Press Release

First Hawaiian, Inc. Reports Second Quarter 2023 Financial Results and Declares Dividend

First Hawaiian, Inc. Reports Second Quarter 2023 Financial Results and Declares Dividend

July 28, 2023 at 8:00 AM EDT

HONOLULU, July 28, 2023 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended June 30, 2023.

“I’m pleased to report that we had a solid second quarter in spite of a challenging interest rate environment,” said Bob Harrison, Chairman, President and CEO. “We grew loans and capital, credit quality remains excellent, and our profitability measures continue to be strong.”

On July 19, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on September 1, 2023, to stockholders of record at the close of business on August 21, 2023.  

Second Quarter 2023 Highlights:

  • Net income of $62.4 million, or $0.49 per diluted share
  • Total loans and leases increased $141.6 million versus prior quarter
  • Total deposits decreased $203.3 million versus prior quarter
  • Net interest margin decreased 20 basis points to 2.91%
  • Recorded a $5.0 million provision for credit losses
  • Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet 
Total assets were $24.5 billion as of June 30, 2023, compared to $24.9 billion as of March 31, 2023.

Gross loans and leases were $14.4 billion as of June 30, 2023, an increase of $141.6 million, or 1.0%, from $14.2 billion as of March 31, 2023.

Total deposits were $21.1 billion as of June 30, 2023, a decrease of $203.3 million, or 1.0%, from $21.3 billion as of March 31, 2023.  

Net Interest Income 
Net interest income for the second quarter of 2023 was $159.9 million, a decrease of $7.3 million, or 4.4%, compared to $167.2 million for the prior quarter.  

The net interest margin was 2.91% in the second quarter of 2023, a decrease of 20 basis points compared to 3.11% in the prior quarter.

Provision Expense 
During the quarter ended June 30, 2023, we recorded a $5.0 million provision for credit losses. In the quarter ended March 31, 2023, we recorded a $8.8 million provision for credit losses.

Noninterest Income 
Noninterest income was $47.3 million in the second quarter of 2023, a decrease of $1.7 million compared to noninterest income of $49.0 million in the prior quarter.     

Noninterest Expense 
Noninterest expense was $120.9 million in the second quarter of 2023, an increase of $2.3 million compared to noninterest expense of $118.6 million in the prior quarter.  

The efficiency ratio was 58.0% and 54.5% for the quarters ended June 30, 2023 and March 31, 2023, respectively.

Taxes 
The effective tax rate was 23.3% and 24.8% for the quarters ended June 30, 2023 and March 31, 2023, respectively.

Asset Quality 
The allowance for credit losses was $148.6 million, or 1.03% of total loans and leases, as of June 30, 2023, compared to $147.1 million, or 1.03% of total loans and leases, as of March 31, 2023. The reserve for unfunded commitments was $36.2 million as of both June 30, 2023 and March 31, 2023.   Net charge-offs were $3.5 million, or 0.10% of average loans and leases on an annualized basis, for the quarter ended June 30, 2023, compared to net charge-offs of $3.2 million, or 0.09% of average loans and leases on an annualized basis, for the quarter ended March 31, 2023. Total non-performing assets were $13.2 million, or 0.09% of total loans and leases and other real estate owned, on June 30, 2023, compared to total non-performing assets of $13.8 million, or 0.10% of total loans and leases and other real estate owned, on March 31, 2023.

Capital 
Total stockholders' equity was $2.4 billion and $2.3 billion on June 30, 2023 and March 31, 2023, respectively.    

The tier 1 leverage, common equity tier 1 and total capital ratios were 8.30%, 12.05% and 13.17%, respectively, on June 30, 2023, compared with 8.26%, 11.97%, and 13.09%, respectively, on March 31, 2023.

The Company did not repurchase any shares in the second 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, please register via the following link: https://register.vevent.com/register/BI348950fc095448439d48b25a0e9c5697, and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time.

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

Forward-Looking 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, 2022 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.

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 Six Months Ended  
    June 30,   March 31,   June 30,   June 30,  
(dollars in thousands, except per share data)   2023   2023   2022   2023   2022    
Operating Results:                                
Net interest income   $ 159,939   $ 167,247   $ 145,147   $ 327,186   $ 279,019    
Provision for credit losses     5,000     8,800     1,000     13,800     (4,747 )  
Noninterest income     47,348     49,023     44,137     96,371     85,517    
Noninterest expense     120,881     118,567     109,175     239,448     213,217    
Net income     62,442     66,818     59,360     129,260     117,079    
Basic earnings per share     0.49     0.52     0.46     1.01     0.92    
Diluted earnings per share     0.49     0.52     0.46     1.01     0.91    
Dividends declared per share     0.26     0.26     0.26     0.52     0.52    
Dividend payout ratio     53.06 %   50.00 %   56.52 %   51.49 %   57.14   %
Performance Ratios(1):                                
Net interest margin     2.91 %   3.11 %   2.60 %   3.01 %   2.51   %
Efficiency ratio     57.96 %   54.46 %   57.33 %   56.17 %   58.15   %
Return on average total assets     1.01 %   1.10 %   0.94 %   1.06 %   0.94   %
Return on average tangible assets (non-GAAP)(2)     1.05 %   1.15 %   0.98 %   1.10 %   0.98   %
Return on average total stockholders' equity     10.68 %   11.78 %   10.52 %   11.23 %   9.82   %
Return on average tangible stockholders' equity (non-GAAP)(2)     18.57 %   20.78 %   18.79 %   19.65 %   16.76   %
Average Balances:                                
Average loans and leases   $ 14,283,222   $ 14,079,337   $ 13,058,558   $ 14,181,842   $ 12,939,745    
Average earning assets     22,186,316     21,873,259     22,520,605     22,030,652     22,492,066    
Average assets     24,821,486     24,548,124     25,250,176     24,685,560     25,165,783    
Average deposits     21,057,259     21,468,624     22,401,558     21,261,805     22,182,406    
Average stockholders' equity     2,344,285     2,299,422     2,262,654     2,321,977     2,404,471    
Market Value Per Share:                                
Closing     18.01     20.63     22.80     18.01     22.80    
High     21.00     28.28     28.44     28.28     31.16    
Low     15.08     19.68     21.49     15.08     21.49    


