Press Release

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

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

July 23, 2021 at 8:00 AM EDT

HONOLULU, July 23, 2021 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended June 30, 2021.

“We are pleased with our financial performance during the second quarter, which was driven by the strong return of tourism and pickup in the local economy,” said Bob Harrison, Chairman, President and CEO.  “We had good activity in the loan portfolio, solid growth in fee income and credit quality remained excellent. In addition, we benefitted from the improved outlook for the local economy with the release of $35 million from our reserves for credit losses.”

On July 21, 2021 the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on September 3, 2021 to stockholders of record at the close of business on August 23, 2021.  

Second Quarter 2021 Highlights:

  • Net income of $86.7 million, or $0.67 per diluted share
  • Total loans and leases decreased $196.5 million, or 1.5%, versus prior quarter
  • Total deposits increased $701.4 million, or 3.5%, versus prior quarter
  • Recorded a $35.0 million negative provision for credit losses
  • Board of Directors declared a quarterly dividend of $0.26 per share
  • Repurchased $22.4 million of stock under share repurchase program

Balance Sheet

Total assets were $24.2 billion as of June 30, 2021, compared to $23.5 billion as of March 31, 2021.

Gross loans and leases were $13.1 billion as of June 30, 2021, a decrease of $196.5 million, or 1.5%, from $13.3 billion as of March 31, 2021.

Total deposits were $20.8 billion as of June 30, 2021, an increase of $701.4 million, or 3.5%, from $20.1 billion as of March 31, 2021.

Net Interest Income

Net interest income for the second quarter of 2021 was $131.5 million, an increase of $2.3 million, or 1.8%, compared to $129.2 million for the prior quarter.  

The net interest margin (NIM) was 2.46% in the second quarter of 2021, a decrease of 9 basis points compared to 2.55% in the first quarter of 2021.

Provision Expense

During the quarter ended June 30, 2021, we recorded a $35.0 million negative provision for credit losses. We did not record a provision for credit losses in the quarter ended March 31, 2021.

Noninterest Income

Noninterest income was $49.4 million in the second quarter of 2021, an increase of $5.5 million compared to noninterest income of $43.9 million in the first quarter of 2021.     

Noninterest Expense

Noninterest expense was $99.4 million in the second quarter of 2021, an increase of $3.1 million compared to noninterest expense of $96.3 million in the first quarter of 2021.

The efficiency ratio was 54.7% and 55.5% for the quarters ended June 30, 2021 and March 31, 2021, respectively.

Taxes

The effective tax rate was 25.5% for the quarter ended June 30, 2021 and 24.8% for the quarter ended March 31, 2021.

Asset Quality

The allowance for credit losses was $169.1 million, or 1.29% of total loans and leases, as of June 30, 2021, compared to $200.4 million, or 1.51% of total loans and leases, as of March 31, 2021. The reserve for unfunded commitments was $29.2 million as of June 30, 2021 compared to $34.1 million as of March 31, 2021. Net charge-offs were $1.1 million, or 0.03% of average loans and leases on an annualized basis, for the quarter ended June 30, 2021, compared to net charge-offs of $4.6 million, or 0.14% of average loans and leases on an annualized basis, for the quarter ended March 31, 2021. Total non-performing assets were $8.9 million, or 0.07% of total loans and leases and other real estate owned, at June 30, 2021, compared to total non-performing assets of $9.1 million, or 0.07% of total loans and leases and other real estate owned at March 31, 2021.  

Capital

Total stockholders' equity was $2.7 billion at both June 30, 2021 and March 31, 2021.    

The tier 1 leverage, common equity tier 1 and total capital ratios were 7.68%, 12.76% and 14.01%, respectively, at June 30, 2021, compared with 7.90%, 12.82% and 14.07%, respectively, at March 31, 2021.

The Company repurchased 0.8 million shares of common stock at a total cost of $22.4 million under the stock repurchase program in the second quarter. The average cost was $27.99 per share repurchased. Remaining buyback authority under the stock repurchase program was $43.1 million at June 30, 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: 3681457.   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 July 30, 2021. Access the replay by dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID: 3681457.

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 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.

