First Hawaiian, Inc. Reports First Quarter 2021 Financial Results and Declares Dividend


HONOLULU, April 23, 2021 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended March 31, 2021.

“We had a good first quarter as our teams continued supporting local businesses by originating $459 million of PPP loans. We also experienced strong deposit growth and maintained excellent credit quality,” said Bob Harrison, Chairman, President and CEO. “We are optimistic about the local economy, as the state’s vaccine rollout is well underway and we are seeing a steady increase in visitor arrivals, all positive signs for Hawaii’s economy.”

On April 21, 2021 the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on June 4, 2021 to stockholders of record at the close of business on May 24, 2021.  

First Quarter 2021 Highlights:

  • Net income of $57.7 million, or $0.44 per diluted share
  • Total loans and leases increased $21.2 million versus prior quarter
  • Total deposits increased $906.0 million, or 4.7%, versus prior quarter
  • Did not record a provision for credit losses
  • Board of Directors declared a quarterly dividend of $0.26 per share
  • Repurchased $9.5 million of stock under share repurchase program

Balance Sheet

Total assets were $23.5 billion as of March 31, 2021, compared to $22.7 billion as of December 31, 2020.

Gross loans and leases were $13.3 billion as of March 31, 2021, unchanged from $13.3 billion as of December 31, 2020.

Total deposits were $20.1 billion as of March 31, 2021, an increase of $906.0 million, or 4.7%, from $19.2 billion as of December 31, 2020.

Net Interest Income

Net interest income for the first quarter of 2021 was $129.2 million, a decrease of $6.1 million, or 4.5%, compared to $135.2 million for the prior quarter.

The NIM was 2.55% in the first quarter of 2021, a decrease of 16 basis points compared to 2.71% in the fourth quarter of 2020.

Provision Expense

During the quarter ended March 31, 2021, the Bank did not record a provision for credit losses. In the quarter ended December 31, 2020, the total provision for credit losses was $20.0 million.

Noninterest Income

Noninterest income was $43.9 million in the first quarter of 2021, a decrease of $9.7 million compared to noninterest income of $53.6 million in the fourth quarter of 2020.

Noninterest Expense

Noninterest expense was $96.3 million in the first quarter of 2021, an increase of $8.2 million compared to noninterest expense of $88.1 million in the fourth quarter of 2020.

The efficiency ratio was 55.5% and 46.6% for the quarters ended March 31, 2021 and December 31, 2020, respectively.

Taxes

The effective tax rate was 24.8% for the quarter ended March 31, 2021 and 23.5% for the quarter ended December 31, 2020.

Asset Quality

The allowance for credit losses was $200.4 million, or 1.51% of total loans and leases, as of March 31, 2021, compared to $208.5 million, or 1.57% of total loans and leases, as of December 31, 2020. The reserve for unfunded commitments was $34.1 million as of March 31, 2021 compared to $30.6 million as of December 31, 2020. Net charge-offs were $4.6 million, or 0.14% of average loans and leases on an annualized basis for the quarter ended March 31, 2021, compared to net charge-offs of $1.4 million, or 0.04% of average loans and leases on an annualized basis for the quarter ended December 31, 2020. Total non-performing assets were $9.1 million, or 0.07% of total loans and leases and other real estate owned, at both March 31, 2021 and December 31, 2020.

Capital

Total stockholders' equity was $2.7 billion at both March 31, 2021 and December 31, 2020.

The tier 1 leverage, common equity tier 1 and total capital ratios were 7.90%, 12.82% and 14.07%, respectively, at March 31, 2021, compared with 8.00%, 12.47% and 13.73%, respectively, at December 31, 2020.

The Company repurchased 0.3 million shares of common stock at a total cost of $9.5 million under the stock repurchase program in the first quarter. The average cost was $28.70 per share repurchased. Remaining buyback authority under the stock repurchase program was $65.5 million at March 31, 2021.

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. To access the call, participants should dial (844) 452-2942 (US/Canada), or (574) 990-9846 (International) ten minutes prior to the start of the call and enter the conference ID: 4277629. 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. A telephonic replay of the conference call will be available two hours after the conclusion of the call until 4:30 p.m. (Eastern Time) on April 30, 2021. Access the replay by dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID: 4277629.

Forward-Looking Statements
This 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, 2020.

Use of Non-GAAP Financial Measures

We present net interest income, noninterest income, noninterest expense, net income, earnings per share (basic and diluted) 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.