    As of   As of   As of   As of  
    June 30,   March 31,   December 31,   June 30,  
(dollars in thousands, except per share data)   2023   2023   2022   2022  
Balance Sheet Data:                          
Loans and leases   $ 14,362,832   $ 14,221,272   $ 14,092,012   $ 13,262,781  
Total assets     24,511,566     24,884,207     24,577,223     25,377,533  
Total deposits     21,078,166     21,281,500     21,689,029     22,601,454  
Short-term borrowings         250,000     75,000      
Long-term borrowings     500,000     500,000          
Total stockholders' equity     2,359,738     2,329,012     2,269,005     2,252,611  
                           
Per Share of Common Stock:                          
Book value   $ 18.49   $ 18.26   $ 17.82   $ 17.67  
Tangible book value (non-GAAP)(2)     10.69     10.45     10.00     9.86  
                           
Asset Quality Ratios:                          
Non-accrual loans and leases / total loans and leases     0.09 %   0.10 %   0.08 %   0.06 %
Allowance for credit losses for loans and leases / total loans and leases     1.03 %   1.03 %   1.02 %   1.12 %
                           
Capital Ratios:                          
Common Equity Tier 1 Capital Ratio     12.05 %   11.97 %   11.82 %   11.98 %
Tier 1 Capital Ratio     12.05 %   11.97 %   11.82 %   11.98 %
Total Capital Ratio     13.17 %   13.09 %   12.92 %   13.14 %
Tier 1 Leverage Ratio     8.30 %   8.26 %   8.11 %   7.54 %
Total stockholders' equity to total assets     9.63 %   9.36 %   9.23 %   8.88 %
Tangible stockholders' equity to tangible assets (non-GAAP)(2)     5.80 %   5.58 %   5.40 %   5.16 %
                           
Non-Financial Data:                          
Number of branches     51     51     51     51  
Number of ATMs     296     296     294     297  
Number of Full-Time Equivalent Employees     2,126     2,100     2,063     2,021  

_____________________

 (1)   Except for the efficiency ratio, amounts are annualized for the three and six months ended June 30, 2023 and 2022 and three months ended March 31, 2023.

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

                               
Consolidated Statements of Income   Table 2
    For the Three Months Ended   For the Six Months Ended
    June 30,   March 31,   June 30,   June 30,
(dollars in thousands, except per share amounts)   2023   2023   2022     2023   2022  
Interest income                              
Loans and lease financing   $ 185,340   $ 172,339   $ 111,916     $ 357,679   $ 215,648  
Available-for-sale investment securities     18,094     18,688     16,643       36,782     48,750  
Held-to-maturity investment securities     18,282     18,957     18,289       37,239     18,289  
Other     7,489     3,561     2,896       11,050     3,678  
Total interest income     229,205     213,545     149,744       442,750     286,365  
Interest expense                              
Deposits     58,071     43,284     4,597       101,355     7,346  
Short-term and long-term borrowings     10,656     2,563           13,219      
Other     539     451           990      
Total interest expense     69,266     46,298     4,597       115,564     7,346  
Net interest income     159,939     167,247     145,147       327,186     279,019  
Provision for credit losses     5,000     8,800     1,000       13,800     (4,747 )
Net interest income after provision for credit losses     154,939     158,447     144,147       313,386     283,766  
Noninterest income                              
Service charges on deposit accounts     7,246     7,231     6,843       14,477     14,344  
Credit and debit card fees     15,461     16,298     17,056       31,759     31,906  
Other service charges and fees     9,056     9,162     9,018       18,218     18,672  
Trust and investment services income     9,448     9,614     8,759       19,062     17,642  
Bank-owned life insurance     3,271     5,120     (859 )     8,391     (1,276 )
Other     2,866     1,598     3,320       4,464     4,229  
Total noninterest income     47,348     49,023     44,137       96,371     85,517  
Noninterest expense                              
Salaries and employee benefits     57,904     56,032     49,902       113,936     98,128  
Contracted services and professional fees     17,498     16,313     18,617       33,811     35,764  
Occupancy     7,554     7,782     7,334       15,336     14,744  
Equipment     11,000     9,736     7,754       20,736     13,731  
Regulatory assessment and fees     3,676     3,836     2,301       7,512     4,525  
Advertising and marketing     1,891     1,994     1,994       3,885     4,022  
Card rewards program     7,681     8,085     7,285       15,766     14,168  
Other     13,677     14,789     13,988       28,466     28,135  
Total noninterest expense     120,881     118,567     109,175       239,448     213,217  
Income before provision for income taxes     81,406     88,903     79,109       170,309     156,066  
Provision for income taxes     18,964     22,085     19,749       41,049     38,987  
Net income   $ 62,442   $ 66,818   $ 59,360     $ 129,260   $ 117,079  
Basic earnings per share   $ 0.49   $ 0.52   $ 0.46     $ 1.01   $ 0.92  
Diluted earnings per share   $ 0.49   $ 0.52   $ 0.46     $ 1.01   $ 0.91  
Basic weighted-average outstanding shares     127,591,371     127,453,820     127,672,244       127,522,975     127,614,564  
Diluted weighted-average outstanding shares     127,832,351     128,033,812     128,014,777       127,901,225     128,108,630  


