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First Hawaiian Inc

First Hawaiian, Inc. Reports Third Quarter 2024 Financial Results and Declares Dividend

Source: GlobeNewswire
First Hawaiian, Inc. Reports Third Quarter 2024 Financial Results and Declares Dividend

HONOLULU, Oct. 25, 2024 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended September 30, 2024.

“I’m happy to report that we had a very good third quarter,” said Bob Harrison, Chairman, President, and CEO. “Net interest income and noninterest income increased over the prior quarter, expenses were well controlled and credit quality remained excellent. I’m also pleased to report that during the third quarter, Moody’s reviewed and reaffirmed all of First Hawaiian Bank’s long-term credit and deposit ratings.”

On October 23, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on November 29, 2024, to stockholders of record at the close of business on November 18, 2024.

Third Quarter 2024 Highlights:

  • Net income of $61.5 million, or $0.48 per diluted share
  • Total loans and leases decreased $118.5 million versus the prior quarter
  • Total deposits decreased $91.1 million versus the prior quarter
  • Net interest margin increased 3 basis points to 2.95%
  • Recorded a $7.4 million provision for credit losses
  • Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet

Total assets were $23.8 billion as of September 30, 2024, a decrease of $211.5 million, or 0.9%, from $24.0 billion as of June 30, 2024.

Gross loans and leases were $14.2 billion as of September 30, 2024, a decrease of $118.5 million, or 0.8%, from $14.4 billion as of June 30, 2024.

Total deposits were $20.2 billion as of September 30, 2024, a decrease of $91.1 million, or 0.4%, from $20.3 billion as of June 30, 2024.

Net Interest Income

Net interest income for the third quarter of 2024 was $156.7 million, an increase of $3.9 million, or 2.5%, compared to $152.9 million for the prior quarter.

The net interest margin was 2.95% in the third quarter of 2024, an increase of 3 basis points compared to 2.92% in the prior quarter.

Provision Expense

During the quarter ended September 30, 2024, we recorded a $7.4 million provision for credit losses. In the quarter ended June 30, 2024, we recorded a $1.8 million provision for credit losses.

Noninterest Income

Noninterest income was $53.3 million in the third quarter of 2024, an increase of $1.5 million compared to noninterest income of $51.8 million in the prior quarter.

Noninterest Expense

Noninterest expense was $126.1 million in the third quarter of 2024, an increase of $4.1 million compared to noninterest expense of $122.1 million in the prior quarter.

The efficiency ratio was 59.8% and 59.2% for the quarters ended September 30, 2024 and June 30, 2024, respectively.

Taxes

The effective tax rate was 19.6% and 23.3% for the quarters ended September 30, 2024 and June 30, 2024, respectively.

Asset Quality

The allowance for credit losses was $163.7 million, or 1.15% of total loans and leases, as of September 30, 2024, compared to $160.5 million, or 1.12% of total loans and leases, as of June 30, 2024. The reserve for unfunded commitments was $33.7 million as of September 30, 2024 compared to $33.4 million as of June 30, 2024. Net charge-offs were $3.9 million, or 0.11% of average loans and leases on an annualized basis, for the quarter ended September 30, 2024, compared to net charge-offs of $2.5 million, or 0.07% of average loans and leases on an annualized basis, for the quarter ended June 30, 2024. Total non-performing assets were $17.8 million, or 0.13% of total loans and leases and other real estate owned, as of September 30, 2024, compared to $18.0 million, or 0.13% of total loans and leases and other real estate owned, as of June 30, 2024.

Capital

Total stockholders' equity increased $97.7 million in the third quarter, and stood at $2.6 billion on September 30, 2024 and June 30, 2024.

The tier 1 leverage, common equity tier 1 and total capital ratios were 9.14%, 13.03% and 14.25%, respectively, on September 30, 2024, compared with 9.03%, 12.73% and 13.92%, respectively, on June 30, 2024.

The Company did not repurchase any shares in the third quarter.

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 by phone, participants will need to click on the following registration link: https://register.vevent.com/register/BIec8273f35cc340bcb13d27eae17d127b, register for the conference call, and then you will receive the dial-in number and a personalized PIN code. 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 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. 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 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, 2023 and our Quarterly Report on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024.

Use of Non-GAAP Financial Measures
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 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
khaseyama@fhb.com
Media Contact:
Lindsay Chambers
(808) 525-6254
lchambers@fhb.com


