held for sale   180      538   1,241 
Loans and leases   13,262,781   12,891,743   12,961,999   13,103,785 
Less: allowance for credit losses   148,942   150,280   157,262   169,148 
Net loans and leases   13,113,839   12,741,463   12,804,737   12,934,637 
             
Premises and equipment, net   310,047   315,766   318,448   319,452 
Other real estate owned and repossessed personal property        175    
Accrued interest receivable   63,240   61,561   63,158   66,734 
Bank-owned life insurance   470,542   471,401   471,819   466,402 
Goodwill   995,492   995,492   995,492   995,492 
Mortgage servicing rights   7,152   7,650   8,302   10,007 
Other assets   822,404   760,843   643,240   592,135 
Total assets $ 25,377,533  $25,042,720  $24,992,410  $24,246,328 
Liabilities and Stockholders' Equity            
Deposits:            
Interest-bearing $ 12,990,571  $12,504,821  $12,422,283  $12,245,193 
Noninterest-bearing   9,610,883   9,765,609   9,393,863   8,589,922 
Total deposits   22,601,454   22,270,430   21,816,146   20,835,115 
Long-term borrowings           200,000 
Retirement benefits payable   134,151   134,323   134,491   144,101 
Other liabilities   389,317   352,818   384,861   335,771 
Total liabilities   23,124,922   22,757,571   22,335,498   21,514,987 
             
Stockholders' equity            
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 140,943,908 / 127,451,087 shares as of June 30, 2022, issued/outstanding: 140,875,595 / 127,686,307 shares as of March 31, 2022, issued/outstanding: 140,581,715 / 127,502,472 shares as of December 31, 2021 and issued/outstanding: 140,542,398 / 129,019,871 shares as of June 30, 2021)   1,409   1,409   1,406   1,405 
Additional paid-in capital   2,533,407   2,530,795   2,527,663   2,520,790 
Retained earnings   654,777   628,642   604,534   550,511 
Accumulated other comprehensive loss, net   (571,457)  (517,502)  (121,693)  (29,702)
Treasury stock (13,492,821 shares as of June 30, 2022, 13,189,288 shares as of March 31, 2022, 13,079,243 shares as of December 31, 2021 and 11,522,527 shares as of June 30, 2021)   (365,525)  (358,195)  (354,998)  (311,663)
Total stockholders' equity   2,252,611   2,285,149   2,656,912   2,731,341 
Total liabilities and stockholders' equity $ 25,377,533  $25,042,720  $24,992,410  $24,246,328 

                          
Average Balances and Interest Rates                       Table 4
  Three Months Ended  Three Months Ended  Three Months Ended  
  June 30, 2022 March 31, 2022 June 30, 2021 
  Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ 
(dollars in millions) Balance Expense Rate Balance Expense Rate Balance Expense Rate 
Earning Assets                         
Interest-Bearing Deposits in Other Banks $ 1,297.3 $ 2.8  0.85%  $1,138.3 $0.6 0.20%$1,503.0 $0.4 0.10%
Available-for-Sale Investment Securities                         
Taxable   3,946.4   16.6  1.68  7,800.3  29.2 1.50  6,298.3  22.5 1.43 
Non-Taxable   8.4   0.1  5.26  636.7  3.6 2.32  468.4  2.7 2.30 
Held-to-Maturity Investment Securities                         
Taxable   3,533.6   15.0  1.70           
Non-Taxable   607.0   4.1  2.71           
Total Investment Securities   8,095.4   35.8  1.77  8,437.0  32.8 1.56  6,766.7  25.2 1.49 
Loans Held for Sale   0.3    5.06  1.2   2.02  2.0   1.44 
Loans and Leases(1)                         
Commercial and industrial   1,951.3   15.0  3.09  1,973.1  14.6 3.01  2,882.1  21.1 2.94 
Commercial real estate   3,808.9   30.7  3.23  3,632.2  25.8 2.88  3,419.7  25.3 2.97 
Construction   711.3   6.3  3.57  766.9  5.7 3.03  800.9  6.3 3.15 
Residential:                         
Residential mortgage   4,183.0   36.7  3.51  4,111.0  34.8 3.38  3,765.4  34.0 3.62 
Home equity line   945.7   5.9  2.49  891.6  5.5 2.48  812.6  5.5 2.72 
Consumer   1,218.0   15.5  5.09  1,218.6  15.6 5.19  1,277.9  16.9 5.32 
Lease financing   240.4   2.1  3.53  226.2  1.9 3.42  246.5  1.9 3.06 
Total Loans and Leases   13,058.6   112.2  3.44  12,819.6  103.9 3.27  13,205.1  111.0 3.37 
Other Earning Assets   69.0   0.1  0.79  67.1  0.2 1.31  62.5  0.3 1.91 
Total Earning Assets(2)   22,520.6   150.9  2.68  22,463.2  137.5 2.47  21,539.3  136.9 2.55 
Cash and Due from Banks   300.8       292.1       290.7      
Other Assets   2,428.8       2,325.2       2,185.1      
Total Assets $ 25,250.2      $25,080.5      $24,015.1      
                          