                         
Consolidated Balance Sheets   Table 3
    June 30,   March 31,   December 31,   June 30,
(dollars in thousands, except share amount)   2023
  2023
  2022
  2022
Assets                        
Cash and due from banks   $ 318,333     $ 253,705     $ 297,502     $ 279,629  
Interest-bearing deposits in other banks     239,798       611,887       229,122       1,254,047  
Investment securities:                        
Available-for-sale, at fair value (amortized cost: $3,296,825 as of June 30, 2023, $3,427,708 as of March 31, 2023, $3,549,599 as of December 31, 2022 and $4,267,809 as of June 30, 2022)     2,909,372       3,054,280       3,151,133       3,967,746  
Held-to-maturity, at amortized cost (fair value: $3,697,261 as of June 30, 2023, $3,824,478 as of March 31, 2023, $3,814,822 as of December 31, 2022 and $3,910,780 as of June 30, 2022)     4,180,408       4,261,361       4,320,639       4,093,215  
Loans held for sale                       180  
Loans and leases     14,362,832       14,221,272       14,092,012       13,262,781  
Less: allowance for credit losses     148,581       147,122       143,900       148,942  
Net loans and leases     14,214,251       14,074,150       13,948,112       13,113,839  
                         
Premises and equipment, net     277,817       278,121       280,355       310,047  
Other real estate owned and repossessed personal property           91       91        
Accrued interest receivable     80,710       79,200       78,194       63,240  
Bank-owned life insurance     476,177       473,255       473,067       470,542  
Goodwill     995,492       995,492       995,492       995,492  
Mortgage servicing rights     6,072       6,299       6,562       7,152  
Other assets     813,136       796,366       796,954       822,404  
Total assets   $ 24,511,566     $ 24,884,207     $ 24,577,223     $ 25,377,533  
Liabilities and Stockholders' Equity                        
Deposits:                        
Interest-bearing   $ 12,911,539     $ 12,579,155     $ 12,824,383     $ 12,990,571  
Noninterest-bearing     8,166,627       8,702,345       8,864,646       9,610,883  
Total deposits     21,078,166       21,281,500       21,689,029       22,601,454  
Short-term borrowings           250,000       75,000        
Long-term borrowings     500,000       500,000              
Retirement benefits payable     100,671       101,622       102,577       134,151  
Other liabilities     472,991       422,073       441,612       389,317  
Total liabilities     22,151,828       22,555,195       22,308,218       23,124,922  
                         
Stockholders' equity                        
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 141,327,860 / 127,608,037 shares as of June 30, 2023, issued/outstanding: 141,291,086 / 127,573,680 shares as of March 31, 2023, issued/outstanding: 140,963,918 / 127,363,327 shares as of December 31, 2022 and issued/outstanding: 140,943,908 / 127,451,087 shares as of June 30, 2022)     1,413       1,413       1,410       1,409  
Additional paid-in capital     2,543,226       2,540,653       2,538,336       2,533,407  
Retained earnings     799,045       769,791       736,544       654,777  
Accumulated other comprehensive loss, net     (612,736 )     (611,679 )     (639,254 )     (571,457 )
Treasury stock (13,719,823 shares as of June 30, 2023, 13,717,406 shares as of March 31, 2023, 13,600,591 shares as of December 31, 2022 and 13,492,821 shares as of June 30, 2022)     (371,210 )     (371,166 )     (368,031 )     (365,525 )
Total stockholders' equity     2,359,738       2,329,012       2,269,005       2,252,611  
Total liabilities and stockholders' equity   $ 24,511,566     $ 24,884,207     $ 24,577,223     $ 25,377,533  