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 14 and 15 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   For the Six Months Ended  
    June 30   March 31   June 30   June 30  
(dollars in thousands, except per share data)   2021      2021      2020   2021      2020  
Operating Results:                                      
Net interest income   $ 131,481     $ 129,158     $ 127,822     $ 260,639     $ 266,505    
Provision for credit losses     (35,000 )           55,446       (35,000 )     96,646    
Noninterest income     49,371       43,868       45,656       93,239       94,884    
Noninterest expense     99,388       96,306       91,450       195,694       187,916    
Net income     86,741       57,693       20,049       144,434       58,914    
Basic earnings per share     0.67       0.44       0.15       1.11       0.45    
Diluted earnings per share     0.67       0.44       0.15       1.11       0.45    
Dividends declared per share     0.26       0.26       0.26       0.52       0.52    
Dividend payout ratio     38.81   %   59.09   %   173.33   %   46.85   %   115.56   %
Supplemental Income Statement Data (non-GAAP):                                      
Core net interest income   $ 131,481     $ 129,158     $ 127,822     $ 260,639     $ 266,505    
Core noninterest income     49,269       43,868       45,867       93,137       95,010    
Core noninterest expense     98,228       96,306       91,450       194,534       187,916    
Core net income     87,704       57,693       20,204       145,397       59,007    
Core basic earnings per share     0.68       0.44       0.16       1.12       0.45    
Core diluted earnings per share     0.68       0.44       0.16       1.12       0.45    
Performance Ratios(1):                                      
Net interest margin     2.46   %     2.55   %   2.58   %   2.50   %     2.84   %
Core net interest margin (non-GAAP)     2.46   %     2.55   %   2.58   %   2.50   %     2.84   %
Efficiency ratio     54.74   %     55.53   %   52.70   %   55.12   %     51.99   %
Core efficiency ratio (non-GAAP)     54.13   %     55.53   %   52.64   %   54.81   %     51.97   %
Return on average total assets     1.45   %     1.02   %   0.36   %   1.24   %     0.56   %
Core return on average total assets (non-GAAP)     1.46   %     1.02   %   0.36   %   1.25   %     0.56   %
Return on average tangible assets (non-GAAP)     1.51   %     1.07   %   0.38   %   1.30   %     0.58   %
Core return on average tangible assets (non-GAAP)(2)     1.53   %     1.07   %   0.38   %   1.30   %     0.58   %
Return on average total stockholders' equity     12.92   %     8.58   %   2.99   %   10.75   %     4.42   %
Core return on average total stockholders' equity (non-GAAP)     13.07   %     8.58   %   3.01   %   10.82   %     4.43   %
Return on average tangible stockholders' equity (non-GAAP)     20.51   %     13.51   %   4.74   %   16.99   %     7.04   %
Core return on average tangible stockholders’ equity (non-GAAP)(3)     20.74   %     13.51   %   4.77   %   17.10   %     7.05   %
Average Balances:                                      
Average loans and leases   $ 13,205,086     $ 13,242,270     $ 13,956,669     $ 13,223,575     $ 13,574,048    
Average earning assets     21,539,264       20,476,149       19,854,795       21,010,643       18,834,492    
Average assets     24,015,065       22,944,699       22,341,654       23,482,839       21,327,479    
Average deposits     20,638,015       19,503,067       18,540,394       20,073,676       17,541,849    
Average stockholders' equity     2,691,966       2,727,701       2,697,775       2,709,735       2,679,293    
Market Value Per Share:                                      
Closing     28.34       27.37       17.24       28.34       17.24    
High     29.85       30.80       21.50       30.80       31.25    
Low     24.75       23.14       13.56       23.14       13.56    

 

                                   
    As of   As of   As of   As of  
    June 30   March 31   December 31   June 30  
(dollars in thousands, except per share data)   2021   2021   2020   2020  
Balance Sheet Data:                                  
Loans and leases   $ 13,103,785     $ 13,300,289     $ 13,279,097     $ 13,764,030    
Total assets     24,246,328       23,497,596       22,662,831       22,993,715    
Total deposits     20,835,115       20,133,681       19,227,723       19,361,634    
Short-term borrowings                       200,000    
Long-term borrowings     200,000       200,010       200,010       200,019    
Total stockholders' equity     2,731,341       2,683,630       2,744,104       2,701,897    
                                   
Per Share of Common Stock:                                  
Book value   $ 21.17     $ 20.68     $ 21.12     $ 20.81    
Tangible book value (non-GAAP)(4)     13.45       13.01       13.46       13.14    
                                   
Asset Quality Ratios:                                  
Non-accrual loans and leases / total loans and leases     0.07   %     0.07   %   0.07   %   0.24   %
Allowance for credit losses for loans and leases / total loans and leases     1.29   %     1.51   %   1.57   %   1.40   %
                                   
Capital Ratios:                                  
Common Equity Tier 1 Capital Ratio      12.76   %     12.82   %   12.47   %   11.86   %
Tier 1 Capital Ratio     12.76   %     12.82   %   12.47   %   11.86   %
Total Capital Ratio     14.01   %     14.07   %   13.73   %   13.11   %
Tier 1 Leverage Ratio     7.68   %     7.90   %   8.00   %   7.75   %
Total stockholders' equity to total assets     11.26   %     11.42   %   12.11   %   11.75   %
Tangible stockholders' equity to tangible assets (non-GAAP)     7.47   %     7.50   %   8.07   %   7.76   %
                                   
Non-Financial Data:                                  
Number of branches     54       54       54       58    
Number of ATMs     294       297       297       295    
Number of Full-Time Equivalent Employees     2,087       2,090       2,103       2,100    

 

________________________
(1)   Except for the efficiency ratio and the core efficiency ratio, amounts are annualized for the three and six months ended June 30, 2021 and 2020 and the three months ended March 31, 2021.