Interest-Bearing Liabilities                         
Interest-Bearing Deposits                         
Savings $ 6,971.3 $ 1.7  0.10%  $6,668.4 $0.5 0.03% 6,361.8 $0.5 0.03%
Money Market   4,127.4   1.4  0.14  4,048.9  0.5 0.05  3,783.1  0.5 0.06 
Time   1,671.4   1.5  0.36  1,748.5  1.7 0.39  2,034.5  2.3 0.45 
Total Interest-Bearing Deposits   12,770.1   4.6  0.14  12,465.8  2.7 0.09  12,179.4  3.3 0.11 
Long-Term Borrowings            200.0  1.4 2.76 
Total Interest-Bearing Liabilities   12,770.1   4.6  0.14  12,465.8  2.7 0.09  12,379.4  4.7 0.15 
Net Interest Income    $ 146.3      $134.8      $132.2   
Interest Rate Spread        2.54%        2.38%      2.40%
Net Interest Margin        2.60%        2.42%      2.46%
Noninterest-Bearing Demand Deposits   9,631.4       9,495.0       8,458.6      
Other Liabilities   586.0       571.8       485.1      
Stockholders' Equity   2,262.7       2,547.9       2,692.0      
Total Liabilities and Stockholders' Equity $ 25,250.2      $25,080.5      $24,015.1      

(1) Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
   
(2) Interest income includes taxable-equivalent basis adjustments of $1.2 million, $1.0 million and $0.7 million for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively.

                  
Average Balances and Interest Rates               Table 5
  Six Months Ended  Six Months Ended  
  June 30, 2022 June 30, 2021 
  Average Income/ Yield/ Average Income/ Yield/ 
(dollars in millions) Balance Expense Rate Balance Expense Rate 
Earning Assets                 
Interest-Bearing Deposits in Other Banks $ 1,218.3 $ 3.3  0.55%  $1,222.4 $0.6 0.10%
Available-for-Sale Investment Securities                 
Taxable   5,862.7   45.7  1.56  6,125.1  44.6 1.46 
Non-Taxable   320.8   3.9  2.41  373.7  4.0 2.11 
Held-to-Maturity Investment Securities                 
Taxable   1,776.6   15.0  1.69      
Non-Taxable   305.2   4.1  2.71      
Total Investment Securities   8,265.3   68.7  1.66  6,498.8  48.6 1.49 
Loans Held for Sale   0.8    2.60  5.6  0.1 2.28 
Loans and Leases(1)                 
Commercial and industrial   1,962.1   29.7  3.05  2,954.0  41.5 2.84 
Commercial real estate   3,721.0   56.4  3.06  3,402.6  50.2 2.98 
Construction   738.9   12.1  3.30  774.0  12.1 3.16 
Residential:                 
Residential mortgage   4,147.2   71.5  3.45  3,730.9  68.7 3.68 
Home equity line   918.8   11.3  2.48  817.3  11.2 2.76 
Consumer   1,218.3   31.1  5.14  1,300.7  34.7 5.37 
Lease financing   233.4   4.0  3.48  244.1  3.7 3.04 
Total Loans and Leases   12,939.7   216.1  3.36  13,223.6  222.1 3.38 
Other Earning Assets   68.0   0.4  1.05  60.2  0.5 1.85 
Total Earning Assets(2)   22,492.1   288.5  2.58  21,010.6  271.9 2.60 
Cash and Due from Banks   296.5       292.3      
Other Assets   2,377.2       2,179.9      
Total Assets $ 25,165.8      $23,482.8      
                  