                                                   
Average Balances and Interest Rates                                               Table 4
    Three Months Ended   Three Months Ended   Three Months Ended  
    June 30, 2023   March 31, 2023   June 30, 2022  
    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   $ 569.3   $ 7.2   5.07 % $ 299.6   $ 3.4   4.60 % $ 1,297.3   $ 2.8   0.85 %
Available-for-Sale Investment Securities                                                  
Taxable     2,978.6     18.0   2.42     3,081.4     18.4   2.39     3,946.4     16.6   1.68  
Non-Taxable     5.8     0.1   5.74     31.1     0.4   5.55     8.4     0.1   5.26  
Held-to-Maturity Investment Securities                                                  
Taxable     3,618.7     15.3   1.69     3,683.8     15.7   1.70     3,533.6     15.0   1.70  
Non-Taxable     610.4     3.7   2.46     612.2     4.1   2.74     607.0     4.1   2.71  
Total Investment Securities     7,213.5     37.1   2.06     7,408.5     38.6   2.09     8,095.4     35.8   1.77  
Loans Held for Sale     0.5       5.87     0.1       5.53     0.3       5.06  
Loans and Leases(1)                                                  
Commercial and industrial     2,265.7     36.2   6.41     2,192.9     32.4   5.98     1,951.3     15.0   3.09  
Commercial real estate     4,183.6     64.9   6.22     4,105.7     58.3   5.76     3,808.9     30.7   3.23  
Construction     874.3     15.2   6.96     873.9     14.7   6.83     711.3     6.3   3.57  
Residential:                                                  
Residential mortgage     4,314.0     39.1   3.62     4,307.0     38.4   3.57     4,183.0     36.7   3.51  
Home equity line     1,119.3     9.2   3.31     1,074.9     8.7   3.27     945.7     5.9   2.49  
Consumer     1,196.6     17.7   5.92     1,213.5     17.2   5.75     1,218.0     15.5   5.09  
Lease financing     329.7     3.6   4.43     311.4     3.1   4.10     240.4     2.1   3.53  
Total Loans and Leases     14,283.2     185.9   5.22     14,079.3     172.8   4.96     13,058.6     112.2   3.44  
Other Earning Assets     119.8     0.3   0.99     85.8     0.2   0.76     69.0     0.1   0.79  
Total Earning Assets(2)     22,186.3     230.5   4.16     21,873.3     215.0   3.97     22,520.6     150.9   2.68  
Cash and Due from Banks     257.9               286.1               300.8            
Other Assets     2,377.3               2,388.7               2,428.8            
Total Assets   $ 24,821.5             $ 24,548.1             $ 25,250.2            
                                                   
Interest-Bearing Liabilities                                                  
Interest-Bearing Deposits                                                  
Savings   $ 6,099.4   $ 16.1   1.05 % $ 6,354.3   $ 13.9   0.89 %   6,971.3   $ 1.7   0.10 %
Money Market     3,809.8     19.6   2.07     3,853.5     14.3   1.50     4,127.4     1.4   0.14  
Time     2,877.8     22.4   3.12     2,515.6     15.1   2.44     1,671.4     1.5   0.36  
Total Interest-Bearing Deposits     12,787.0     58.1   1.82     12,723.4     43.3   1.38     12,770.1     4.6   0.14  
Federal Funds Purchased     2.9       5.00     67.1     0.7   4.43            
Other Short-Term Borrowings     362.9     4.7   5.16     52.8     0.7   5.02            
Long-Term Borrowings     500.0     6.0   4.78     105.5     1.2   4.52            
Other Interest-Bearing Liabilities     54.0     0.5   4.00     42.8     0.4   4.27            
Total Interest-Bearing Liabilities     13,706.8     69.3   2.03     12,991.6     46.3   1.45     12,770.1     4.6   0.14  
Net Interest Income         $ 161.2             $ 168.7             $ 146.3      
Interest Rate Spread               2.13 %             2.52 %             2.54 %
Net Interest Margin               2.91 %             3.11 %             2.60 %
Noninterest-Bearing Demand Deposits     8,270.3               8,745.2               9,631.4            
Other Liabilities     500.1               511.9               586.0            
Stockholders' Equity     2,344.3               2,299.4               2,262.7            
Total Liabilities and Stockholders' Equity   $ 24,821.5             $ 24,548.1             $ 25,250.2            

______________________________

(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 $1.3 million, $1.4 million and $1.2 million for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