Core net interest margin, core efficiency ratio, core return on average total assets and core return on average total stockholders’ equity are non-GAAP financial measures. We compute our core net interest margin as the ratio of core net interest income to average earning assets. 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.   We compute our core return on average total assets as the ratio of core net income to average total assets. We compute our core return on average total stockholders’ equity as the ratio of core net income to average total stockholders’ equity.

Return on average tangible stockholders’ equity, core return on average tangible stockholders’ equity, return on average tangible assets, core return on average tangible assets and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. 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 core return on average tangible stockholders’ equity as the ratio of core 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 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 core return on average tangible assets as the ratio of core net income to average tangible assets. 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. 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.

Tables 12 and 13 at the end of this document provide a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.

Investor Relations Contact:
Kevin Haseyama, CFA
(808) 525-6268
khaseyama@fhb.com
Media Contact:
Susan Kam
(808) 525-6254
skam@fhb.com


            
Financial Highlights         Table 1 
   For the Three Months Ended 
   March 31,  December 31,  March 31,  
(dollars in thousands, except per share data)     2021    2020    2020    
Operating Results:           
Net interest income  $ 129,158 $135,227 $138,683 
Provision for credit losses     20,000  41,200 
Noninterest income    43,868  53,598  49,228 
Noninterest expense    96,306  88,127  96,466 
Net income    57,693  61,739  38,865 
Basic earnings per share    0.44  0.48  0.30 
Diluted earnings per share    0.44  0.47  0.30 
Dividends declared per share    0.26  0.26  0.26 
Dividend payout ratio    59.09% 55.32% 86.67%
Supplemental Income Statement Data (non-GAAP):           
Core net interest income  $ 129,158 $135,227 $138,683 
Core noninterest income    43,868  58,438  49,143 
Core noninterest expense    96,306  88,127  96,466 
Core net income    57,693  65,288  38,803 
Core basic earnings per share    0.44  0.50  0.30 
Core diluted earnings per share    0.44  0.50  0.30 
Performance Ratio(1):           
Net interest margin    2.55%   2.71%   3.12%  
Core net interest margin (non-GAAP)    2.55%   2.71%   3.12%  
Efficiency ratio    55.53%   46.59%   51.33%  
Core efficiency ratio (non-GAAP)    55.53%   45.43%   51.35%  
Return on average total assets    1.02%   1.09%   0.77%  
Core return on average total assets (non-GAAP)    1.02%   1.16%   0.77%  
Return on average tangible assets (non-GAAP)    1.07%   1.14%   0.81%  
Core return on average tangible assets (non-GAAP)(2)    1.07%   1.21%   0.81%  
Return on average total stockholders' equity    8.58%   8.99%   5.87%  
Core return on average total stockholders' equity (non-GAAP)    8.58%   9.51%   5.87%  
Return on average tangible stockholders' equity (non-GAAP)    13.51%   14.14%   9.39%  
Core return on average tangible stockholders’ equity (non-GAAP)(3)    13.51%   14.95%   9.37%  
Average Balances:           
Average loans and leases  $ 13,242,270 $13,366,980 $13,191,426 
Average earning assets    20,476,149  19,977,933  17,814,189 
Average assets    22,944,699  22,468,040  20,313,304 
Average deposits    19,503,067  19,020,800  16,543,305 
Average stockholders' equity    2,727,701  2,732,271  2,660,811 
Market Value Per Share:           
Closing    27.37  23.58  16.53 
High    30.80  23.90  31.25 
Low    23.14  14.16  15.42 


           
  As of As of As of 
  March 31,  December 31,  March 31,  
(dollars in thousands, except per share data)    2021    2020 2020 
Balance Sheet Data:              
Loans and leases $ 13,300,289 $13,279,097 $13,380,270 
Total assets   23,497,596  22,662,831  20,755,891 
Total deposits   20,133,681  19,227,723  17,020,002 
Short-term borrowings      400,000 
Long-term borrowings   200,010  200,010  200,019 
Total stockholders' equity   2,683,630  2,744,104  2,664,685 
           
Per Share of Common Stock:          
Book value $ 20.68 $21.12 $20.52 
Tangible book value (non-GAAP)(4)   13.01  13.46  12.86 
           
Asset Quality Ratios:          
Non-accrual loans and leases / total loans and leases   0.07%   0.07% 0.05%  
Allowance for credit losses for loans and leases / total loans and leases   1.51%   1.57% 1.24%  
           
Capital Ratios:          
Common Equity Tier 1 Capital Ratio    12.82%    12.47% 11.65%  
Tier 1 Capital Ratio   12.82%   12.47% 11.65%  
Total Capital Ratio   14.07%   13.73% 12.90%  
Tier 1 Leverage Ratio   7.90%   8.00% 8.63%  
Total stockholders' equity to total assets   11.42%   12.11% 12.84%  
Tangible stockholders' equity to tangible assets (non-GAAP)   7.50%   8.07% 8.45%  
           
Non-Financial Data:          
Number of branches   54  54  58 
Number of ATMs   297  297  304 
Number of Full-Time Equivalent Employees   2,090  2,103  2,103 


(1)Except for the efficiency ratio and the core efficiency ratio, amounts are annualized for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020.
  