(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 14, 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 14, 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 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)     2021   2021   2020   2021   2020
Interest income                                  
Loans and lease financing     $ 110,919     $ 110,939     $ 122,298     $ 221,858     $ 257,269  
Available-for-sale securities       24,637       23,146       17,529       47,783       38,739  
Other       666       491       792       1,157       3,143  
Total interest income       136,222       134,576       140,619       270,798       299,151  
Interest expense                                  
Deposits       3,363       4,056       8,583       7,419       24,183  
Short-term and long-term borrowings       1,378       1,362       4,214       2,740       8,463  
Total interest expense       4,741       5,418       12,797       10,159       32,646  
Net interest income       131,481       129,158       127,822       260,639       266,505  
Provision for credit losses       (35,000 )           55,446       (35,000 )     96,646  
Net interest income after provision for credit losses       166,481       129,158       72,376       295,639       169,859  
Noninterest income                                  
Service charges on deposit accounts       6,632       6,718       5,927       13,350       14,877  
Credit and debit card fees       16,746       14,551       10,870       31,297       25,819  
Other service charges and fees       10,303       8,846       7,912       19,149       16,451  
Trust and investment services income       8,707       8,492       8,664       17,199       18,255  
Bank-owned life insurance       3,104       2,389       4,432       5,493       6,692  
Investment securities gains (losses), net       102             (211 )     102       (126 )
Other       3,777       2,872       8,062       6,649       12,916  
Total noninterest income       49,371       43,868       45,656       93,239       94,884  
Noninterest expense                                  
Salaries and employee benefits       45,982       43,936       42,414       89,918       87,243  
Contracted services and professional fees       16,516       17,188       15,478       33,704       31,533  
Occupancy       7,314       7,170       7,302       14,484       14,545  
Equipment       6,362       5,491       5,207       11,853       9,915  
Regulatory assessment and fees       1,826       2,034       2,100       3,860       4,046  
Advertising and marketing       1,469       1,591       1,402       3,060       3,225  
Card rewards program       6,262       4,835       5,163       11,097       12,178  
Other       13,657       14,061       12,384       27,718       25,231  
Total noninterest expense       99,388       96,306       91,450       195,694       187,916  
Income before provision for income taxes       116,464       76,720       26,582       193,184       76,827  
Provision for income taxes       29,723       19,027       6,533       48,750       17,913  
Net income     $ 86,741     $ 57,693     $ 20,049     $ 144,434     $ 58,914  
Basic earnings per share     $ 0.67     $ 0.44     $ 0.15     $ 1.11     $ 0.45  
Diluted earnings per share     $ 0.67     $ 0.44     $ 0.15     $ 1.11     $ 0.45  
Basic weighted-average outstanding shares       129,392,339       129,933,104       129,856,730       129,661,228       129,876,218  
Diluted weighted-average outstanding shares       129,828,847       130,589,878       130,005,195       130,164,762       130,163,722  

 

 

                         
Consolidated Balance Sheets   Table 3
    June 30   March 31   December 31   June 30
(dollars in thousands)   2021   2021   2020   2020
Assets                        
Cash and due from banks   $ 347,861     $ 278,994     $ 303,373     $ 347,592  
Interest-bearing deposits in other banks     1,558,437       983,816       737,571       1,507,630  
Investment securities, at fair value (amortized cost: $6,951,153 as of June 30, 2021, $6,708,431 as of March 31, 2021, $5,985,031 as of December 31, 2020 and $5,025,433 as of June 30, 2020)     6,953,930       6,692,479       6,071,415       5,135,775  
Loans held for sale     1,241       9,390       11,579       6,698  
Loans and leases     13,103,785       13,300,289       13,279,097       13,764,030  
Less: allowance for credit losses     169,148       200,366       208,454       192,120  
Net loans and leases     12,934,637       13,099,923       13,070,643       13,571,910  
                         