                                   
Average Balances and Interest Rates                               Table 5
    Six Months Ended   Six Months Ended  
    June 30, 2023   June 30, 2022  
    Average   Income/   Yield/   Average   Income/   Yield/  
(dollars in millions)   Balance   Expense   Rate   Balance   Expense   Rate  
Earning Assets                                  
Interest-Bearing Deposits in Other Banks   $ 435.2   $ 10.6   4.91 % $ 1,218.3   $ 3.3   0.55 %
Available-for-Sale Investment Securities                                  
Taxable     3,029.7     36.4   2.41     5,862.7     45.7   1.56  
Non-Taxable     18.4     0.5   5.58     320.8     3.9   2.41  
Held-to-Maturity Investment Securities                                  
Taxable     3,651.1     30.9   1.70     1,776.6     15.0   1.69  
Non-Taxable     611.3     7.9   2.60     305.2     4.1   2.71  
Total Investment Securities     7,310.5     75.7   2.08     8,265.3     68.7   1.66  
Loans Held for Sale     0.3       5.79     0.8       2.60  
Loans and Leases(1)                                  
Commercial and industrial     2,229.5     68.6   6.20     1,962.1     29.7   3.05  
Commercial real estate     4,144.9     123.2   5.99     3,721.0     56.4   3.06  
Construction     874.1     29.9   6.89     738.9     12.1   3.30  
Residential:                                  
Residential mortgage     4,310.5     77.5   3.59     4,147.2     71.5   3.45  
Home equity line     1,097.2     17.9   3.29     918.8     11.3   2.48  
Consumer     1,205.0     34.8   5.84     1,218.3     31.1   5.14  
Lease financing     320.6     6.8   4.27     233.4     4.0   3.48  
Total Loans and Leases     14,181.8     358.7   5.09     12,939.7     216.1   3.36  
Other Earning Assets     102.9     0.5   0.90     68.0     0.4   1.05  
Total Earning Assets(2)     22,030.7     445.5   4.07     22,492.1     288.5   2.58  
Cash and Due from Banks     271.9               296.5            
Other Assets     2,383.0               2,377.2            
Total Assets   $ 24,685.6             $ 25,165.8            
                                   
Interest-Bearing Liabilities                                  
Interest-Bearing Deposits                                  
Savings   $ 6,226.2   $ 30.0   0.97 % $ 6,820.7   $ 2.2   0.07 %
Money Market     3,831.5     33.9   1.78     4,088.3     2.0   0.09  
Time     2,697.7     37.5   2.80     1,709.8     3.2   0.38  
Total Interest-Bearing Deposits     12,755.4     101.4   1.60     12,618.8     7.4   0.12  
Federal Funds Purchased     34.8     0.8   4.45            
Other Short-Term Borrowings     208.7     5.3   5.14            
Long-Term Borrowings     303.8     7.1   4.73            
Other Interest-Bearing Liabilities     48.5     1.0   4.12            
Total Interest-Bearing Liabilities     13,351.2     115.6   1.75     12,618.8     7.4   0.12  
Net Interest Income         $ 329.9             $ 281.1      
Interest Rate Spread               2.32 %             2.46 %
Net Interest Margin               3.01 %             2.51 %
Noninterest-Bearing Demand Deposits     8,506.4               9,563.6            
Other Liabilities     506.0               578.9            
Stockholders' Equity     2,322.0               2,404.5            
Total Liabilities and Stockholders' Equity   $ 24,685.6             $ 25,165.8            

______________________________

(1)   Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.

(2)   Interest income includes taxable-equivalent basis adjustments of $2.7 million and $2.1 million for the six months ended June 30, 2023 and 2022, respectively.

                   
Analysis of Change in Net Interest Income                 Table 6
    Three Months Ended June 30, 2023
    Compared to March 31, 2023
(dollars in millions)   Volume   Rate   Total
Change in Interest Income:                  
Interest-Bearing Deposits in Other Banks   $ 3.4     $ 0.4     $ 3.8  
Available-for-Sale Investment Securities                  
Taxable     (0.6 )     0.2       (0.4 )
Non-Taxable     (0.3 )           (0.3 )
Held-to-Maturity Investment Securities                  
Taxable     (0.3 )     (0.1 )     (0.4 )
Non-Taxable           (0.4 )     (0.4 )
Total Investment Securities     (1.2 )     (0.3 )     (1.5 )
Loans and Leases                  
Commercial and industrial     1.2       2.6       3.8  
Commercial real estate     1.3       5.3       6.6  
Construction           0.5       0.5  
Residential:                  
Residential mortgage     0.1       0.6       0.7  
Home equity line     0.4       0.1       0.5  
Consumer     (0.2 )     0.7       0.5  
Lease financing     0.2       0.3       0.5  
Total Loans and Leases     3.0       10.1       13.1  
Other Earning Assets     0.1             0.1  
Total Change in Interest Income     5.3       10.2       15.5  
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings     (0.5 )     2.7       2.2  
Money Market     (0.2 )     5.5       5.3  
Time     2.5       4.8       7.3  
Total Interest-Bearing Deposits     1.8       13.0       14.8  
Federal Funds Purchased     (0.8 )     0.1       (0.7 )
Other Short-Term Borrowings     4.0             4.0  
Long-Term Borrowings     4.7       0.1       4.8  
Other Interest-Bearing Liabilities     0.1             0.1  
Total Change in Interest Expense     9.8       13.2       23.0  
Change in Net Interest Income   $ (4.5 )   $ (3.0 )   $ (7.5 )