                 
Financial Highlights Table 1
  For the Three Months Ended For the Nine Months Ended  
  September 30,  June 30,  September 30,  September 30,  
(dollars in thousands, except per share data) 2024 2024 2023 2024 2023 
Operating Results:                
Net interest income $ 156,707 $152,851 $157,148 $ 463,985 $484,334 
Provision for credit losses   7,400  1,800  7,500   15,500  21,300 
Noninterest income   53,288  51,768  46,097   156,427  142,468 
Noninterest expense   126,147  122,086  119,383   377,046  358,831 
Net income   61,492  61,921  58,221   177,633  187,481 
Basic earnings per share   0.48  0.48  0.46   1.39  1.47 
Diluted earnings per share   0.48  0.48  0.46   1.38  1.47 
Dividends declared per share   0.26  0.26  0.26   0.78  0.78 
Dividend payout ratio   54.17% 54.17% 56.52%  56.52% 53.06%
Performance Ratios(1):                
Net interest margin  2.95% 2.92% 2.86% 2.93% 2.96%
Efficiency ratio  59.77% 59.22% 58.31% 60.38% 56.86%
Return on average total assets  1.02% 1.04% 0.93% 0.99% 1.01%
Return on average tangible assets (non-GAAP)(2)  1.06% 1.08% 0.97% 1.03% 1.06%
Return on average total stockholders' equity  9.45% 9.91% 9.76% 9.37% 10.72%
Return on average tangible stockholders' equity (non-GAAP)(2)  15.35% 16.42% 16.84% 15.43% 18.68%
Average Balances:                
Average loans and leases $ 14,304,806 $14,358,049 $14,349,402 $ 14,325,065 $14,238,309 
Average earning assets   21,328,882  21,247,707  22,060,480   21,352,739  22,040,704 
Average assets   24,046,696  23,958,913  24,727,893   24,064,208  24,699,826 
Average deposits   20,367,805  20,308,028  21,212,102   20,415,746  21,245,055 
Average stockholders' equity   2,588,806  2,512,471  2,367,422   2,532,911  2,337,292 
Market Value Per Share:                
Closing   23.15  20.76  18.05   23.15  18.05 
High   26.18  22.68  22.59   26.18  28.28 
Low   20.28  19.48  17.41   19.48  15.08 


              
  As of As of As of As of 
  September 30,  June 30,  December 31,  September 30,  
(dollars in thousands, except per share data) 2024 2024 2023 2023 
Balance Sheet Data:             
Loans and leases $ 14,241,370 $14,359,899 $14,353,497 $14,332,335 
Total assets   23,780,285  23,991,791  24,926,474  24,912,524 
Total deposits   20,227,702  20,318,832  21,332,657  21,511,489 
Short-term borrowings   250,000  500,000  500,000  500,000 
Total stockholders' equity   2,648,034  2,550,312  2,486,066  2,351,009 
              
Per Share of Common Stock:             
Book value $ 20.71 $19.94 $19.48 $18.42 
Tangible book value (non-GAAP)(2)   12.92  12.16  11.68  10.62 
              
Asset Quality Ratios:             
Non-accrual loans and leases / total loans and leases  0.13% 0.13% 0.13% 0.10%
Allowance for credit losses for loans and leases / total loans and leases  1.15% 1.12% 1.09% 1.08%
              
Capital Ratios:             
Common Equity Tier 1 Capital Ratio  13.03% 12.73% 12.39% 12.21%
Tier 1 Capital Ratio  13.03% 12.73% 12.39% 12.21%
Total Capital Ratio  14.25% 13.92% 13.57% 13.38%
Tier 1 Leverage Ratio  9.14% 9.03% 8.64% 8.45%
Total stockholders' equity to total assets  11.14% 10.63% 9.97% 9.44%
Tangible stockholders' equity to tangible assets (non-GAAP)(2)  7.25% 6.76% 6.23% 5.67%
              
Non-Financial Data:             
Number of branches   48  48  50  50 
Number of ATMs   273  272  275  294 
Number of Full-Time Equivalent Employees   2,022  2,032  2,089  2,087 


(1)   Except for the efficiency ratio, amounts are annualized for the three and nine months ended September 30, 2024 and 2023 and three months ended June 30, 2024.

(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 Nine Months Ended
  September 30,  June 30,  September 30,  September 30, 
(dollars in thousands, except per share amounts) 2024 2024 2023 2024 2023
Interest income               
Loans and lease financing $ 205,682 $202,068 $194,098 $ 607,594 $551,777
Available-for-sale investment securities   12,850  14,143  18,426   41,539  55,208
Held-to-maturity investment securities   16,937  17,575  18,271   52,305  55,510
Other   14,527  11,148  9,004   38,444  20,054
Total interest income   249,996  244,934  239,799   739,882  682,549
Interest expense               
Deposits   87,500  85,609  74,651   257,252  176,006
Short-term and long-term borrowings   5,397  5,953  6,838   17,303  20,057
Other   392  521  1,162   1,342  2,152
Total interest expense   93,289  92,083  82,651   275,897  198,215
Net interest income   156,707  152,851  157,148   463,985  484,334
Provision for credit losses   7,400  1,800  7,500   15,500  21,300
Net interest income after provision for credit losses   149,307  151,051  149,648   448,485  463,034
Noninterest income               
Service charges on deposit accounts   7,783  7,793  7,524   23,122  22,001
Credit and debit card fees   17,533  15,861  15,748   49,567  47,507
Other service charges and fees   11,790  11,036  9,546   32,730  27,764
Trust and investment services income   9,077  9,426  9,742   28,857  28,804
Bank-owned life insurance   4,502  3,360  1,872   12,148  10,263
Other   2,603  4,292  1,665   10,003  6,129
Total noninterest income   53,288  51,768  46,097   156,427  142,468
Noninterest expense               
Salaries and employee benefits   59,563  57,737  55,937   176,562  169,873
Contracted services and professional fees   14,634  16,067  16,393   46,440  50,204
Occupancy   6,945  7,377  6,711   21,263  22,047
Equipment   13,078  13,196  11,826   39,687  32,562
Regulatory assessment and fees   3,412  3,814  4,149   15,346  11,661
Advertising and marketing   1,813  1,765  2,289   6,190  6,174
Card rewards program   8,678  8,719  8,358   25,905  24,124
Other   18,024  13,411  13,720   45,653  42,186
Total noninterest expense   126,147  122,086  119,383   377,046  358,831
Income before provision for income taxes   76,448  80,733  76,362   227,866  246,671
Provision for income taxes   14,956  18,812  18,141   50,233  59,190
Net income $ 61,492 $61,921 $58,221 $ 177,633 $187,481
Basic earnings per share $ 0.48 $0.48 $0.46 $ 1.39 $1.47
Diluted earnings per share $ 0.48 $0.48 $0.46 $ 1.38 $1.47
Basic weighted-average outstanding shares   127,886,167  127,867,853  127,609,860   127,820,737  127,552,255
Diluted weighted-average outstanding shares   128,504,035  128,262,594  127,936,440   128,362,433  127,897,829