Premises and equipment, net     319,452       319,949       322,401       322,919  
Other real estate owned and repossessed personal property                       446  
Accrued interest receivable     66,734       69,879       69,626       58,420  
Bank-owned life insurance     466,402       468,927       466,537       458,720  
Goodwill     995,492       995,492       995,492       995,492  
Mortgage servicing rights     10,007       10,869       10,731       11,595  
Other assets     592,135       567,878       603,463       576,518  
Total assets   $ 24,246,328     $ 23,497,596     $ 22,662,831     $ 22,993,715  
Liabilities and Stockholders' Equity                        
Deposits:                        
Interest-bearing   $ 12,245,193     $ 11,958,606     $ 11,705,609     $ 12,481,543  
Noninterest-bearing     8,589,922       8,175,075       7,522,114       6,880,091  
Total deposits     20,835,115       20,133,681       19,227,723       19,361,634  
Short-term borrowings                       200,000  
Long-term borrowings     200,000       200,010       200,010       200,019  
Retirement benefits payable     144,101       143,736       143,373       138,624  
Other liabilities     335,771       336,539       347,621       391,541  
Total liabilities     21,514,987       20,813,966       19,918,727       20,291,818  
                         
Stockholders' equity                        
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 140,542,398 / 129,019,871 shares as of June 30, 2021, 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: 140,140,542 / 129,866,898 shares as of June 30, 2020)     1,405       1,405       1,402       1,401  
Additional paid-in capital     2,520,790       2,517,048       2,514,014       2,509,271  
Retained earnings     550,511       497,418       473,974       415,296  
Accumulated other comprehensive (loss) income, net     (29,702 )     (43,435 )     31,604       52,731  
Treasury stock (11,522,527 shares as of June 30, 2021, 10,705,290 shares as of March 31, 2021, 10,278,861 shares as of December 31, 2020 and 10,273,644 shares as of June 30, 2020)     (311,663 )     (288,806 )     (276,890 )     (276,802 )
Total stockholders' equity     2,731,341       2,683,630       2,744,104       2,701,897  
Total liabilities and stockholders' equity   $ 24,246,328     $ 23,497,596     $ 22,662,831     $ 22,993,715  

 

 

                                                         
Average Balances and Interest Rates                                                   Table 4
    Three Months Ended   Three Months Ended   Three Months Ended  
    June 30, 2021   March 31, 2021   June 30, 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   $ 1,503.0   $ 0.4   0.10   %   $ 938.7   $ 0.2   0.10   % $ 1,436.2   $ 0.4   0.10   %
Available-for-Sale Investment Securities                                                        
Taxable     6,298.3     22.5   1.43       5,949.9     22.1   1.49       4,389.7     17.5   1.60    
Non-Taxable     468.4     2.7   2.30       278.0     1.3   1.80       0.7       2.58    
Total Available-for-Sale Investment Securities     6,766.7     25.2   1.49       6,227.9     23.4   1.50       4,390.4     17.5   1.60    
Loans Held for Sale     2.0       1.44       9.2     0.1   2.46       9.8     0.1   2.93    
Loans and Leases(1)                                                        
Commercial and industrial     2,882.1     21.1   2.94       3,026.7     20.4   2.74       3,601.0     24.3   2.71    
Commercial real estate     3,419.7     25.3   2.97       3,385.2     24.9   2.98       3,438.8     28.3   3.31    
Construction     800.9     6.3   3.15       746.8     5.8   3.16       584.1     4.9   3.35    
Residential:                                                        
Residential mortgage     3,765.4     34.0   3.62       3,696.1     34.7   3.76       3,682.7     35.7   3.88    
Home equity line     812.6     5.5   2.72       822.0     5.7   2.80       885.2     6.8   3.07    
Consumer     1,277.9     16.9   5.32       1,323.7     17.7   5.43       1,526.5     20.6   5.42    
Lease financing     246.5     1.9   3.06       241.8     1.8   3.02       238.4     1.7   2.88    
Total Loans and Leases     13,205.1     111.0   3.37       13,242.3     111.0   3.39       13,956.7     122.3   3.52    
Other Earning Assets     62.5     0.3   1.91       58.0     0.3   1.79       61.7     0.4   2.79    
Total Earning Assets(2)     21,539.3     136.9   2.55       20,476.1     135.0   2.66       19,854.8     140.7   2.84    
Cash and Due from Banks     290.7                 294.0                 295.1              
Other Assets     2,185.1                 2,174.6                 2,191.8              
Total Assets   $ 24,015.1               $ 22,944.7               $ 22,341.7              
                                                         