                   
Analysis of Change in Net Interest Income                 Table 7
    Three Months Ended June 30, 2023
    Compared to June 30, 2022
(dollars in millions)   Volume   Rate   Total
Change in Interest Income:                  
Interest-Bearing Deposits in Other Banks   $ (2.3 )   $ 6.7     $ 4.4  
Available-for-Sale Investment Securities                  
Taxable     (4.7 )     6.1       1.4  
Held-to-Maturity Investment Securities                  
Taxable     0.3             0.3  
Non-Taxable           (0.4 )     (0.4 )
Total Investment Securities     (4.4 )     5.7       1.3  
Loans and Leases                  
Commercial and industrial     2.8       18.4       21.2  
Commercial real estate     3.3       30.9       34.2  
Construction     1.7       7.2       8.9  
Residential:                  
Residential mortgage     1.2       1.2       2.4  
Home equity line     1.2       2.1       3.3  
Consumer     (0.3 )     2.5       2.2  
Lease financing     0.9       0.6       1.5  
Total Loans and Leases     10.8       62.9       73.7  
Other Earning Assets     0.1       0.1       0.2  
Total Change in Interest Income     4.2       75.4       79.6  
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings     (0.2 )     14.6       14.4  
Money Market     (0.1 )     18.3       18.2  
Time     1.8       19.1       20.9  
Total Interest-Bearing Deposits     1.5       52.0       53.5  
Other Short-Term Borrowings     4.7             4.7  
Long-Term Borrowings     6.0             6.0  
Other Interest-Bearing Liabilities     0.5             0.5  
Total Change in Interest Expense     12.7       52.0       64.7  
Change in Net Interest Income   $ (8.5 )   $ 23.4     $ 14.9  


                   
Analysis of Change in Net Interest Income                 Table 8
    Six Months Ended June 30, 2023
    Compared to June 30, 2022
(dollars in millions)   Volume   Rate   Total
Change in Interest Income:                  
Interest-Bearing Deposits in Other Banks   $ (3.4 )   $ 10.7     $ 7.3  
Available-for-Sale Investment Securities                  
Taxable     (27.6 )     18.3       (9.3 )
Non-Taxable     (5.6 )     2.2       (3.4 )
Held-to-Maturity Investment Securities                  
Taxable     15.8       0.1       15.9  
Non-Taxable     4.0       (0.2 )     3.8  
Total Investment Securities     (13.4 )     20.4       7.0  
Loans and Leases                  
Commercial and industrial     4.5       34.4       38.9  
Commercial real estate     7.1       59.7       66.8  
Construction     2.5       15.3       17.8  
Residential:                  
Residential mortgage     3.0       3.0       6.0  
Home equity line     2.5       4.1       6.6  
Consumer     (0.4 )     4.1       3.7  
Lease financing     1.7       1.1       2.8  
Total Loans and Leases     20.9       121.7       142.6  
Other Earning Assets     0.2       (0.1 )     0.1  
Total Change in Interest Income     4.3       152.7       157.0  
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings     (0.2 )     28.0       27.8  
Money Market     (0.1 )     32.0       31.9  
Time     2.8       31.5       34.3  
Total Interest-Bearing Deposits     2.5       91.5       94.0  
Federal Funds Purchased     0.8             0.8  
Other Short-Term Borrowings     5.3             5.3  
Long-Term Borrowings     7.1             7.1  
Other Interest-Bearing Liabilities     1.0             1.0  
Total Change in Interest Expense     16.7       91.5       108.2  
Change in Net Interest Income   $ (12.4 )   $ 61.2     $ 48.8  


                         
Loans and Leases                       Table 9
    June 30,   March 31,   December 31,   June 30,
(dollars in thousands)   2023   2023   2022   2022
Commercial and industrial:                        
Commercial and industrial excluding Paycheck Protection Program loans   $ 2,175,841   $ 2,254,506   $ 2,217,604   $ 1,898,899
Paycheck Protection Program loans     11,990     13,826     18,293     43,233
Total commercial and industrial     2,187,831     2,268,332     2,235,897     1,942,132
Commercial real estate     4,290,948     4,106,200     4,132,309     3,956,828
Construction     913,837     913,959     844,643     727,771
Residential:                        
Residential mortgage     4,317,537     4,318,742     4,302,788     4,212,768
Home equity line     1,138,163     1,095,365     1,055,351     971,569
Total residential     5,455,700     5,414,107     5,358,139     5,184,337
Consumer     1,182,116     1,191,552     1,222,934     1,207,051
Lease financing     332,400     327,122     298,090     244,662
Total loans and leases   $ 14,362,832   $ 14,221,272   $ 14,092,012   $ 13,262,781


                         
Deposits                       Table 10
    June 30,   March 31,   December 31,   June 30,
(dollars in thousands)   2023   2023   2022   2022
Demand   $ 8,166,627   $ 8,702,345   $ 8,864,646   $ 9,610,883
Savings     5,835,975     6,173,398     6,382,910     7,243,185
Money Market     3,767,792     3,818,355     3,965,423     4,079,706
Time     3,307,772     2,587,402     2,476,050     1,667,680
Total Deposits   $ 21,078,166   $ 21,281,500   $ 21,689,029   $ 22,601,454


                         
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)      2023      2023      2022      2022
Non-Performing Assets                        
Non-Accrual Loans and Leases                        
Commercial Loans:                        
Commercial and industrial   $ 1,024   $ 1,158   $ 1,215   $ 682
Commercial real estate         727     727     727
Total Commercial Loans     1,024     1,885     1,942     1,409
Residential Loans:                        
Residential mortgage     6,097     6,896     6,166     6,450
Home equity line     6,107     4,903     3,797    
Total Residential Loans     12,204     11,799     9,963     6,450
Total Non-Accrual Loans and Leases     13,228     13,684     11,905     7,859
Other Real Estate Owned         91     91    
Total Non-Performing Assets   $ 13,228   $ 13,775   $ 11,996   $ 7,859
                         