Interest-Bearing Liabilities                 
Interest-Bearing Deposits                 
Savings $ 6,820.7 $ 2.2  0.07%  $6,169.5 $1.1 0.04%
Money Market   4,088.3   2.0  0.09  3,657.3  1.0 0.05 
Time   1,709.8   3.2  0.38  2,160.8  5.3 0.49 
Total Interest-Bearing Deposits   12,618.8   7.4  0.12  11,987.6  7.4 0.12 
Long-Term Borrowings       200.0  2.7 2.76 
Total Interest-Bearing Liabilities   12,618.8   7.4  0.12  12,187.6  10.1 0.17 
Net Interest Income    $ 281.1      $261.8   
Interest Rate Spread        2.46%        2.43%
Net Interest Margin        2.51%        2.50%
Noninterest-Bearing Demand Deposits   9,563.6       8,086.1      
Other Liabilities   578.9       499.4      
Stockholders' Equity   2,404.5       2,709.7      
Total Liabilities and Stockholders' Equity $ 25,165.8      $23,482.8      

(1) Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
   
(2) Interest income includes taxable-equivalent basis adjustments of $2.1 million and $1.1 million for the six months ended June 30, 2022 and 2021, respectively.

          
Analysis of Change in Net Interest Income        Table 6
  Three Months Ended June 30, 2022
  Compared to March 31, 2022
(dollars in millions) Volume Rate Total
Change in Interest Income:         
Interest-Bearing Deposits in Other Banks $ 0.1  $ 2.1  $ 2.2 
Available-for-Sale Investment Securities         
Taxable   (15.8)   3.2    (12.6)
Non-Taxable   (5.6)   2.1    (3.5)
Held-to-Maturity Investment Securities         
Taxable   15.0       15.0 
Non-Taxable   4.1       4.1 
Total Investment Securities   (2.3)   5.3    3.0 
Loans and Leases         
Commercial and industrial   (0.1)   0.5    0.4 
Commercial real estate   1.4    3.5    4.9 
Construction   (0.4)   1.0    0.6 
Residential:         
Residential mortgage   0.6    1.3    1.9 
Home equity line   0.4       0.4 
Consumer      (0.1)   (0.1)
Lease financing   0.1    0.1    0.2 
Total Loans and Leases   2.0    6.3    8.3 
Other Earning Assets      (0.1)   (0.1)
Total Change in Interest Income   (0.2)   13.6    13.4 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   0.1    1.1    1.2 
Money Market      0.9    0.9 
Time   (0.1)   (0.1)   (0.2)
Total Interest-Bearing Deposits      1.9    1.9 
Total Change in Interest Expense      1.9    1.9 
Change in Net Interest Income $ (0.2) $ 11.7  $ 11.5 

          
Analysis of Change in Net Interest Income        Table 7
  Three Months Ended June 30, 2022
  Compared to June 30, 2021
(dollars in millions) Volume Rate Total
Change in Interest Income:         
Interest-Bearing Deposits in Other Banks $  $ 2.4  $ 2.4 
Available-for-Sale Investment Securities         
Taxable   (9.4)   3.5    (5.9)
Non-Taxable   (4.1)   1.5    (2.6)
Held-to-Maturity Investment Securities         
Taxable   15.0       15.0 
Non-Taxable   4.1       4.1 
Total Investment Securities   5.6    5.0    10.6 
Loans and Leases         
Commercial and industrial   (7.1)   1.0    (6.1)
Commercial real estate   3.0    2.4    5.4 
Construction   (0.8)   0.8    
Residential:         
Residential mortgage   3.7    (1.0)   2.7 
Home equity line   0.9    (0.5)   0.4 
Consumer   (0.7)   (0.7)   (1.4)
Lease financing   (0.1)   0.3    0.2 
Total Loans and Leases   (1.1)   2.3    1.2 
Other Earning Assets      (0.2)   (0.2)
Total Change in Interest Income   4.5    9.5    14.0 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   0.1    1.1    1.2 
Money Market   0.1    0.8    0.9 
Time   (0.4)   (0.4)   (0.8)
Total Interest-Bearing Deposits   (0.2)   1.5    1.3 
Long-Term Borrowings   (0.7)   (0.7)   (1.4)
Total Change in Interest Expense   (0.9)   0.8    (0.1)
Change in Net Interest Income $ 5.4  $ 8.7  $ 14.1 

          
Analysis of Change in Net Interest Income        Table 8
  Six Months Ended June 30, 2022
  Compared to June 30, 2021
(dollars in millions) Volume Rate Total
Change in Interest Income:         
Interest-Bearing Deposits in Other Banks $  $ 2.7  $ 2.7 
Available-for-Sale Investment Securities         
Taxable   (1.9)   3.0    1.1 
Non-Taxable   (0.6)   0.5    (0.1)
Held-to-Maturity Investment Securities         
Taxable   15.0       15.0 
Non-Taxable   4.1       4.1 
Total Investment Securities   16.6    3.5    20.1 
Loans Held for Sale   (0.1)      (0.1)
Loans and Leases         
Commercial and industrial   (14.7)   2.9    (11.8)
Commercial real estate   4.8    1.4    6.2 
Construction   (0.5)   0.5    
Residential:         
Residential mortgage   7.2    (4.4)   2.8 
Home equity line   1.3    (1.2)   0.1 
Consumer   (2.1)   (1.5)   (3.6)
Lease financing   (0.2)   0.5    0.3 
Total Loans and Leases   (4.2)   (1.8)   (6.0)
Other Earning Assets   0.1    (0.2)   (0.1)
Total Change in Interest Income   12.4    4.2    16.6 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   0.1    1.0    1.1 
Money Market   0.2    0.8    1.0 
Time   (1.0)   (1.1)   (2.1)
Total Interest-Bearing Deposits   (0.7)   0.7    
Long-Term Borrowings   (1.4)   (1.3)   (2.7)
Total Change in Interest Expense   (2.1)   (0.6)   (2.7)
Change in Net Interest Income $ 14.5  $ 4.8  $ 19.3 

             
Loans and Leases           Table 9
  June 30,  March 31,  December 31,  June 30, 
(dollars in thousands) 2022    2022    2021    2021
Commercial and industrial:            
Commercial and industrial excluding Paycheck Protection Program loans $ 1,898,899 $1,817,346 $1,870,657 $1,753,444
Paycheck Protection Program loans   43,233  106,188  216,442  811,103
Total commercial and industrial   1,942,132  1,923,534  2,087,099  2,564,547
Commercial real estate   3,956,828  3,759,980  3,639,623  3,528,068
Construction   727,771  708,300  813,969  853,865
Residential:            
Residential mortgage   4,212,768  4,153,824  4,083,367  3,821,407
Home equity line   971,569  918,101  876,608  825,368
Total residential   5,184,337  5,071,925  4,959,975  4,646,775
Consumer   1,207,051  1,204,834  1,229,939  1,267,559
Lease financing   244,662  223,170  231,394  242,971
Total loans and leases $ 13,262,781 $12,891,743 $12,961,999 $13,103,785

             
Deposits           Table 10
  June 30,  March 31,  December 31,  June 30, 
(dollars in thousands) 2022    2022    2021    2021
Demand $ 9,610,883 $9,765,609 $9,393,863 $8,589,922
Savings   7,243,185  6,812,758  6,612,775  6,421,053
Money Market   4,079,706  3,990,225  4,033,070  3,920,477
Time   1,667,680  1,701,838  1,776,438  1,903,663
Total Deposits $ 22,601,454 $22,270,430 $21,816,146 $20,835,115

             
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More           Table 11
  June 30,  March 31,  December 31,  June 30, 
(dollars in thousands) 2022    2022    2021    2021
Non-Performing Assets            
Non-Accrual Loans and Leases            
Commercial Loans:            
Commercial and industrial $ 682 $707 $718 $828
Commercial real estate   727  727  727  937
Lease financing    75    
Total Commercial Loans   1,409  1,509  1,445  1,765
Residential Loans:            
Residential mortgage   6,450  7,092  5,637  7,140
Total Residential Loans   6,450  7,092  5,637  7,140
Total Non-Accrual Loans and Leases   7,859  8,601  7,082  8,905
Other Real Estate Owned      175  
Total Non-Performing Assets $ 7,859 $8,601 $7,257 $8,905
             
Accruing Loans and Leases Past Due 90 Days or More            
Commercial Loans:            
Commercial and industrial $ 2,230 $591 $740 $494
Commercial real estate   176      
Construction   352      60
Total Commercial Loans   2,758  591  740  554
Residential Loans:            
Residential mortgage   750  13  987  
Home equity line   1,039  2,252  3,681  4,680
Total Residential Loans   1,789  2,265  4,668  4,680
Consumer   1,218  1,588  1,800  1,134
Total Accruing Loans and Leases Past Due 90 Days or More $ 5,765 $4,444 $7,208 $6,368
             
Restructured Loans on Accrual Status and Not Past Due 90 Days or More $ 29,440 $32,590 $34,893 $36,668
Total Loans and Leases $ 13,262,781 $12,891,743 $12,961,999 $13,103,785

                 
Allowance for Credit Losses and Reserve for Unfunded Commitments Table 12
  For the Three Months Ended  For the Six Months Ended  
  June 30,  March 31,  June 30,  June 30,  June 30,  
(dollars in thousands) 2022 2022    2021    2022 2021 
Balance at Beginning of Period $ 179,238  $187,584  $234,469    187,584   239,057  
Loans and Leases Charged-Off                
Commercial Loans:                
Commercial and industrial   (243)  (706)  (330)   (949)  (1,293) 
Commercial real estate              (66) 
Total Commercial Loans   (243)  (706)  (330)   (949)  (1,359) 
Residential Loans:                
Residential mortgage              (98) 
Home equity line   (1,120)  (43)      (1,163)    
Total Residential Loans   (1,120)  (43)      (1,163)  (98) 
Consumer   (3,659)  (4,109)  (3,917)   (7,768)  (10,458) 
Total Loans and Leases Charged-Off   (5,022)  (4,858)  (4,247)   (9,880)  (11,915) 
Recoveries on Loans and Leases Previously Charged-Off                
Commercial Loans:                
Commercial and industrial   301   53   287    354   502  
Commercial real estate     14   12    14   15  
Construction              166  
Lease financing   60          60     
Total Commercial Loans   361   67   299    428   683  
Residential Loans:                
Residential mortgage   192   16   14    208   31  
Home equity line   191   28   38    219   62  
Total Residential Loans   383   44   52    427   93  
Consumer   1,940   2,148   2,797    4,088   5,452  
Total Recoveries on Loans and Leases Previously Charged-Off   2,684   2,259   3,148    4,943   6,228  
Net Loans and Leases Charged-Off   (2,338)  (2,599)  (1,099)   (4,937)  (5,687) 
Provision for Credit Losses   1,000   (5,747)  (35,000)   (4,747)  (35,000) 
Balance at End of Period $ 177,900  $179,238  $198,370  $ 177,900  $198,370  
Components:                
Allowance for Credit Losses $ 148,942  $150,280  $169,148  $ 148,942  $169,148  
Reserve for Unfunded Commitments   28,958   28,958   29,222    28,958   29,222  
Total Allowance for Credit Losses and Reserve for Unfunded Commitments $ 177,900  $179,238  $198,370  $ 177,900  $198,370  
Average Loans and Leases Outstanding $ 13,058,558  $12,819,612  $13,205,086  $ 12,939,745  $13,223,575  
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)   0.07 %   0.08 % 0.03 %  0.08 %   0.09 %
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding   1.12 %   1.17 % 1.29 %  1.12 %   1.29 %
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases  18.95x  17.47x  18.99x  18.95x  18.99x 

(1) Annualized for the three and six months ended June 30, 2022 and 2021, and three months ended March 31, 2022.

                            
Loans and Leases by Year of Origination and Credit Quality Indicator  Table 13
                       Revolving   
                       Loans   
                       Converted   
  Term Loans Revolving to Term   
  Amortized Cost Basis by Origination Year Loans Loans   
                    Amortized Amortized   
(dollars in thousands) 2022 2021 2020 2019 2018 Prior Cost Basis Cost Basis Total
Commercial Lending                           
Commercial and Industrial                           
Risk rating:                           
Pass $ 216,303 $ 421,981 $ 66,601 $ 182,175 $ 60,586 $ 156,647 $ 697,256 $ 19,128 $ 1,820,677
Special Mention   2,816   316   1,628   2,822   748   5,295   1,073   841   15,539
Substandard     320   1,103   1,605   1,019   879   16,214   114   21,254
Other (1)   12,807   9,613   11,531   5,366   3,075   1,576   40,694     84,662
Total Commercial and Industrial   231,926   432,230   80,863   191,968   65,428   164,397   755,237   20,083   1,942,132
                            
Commercial Real Estate                           
Risk rating:                           
Pass   516,062   695,446   338,391   516,210   459,372   1,270,438   84,174     3,880,093
Special Mention       562   47,781     11,140   695     60,178
Substandard       180     1,742   14,476   3     16,401
Other (1)             156       156
Total Commercial Real Estate   516,062   695,446   339,133   563,991   461,114   1,296,210   84,872     3,956,828
                            
Construction                           
Risk rating:                           
Pass   39,575   193,588   127,677   85,471   115,881   88,509   14,965     665,666
Special Mention         236     350       586
Substandard           351   498       849
Other (1)   13,228   29,529   6,049   2,849   3,913   4,151   951     60,670
Total Construction   52,803   223,117   133,726   88,556   120,145   93,508   15,916     727,771
                            
Lease Financing                           
Risk rating:                           
Pass   41,656   26,813   49,889   43,989   7,801   68,457       238,605
Special Mention     457   2,642   1,358   11   17       4,485
Substandard       195   16   14   1,347       1,572
Total Lease Financing   41,656   27,270   52,726   45,363   7,826   69,821       244,662
                            
Total Commercial Lending $ 842,447 $ 1,378,063 $ 606,448 $ 889,878 $ 654,513 $ 1,623,936 $ 856,025 $ 20,083 $ 6,871,393

                            
                       Revolving   
                       Loans   
                       Converted   
  Term Loans Revolving to Term   
  Amortized Cost Basis by Origination Year Loans Loans   
(continued)                   Amortized Amortized   
(dollars in thousands) 2022 2021 2020 2019 2018 Prior Cost Basis Cost Basis Total
Residential Lending                           
Residential Mortgage                           
FICO:                           
740 and greater $ 352,342 $ 1,069,214 $ 587,478 $ 252,428 $ 178,752 $ 974,057 $ $ $ 3,414,271
680 - 739   46,224   124,306   79,422   45,117   21,882   144,226       461,177
620 - 679   5,305   19,143   14,291   5,405   3,892   38,470       86,506
550 - 619   169   1,943   294   226   2,073   8,017       12,722
Less than 550   2,085   1,242   60     340   4,656       8,383
No Score (3)   10,652   14,868   7,544   13,471   16,488   54,373       117,396
Other (2)   20,365   19,445   15,580   9,552   9,757   31,304   4,999   1,311   112,313
Total Residential Mortgage   437,142   1,250,161   704,669   326,199   233,184   1,255,103   4,999   1,311   4,212,768
                            
Home Equity Line                           
FICO:                           
740 and greater               748,148   2,227   750,375
680 - 739               157,042   3,106   160,148
620 - 679               40,070   2,454   42,524
550 - 619               9,202   1,601   10,803
Less than 550               1,159   491   1,650
No Score (3)               6,069     6,069
Total Home Equity Line               961,690   9,879   971,569
Total Residential Lending   437,142   1,250,161   704,669   326,199   233,184   1,255,103   966,689   11,190   5,184,337
                            
Consumer Lending                           
FICO:                           
740 and greater   115,911   132,565   66,828   59,155   38,001   17,426   117,266   203   547,355
680 - 739   53,590   80,240   45,783   41,393   23,562   13,947   67,636   566   326,717
620 - 679   11,760   35,430   17,746   22,180   13,928   11,374   30,079   1,018   143,515
550 - 619   1,000   6,548   6,576   10,400   7,652   6,801   10,044   1,026   50,047
Less than 550   379   1,758   2,973   5,022   2,547   2,525   3,047   483   18,734
No Score (3)   1,087   402   9   52   31   45   37,536   303   39,465
Other (2)   1,675   4,218   358   1,674     2,152   71,141     81,218
Total Consumer Lending   185,402   261,161   140,273   139,876   85,721   54,270   336,749   3,599   1,207,051
                            
Total Loans and Leases $ 1,464,991 $ 2,889,385 $ 1,451,390 $ 1,355,953 $ 973,418 $ 2,933,309 $ 2,159,463 $ 34,872 $ 13,262,781

(1)  Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score.
   
(2) Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating.
   
(3)  No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.

                 
GAAP to Non-GAAP Reconciliation Table 14
  For the Three Months Ended  For the Six Months Ended  
  June 30,  March 31,  June 30,  June 30,  
(dollars in thousands, except per share amounts) 2022     2022    2021    2022     2021 
Income Statement Data:                
Net income $ 59,360 $57,719 $86,741 $ 117,079 $144,434 
                 
Average total stockholders' equity $ 2,262,654 $2,547,865 $2,691,966 $ 2,404,471 $2,709,735 
Less: average goodwill   995,492  995,492  995,492   995,492  995,492 
Average tangible stockholders' equity $ 1,267,162 $1,552,373 $1,696,474 $ 1,408,979 $1,714,243 
                 
Average total assets $ 25,250,176 $25,080,453 $24,015,065 $ 25,165,783 $23,482,839 
Less: average goodwill   995,492  995,492  995,492   995,492  995,492 
Average tangible assets $ 24,254,684 $24,084,961 $23,019,573 $ 24,170,291 $22,487,347 
                 
Return on average total stockholders' equity(1)   10.52%   9.19% 12.92%  9.82%   10.75%
Return on average tangible stockholders' equity (non-GAAP)(1)   18.79%   15.08% 20.51%  16.76%   16.99%
                 
Return on average total assets(1)   0.94%   0.93% 1.45%  0.94%   1.24%
Return on average tangible assets (non-GAAP)(1)   0.98%   0.97% 1.51%  0.98%   1.30%
                 

              
           
  As of As of As of As of 
  June 30,  March 31,  December 31,  June 30,  
(dollars in thousands, except per share amounts) 2022    2022    2021    2021 
Balance Sheet Data:             
Total stockholders' equity $ 2,252,611 $2,285,149 $2,656,912 $2,731,341 
Less: goodwill   995,492  995,492  995,492  995,492 
Tangible stockholders' equity $ 1,257,119 $1,289,657 $1,661,420 $1,735,849 
              
Total assets $ 25,377,533 $25,042,720 $24,992,410 $24,246,328 
Less: goodwill   995,492  995,492  995,492  995,492 
Tangible assets $ 24,382,041 $24,047,228 $23,996,918 $23,250,836 
              
Shares outstanding   127,451,087  127,686,307  127,502,472  129,019,871 
              
Total stockholders' equity to total assets   8.88%   9.13% 10.63% 11.26%
Tangible stockholders' equity to tangible assets (non-GAAP)   5.16%   5.36% 6.92% 7.47%
              
Book value per share $ 17.67 $17.90 $20.84 $21.17 
Tangible book value per share (non-GAAP) $ 9.86 $10.10 $13.03 $13.45 

(1)   Annualized for the three and six months ended June 30, 2022 and 2021, and three months ended March 31, 2022.

 

 

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