Interest-Bearing Liabilities                                                        
Interest-Bearing Deposits                                                        
Savings   $ 6,361.8   $ 0.5   0.03   %   $ 5,975.1   $ 0.6   0.04   %   5,501.9   $ 0.9   0.07   %
Money Market     3,783.1     0.5   0.06       3,530.0     0.4   0.05       3,270.3     1.1   0.13    
Time     2,034.5     2.3   0.45       2,288.5     3.0   0.53       3,335.6     6.6   0.79    
Total Interest-Bearing Deposits     12,179.4     3.3   0.11       11,793.6     4.0   0.14       12,107.8     8.6   0.29    
Short-Term Borrowings                             395.6     2.8   2.88    
Long-Term Borrowings     200.0     1.4   2.76       200.0     1.4   2.76       200.0     1.4   2.77    
Total Interest-Bearing Liabilities     12,379.4     4.7   0.15       11,993.6     5.4   0.18       12,703.4     12.8   0.41    
Net Interest Income         $ 132.2               $ 129.6               $ 127.9        
Interest Rate Spread               2.40   %               2.48   %             2.43   %
Net Interest Margin               2.46   %               2.55   %             2.58   %
Noninterest-Bearing Demand Deposits     8,458.6                 7,709.5                 6,432.6              
Other Liabilities     485.1                 513.9                 507.9              
Stockholders' Equity     2,692.0                 2,727.7                 2,697.8              
Total Liabilities and Stockholders' Equity   $ 24,015.1               $ 22,944.7               $ 22,341.7              

________________________
(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 $0.7 million, $0.4 million and $0.1 million for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

 

 

                                       
Average Balances and Interest Rates                                 Table 5
    Six Months Ended   Six Months Ended  
    June 30, 2021   June 30, 2020  
    Average   Income/   Yield/   Average   Income/   Yield/  
(dollars in millions)   Balance   Expense   Rate   Balance   Expense   Rate  
Earning Assets                                      
Interest-Bearing Deposits in Other Banks   $ 1,222.4   $ 0.6   0.10   %   $ 976.5   $ 2.0   0.40   %
Available-for-Sale Investment Securities                                      
Taxable     6,125.1     44.6   1.46       4,211.4     38.7   1.84    
Non-Taxable     373.7     4.0   2.11       0.4       2.58    
Total Available-for-Sale Investment Securities     6,498.8     48.6   1.49       4,211.8     38.7   1.84    
Loans Held for Sale     5.6     0.1   2.28       12.8     0.1   2.17    
Loans and Leases(1)                                      
Commercial and industrial     2,954.0     41.5   2.84       3,188.4     48.9   3.08    
Commercial real estate     3,402.6     50.2   2.98       3,426.3     62.9   3.69    
Construction     774.0     12.1   3.16       561.5     10.6   3.79    
Residential:                                      
Residential mortgage     3,730.9     68.7   3.68       3,711.5     73.4   3.95    
Home equity line     817.3     11.2   2.76       886.3     14.5   3.28    
Consumer     1,300.7     34.7   5.37       1,569.2     43.6   5.59    
Lease financing     244.1     3.7   3.04       230.8     3.3   2.90    
Total Loans and Leases     13,223.6     222.1   3.38       13,574.0     257.2   3.80    
Other Earning Assets     60.2     0.5   1.85       59.4     1.2   3.99    
Total Earning Assets(2)     21,010.6     271.9   2.60       18,834.5     299.2   3.19    
Cash and Due from Banks     292.3                 311.2              
Other Assets     2,179.9                 2,181.8              
Total Assets   $ 23,482.8               $ 21,327.5              
                                       
Interest-Bearing Liabilities                                      
Interest-Bearing Deposits                                      
Savings   $ 6,169.5   $ 1.1   0.04   %   $ 5,296.1   $ 4.2   0.16   %
Money Market     3,657.3     1.0   0.05       3,167.6     5.7   0.36    
Time     2,160.8     5.3   0.49       2,935.1     14.3   0.98    
Total Interest-Bearing Deposits     11,987.6     7.4   0.12       11,398.8     24.2   0.43    
Short-Term Borrowings                 398.6     5.7   2.88    
Long-Term Borrowings     200.0     2.7   2.76       200.0     2.7   2.77    
Total Interest-Bearing Liabilities     12,187.6     10.1   0.17       11,997.4     32.6   0.55    
Net Interest Income         $ 261.8               $ 266.6        
Interest Rate Spread               2.43   %               2.64   %
Net Interest Margin               2.50   %               2.84   %
Noninterest-Bearing Demand Deposits     8,086.1                 6,143.0              
Other Liabilities     499.4                 507.8              
Stockholders' Equity     2,709.7                 2,679.3              
Total Liabilities and Stockholders' Equity   $ 23,482.8               $ 21,327.5              

________________________
(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 and $0.1 million for the six months ended June 30, 2021 and 2020, respectively.

 

 

                   
Analysis of Change in Net Interest Income                 Table 6
    Three Months Ended June 30, 2021
    Compared to March 31, 2021
(dollars in millions)   Volume   Rate   Total
Change in Interest Income:                  
Interest-Bearing Deposits in Other Banks   $ 0.2     $     $ 0.2  
Available-for-Sale Investment Securities                  
Taxable     1.3       (0.9 )     0.4  
Non-Taxable     1.0       0.4       1.4  
Total Available-for-Sale Investment Securities     2.3       (0.5 )     1.8  
Loans Held for Sale     (0.1 )           (0.1 )
Loans and Leases                  
Commercial and industrial     (0.9 )     1.6       0.7  
Commercial real estate     0.4             0.4  
Construction     0.5             0.5  
Residential:                  
Residential mortgage     0.6       (1.3 )     (0.7 )
Home equity line     (0.1 )     (0.1 )     (0.2 )
Consumer     (0.5 )     (0.3 )     (0.8 )
Lease financing     0.1             0.1  
Total Loans and Leases     0.1       (0.1 )      
Total Change in Interest Income     2.5       (0.6 )     1.9  
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings           (0.1 )     (0.1 )
Money Market           0.1       0.1  
Time     (0.3 )     (0.4 )     (0.7 )
Total Interest-Bearing Deposits     (0.3 )     (0.4 )     (0.7 )
Total Change in Interest Expense     (0.3 )     (0.4 )     (0.7 )
Change in Net Interest Income   $ 2.8     $ (0.2 )   $ 2.6  

 

 

                   
Analysis of Change in Net Interest Income                 Table 7
    Three Months Ended June 30, 2021
    Compared to June 30, 2020
(dollars in millions)   Volume   Rate   Total
Change in Interest Income:                  
Available-for-Sale Investment Securities                  
Taxable   $ 7.0     $ (2.0 )   $ 5.0  
Non-Taxable     2.7             2.7  
Total Available-for-Sale Investment Securities     9.7       (2.0 )     7.7  
Loans Held for Sale     (0.1 )           (0.1 )
Loans and Leases                  
Commercial and industrial     (5.2 )     2.0       (3.2 )
Commercial real estate     (0.1 )     (2.9 )     (3.0 )
Construction     1.7       (0.3 )     1.4  
Residential:                  
Residential mortgage     0.8       (2.5 )     (1.7 )
Home equity line     (0.5 )     (0.8 )     (1.3 )
Consumer     (3.3 )     (0.4 )     (3.7 )
Lease financing     0.1       0.1       0.2  
Total Loans and Leases     (6.5 )     (4.8 )     (11.3 )
Other Earning Assets           (0.1 )     (0.1 )
Total Change in Interest Income     3.1       (6.9 )     (3.8 )
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings     0.1       (0.5 )     (0.4 )
Money Market     0.1       (0.7 )     (0.6 )
Time     (2.0 )     (2.3 )     (4.3 )
Total Interest-Bearing Deposits     (1.8 )     (3.5 )     (5.3 )
Short-Term Borrowings     (1.4 )     (1.4 )     (2.8 )
Total Change in Interest Expense     (3.2 )     (4.9 )     (8.1 )
Change in Net Interest Income   $ 6.3     $ (2.0 )   $ 4.3  

 

 

                   
Analysis of Change in Net Interest Income                 Table 8
    Six Months Ended June 30, 2021
    Compared to June 30, 2020
(dollars in millions)   Volume   Rate   Total
Change in Interest Income:                  
Interest-Bearing Deposits in Other Banks   $ 0.3     $ (1.7 )   $ (1.4 )
Available-for-Sale Investment Securities                  
Taxable     15.0       (9.1 )     5.9  
Non-Taxable     4.0             4.0  
Total Available-for-Sale Investment Securities     19.0       (9.1 )     9.9  
Loans and Leases                  
Commercial and industrial     (3.6 )     (3.8 )     (7.4 )
Commercial real estate     (0.4 )     (12.3 )     (12.7 )
Construction     3.5       (2.0 )     1.5  
Residential:                  
Residential mortgage     0.4       (5.1 )     (4.7 )
Home equity line     (1.1 )     (2.2 )     (3.3 )
Consumer     (7.3 )     (1.6 )     (8.9 )
Lease financing     0.2       0.2       0.4  
Total Loans and Leases     (8.3 )     (26.8 )     (35.1 )
Other Earning Assets           (0.7 )     (0.7 )
Total Change in Interest Income     11.0       (38.3 )     (27.3 )
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings     0.5       (3.6 )     (3.1 )
Money Market     0.8       (5.5 )     (4.7 )
Time     (3.1 )     (5.9 )     (9.0 )
Total Interest-Bearing Deposits     (1.8 )     (15.0 )     (16.8 )
Short-Term Borrowings     (2.8 )     (2.9 )     (5.7 )
Total Change in Interest Expense     (4.6 )     (17.9 )     (22.5 )
Change in Net Interest Income   $ 15.6     $ (20.4 )   $ (4.8 )

 

 

                         
Loans and Leases                       Table 9
    June 30   March 31   December 31   June 30
(dollars in thousands)   2021      2021      2020      2020
Commercial and industrial:                        
Commercial and industrial excluding Paycheck Protection Program loans   $ 1,753,444   $ 1,962,672   $ 2,218,266   $ 2,507,312
Paycheck Protection Program loans     811,103     1,158,764     801,241     916,396
Total commercial and industrial     2,564,547     3,121,436     3,019,507     3,423,708
Commercial real estate     3,528,068     3,396,233     3,392,676     3,423,499
Construction     853,865     739,271     735,819     617,935
Residential:                        
Residential mortgage     3,821,407     3,715,676     3,690,218     3,691,950
Home equity line     825,368     805,746     841,624     876,491
Total residential     4,646,775     4,521,422     4,531,842     4,568,441
Consumer     1,267,559     1,283,779     1,353,842     1,492,160
Lease financing     242,971     238,148     245,411     238,287
Total loans and leases   $ 13,103,785   $ 13,300,289   $ 13,279,097   $ 13,764,030

 

 

                           
Deposits                         Table 10
      June 30   March 31   December 31   June 30
(dollars in thousands)     2021      2021      2020      2020
Demand     $ 8,589,922   $ 8,175,075   $ 7,522,114   $ 6,880,091
Savings       6,421,053     6,141,161     6,020,075     5,727,367
Money Market       3,920,477     3,642,604     3,337,236     3,247,511
Time       1,903,663     2,174,841     2,348,298     3,506,665
Total Deposits     $ 20,835,115   $ 20,133,681   $ 19,227,723   $ 19,361,634

 

 

                           
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)     2021      2021      2020      2020
Non-Performing Assets                          
Non-Accrual Loans and Leases                          
Commercial Loans:                          
Commercial and industrial     $ 828   $ 593   $ 518   $ 11,559
Commercial real estate       937     937     80     13,168
Construction           579     2,043     2,043
Total Commercial Loans       1,765     2,109     2,641     26,770
Residential Loans:                          
Residential mortgage       7,140     6,999     6,441     6,059
Total Residential Loans       7,140     6,999     6,441     6,059
Total Non-Accrual Loans and Leases       8,905     9,108     9,082     32,829
Other Real Estate Owned                   446
Total Non-Performing Assets     $ 8,905   $ 9,108   $ 9,082   $ 33,275
                           
Accruing Loans and Leases Past Due 90 Days or More                          
Commercial Loans:                          
Commercial and industrial     $ 494   $ 1,365   $ 2,108   $ 2,309
Commercial real estate           1,054     882     900
Construction       60     89     93     248
Total Commercial Loans       554     2,508     3,083     3,457
Residential Loans:                          
Home equity line       4,680     4,975     4,818     4,496
Total Residential Loans       4,680     4,975     4,818     4,496
Consumer       1,134     2,024     3,266     2,167
Total Accruing Loans and Leases Past Due 90 Days or More     $ 6,368   $ 9,507   $ 11,167   $ 10,120
                           
Restructured Loans on Accrual Status and Not Past Due 90 Days or More     $ 36,668   $ 39,831   $ 16,684   $ 11,182
Total Loans and Leases     $ 13,103,785   $ 13,300,289   $ 13,279,097   $ 13,764,030

 

 

                                 
Allowance for Credit Losses                           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)   2021   2021      2020      2021   2020  
Balance at Beginning of Period   $ 200,366     $ 208,454     $ 166,013     $ 208,454     $ 130,530    
Adjustment to Adopt ASC Topic 326                             770    
After Adoption of ASC Topic 326     200,366       208,454       166,013       208,454       131,300    
Loans and Leases Charged-Off                                
Commercial Loans:                                
Commercial and industrial     (330 )     (963 )     (13,974 )     (1,293 )     (14,175 )  
Commercial real estate           (66 )     (2,723 )     (66 )     (2,723 )  
Construction                 (379 )           (379 )  
Total Commercial Loans     (330 )     (1,029 )     (17,076 )     (1,359 )     (17,277 )  
Residential Loans:                                
Residential mortgage           (98 )     (14 )     (98 )     (14 )  
Home equity line                             (8 )  
Total Residential Loans           (98 )     (14 )     (98 )     (22 )  
Consumer     (3,917 )     (6,541 )     (8,907 )     (10,458 )     (17,504 )  
Total Loans and Leases Charged-Off     (4,247 )     (7,668 )     (25,997 )     (11,915 )     (34,803 )  
Recoveries on Loans and Leases Previously Charged-Off                                
Commercial Loans:                                
Commercial and industrial     287       215       100       502       320    
Commercial real estate     12       3             15          
Construction           166       30       166       140    
Total Commercial Loans     299       384       130       683       460    
Residential Loans:                                
Residential mortgage     14       17       17       31       152    
Home equity line     38       24       8       62       130    
Total Residential Loans     52       41       25       93       282    
Consumer     2,797       2,655       2,456       5,452       4,539    
Total Recoveries on Loans and Leases Previously Charged-Off     3,148       3,080       2,611       6,228       5,281    
Net Loans and Leases Charged-Off     (1,099 )     (4,588 )     (23,386 )     (5,687 )     (29,522 )  
Provision for Credit Losses - Loans and Leases     (30,119 )     (3,500 )     49,493       (33,619 )     90,342    
Balance at End of Period   $ 169,148     $ 200,366     $ 192,120     $ 169,148     $ 192,120    
Average Loans and Leases Outstanding   $ 13,205,086     $ 13,242,270     $ 13,956,669     $ 13,223,575     $ 13,574,048    
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)     0.03   %     0.14   %   0.67   %   0.09   %     0.44   %
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding     1.29   %     1.51   %   1.40   %   1.29   %     1.40   %

________________________
(1)   Annualized for the three and six months ended June 30, 2021 and 2020 and three months ended March 31, 2021.

 

                                                       
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)   2021   2020   2019   2018   2017   Prior   Cost Basis   Cost Basis   Total
Commercial Lending                                                      
Commercial and Industrial                                                      
Risk rating:                                                      
Pass   $ 606,765   $ 422,457   $ 242,554   $ 136,069   $ 48,828   $ 207,502   $ 674,340   $ 23,935   $ 2,362,450
Special Mention     122     8,994     33,617     12,735     1,425     4,647     14,338     376     76,254
Substandard         7,149     2,400     16,246     137     8,731     6,397     1,344     42,404
Other (1)     9,812     8,774     10,337     6,632     3,531     965     43,388         83,439
Total Commercial and Industrial     616,699     447,374     288,908     171,682     53,921     221,845     738,463     25,655     2,564,547
                                                       
Commercial Real Estate                                                      
Risk rating:                                                      
Pass     288,366     342,013     571,608     557,533     449,551     1,055,803     63,775     2     3,328,651
Special Mention         1,482     52,852     16,081     33,022     55,933     7,604         166,974
Substandard         411         7,016     2,069     21,962     502         31,960
Other (1)                         483             483
Total Commercial Real Estate     288,366     343,906     624,460     580,630     484,642     1,134,181     71,881     2     3,528,068
                                                       
Construction                                                      
Risk rating:                                                      
Pass     49,592     97,149     296,405     173,352     62,983     70,998     55,892         806,371
Special Mention             494     705         361             1,560
Substandard                 373         1,378             1,751
Other (1)     11,829     15,036     5,247     5,381     2,953     2,930     807         44,183
Total Construction     61,421     112,185     302,146     179,811     65,936     75,667     56,699         853,865
                                                       
Lease Financing                                                      
Risk rating:                                                      
Pass     21,690     69,598     55,494     11,376     16,623     60,091             234,872
Special Mention     545     308     465     246     81     232             1,877
Substandard         2,720     1,668     260     1,072     502             6,222
Total Lease Financing     22,235     72,626     57,627     11,882     17,776     60,825             242,971
                                                       
Total Commercial Lending   $ 988,721   $ 976,091   $ 1,273,141   $ 944,005   $ 622,275   $ 1,492,518   $ 867,043   $ 25,657   $ 7,189,451

 

                                                       
                                              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   $ 570,542   $ 675,163   $ 329,047   $ 224,827   $ 293,853   $ 958,515   $   $   $ 3,051,947
680 - 739     68,225     86,857     50,699     43,075     42,753     144,223             435,832
620 - 679     11,867     12,564     9,988     6,352     9,310     41,478             91,559
550 - 619         1,018     171     1,322     1,752     11,788             16,051
Less than 550         1,274         346     2,545     2,807             6,972
No Score (3)     10,207     8,602     15,988     21,087     18,814     51,217             125,915
Other (2)     10,440     17,605     12,917     11,910     19,349     20,130     625     155     93,131
Total Residential Mortgage     671,281     803,083     418,810     308,919     388,376     1,230,158     625     155     3,821,407
                                                       
Home Equity Line                                                      
FICO:                                                      
740 and greater                             610,924     1,757