Accruing Loans and Leases Past Due 90 Days or More                        
Commercial Loans:                        
Commercial and industrial   $ 599   $ 461   $ 291   $ 2,230
Commercial real estate     619     1,346         176
Construction         102         352
Total Commercial Loans     1,218     1,909     291     2,758
Residential Loans:                        
Residential mortgage     58     58     58     750
Home equity line                 1,039
Total Residential Loans     58     58     58     1,789
Consumer     1,975     2,502     2,885     1,218
Total Accruing Loans and Leases Past Due 90 Days or More   $ 3,251   $ 4,469   $ 3,234   $ 5,765
                         
Total Loans and Leases   $ 14,362,832   $ 14,221,272   $ 14,092,012   $ 13,262,781


                                 
Allowance for Credit Losses and Reserve for Unfunded Commitments   Table 12
    For the Three Months Ended   For the Six Months Ended  
    June 30,   March 31,   June 30,   June 30,   June 30,  
(dollars in thousands)   2023
  2023
  2022
  2023
  2022
 
Balance at Beginning of Period   $ 183,321     $ 177,735     $ 179,238       177,735       187,584    
Loans and Leases Charged-Off                                
Commercial and industrial     (997 )     (791 )     (243 )     (1,788 )     (949 )  
Residential Loans:                                
Residential mortgage           (122 )           (122 )        
Home equity line     (137 )     (135 )     (1,120 )     (272 )     (1,163 )  
Total Residential Loans     (137 )     (257 )     (1,120 )     (394 )     (1,163 )  
Consumer     (4,516 )     (4,782 )     (3,659 )     (9,298 )     (7,768 )  
Total Loans and Leases Charged-Off     (5,650 )     (5,830 )     (5,022 )     (11,480 )     (9,880 )  
Recoveries on Loans and Leases Previously Charged-Off                                
Commercial Loans:                                
Commercial and industrial     292       246       301       538       354    
Commercial real estate                             14    
Lease financing                 60             60    
Total Commercial Loans     292       246       361       538       428    
Residential Loans:                                
Residential mortgage     30       27       192       57       208    
Home equity line     59       177       191       236       219    
Total Residential Loans     89       204       383       293       427    
Consumer     1,728       2,166       1,940       3,894       4,088    
Total Recoveries on Loans and Leases Previously Charged-Off     2,109       2,616       2,684       4,725       4,943    
Net Loans and Leases Charged-Off     (3,541 )     (3,214 )     (2,338 )     (6,755 )     (4,937 )  
Provision for Credit Losses     5,000       8,800       1,000       13,800       (4,747 )  
Balance at End of Period   $ 184,780     $ 183,321     $ 177,900     $ 184,780     $ 177,900    
Components:                                
Allowance for Credit Losses   $ 148,581     $ 147,122     $ 148,942     $ 148,581     $ 148,942    
Reserve for Unfunded Commitments     36,199       36,199       28,958       36,199       28,958    
Total Allowance for Credit Losses and Reserve for Unfunded Commitments   $ 184,780     $ 183,321     $ 177,900     $ 184,780     $ 177,900    
Average Loans and Leases Outstanding   $ 14,283,222     $ 14,079,337     $ 13,058,558     $ 14,181,842     $ 12,939,745    
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)     0.10   %   0.09   %   0.07   %   0.10   %   0.08   %
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding     1.03   %   1.03   %   1.12   %   1.03   %   1.12   %
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases     11.23x     10.75x     18.95x     11.23x     18.95x  

_____________________________

(1)   Annualized for the three and six months ended June 30, 2023 and 2022 and three months ended March 31, 2023.

                                                       
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)   2023   2022   2021   2020   2019   Prior   Cost Basis   Cost Basis   Total
Commercial Lending                                                      
Commercial and Industrial                                                      
Risk rating:                                                      
Pass   $ 33,877   $ 299,913   $ 385,159   $ 38,769   $ 157,794   $ 165,747   $ 952,182   $ 15,003   $ 2,048,444
Special Mention     103     31,193     154     849     2,397     1,481     2,967     186     39,330
Substandard     352     563     260     936     819     1,100     12,539     17     16,586
Other(1)     11,743     13,284     6,301     3,275     2,644     1,668     44,556         83,471
Total Commercial and Industrial     46,075     344,953     391,874     43,829     163,654     169,996     1,012,244     15,206     2,187,831
Current period gross charge-offs     72     60     9     28     92     1,527             1,788
                                                       
Commercial Real Estate                                                      
Risk rating:                                                      
Pass     212,159     876,558     655,847     333,142     564,881     1,499,805     72,447         4,214,839
Special Mention     1,737     156         547     6,983     12,389     12,952         34,764
Substandard         5,141         171         35,883     2         41,197
Other(1)                         148             148
Total Commercial Real Estate     213,896     881,855     655,847     333,860     571,864     1,548,225     85,401         4,290,948
Current period gross charge-offs                                    
                                                       