(2)Core return on average tangible assets is a non-GAAP financial measure. We compute our core return on average tangible assets as the ratio of core 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. For a reconciliation to the most directly comparable GAAP financial measure for core net income, see Table 12, GAAP to Non-GAAP Reconciliation.
  
(3)Core return on average tangible stockholders’ equity is a non-GAAP financial measure. We compute our core return on average tangible stockholders’ equity as the ratio of core 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. For a reconciliation to the most directly comparable GAAP financial measure for core net income, see Table 12, GAAP to Non-GAAP Reconciliation.
  
(4)Tangible book value is a non-GAAP financial measure. We compute our tangible book value as the ratio of tangible stockholders’ equity to shares outstanding. Tangible stockholders’ equity is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our total stockholders’ equity. For a reconciliation to the most directly comparable GAAP financial measure for core net income, see Table 12, GAAP to Non-GAAP Reconciliation.

         

           
Consolidated Statements of Income  Table 2
   For the Three Months Ended
   March 31,  December 31,  March 31, 
(dollars in thousands, except per share amounts)     2021    2020     2020
Interest income          
Loans and lease financing  $ 110,939 $118,314  $134,971
Available-for-sale securities    23,146  22,752   21,210
Other    491  615   2,351
Total interest income    134,576  141,681   158,532
Interest expense          
Deposits    4,056  5,061   15,600
Short-term and long-term borrowings    1,362  1,393   4,249
Total interest expense    5,418  6,454   19,849
Net interest income    129,158  135,227   138,683
Provision for credit losses     20,000   41,200
Net interest income after provision for credit losses    129,158  115,227   97,483
Noninterest income          
Service charges on deposit accounts    6,718  6,769   8,950
Credit and debit card fees    14,551  15,583   14,949
Other service charges and fees    8,846  8,404   8,539
Trust and investment services income    8,492  8,733   9,591
Bank-owned life insurance    2,389  4,159   2,260
Investment securities (losses) gains, net     (12)  85
Other    2,872  9,962   4,854
Total noninterest income    43,868  53,598   49,228
Noninterest expense          
Salaries and employee benefits    43,936  42,687   44,829
Contracted services and professional fees    17,188  13,940   16,055
Occupancy    7,170  7,355   7,243
Equipment    5,491  5,225   4,708
Regulatory assessment and fees    2,034  2,168   1,946
Advertising and marketing    1,591  1,096   1,823
Card rewards program    4,835  4,890   7,015
Other    14,061  10,766   12,847
Total noninterest expense    96,306  88,127   96,466
Income before provision for income taxes    76,720  80,698   50,245
Provision for income taxes    19,027  18,959   11,380
Net income  $ 57,693 $61,739  $38,865
Basic earnings per share  $ 0.44 $0.48  $0.30
Diluted earnings per share  $ 0.44 $0.47  $0.30
Basic weighted-average outstanding shares    129,933,104  129,912,104   129,895,706
Diluted weighted-average outstanding shares    130,589,878  130,314,381   130,351,585


           
Consolidated Balance Sheets  Table 3
   March 31,  December 31,  March 31, 
(dollars in thousands)     2021    2020    2020
Assets          
Cash and due from banks  $ 278,994  $303,373  $353,908 
Interest-bearing deposits in other banks    983,816   737,571   698,924 
Investment securities, at fair value (amortized cost: $6,708,431 as of
March 31, 2021, $5,985,031 as of December 31, 2020 and $4,014,397 as of
March 31, 2020)
    6,692,479   6,071,415   4,058,457 
Loans held for sale    9,390   11,579   8,180 
Loans and leases    13,300,289   13,279,097   13,380,270 
Less: allowance for credit losses    200,366   208,454   166,013 
Net loans and leases    13,099,923   13,070,643   13,214,257 
           
Premises and equipment, net    319,949   322,401   321,254 
Other real estate owned and repossessed personal property         238 
Accrued interest receivable    69,879   69,626   43,552 
Bank-owned life insurance    468,927   466,537   455,226 
Goodwill    995,492   995,492   995,492 
Mortgage servicing rights    10,869   10,731   11,979 
Other assets    567,878   603,463   594,424 
Total assets  $ 23,497,596  $22,662,831  $20,755,891 
Liabilities and Stockholders' Equity          
Deposits:          
Interest-bearing  $ 11,958,606  $11,705,609  $11,274,463 
Noninterest-bearing    8,175,075   7,522,114   5,745,539 
Total deposits    20,133,681   19,227,723   17,020,002 
Short-term borrowings         400,000 
Long-term borrowings    200,010   200,010   200,019 
Retirement benefits payable    143,736   143,373   138,396 
Other liabilities    336,539   347,621   332,789 
Total liabilities    20,813,966   19,918,727   18,091,206 
           
Stockholders' equity          
Common stock ($0.01 par value; authorized 300,000,000 shares;
issued/outstanding: 140,455,180 / 129,749,890 shares as of
March 31, 2021, issued/outstanding: 140,191,133 / 129,912,272
shares as of December 31, 2020 and issued/outstanding:
140,092,172 / 129,827,968 shares as of March 31, 2020)
    1,405   1,402   1,401 
Additional paid-in capital    2,517,048   2,514,014   2,506,477 
Retained earnings    497,418   473,974   429,323 
Accumulated other comprehensive (loss) income, net    (43,435)  31,604   4,129 
Treasury stock (10,705,290 shares as of March 31, 2021,
10,278,861 shares as of December 31, 2020 and 10,264,204 shares
as of March 31, 2020)
    (288,806)  (276,890)  (276,645)
Total stockholders' equity    2,683,630   2,744,104   2,664,685 
Total liabilities and stockholders' equity  $ 23,497,596  $22,662,831  $20,755,891 


                          
Average Balances and Interest Rates                      Table 4 
  Three Months Ended  Three Months Ended  Three Months Ended  
  March 31, 2021 December 31, 2020 March 31, 2020 
  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 $ 938.7 $ 0.2  0.10%  $688.1 $0.2 0.10%  $516.8 $1.6 1.25%
Available-for-Sale Investment Securities                         
Taxable   5,949.9   22.1  1.49  5,632.9  22.0 1.56  4,033.2  21.2 2.10 
Non-Taxable   278.0   1.3  1.80  220.0  0.9 1.74      
Total Available-for-Sale Investment Securities   6,227.9   23.4  1.50  5,852.9  22.9 1.57  4,033.2  21.2 2.10 
Loans Held for Sale   9.2   0.1  2.46  16.2  0.1 2.00  15.8  0.1 1.70 
Loans and Leases(1)                         
Commercial and industrial   3,026.7   20.4  2.74  3,077.6  22.6 2.93  2,776.2  24.6 3.56 
Commercial real estate   3,385.2   24.9  2.98  3,407.2  26.2 3.06  3,433.2  34.6 4.05 
Construction   746.8   5.8  3.16  703.1  5.6 3.14  538.5  5.7 4.27 
Residential:                         
Residential mortgage   3,696.1   34.7  3.76  3,679.6  37.1 4.03  3,721.2  37.7 4.05 
Home equity line   822.0   5.7  2.80  856.8  6.1 2.81  887.4  7.7 3.50 
Consumer   1,323.7   17.7  5.43  1,394.5  19.0 5.43  1,611.7  23.0 5.75 
Lease financing   241.8   1.8  3.02  248.2  1.8 2.89  223.2  1.6 2.85 
Total Loans and Leases   13,242.3   111.0  3.39  13,367.0  118.4 3.53  13,191.4  134.9 4.11 
Other Earning Assets   58.0   0.3  1.79  53.7  0.4 3.26  57.0  0.7 5.30 
Total Earning Assets(2)   20,476.1   135.0  2.66  19,977.9  142.0 2.83  17,814.2  158.5 3.57 
Cash and Due from Banks   294.0       289.2       327.4      
Other Assets   2,174.6       2,200.9       2,171.7      
Total Assets $ 22,944.7      $22,468.0      $20,313.3      
                          
Interest-Bearing Liabilities                         
Interest-Bearing Deposits                         
Savings $ 5,975.1 $ 0.6  0.04%  $5,786.4 $0.5 0.03%   5,090.4 $3.3 0.26%
Money Market   3,530.0   0.4  0.05  3,440.9  0.4 0.05  3,064.8  4.6 0.61 
Time   2,288.5   3.0  0.53  2,461.3  4.2 0.67  2,534.7  7.7 1.23 
Total Interest-Bearing Deposits   11,793.6   4.0  0.14  11,688.6  5.1 0.17  10,689.9  15.6 0.59 
Short-Term Borrowings            401.7  2.8 2.88 
Long-Term Borrowings   200.0   1.4  2.76  200.0  1.4 2.77  200.0  1.4 2.77 
Total Interest-Bearing Liabilities   11,993.6   5.4  0.18  11,888.6  6.5 0.22  11,291.6  19.8 0.71 
Net Interest Income    $ 129.6      $135.5      $138.7   
Interest Rate Spread        2.48%        2.61%        2.86%
Net Interest Margin        2.55%        2.71%        3.12%
Noninterest-Bearing Demand Deposits   7,709.5       7,332.2       5,853.4      
Other Liabilities   513.9       514.9       507.5      
Stockholders' Equity   2,727.7       2,732.3       2,660.8      
Total Liabilities and Stockholders' Equity $ 22,944.7      $22,468.0      $20,313.3      

 

(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 $0.4 million, $0.3 million and nil for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020, respectively.


          
Analysis of Change in Net Interest Income        Table 5
  Three Months Ended March 31, 2021
  Compared to December 31, 2020
(dollars in millions) Volume Rate Total
Change in Interest Income:                  
Available-for-Sale Investment Securities         
Taxable $ 1.2  $ (1.1) $ 0.1 
Non-Taxable   0.3    0.1    0.4 
Total Available-for-Sale Investment Securities   1.5    (1.0)   0.5 
Loans and Leases         
Commercial and industrial   (0.5)   (1.7)   (2.2)
Commercial real estate   (0.2)   (1.1)   (1.3)
Construction   0.2       0.2 
Residential:         
Residential mortgage   0.2    (2.6)   (2.4)
Home equity line   (0.4)      (0.4)
Consumer   (1.3)      (1.3)
Lease financing   (0.1)   0.1    
Total Loans and Leases   (2.1)   (5.3)   (7.4)
Other Earning Assets   0.1    (0.2)   (0.1)
Total Change in Interest Income   (0.5)   (6.5)   (7.0)
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings      0.1    0.1 
Time   (0.3)   (0.9)   (1.2)
Total Interest-Bearing Deposits   (0.3)   (0.8)   (1.1)
Total Change in Interest Expense   (0.3)   (0.8)   (1.1)
Change in Net Interest Income $ (0.2) $ (5.7) $ (5.9)


          
Analysis of Change in Net Interest Income        Table 6
  Three Months Ended March 31, 2021
  Compared to March 31, 2020
(dollars in millions) Volume Rate Total
Change in Interest Income:                  
Interest-Bearing Deposits in Other Banks $ 0.7  $ (2.1) $ (1.4)
Available-for-Sale Investment Securities         
Taxable   8.2    (7.3)   0.9 
Non-Taxable   1.3       1.3 
Total Available-for-Sale Investment Securities   9.5    (7.3)   2.2 
Loans and Leases         
Commercial and industrial   2.0    (6.2)   (4.2)
Commercial real estate   (0.5)   (9.2)   (9.7)
Construction   1.8    (1.7)   0.1 
Residential:         
Residential mortgage   (0.3)   (2.7)   (3.0)
Home equity line   (0.5)   (1.5)   (2.0)
Consumer   (4.0)   (1.3)   (5.3)
Lease financing   0.1    0.1    0.2 
Total Loans and Leases   (1.4)   (22.5)   (23.9)
Other Earning Assets   0.1    (0.5)   (0.4)
Total Change in Interest Income   8.9    (32.4)   (23.5)
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   0.5    (3.2)   (2.7)
Money Market   0.6    (4.8)   (4.2)
Time   (0.7)   (4.0)   (4.7)
Total Interest-Bearing Deposits   0.4    (12.0)   (11.6)
Short-Term Borrowings   (1.4)   (1.4)   (2.8)
Total Change in Interest Expense   (1.0)   (13.4)   (14.4)
Change in Net Interest Income $ 9.9  $ (19.0) $ (9.1)


          
Loans and Leases        Table 7
  March 31,  December 31,  March 31, 
(dollars in thousands)    2021    2020    2020
Commercial and industrial:         
Commercial and industrial excluding Paycheck Protection Program loans $ 1,962,672 $2,218,266 $3,025,345
Paycheck Protection Program loans   1,158,764  801,241  
Total commercial and industrial   3,121,436  3,019,507  3,025,345
Commercial real estate   3,396,233  3,392,676  3,413,014
Construction   739,271  735,819  572,062
Residential:         
Residential mortgage   3,715,676  3,690,218  3,673,455
Home equity line   805,746  841,624  891,698
Total residential   4,521,422  4,531,842  4,565,153
Consumer   1,283,779  1,353,842  1,568,073
Lease financing   238,148  245,411  236,623
Total loans and leases $ 13,300,289 $13,279,097 $13,380,270


           
Deposits         Table 8
   March 31,  December 31,  March 31, 
(dollars in thousands)     2021    2020    2020
Demand  $ 8,175,075 $7,522,114 $5,745,539
Savings    6,141,161  6,020,075  5,213,471
Money Market    3,642,604  3,337,236  3,148,694
Time    2,174,841  2,348,298  2,912,298
Total Deposits  $ 20,133,681 $19,227,723 $17,020,002


           
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More         Table 9
   March 31,  December 31,  March 31, 
(dollars in thousands)     2021    2020    2020
Non-Performing Assets          
Non-Accrual Loans and Leases          
Commercial Loans:          
Commercial and industrial  $ 593 $518 $32
Commercial real estate    937  80  
Construction    579  2,043  2,422
Total Commercial Loans    2,109  2,641  2,454
Residential Loans:          
Residential mortgage    6,999  6,441  4,472
Total Residential Loans    6,999  6,441  4,472
Total Non-Accrual Loans and Leases    9,108  9,082  6,926
Other Real Estate Owned       238
Total Non-Performing Assets  $ 9,108 $9,082 $7,164
           
Accruing Loans and Leases Past Due 90 Days or More          
Commercial Loans:          
Commercial and industrial  $ 1,365 $2,108 $4,007
Commercial real estate    1,054  882  757
Construction    89  93  148
Total Commercial Loans    2,508  3,083  4,912
Residential Loans:          
Residential mortgage       82
Home equity line    4,975  4,818  2,566
Total Residential Loans    4,975  4,818  2,648
Consumer    2,024  3,266  3,353
Total Accruing Loans and Leases Past Due 90 Days or More  $ 9,507 $11,167 $10,913
           
Restructured Loans on Accrual Status and Not Past Due 90 Days or More  $ 39,831 $16,684 $17,823
Total Loans and Leases  $ 13,300,289 $13,279,097 $13,380,270


            
Allowance for Credit Losses         Table 10 
   For the Three Months Ended  
   March 31,  December 31,  March 31,  
(dollars in thousands)     2021    2020    2020    
Balance at Beginning of Period  $ 208,454  $195,876  $130,530  
Adjustment to Adopt ASC Topic 326         770  
After Adoption of ASC Topic 326    208,454   195,876   131,300  
Loans and Leases Charged-Off           
Commercial Loans:           
Commercial and industrial    (963)  (799)  (201) 
Commercial real estate    (66)  (30)    
Total Commercial Loans    (1,029)  (829)  (201) 
Residential Loans:           
Residential mortgage    (98)       
Home equity line      (46)  (8) 
Total Residential Loans    (98)  (46)  (8) 
Consumer    (6,541)  (7,049)  (8,597) 
Total Loans and Leases Charged-Off    (7,668)  (7,924)  (8,806) 
Recoveries on Loans and Leases Previously Charged-Off           
Commercial Loans:           
Commercial and industrial    215   2,986   220  
Commercial real estate    3   615     
Construction    166   30   110  
Total Commercial Loans    384   3,631   330  
Residential Loans:           
Residential mortgage    17   37   135  
Home equity line    24   21   122  
Total Residential Loans    41   58   257  
Consumer    2,655   2,812   2,083  
Total Recoveries on Loans and Leases Previously Charged-Off    3,080   6,501   2,670  
Net Loans and Leases Charged-Off    (4,588)  (1,423)  (6,136) 
Provision for Credit Losses - Loans and Leases    (3,500)  14,001   40,849  
Balance at End of Period  $ 200,366  $208,454  $166,013  
Average Loans and Leases Outstanding  $ 13,242,270  $13,366,980  $13,191,426  
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)    0.14 %   0.04 %   0.19 %  
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding    1.51 %   1.57 %   1.24 %  


(1)Annualized for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020.


                            
Loans and Leases by Year of Origination and Credit Quality Indicator  Table 11
                       Revolving   
                       Loans   
                       Converted   
  Term Loans Revolving to Term   
  Amortized Cost Basis by Origination Year Loans Loans   
                    Amortized Amortized   
(dollars in thousands) 2021 2020 2019 2018 2017 Prior Cost Basis Cost Basis Total
Commercial Lending                           
Commercial and Industrial                           
Risk rating:                           
Pass $ 495,898 $ 781,914 $ 315,190 $ 152,290 $ 51,136 $ 218,781 $ 785,046 $ 27,922 $ 2,828,177
Special Mention     17,608   10,957   19,751   1,930   5,373   66,867   607   123,093
Substandard     23,098   2,808   16,913   584   12,048   28,361   1,367   85,179
Other (1)   3,252   9,848   11,793   7,889   4,362   1,496   46,347     84,987
Total Commercial and Industrial   499,150   832,468   340,748   196,843   58,012   237,698   926,621   29,896   3,121,436
                            
Commercial Real Estate                           
Risk rating:                           
Pass   41,958   346,445   613,930   556,954   454,433   1,104,669   51,280   8   3,169,677
Special Mention     1,491   58,763   14,518   33,401   64,971       173,144
Substandard     346     14,751   3,740   26,082   8,004     52,923
Other (1)             489       489
Total Commercial Real Estate   41,958   348,282   672,693   586,223   491,574   1,196,211   59,284   8   3,396,233
                            
Construction                           
Risk rating:                           
Pass   32,201   73,512   260,522   162,052   58,537   63,624   24,043     674,491
Special Mention       507   706   4,429   9,172       14,814
Substandard         536     1,478       2,014
Other (1)   5,410   16,755   9,924   7,588   3,655   4,040   580     47,952
Total Construction   37,611   90,267   270,953   170,882   66,621   78,314   24,623     739,271
                            
Lease Financing                           
Risk rating:                           
Pass   6,487   73,461   58,375   12,521   16,410   60,734       227,988
Special Mention   566   334   843   286   1,223   599       3,851
Substandard     2,714   1,673   293   1,107   522       6,309
Total Lease Financing   7,053   76,509   60,891   13,100   18,740   61,855       238,148
                            
Total Commercial Lending $ 585,772 $ 1,347,526 $ 1,345,285 $ 967,048 $ 634,947 $ 1,574,078 $ 1,010,528 $ 29,904 $ 7,495,088


                            
                       Revolving   
                       Loans   
                       Converted   
  Term Loans Revolving to Term   
  Amortized Cost Basis by Origination Year Loans Loans   
(continued)                   Amortized Amortized   
(dollars in thousands) 2021 2020 2019 2018 2017 Prior Cost Basis Cost Basis Total
Residential Lending                           
Residential Mortgage                           
FICO:                           
740 and greater $ 269,847 $ 698,143 $ 355,459 $ 261,304 $ 320,423 $ 1,031,922 $ $ $ 2,937,098
680 - 739   32,425   83,210   51,384   41,764   48,039   168,279       425,101
620 - 679   4,220   15,727   7,626   11,214   9,310   49,018       97,115
550 - 619       1,945   2,810   2,906   14,044       21,705
Less than 550       854   602   2,914   2,673       7,043
No Score (3)   4,599   12,498   17,761   21,197   19,972   55,404       131,431
Other (2)   5,767   20,213   13,584   13,754   20,607   21,516   580   162   96,183
Total Residential Mortgage   316,858   829,791   448,613   352,645   424,171   1,342,856   580   162   3,715,676
                            
Home Equity Line                           
FICO:                           
740 and greater               589,662   2,108   591,770
680 - 739               149,384   3,537   152,921
620 - 679               37,325   1,432   38,757
550 - 619               12,870   1,419   14,289
Less than 550               3,641   359   4,000
No Score (3)               4,009     4,009
Total Home Equity Line               796,891   8,855   805,746
Total Residential Lending   316,858   829,791   448,613   352,645   424,171   1,342,856   797,471   9,017   4,521,422
                            
Consumer Lending                           
FICO:                           
740 and greater   37,038   105,809   109,925   86,146   44,909   22,098   107,725   266   513,916
680 - 739   19,163   79,376   82,058   58,077   31,081   16,370   72,053   774   358,952
620 - 679   6,167   38,079   44,459   30,055   21,453   11,715   33,935   1,213   187,076
550 - 619   337   8,215   18,414   15,800   13,267   8,437   11,582   1,364   77,416
Less than 550   88   2,644   8,907   7,785   5,711   3,445   4,181   719   33,480
No Score (3)   955   354   99   57   99   7   32,161   411   34,143
Other (2)     376   1,774   66   2,183   6,748   67,649     78,796
Total Consumer Lending   63,748   234,853   265,636   197,986   118,703   68,820   329,286   4,747   1,283,779
                            
Total Loans and Leases $ 966,378 $ 2,412,170 $ 2,059,534 $ 1,517,679 $ 1,177,821 $ 2,985,754 $ 2,137,285 $ 43,668 $ 13,300,289


(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 12 
   For the Three Months Ended  
   March 31,  December 31,  March 31,  
(dollars in thousands, except per share amounts)     2021     2020    2020    
Income Statement Data:           
Net income  $ 57,693 $61,739 $38,865 
Core net income  $ 57,693 $65,288 $38,803 
            
Average total stockholders' equity  $ 2,727,701 $2,732,271 $2,660,811 
Less: average goodwill    995,492  995,492  995,492 
Average tangible stockholders' equity  $ 1,732,209 $1,736,779 $1,665,319 
            
Average total assets  $ 22,944,699 $22,468,040 $20,313,304 
Less: average goodwill    995,492  995,492  995,492 
Average tangible assets  $ 21,949,207 $21,472,548 $19,317,812 
            
Return on average total stockholders' equity(1)    8.58%   8.99%   5.87%  
Core return on average total stockholders' equity (non-GAAP)(1)    8.58%   9.51%   5.87%  
Return on average tangible stockholders' equity (non-GAAP)(1)    13.51%   14.14%   9.39%  
Core return on average tangible stockholders' equity (non-GAAP)(1)    13.51%   14.95%   9.37%  
            
Return on average total assets(1)    1.02%   1.09%   0.77%  
Core return on average total assets (non-GAAP)(1)    1.02%   1.16%   0.77%  
Return on average tangible assets (non-GAAP)(1)    1.07%   1.14%   0.81%  
Core return on average tangible assets (non-GAAP)(1)    1.07%   1.21%   0.81%  


   As of As of As of 
   March 31,  December 31,  March 31,  
      2021    2020    2020 
Balance Sheet Data:           
Total stockholders' equity  $ 2,683,630 $2,744,104 $2,664,685 
Less: goodwill    995,492  995,492  995,492 
Tangible stockholders' equity  $ 1,688,138 $1,748,612 $1,669,193 
            
Total assets  $ 23,497,596 $22,662,831 $20,755,891 
Less: goodwill    995,492  995,492  995,492 
Tangible assets  $ 22,502,104 $21,667,339 $19,760,399 
            
Shares outstanding    129,749,890  129,912,272  129,827,968 
            
Total stockholders' equity to total assets    11.42%   12.11%   12.84%
Tangible stockholders' equity to tangible assets (non-GAAP)   7.50%   8.07%   8.45%
            
Book value per share  $ 20.68 $21.12 $20.52 
Tangible book value per share (non-GAAP)  $ 13.01 $13.46 $12.86 

 

(1)Annualized for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020.


            
GAAP to Non-GAAP Reconciliation         Table 13 
   For the Three Months Ended 
   March 31,  December 31,  March 31,  
(dollars in thousands, except per share amounts)     2021    2020    2020    
Net interest income  $ 129,158 $135,227  $138,683  
Core net interest income (non-GAAP)  $ 129,158 $135,227  $138,683  
            
Noninterest income  $ 43,868 $53,598  $49,228  
Losses (gains) on sale of securities     12   (85) 
Costs associated with the sale of stock(1)     4,828     
Core noninterest income (non-GAAP)  $ 43,868 $58,438  $49,143  
            
Noninterest expense  $ 96,306 $88,127  $96,466  
Core noninterest expense (non-GAAP)  $ 96,306 $88,127  $96,466  
            
Net income  $ 57,693 $61,739  $38,865  
Losses (gains) on sale of securities     12   (85) 
Costs associated with the sale of stock(1)     4,828     
Tax adjustments(2)     (1,291)  23  
Total core adjustments     3,549   (62) 
Core net income (non-GAAP)  $ 57,693 $65,288  $38,803  
            
Basic earnings per share  $ 0.44 $0.48  $0.30  
Diluted earnings per share  $ 0.44 $0.47  $0.30  
Efficiency ratio    55.53% 46.59 %  51.33 % 
            
Core basic earnings per share (non-GAAP)  $ 0.44 $0.50  $0.30  
Core diluted earnings per share (non-GAAP)  $ 0.44 $0.50  $0.30  
Core efficiency ratio (non-GAAP)    55.53% 45.43 %  51.35 % 


(1)Costs associated with the sale of stock for the three months ended December 31, 2020 related to changes in the valuation of the funding swap entered into with the buyer of our Visa Class B restricted shares sold in 2016.
  
(2)Represents the adjustments to net income, tax effected at the Company’s effective tax rate for the respective period.