             
Consolidated Balance Sheets Table 3
  September 30,  June 30,  December 31,  September 30, 
(dollars in thousands, except share amount) 2024 2024 2023 2023
Assets            
Cash and due from banks $ 252,209  $290,501  $185,015  $246,028 
Interest-bearing deposits in other banks   820,603   824,258   1,554,882   967,400 
Investment securities:            
Available-for-sale, at fair value (amortized cost: $2,290,781 as of September 30, 2024, $2,379,004 as of June 30, 2024, $2,558,675 as of December 31, 2023 and $3,172,031 as of September 30, 2023)   2,055,959   2,067,956   2,255,336   2,722,704 
Held-to-maturity, at amortized cost (fair value: $3,475,143 as of September 30, 2024, $3,401,006 as of June 30, 2024, $3,574,856 as of December 31, 2023 and $3,433,029 as of September 30, 2023)   3,853,697   3,917,175   4,041,449   4,104,114 
Loans held for sale   —   2,820   190   — 
Loans and leases   14,241,370   14,359,899   14,353,497   14,332,335 
Less: allowance for credit losses   163,700   160,517   156,533   154,795 
Net loans and leases   14,077,670   14,199,382   14,196,964   14,177,540 
             
Premises and equipment, net   287,036   283,762   281,461   277,805 
Accrued interest receivable   81,875   82,512   84,417   84,327 
Bank-owned life insurance   490,135   486,261   479,907   477,698 
Goodwill   995,492   995,492   995,492   995,492 
Mortgage servicing rights   5,236   5,395   5,699   5,855 
Other assets   860,373   836,277   845,662   853,561 
Total assets $ 23,780,285  $23,991,791  $24,926,474  $24,912,524 
Liabilities and Stockholders' Equity            
Deposits:            
Interest-bearing $ 13,427,674  $13,461,365  $13,749,095  $13,612,493 
Noninterest-bearing   6,800,028   6,857,467   7,583,562   7,898,996 
Total deposits   20,227,702   20,318,832   21,332,657   21,511,489 
Short-term borrowings   250,000   500,000   500,000   500,000 
Retirement benefits payable   100,448   101,304   103,285   99,685 
Other liabilities   554,101   521,343   504,466   450,341 
Total liabilities   21,132,251   21,441,479   22,440,408   22,561,515 
             
Stockholders' equity            
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 141,735,601 / 127,886,167 shares as of September 30, 2024, issued/outstanding: 141,728,446 / 127,879,012 shares as of June 30, 2024, issued/outstanding: 141,340,539 / 127,618,761 shares as of December 31, 2023 and issued/outstanding: 141,330,663 / 127,609,934 shares as of September 30, 2023)   1,417   1,417   1,413   1,413 
Additional paid-in capital   2,558,158   2,554,795   2,548,250   2,545,659 
Retained earnings   915,062   887,176   837,859   823,895 
Accumulated other comprehensive loss, net   (452,658)  (519,132)  (530,210)  (648,731)
Treasury stock (13,849,434 shares as of September 30, 2024, 13,849,434 shares as of June 30, 2024, 13,721,778 shares as of December 31, 2023 and 13,720,729 shares as of September 30, 2023)   (373,945)  (373,944)  (371,246)  (371,227)
Total stockholders' equity   2,648,034   2,550,312   2,486,066   2,351,009 
Total liabilities and stockholders' equity $ 23,780,285  $23,991,791  $24,926,474  $24,912,524 


                          
Average Balances and Interest Rates                       Table 4
  Three Months Ended  Three Months Ended  Three Months Ended  
  September 30, 2024 June 30, 2024 September 30, 2023 
  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 $ 1,020.4 $ 13.9 5.40%$773.4 $10.5 5.45%$608.6 $8.2 5.36%
Available-for-Sale Investment Securities                         
Taxable   2,062.6   12.8 2.48  2,100.7  14.1 2.69  2,834.6  18.4 2.59 
Non-Taxable   1.5   — 5.06  1.5  — 5.76  2.3  — 5.48 
Held-to-Maturity Investment Securities                         
Taxable   3,288.2   13.8 1.67  3,358.2  14.4 1.71  3,544.1  15.0 1.70 
Non-Taxable   602.3   3.7 2.46  602.9  4.0 2.64  604.3  4.1 2.66 
Total Investment Securities   5,954.6   30.3 2.03  6,063.3  32.5 2.15  6,985.3  37.5 2.14 
Loans Held for Sale   2.2   — 5.64  1.0  — 6.58  0.4  — 6.63 
Loans and Leases(1)                         
Commercial and industrial   2,165.3   38.0 6.98  2,201.6  38.1 6.96  2,123.5  35.7 6.66 
Commercial real estate   4,278.3   71.6 6.67  4,305.6  71.5 6.68  4,381.8  71.4 6.47 
Construction   1,040.7   20.3 7.74  984.8  18.5 7.57  873.7  15.5 7.05 
Residential:                         
Residential mortgage   4,204.5   40.4 3.84  4,229.4  40.1 3.80  4,316.3  40.1 3.72 
Home equity line   1,158.5   13.2 4.52  1,164.2  12.6 4.35  1,154.0  10.1 3.45 
Consumer   1,035.3   18.7 7.19  1,054.1  17.7 6.74  1,172.8  18.3 6.19 
Lease financing   422.2   4.0 3.72  418.3  4.3 4.09  327.3  3.7 4.48 
Total Loans and Leases   14,304.8   206.2 5.74  14,358.0  202.8 5.67  14,349.4  194.8 5.39 
Other Earning Assets   46.9   0.7 5.83  52.0  0.7 5.25  116.8  0.8 2.64 
Total Earning Assets(2)   21,328.9   251.1 4.69  21,247.7  246.5 4.66  22,060.5  241.3 4.35 
Cash and Due from Banks   242.3       240.4       276.0      
Other Assets   2,475.5       2,470.8       2,391.4      
Total Assets $ 24,046.7      $23,958.9      $24,727.9      
                          
Interest-Bearing Liabilities                         
Interest-Bearing Deposits                         
Savings $ 5,963.1 $ 23.6 1.57%$6,000.4 $23.4 1.57%$5,982.5 $19.2 1.27%
Money Market   4,179.5   31.9  3.04  4,076.7  30.6 3.02  3,907.2  24.7 2.51 
Time   3,327.3   32.0  3.83  3,284.3  31.6 3.87  3,362.7  30.8 3.63 
Total Interest-Bearing Deposits   13,469.9   87.5  2.58  13,361.4  85.6 2.58  13,252.4  74.7 2.23 
Other Short-Term Borrowings   451.1   5.4  4.76  500.0  6.0 4.79  113.1  1.5 5.17 
Long-Term Borrowings   —   —  —  —  — —  440.2  5.3 4.83 
Other Interest-Bearing Liabilities   22.4   0.4  6.97  38.2  0.5 5.48  89.1  1.2 5.17 
Total Interest-Bearing Liabilities   13,943.4   93.3  2.66  13,899.6  92.1 2.66  13,894.8  82.7 2.36 
Net Interest Income    $ 157.8      $154.4      $158.6   
Interest Rate Spread(3)       2.03%      2.00%      1.99%
Net Interest Margin(4)       2.95%      2.92%      2.86%
Noninterest-Bearing Demand Deposits   6,897.9       6,946.6       7,959.7      
Other Liabilities   616.6       600.2       506.0      
Stockholders' Equity   2,588.8       2,512.5       2,367.4      
Total Liabilities and Stockholders' Equity $ 24,046.7      $23,958.9      $24,727.9      


(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 $1.1 million, $1.5 million and $1.5 million for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively.

(3)   Interest rate spread is the difference between the average yield on earning assets and the average rate paid on interest-bearing liabilities, on a fully taxable-equivalent basis.

(4)   Net interest margin is net interest income annualized for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, on a fully taxable-equivalent basis, divided by average total earning assets.

                  
Average Balances and Interest Rates               Table 5
  Nine Months Ended  Nine Months Ended  
  September 30, 2024 September 30, 2023 
  Average Income/ Yield/ Average Income/ Yield/ 
(dollars in millions) Balance Expense Rate Balance Expense Rate 
Earning Assets                 
Interest-Bearing Deposits in Other Banks $ 884.6 $ 35.9  5.43%  $493.6 $18.8 5.10%
Available-for-Sale Investment Securities                 
Taxable   2,124.4   41.5  2.61  2,964.0  54.8 2.47 
Non-Taxable   1.6   0.1  5.49  13.0  0.5 5.57 
Held-to-Maturity Investment Securities                 
Taxable   3,354.0   42.7  1.70  3,615.0  46.0 1.70 
Non-Taxable   602.9   11.7  2.58  608.9  11.9 2.62 
Total Investment Securities   6,082.9   96.0  2.10  7,200.9  113.2 2.10 
Loans Held for Sale   1.3   0.1  6.11  0.3  — 6.11 
Loans and Leases(1)                 
Commercial and industrial   2,177.2   113.3  6.95  2,193.8  104.3 6.35 
Commercial real estate   4,302.4   213.4  6.62  4,224.7  194.6 6.16 
Construction   983.6   56.2  7.63  874.0  45.4 6.95 
Residential:                 
Residential mortgage   4,232.6   122.5  3.86  4,312.4  117.6 3.64 
Home equity line   1,164.9   37.8  4.34  1,116.4  27.9 3.35 
Consumer   1,057.6   54.4  6.87  1,194.1  53.2 5.95 
Lease financing   406.8   11.9  3.90  322.9  10.5 4.34 
Total Loans and Leases   14,325.1   609.5  5.68  14,238.3  553.5 5.19 
Other Earning Assets   58.8   2.5  5.69  107.6  1.3 1.53 
Total Earning Assets(2)   21,352.7   744.0  4.65  22,040.7  686.8 4.16 
Cash and Due from Banks   242.4       273.3      
Other Assets   2,469.1       2,385.8      
Total Assets $ 24,064.2      $24,699.8      
                  
Interest-Bearing Liabilities                 
Interest-Bearing Deposits                 
Savings $ 6,007.6 $ 70.5 1.57%$6,144.1 $49.1 1.07%
Money Market   4,067.5   91.3 3.00  3,857.0  58.6 2.03 
Time   3,312.3   95.5 3.85  2,921.8  68.3 3.12 
Total Interest-Bearing Deposits   13,387.4   257.3 2.57  12,922.9  176.0 1.82 
Federal Funds Purchased   —   — —  23.0  0.8 4.45 
Other Short-Term Borrowings   483.6   17.3 4.78  176.5  6.8 5.15 
Long-Term Borrowings   —   — —  349.8  12.5 4.78 
Other Interest-Bearing Liabilities   31.1   1.3 5.75  62.1  2.1 4.63 
Total Interest-Bearing Liabilities   13,902.1   275.9 2.65  13,534.3  198.2 1.96 
Net Interest Income    $ 468.1      $488.6   
Interest Rate Spread(3)       2.00%      2.20%
Net Interest Margin(4)       2.93%      2.96%
Noninterest-Bearing Demand Deposits   7,028.4       8,322.2      
Other Liabilities   600.8       506.0      
Stockholders' Equity   2,532.9       2,337.3      
Total Liabilities and Stockholders' Equity $ 24,064.2      $24,699.8      


(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 $4.1 million and $4.2 million for the nine months ended September 30, 2024 and 2023, respectively.

(3)   Interest rate spread is the difference between the average yield on earning assets and the average rate paid on interest-bearing liabilities, on a fully taxable-equivalent basis.

(4)   Net interest margin is net interest income annualized for the nine months ended September 30, 2024 and 2023, on a fully taxable-equivalent basis, divided by average total earning assets.

          
Analysis of Change in Net Interest Income        Table 6
  Three Months Ended September 30, 2024
  Compared to June 30, 2024
(dollars in millions) Volume Rate Total (1)
Change in Interest Income:         
Interest-Bearing Deposits in Other Banks $ 3.5  $ (0.1) $ 3.4 
Available-for-Sale Investment Securities         
Taxable   (0.2)   (1.1)   (1.3)
Held-to-Maturity Investment Securities         
Taxable   (0.3)   (0.3)   (0.6)
Non-Taxable   —    (0.3)   (0.3)
Total Investment Securities   (0.5)   (1.7)   (2.2)
Loans and Leases         
Commercial and industrial   (0.3)   0.2    (0.1)
Commercial real estate   —    0.1    0.1 
Construction   1.3    0.5    1.8 
Residential:         
Residential mortgage   (0.2)   0.5    0.3 
Home equity line   —    0.6    0.6 
Consumer   (0.3)   1.3    1.0 
Lease financing   —    (0.3)   (0.3)
Total Loans and Leases   0.5    2.9    3.4 
Other Earning Assets   (0.1)   0.1    — 
Total Change in Interest Income   3.4    1.2    4.6 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   —    0.2    0.2 
Money Market   1.0    0.3    1.3 
Time   0.6    (0.2)   0.4 
Total Interest-Bearing Deposits   1.6    0.3    1.9 
Other Short-Term Borrowings   (0.5)   (0.1)   (0.6)
Other Interest-Bearing Liabilities   (0.2)   0.1    (0.1)
Total Change in Interest Expense   0.9    0.3    1.2 
Change in Net Interest Income $ 2.5  $ 0.9  $ 3.4 


(1)   The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

          
Analysis of Change in Net Interest Income        Table 7
  Three Months Ended September 30, 2024
  Compared to September 30, 2023
(dollars in millions) Volume Rate Total (1)
Change in Interest Income:         
Interest-Bearing Deposits in Other Banks $ 5.6  $ 0.1  $ 5.7 
Available-for-Sale Investment Securities         
Taxable   (4.8)   (0.8)   (5.6)
Held-to-Maturity Investment Securities         
Taxable   (1.0)   (0.2)   (1.2)
Non-Taxable   —    (0.4)   (0.4)
Total Investment Securities   (5.8)   (1.4)   (7.2)
Loans and Leases         
Commercial and industrial   0.7    1.6    2.3 
Commercial real estate   (1.8)   2.0    0.2 
Construction   3.2    1.6    4.8 
Residential:         
Residential mortgage   (1.0)   1.3    0.3 
Home equity line   —    3.1    3.1 
Consumer   (2.3)   2.7    0.4 
Lease financing   0.9    (0.6)   0.3 
Total Loans and Leases   (0.3)   11.7    11.4 
Other Earning Assets   (0.7)   0.6    (0.1)
Total Change in Interest Income   (1.2)   11.0    9.8 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   (0.1)   4.5    4.4 
Money Market   1.8    5.4    7.2 
Time   (0.3)   1.5    1.2 
Total Interest-Bearing Deposits   1.4    11.4    12.8 
Other Short-Term Borrowings   4.0    (0.1)   3.9 
Long-Term Borrowings   (2.6)   (2.7)   (5.3)
Other Interest-Bearing Liabilities   (1.1)   0.3    (0.8)
Total Change in Interest Expense   1.7    8.9    10.6 
Change in Net Interest Income $ (2.9) $ 2.1  $ (0.8)


(1)   The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

          
Analysis of Change in Net Interest Income        Table 8
  Nine Months Ended September 30, 2024
  Compared to September 30, 2023
(dollars in millions) Volume Rate Total (1)
Change in Interest Income:         
Interest-Bearing Deposits in Other Banks $ 15.8  $ 1.3  $ 17.1 
Available-for-Sale Investment Securities         
Taxable   (16.3)   3.0    (13.3)
Non-Taxable   (0.4)   —    (0.4)
Held-to-Maturity Investment Securities         
Taxable   (3.3)   —    (3.3)
Non-Taxable   (0.1)   (0.1)   (0.2)
Total Investment Securities   (20.1)   2.9    (17.2)
Loans Held for Sale   0.1    —    0.1 
Loans and Leases         
Commercial and industrial   (0.8)   9.8    9.0 
Commercial real estate   3.7    15.1    18.8 
Construction   6.1    4.7    10.8 
Residential:         
Residential mortgage   (2.2)   7.1    4.9 
Home equity line   1.3    8.6    9.9 
Consumer   (6.5)   7.7    1.2 
Lease financing   2.5    (1.1)   1.4 
Total Loans and Leases   4.1    51.9    56.0 
Other Earning Assets   (0.8)   2.0    1.2 
Total Change in Interest Income   (0.9)   58.1    57.2 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   (1.1)   22.5    21.4 
Money Market   3.4    29.3    32.7 
Time   9.9    17.3    27.2 
Total Interest-Bearing Deposits   12.2    69.1    81.3 
Federal Funds Purchased   (0.4)   (0.4)   (0.8)
Other Short-Term Borrowings   11.0    (0.5)   10.5 
Long-Term Borrowings   (6.3)   (6.2)   (12.5)
Other Interest-Bearing Liabilities   (1.2)   0.4    (0.8)
Total Change in Interest Expense   15.3    62.4    77.7 
Change in Net Interest Income $ (16.2) $ (4.3) $ (20.5)


(1)   The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

             
Loans and Leases           Table 9
  September 30, June 30, December 31, September 30,
(dollars in thousands) 2024 2024 2023 2023
Commercial and industrial $ 2,110,077 $2,208,690 $2,165,349 $2,101,442
Commercial real estate   4,265,289  4,305,017  4,340,243  4,387,751
Construction   1,056,249  1,017,649  900,292  885,112
Residential:            
Residential mortgage   4,187,060  4,216,416  4,283,315  4,303,924
Home equity line   1,159,823  1,159,833  1,174,588  1,167,388
Total residential   5,346,883  5,376,249  5,457,903  5,471,312
Consumer   1,030,044  1,027,104  1,109,901  1,154,203
Lease financing   432,828  425,190  379,809  332,515
Total loans and leases $ 14,241,370 $14,359,899 $14,353,497 $14,332,335


             
Deposits           Table 10
  September 30,  June 30,  December 31,  September 30, 
(dollars in thousands) 2024 2024 2023 2023
Demand $ 6,800,028 $6,857,467 $7,583,562 $7,898,996
Savings   5,896,029  6,055,051  6,445,084  6,028,308
Money Market   4,129,381  4,111,609  3,847,853  3,923,054
Time   3,402,264  3,294,705  3,456,158  3,661,131
Total Deposits $ 20,227,702 $20,318,832 $21,332,657 $21,511,489


             
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More           Table 11
  September 30, June 30, December 31, September 30,
(dollars in thousands) 2024 2024 2023 2023
Non-Performing Assets            
Non-Accrual Loans and Leases            
Commercial Loans:            
Commercial and industrial $ 934 $1,084 $970 $988
Commercial real estate   152  3,085  2,953  —
Construction   —  447  —  —
Total Commercial Loans   1,086  4,616  3,923  988
Residential Loans:            
Residential mortgage   9,103  7,273  7,620  7,435
Home equity line   7,645  6,124  7,052  6,200
Total Residential Loans   16,748  13,397  14,672  13,635
Total Non-Accrual Loans and Leases   17,834  18,013  18,595  14,623
Total Non-Performing Assets $ 17,834 $18,013 $18,595 $14,623
             
Accruing Loans and Leases Past Due 90 Days or More            
Commercial Loans:            
Commercial and industrial $ 529 $110 $494 $289
Commercial real estate   568  —  300  170
Total Commercial Loans   1,097  110  794  459
Residential mortgage   931  1,820  —  1,430
Consumer   2,515  1,835  2,702  1,681
Total Accruing Loans and Leases Past Due 90 Days or More $ 4,543 $3,765 $3,496 $3,570
             
Total Loans and Leases $ 14,241,370 $14,359,899 $14,353,497 $14,332,335


                 
Allowance for Credit Losses and Reserve for Unfunded Commitments
   Table 12
  For the Three Months Ended  For the Nine Months Ended  
  September 30,  June 30, September 30, September 30, September 30,  
(dollars in thousands) 2024 2024 2023 2024 2023 
Balance at Beginning of Period $ 193,930  $194,649  $184,780  $ 192,138  $177,735  
Loans and Leases Charged-Off                
Commercial Loans:                
Commercial and industrial   (1,178)  (677)  (784)   (2,764)  (2,572) 
Commercial real estate   (400)  —   —    (400)  —  
Total Commercial Loans   (1,578)  (677)  (784)   (3,164)  (2,572) 
Residential Loans:                
Residential mortgage   —   —   —    —   (122) 
Home equity line   —   —   —    —   (272) 
Total Residential Loans   —   —   —    —   (394) 
Consumer   (4,192)  (4,182)  (3,665)   (13,228)  (12,963) 
Total Loans and Leases Charged-Off   (5,770)  (4,859)  (4,449)   (16,392)  (15,929) 
Recoveries on Loans and Leases Previously Charged-Off                
Commercial and industrial   160   250   2,637    621   3,175  
Residential Loans:                
Residential mortgage   31   28   53    89   110  
Home equity line   86   112   303    242   539  
Total Residential Loans   117   140   356    331   649  
Consumer   1,560   1,950   1,746    5,199   5,640  
Total Recoveries on Loans and Leases Previously Charged-Off   1,837   2,340   4,739    6,151   9,464  
Net Loans and Leases (Charged-Off) Recovered   (3,933)  (2,519)  290    (10,241)  (6,465) 
Provision for Credit Losses   7,400   1,800   7,500    15,500   21,300  
Balance at End of Period $ 197,397  $193,930  $192,570  $ 197,397  $192,570  
Components:                
Allowance for Credit Losses $ 163,700  $160,517  $154,795  $ 163,700  $154,795  
Reserve for Unfunded Commitments   33,697   33,413   37,775    33,697   37,775  
Total Allowance for Credit Losses and Reserve for Unfunded Commitments $ 197,397  $193,930  $192,570  $ 197,397  $192,570  
Average Loans and Leases Outstanding $ 14,304,806  $14,358,049  $14,349,402  $ 14,325,065  $14,238,309  
Ratio of Net Loans and Leases Charged-Off (Recovered) to Average Loans and Leases Outstanding(1)  0.11 % 0.07 % (0.01)% 0.10 % 0.06 %
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding  1.15 % 1.12 % 1.08 % 1.15 % 1.08 %
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases  9.18x  8.91x  10.59x  9.18x  10.59x 


(1)   Annualized for the three and nine months ended September 30, 2024 and 2023 and three months ended June 30, 2024.

                            
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) 2024 2023 2022 2021 2020 Prior Cost Basis Cost Basis Total
Commercial Lending                           
Commercial and Industrial                           
Risk rating:                           
Pass $ 100,174 $ 82,175 $ 191,861 $ 256,997 $ 20,866 $ 266,720 $ 1,026,457 $ 13,396 $ 1,958,646
Special Mention   303   1   7,327   48   398   1,371   18,239   —   27,687
Substandard   —   —   8,251   219   358   2,033   32,296   —   43,157
Other (1)   10,797   10,542   7,779   3,074   1,052   1,723   45,620   —   80,587
Total Commercial and Industrial   111,274   92,718   215,218   260,338   22,674   271,847   1,122,612   13,396   2,110,077
Current period gross charge-offs   —   578   333   89   221   1,543   —   —   2,764
                            
Commercial Real Estate                           
Risk rating:                           
Pass   118,884   347,480   810,746   649,133   325,887   1,774,529   87,188   7,760   4,121,607
Special Mention   3,587   2,261   7,537   41,384   3,306   11,973   7,815   —   77,863
Substandard   —   —   54,984   1,003   —   9,548   149   —   65,684
Other (1)   —   —   —   —   —   135   —   —   135
Total Commercial Real Estate   122,471   349,741   873,267   691,520   329,193   1,796,185   95,152   7,760   4,265,289
Current period gross charge-offs   —   —   —   —   —   400   —   —   400
                            
Construction                           
Risk rating:                           
Pass   61,677   246,176   361,974   241,212   58,820   46,344   4,484   —   1,020,687
Special Mention   —   —   —   —   —   164   —   —   164
Other (1)   4,970   9,468   12,022   3,575   1,199   3,463   701   —   35,398
Total Construction   66,647   255,644   373,996   244,787   60,019   49,971   5,185   —   1,056,249
Current period gross charge-offs   —   —   —   —   —   —   —   —   —
                            
Lease Financing                           
Risk rating:                           
Pass   126,380   105,523   66,764   15,483   23,133   89,254   —   —   426,537
Special Mention   —   42   100   300   5   —   —   —   447
Substandard   4,899   602   343   —   —   —   —   —   5,844
Total Lease Financing   131,279   106,167   67,207   15,783   23,138   89,254   —   —   432,828
Current period gross charge-offs   —   —   —   —   —   —   —   —   —
                            
Total Commercial Lending $ 431,671 $ 804,270 $ 1,529,688 $ 1,212,428 $ 435,024 $ 2,207,257 $ 1,222,949 $ 21,156 $ 7,864,443
Current period gross charge-offs $ — $ 578 $ 333 $ 89 $ 221 $ 1,943 $ — $ — $ 3,164


                            
                       Revolving   
                       Loans   
                       Converted   
  Term Loans Revolving to Term   
  Amortized Cost Basis by Origination Year Loans Loans   
(continued)                   Amortized Amortized   
(dollars in thousands) 2024 2023 2022 2021 2020 Prior Cost Basis Cost Basis Total
Residential Lending                           
Residential Mortgage                           
FICO:                           
740 and greater $ 113,307 $ 206,224 $ 504,141 $ 956,983 $ 503,160 $ 1,129,857 $ — $ — $ 3,413,672
680 - 739   11,614   28,638   65,128   109,018   66,719   157,263   —   —   438,380
620 - 679   1,519   1,792   22,921   19,854   11,651   37,979   —   —   95,716
550 - 619   —   896   3,703   6,707   2,269   15,751   —   —   29,326
Less than 550   —   286   2,380   3,818   2,959   5,569   —   —   15,012
No Score (3)   543   7,117   16,923   10,512   5,553   52,526   —   —   93,174
Other (2)   8,148   12,786   16,721   14,776   11,222   30,022   8,105   —   101,780
Total Residential Mortgage   135,131   257,739   631,917   1,121,668   603,533   1,428,967   8,105   —   4,187,060
Current period gross charge-offs   —   —   —   —   —   —   —   —   —
                            
Home Equity Line                           
FICO:                           
740 and greater   —   —   —   —   —   —   930,909   1,730   932,639
680 - 739   —   —   —   —   —   —   167,097   1,137   168,234
620 - 679   —   —   —   —   —   —   36,540   985   37,525
550 - 619   —   —   —   —   —   —   14,514   581   15,095
Less than 550   —   —   —   —   —   —   4,477   571   5,048
No Score (3)   —   —   —   —   —   —   1,282   —   1,282
Total Home Equity Line   —   —   —   —   —   —   1,154,819   5,004   1,159,823
Current period gross charge-offs   —   —   —   —   —   —   —   —   —
                            
Total Residential Lending $ 135,131 $ 257,739 $ 631,917 $ 1,121,668 $ 603,533 $ 1,428,967 $ 1,162,924 $ 5,004 $ 5,346,883
Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —
                            
Consumer Lending                           
FICO:                           
740 and greater   71,777   71,423   94,710   51,952   18,512   10,435   121,278   128   440,215
680 - 739   51,651   51,667   49,864   23,959   9,995   7,497   77,278   525   272,436
620 - 679   21,223   20,604   21,700   12,515   5,155   5,577   35,665   851   123,290
550 - 619   4,116   7,348   9,802   5,983   2,862   3,862   12,674   825   47,472
Less than 550   1,071   3,266   6,247   3,999   1,783   2,492   4,836   525   24,219
No Score (3)   2,291   117   47   —   7   8   42,658   205   45,333
Other (2)   —   —   296   911   101   981   74,790   —   77,079
Total Consumer Lending $ 152,129 $ 154,425 $ 182,666 $ 99,319 $ 38,415 $ 30,852 $ 369,179 $ 3,059 $ 1,030,044
Current period gross charge-offs $ 385 $ 1,403 $ 2,107 $ 1,085 $ 518 $ 2,234 $ 4,952 $ 544 $ 13,228
                            
Total Loans and Leases $ 718,931 $ 1,216,434 $ 2,344,271 $ 2,433,415 $ 1,076,972 $ 3,667,076 $ 2,755,052 $ 29,219 $ 14,241,370
Current period gross charge-offs $ 385 $ 1,981 $ 2,440 $ 1,174 $ 739 $ 4,177 $ 4,952 $ 544 $ 16,392


(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. As of September 30, 2024, the majority of the loans in this population were current.

(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. As of September 30, 2024, the majority of the loans in this population were current.

(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 Nine Months Ended  
  September 30, June 30, September 30, September 30, 
(dollars in thousands) 2024 2024 2023 2024 2023 
Income Statement Data:                
Net income $61,492 $61,921 $58,221 $177,633 $187,481 
                 
Average total stockholders' equity $2,588,806 $2,512,471 $2,367,422 $2,532,911 $2,337,292 
Less: average goodwill  995,492  995,492  995,492  995,492  995,492 
Average tangible stockholders' equity $1,593,314 $1,516,979 $1,371,930 $1,537,419 $1,341,800 
                 
Average total assets $24,046,696 $23,958,913 $24,727,893 $24,064,208 $24,699,826 
Less: average goodwill  995,492  995,492  995,492  995,492  995,492 
Average tangible assets $23,051,204 $22,963,421 $23,732,401 $23,068,716 $23,704,334 
                 
Return on average total stockholders' equity(1)  9.45% 9.91% 9.76% 9.37% 10.72%
Return on average tangible stockholders' equity (non-GAAP)(1)  15.35% 16.42% 16.84% 15.43% 18.68%
                 
Return on average total assets(1)  1.02% 1.04% 0.93% 0.99% 1.01%
Return on average tangible assets (non-GAAP)(1)  1.06% 1.08% 0.97% 1.03% 1.06%


              
           
  As of As of As of As of 
  September 30, June 30, December 31, September 30, 
(dollars in thousands, except per share amounts) 2024 2024 2023 2023 
Balance Sheet Data:             
Total stockholders' equity $2,648,034 $2,550,312 $2,486,066 $2,351,009 
Less: goodwill  995,492  995,492  995,492  995,492 
Tangible stockholders' equity $1,652,542 $1,554,820 $1,490,574 $1,355,517 
              
Total assets $23,780,285 $23,991,791 $24,926,474 $24,912,524 
Less: goodwill  995,492  995,492  995,492  995,492 
Tangible assets $22,784,793 $22,996,299 $23,930,982 $23,917,032 
              
Shares outstanding  127,886,167  127,879,012  127,618,761  127,609,934 
              
Total stockholders' equity to total assets  11.14% 10.63% 9.97% 9.44%
Tangible stockholders' equity to tangible assets (non-GAAP)  7.25% 6.76% 6.23% 5.67%
              
Book value per share $20.71 $19.94 $19.48 $18.42 
Tangible book value per share (non-GAAP) $12.92 $12.16 $11.68 $10.62 


(1)   Annualized for the three and nine months ended September 30, 2024 and 2023 and three months ended June 30, 2024.