Construction                                                      
Risk rating:                                                      
Pass     77,826     182,679     365,959     76,728     61,906     82,554     6,562         854,214
Special Mention                     205                 205
Other(1)     6,601     26,882     15,766     3,261     2,136     4,067     705         59,418
Total Construction     84,427     209,561     381,725     79,989     64,247     86,621     7,267         913,837
Current period gross charge-offs                                    
                                                       
Lease Financing                                                      
Risk rating:                                                      
Pass     69,487     94,276     21,167     39,215     35,964     70,312             330,421
Special Mention             365     60                     425
Substandard                 171     7     1,376             1,554
Total Lease Financing     69,487     94,276     21,532     39,446     35,971     71,688             332,400
Current period gross charge-offs                                    
                                                       
Total Commercial Lending   $ 413,885   $ 1,530,645   $ 1,450,978   $ 497,124   $ 835,736   $ 1,876,530   $ 1,104,912   $ 15,206   $ 7,725,016
Current period gross charge-offs   $ 72   $ 60   $ 9   $ 28   $ 92   $ 1,527   $   $   $ 1,788


                                                       
                                              Revolving      
                                              Loans      
                                              Converted      
    Term Loans   Revolving   to Term      
    Amortized Cost Basis by Origination Year   Loans   Loans      
(continued)                                       Amortized   Amortized      
(dollars in thousands)   2023   2022   2021   2020   2019   Prior   Cost Basis   Cost Basis   Total
Residential Lending                                                      
Residential Mortgage                                                      
FICO:                                                      
740 and greater   $ 138,593   $ 530,776   $ 1,030,287   $ 544,330   $ 236,821   $ 1,036,361   $   $   $ 3,517,168
680 - 739     25,500     81,562     117,701     74,446     34,186     135,766             469,161
620 - 679     2,468     11,212     16,463     10,747     5,743     38,132             84,765
550 - 619         3,383     4,058     2,471     254     12,362             22,528
Less than 550         197     2,372     1,581     51     5,403             9,604
No Score(3)     6,075     19,497     12,552     6,378     9,837     56,201             110,540
Other(2)     9,916     18,075     17,857     12,952     8,915     28,438     7,618         103,771
Total Residential Mortgage     182,552     664,702     1,201,290     652,905     295,807     1,312,663     7,618         4,317,537
Current period gross charge-offs                         122             122
                                                       
Home Equity Line                                                      
FICO:                                                      
740 and greater                             930,741     1,668     932,409
680 - 739                             151,418     2,449     153,867
620 - 679                             32,897     1,376     34,273
550 - 619                             9,428     1,448     10,876
Less than 550                             5,127     312     5,439
No Score(3)                             1,299         1,299
Total Home Equity Line                             1,130,910     7,253     1,138,163
Current period gross charge-offs                             254     18     272
                                                       
Total Residential Lending   $ 182,552   $ 664,702   $ 1,201,290   $ 652,905   $ 295,807   $ 1,312,663   $ 1,138,528   $ 7,253   $ 5,455,700
Current period gross charge-offs   $   $   $   $   $   $ 122   $ 254   $ 18   $ 394
                                                       
Consumer Lending                                                      
FICO:                                                      
740 and greater     70,561     153,960     93,788     45,022     34,093     19,410     117,437     140     534,411
680 - 739     44,064     84,900     49,136     23,895     19,424     11,352     72,327     431     305,529
620 - 679     14,643     37,576     19,488     9,771     11,007     8,482     33,692     941     135,600
550 - 619     2,255     10,974     8,135     5,608     6,314     5,207     11,730     748     50,971
Less than 550     418     4,358     4,478     2,695     2,975     2,765     4,247     560     22,496
No Score(3)     1,425     586     2         6     17     39,035     167     41,238
Other(2)     36     1,208     3,536     343     1,113     1     85,634         91,871
Total Consumer Lending   $ 133,402   $ 293,562   $ 178,563   $ 87,334   $ 74,932   $ 47,234   $ 364,102   $ 2,987   $ 1,182,116
Current period gross charge-offs   $ 58   $ 1,244   $ 1,260   $ 630   $ 1,239   $ 1,388   $ 3,131   $ 348   $ 9,298
                                                       
Total Loans and Leases   $ 729,839   $ 2,488,909   $ 2,830,831   $ 1,237,363   $ 1,206,475   $ 3,236,427   $ 2,607,542   $ 25,446   $ 14,362,832
Current period gross charge-offs   $ 130   $ 1,304   $ 1,269   $ 658   $ 1,331   $ 3,037   $ 3,385   $ 366   $ 11,480

_______________________________

(1)   Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score.

(2)   Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating.

(3)   No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.

                                 
GAAP to Non-GAAP Reconciliation   Table 14
    For the Three Months Ended   For the Six Months Ended  
    June 30,   March 31,   June 30,   June 30,  
(dollars in thousands)   2023   2023   2022   2023   2022  
Income Statement Data: