Press Release

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

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

October 27, 2023 at 8:00 AM EDT

HONOLULU, Oct. 27, 2023 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended September 30, 2023.

“I’m pleased to report that we delivered strong results in the third quarter.  Our loan balances were stable, we grew consumer and commercial deposits, and credit quality remained excellent,” said Bob Harrison, Chairman, President, and CEO.  “It was during this time that the world saw the devastating impacts of the wildfires on Maui.  Our priority during the quarter was to help our customers, colleagues and the community through this tragedy, and we are committed to helping Maui recover and rebuild stronger than ever.” 

On October 18, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on December 1, 2023, to stockholders of record at the close of business on November 20, 2023.  

Third Quarter 2023 Highlights:

  • Net income of $58.2 million, or $0.46 per diluted share
  • Total loans and leases decreased $30.5 million versus prior quarter
  • Total deposits increased $433.3 million versus prior quarter
  • Net interest margin decreased 5 basis points to 2.86%
  • Recorded a $7.5 million provision for credit losses
  • Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet

Total assets were $24.9 billion as of September 30, 2023, compared to $24.5 billion as of June 30, 2023.

Gross loans and leases were $14.3 billion as of September 30, 2023, a slight decrease of $30.5 million, or 0.2%, from $14.4 billion as of June 30, 2023.

Total deposits were $21.5 billion as of September 30, 2023, an increase of $433.3 million, or 2.1%, from $21.1 billion as of June 30, 2023.  

Net Interest Income

Net interest income for the third quarter of 2023 was $157.1 million, a decrease of $2.8 million, or 1.7%, compared to $159.9 million for the prior quarter.  

The net interest margin was 2.86% in the third quarter of 2023, a decrease of 5 basis points compared to 2.91% in the prior quarter.

Provision Expense

During the quarter ended September 30, 2023, we recorded a $7.5 million provision for credit losses. In the quarter ended June 30, 2023, we recorded a $5.0 million provision for credit losses.

Noninterest Income

Noninterest income was $46.1 million in the third quarter of 2023, a decrease of $1.3 million compared to noninterest income of $47.3 million in the prior quarter.     

Noninterest Expense

Noninterest expense was $119.4 million in the third quarter of 2023, a decrease of $1.5 million compared to noninterest expense of $120.9 million in the prior quarter.  

The efficiency ratio was 58.3% and 58.0% for the quarters ended September 30, 2023 and June 30, 2023, respectively.

Taxes

The effective tax rate was 23.8% and 23.3% for the quarters ended September 30, 2023 and June 30, 2023, respectively.

Asset Quality

The allowance for credit losses was $154.8 million, or 1.08% of total loans and leases, as of September 30, 2023, compared to $148.6 million, or 1.03% of total loans and leases, as of June 30, 2023. The reserve for unfunded commitments was $37.8 million as of September 30, 2023 compared to $36.2 million as of June 30, 2023. Net recoveries were $0.3 million, or 0.01% of average loans and leases on an annualized basis, for the quarter ended September 30, 2023, compared to net charge-offs of $3.5 million, or 0.10% of average loans and leases on an annualized basis, for the quarter ended June 30, 2023. Total non-performing assets were $14.6 million, or 0.10% of total loans and leases and other real estate owned, on September 30, 2023, compared to total non-performing assets of $13.2 million, or 0.09% of total loans and leases and other real estate owned, on June 30, 2023.

Capital

Total stockholders' equity was $2.4 billion on September 30, 2023 and June 30, 2023.    

The tier 1 leverage, common equity tier 1 and total capital ratios were 8.45%, 12.21% and 13.38%, respectively, on September 30, 2023, compared with 8.30%, 12.05% and 13.17%, respectively, on June 30, 2023.

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

First Hawaiian, Inc. 

First Hawaiian, Inc. (NASDAQ:FHB) is a bank holding company headquartered in Honolulu, Hawaii.  Its principal subsidiary, First Hawaiian Bank, founded in 1858 under the name Bishop & Company, is Hawaii’s oldest and largest financial institution with branch locations throughout Hawaii, Guam and Saipan. The company offers a comprehensive suite of banking services to consumer and commercial customers including deposit products, loans, wealth management, insurance, trust, retirement planning, credit card and merchant processing services. Customers may also access their accounts through ATMs, online and mobile banking channels. For more information about First Hawaiian, Inc., visit the Company’s website, www.fhb.com.

Conference Call Information

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

To access the call by phone, please register via the following link:   https://register.vevent.com/register/BIb8dec5c067a34a9783388cdb9da26a39, 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 quarters ended March 31, 2023 and June 30, 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 Nine Months Ended  
    September 30   June 30   September 30   September 30  
(dollars in thousands, except per share data)      2023      2023      2022      2023      2022    
Operating Results:                                
Net interest income   $ 157,148   $ 159,939   $ 162,736   $ 484,334   $ 441,755    
Provision for credit losses     7,500     5,000     3,183     21,300     (1,564 )  
Noninterest income     46,097     47,348     45,857     142,468     131,374    
Noninterest expense     119,383     120,881     113,332     358,831     326,549    
Net income     58,221     62,442     69,018     187,481     186,097    
Basic earnings per share     0.46     0.49     0.54     1.47     1.46    
Diluted earnings per share     0.46     0.49     0.54     1.47     1.45    
Dividends declared per share     0.26     0.26     0.26     0.78     0.78    
Dividend payout ratio     56.52 %   53.06 %   48.15 %   53.06 %   53.79   %
Performance Ratios(1):                                
Net interest margin     2.86 %     2.91 %     2.93 %     2.96 %     2.65   %
Efficiency ratio     58.31 %     57.96 %     53.98 %     56.86 %     56.63   %
Return on average total assets     0.93 %     1.01 %     1.10 %     1.01 %     0.99   %
Return on average tangible assets (non-GAAP)(2)     0.97 %     1.05 %     1.14 %     1.06 %     1.03   %
Return on average total stockholders' equity     9.76 %     10.68 %     12.08 %     10.72 %     10.55   %
Return on average tangible stockholders' equity (non-GAAP)(2)     16.84 %     18.57 %     21.53 %     18.68 %     18.26   %
Average Balances:                                
Average loans and leases   $ 14,349,402   $ 14,283,222   $ 13,491,428   $ 14,238,309   $ 13,125,660    
Average earning assets     22,060,480     22,186,316     22,258,066     22,040,704     22,413,209    
Average assets     24,727,893     24,821,486     24,957,042     24,699,826     25,095,438    
Average deposits     21,212,102     21,057,259     22,148,039     21,245,055     22,170,824    
Average stockholders' equity     2,367,422     2,344,285     2,267,152     2,337,292     2,358,195    
Market Value Per Share:                                
Closing     18.05     18.01     24.63     18.05     24.63    
High     22.59     21.00     28.14     28.28     31.16    
Low     17.41     15.08     21.21     15.08     21.21    


    As of   As of   As of   As of  
    September 30   June 30   December 31   September 30  
(dollars in thousands, except per share data)      2023    2023   2022   2022  
Balance Sheet Data:                              
Loans and leases   $ 14,332,335   $ 14,362,832   $ 14,092,012   $ 13,700,374  
Total assets     24,912,524     24,511,566     24,577,223     24,870,272  
Total deposits     21,511,489     21,078,166     21,689,029     22,091,738  
Short-term borrowings     500,000         75,000      
Long-term borrowings         500,000          
Total stockholders' equity     2,351,009     2,359,738     2,269,005     2,200,651  
                           
Per Share of Common Stock:                          
Book value   $ 18.42   $ 18.49   $ 17.82   $ 17.28  
Tangible book value (non-GAAP)(2)     10.62     10.69     10.00     9.46  
                           
Asset Quality Ratios:                          
Non-accrual loans and leases / total loans and leases     0.10 %     0.09 %   0.08 %   0.06 %  
Allowance for credit losses for loans and leases / total loans and leases     1.08 %     1.03 %   1.02 %   1.08 %  
                           
Capital Ratios:                          
Common Equity Tier 1 Capital Ratio      12.21 %      12.05 %    11.82 %   11.79 %  
Tier 1 Capital Ratio     12.21 %     12.05 %   11.82 %   11.79 %  
Total Capital Ratio     13.38 %     13.17 %   12.92 %   12.92 %  
Tier 1 Leverage Ratio     8.45 %     8.30 %   8.11 %   7.78 %  
Total stockholders' equity to total assets     9.44 %     9.63 %   9.23 %   8.85 %  
Tangible stockholders' equity to tangible assets (non-GAAP)(2)     5.67 %     5.80 %   5.40 %   5.05 %  
                           
Non-Financial Data:                          
Number of branches     50     51     51     51  
Number of ATMs     294     296     294     303  
Number of Full-Time Equivalent Employees     2,087     2,126     2,063     2,042  



(1)     Except for the efficiency ratio, amounts are annualized for the three and nine months ended September 30, 2023 and 2022 and three months ended June 30, 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 Nine Months Ended
    September 30   June 30   September 30   September 30
(dollars in thousands, except per share amounts)      2023      2023      2022        2023      2022  
Interest income                              
Loans and lease financing   $ 194,098   $ 185,340   $ 134,646     $ 551,777   $ 350,294  
Available-for-sale investment securities     18,426     18,094     19,644       55,208     68,394  
Held-to-maturity investment securities     18,271     18,282     17,950       55,510     36,239  
Other     9,004     7,489     4,150       20,054     7,828  
Total interest income     239,799     229,205     176,390       682,549     462,755  
Interest expense                              
Deposits     74,651     58,071     13,653       176,006     20,999  
Short-term and long-term borrowings     6,838     10,656     1       20,057     1  
Other     1,162     539           2,152      
Total interest expense     82,651     69,266     13,654       198,215     21,000  
Net interest income     157,148     159,939     162,736       484,334     441,755  
Provision for credit losses     7,500     5,000     3,183       21,300     (1,564 )
Net interest income after provision for credit losses     149,648     154,939     159,553       463,034     443,319  
Noninterest income                              
Service charges on deposit accounts     7,524     7,246     7,089       22,001     21,433  
Credit and debit card fees     15,748     15,461     17,746       47,507     49,652  
Other service charges and fees     9,546     9,056     9,179       27,764     27,851  
Trust and investment services income     9,742     9,448     9,800       28,804     27,442  
Bank-owned life insurance     1,872     3,271     (341 )     10,263     (1,617 )
Other     1,665     2,866     2,384       6,129     6,613  
Total noninterest income     46,097     47,348     45,857       142,468     131,374  
Noninterest expense                              
Salaries and employee benefits     55,937     57,904     51,372       169,873     149,500  
Contracted services and professional fees     16,393     17,498     16,625       50,204     52,389  
Occupancy     6,711     7,554     8,115       22,047     22,859  
Equipment     11,826     11,000     10,791       32,562     24,522  
Regulatory assessment and fees     4,149     3,676     2,487       11,661     7,012  
Advertising and marketing     2,289     1,891     1,902       6,174     5,924  
Card rewards program     8,358     7,681     8,141       24,124     22,309  
Other     13,720     13,677     13,899       42,186     42,034  
Total noninterest expense     119,383     120,881     113,332       358,831     326,549  
Income before provision for income taxes     76,362     81,406     92,078       246,671     248,144  
Provision for income taxes     18,141     18,964     23,060       59,190     62,047  
Net income   $ 58,221   $ 62,442   $ 69,018     $ 187,481   $ 186,097  
Basic earnings per share   $ 0.46   $ 0.49   $ 0.54     $ 1.47   $ 1.46  
Diluted earnings per share   $ 0.46   $ 0.49   $ 0.54     $ 1.47   $ 1.45  
Basic weighted-average outstanding shares     127,609,860     127,591,371     127,377,713       127,552,255     127,534,746  
Diluted weighted-average outstanding shares     127,936,440     127,832,351     127,796,617       127,897,829     127,996,672  


                         
Consolidated Balance Sheets   Table 3
    September 30   June 30   December 31   September 30
(dollars in thousands, except share amount)      2023        2023        2022        2022  
Assets                        
Cash and due from banks   $ 246,028     $ 318,333     $ 297,502     $ 291,360  
Interest-bearing deposits in other banks     967,400       239,798       229,122       657,574  
Investment securities:                        
Available-for-sale, at fair value (amortized cost: $3,172,031 as of September 30, 2023, $3,296,825 as of June 30, 2023, $3,549,599 as of December 31, 2022 and $3,673,396 as of September 30, 2022)     2,722,704       2,909,372       3,151,133       3,289,160  
Held-to-maturity, at amortized cost (fair value: $3,433,029 as of September 30, 2023, $3,697,261 as of June 30, 2023, $3,814,822 as of December 31, 2022 and $3,960,713 as of September 30, 2022)     4,104,114       4,180,408       4,320,639       4,406,143  
Loans held for sale                       361  
Loans and leases     14,332,335       14,362,832       14,092,012       13,700,374  
Less: allowance for credit losses     154,795       148,581       143,900       148,163  
Net loans and leases     14,177,540       14,214,251       13,948,112       13,552,211  
                         
Premises and equipment, net     277,805       277,817       280,355       299,179  
Other real estate owned and repossessed personal property                 91       139  
Accrued interest receivable     84,327       80,710       78,194       68,545  
Bank-owned life insurance     477,698       476,177       473,067       470,202  
Goodwill     995,492       995,492       995,492       995,492  
Mortgage servicing rights     5,855       6,072       6,562       6,866  
Other assets     853,561       813,136       796,954       833,040  
Total assets   $ 24,912,524     $ 24,511,566     $ 24,577,223     $ 24,870,272  
Liabilities and Stockholders' Equity                        
Deposits:                        
Interest-bearing   $ 13,612,493     $ 12,911,539     $ 12,824,383     $ 12,774,645  
Noninterest-bearing     7,898,996       8,166,627       8,864,646       9,317,093  
Total deposits     21,511,489       21,078,166       21,689,029       22,091,738  
Short-term borrowings     500,000             75,000        
Long-term borrowings           500,000              
Retirement benefits payable     99,685       100,671       102,577       133,981  
Other liabilities     450,341       472,991       441,612       443,902  
Total liabilities     22,561,515       22,151,828       22,308,218       22,669,621  
                         
Stockholders' equity                        
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 141,330,663 / 127,609,934 shares as of September 30, 2023, issued/outstanding: 141,327,860 / 127,608,037 shares as of June 30, 2023, issued/outstanding: 140,963,918 / 127,363,327 shares as of December 31, 2022 and issued/outstanding: 140,958,520 / 127,357,680 shares as of September 30, 2022)     1,413       1,413       1,410       1,410  
Additional paid-in capital     2,545,659       2,543,226       2,538,336       2,535,601  
Retained earnings     823,895       799,045       736,544       690,433  
Accumulated other comprehensive loss, net     (648,731 )     (612,736 )     (639,254 )     (658,756 )
Treasury stock (13,720,729 shares as of September 30, 2023, 13,719,823 shares as of June 30, 2023, 13,600,591 shares as of December 31, 2022 and 13,600,840 shares as of September 30, 2022)     (371,227 )     (371,210 )     (368,031 )     (368,037 )
Total stockholders' equity     2,351,009       2,359,738       2,269,005       2,200,651  
Total liabilities and stockholders' equity   $ 24,912,524     $ 24,511,566     $ 24,577,223     $ 24,870,272  


                                                   
Average Balances and Interest Rates                                               Table 4
    Three Months Ended   Three Months Ended   Three Months Ended  
    September 30, 2023   June 30, 2023   September 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   $ 608.6   $ 8.2   5.36 %   $ 569.3   $ 7.2   5.07 %   $ 724.0   $ 4.0   2.20 %
Available-for-Sale Investment Securities                                                  
Taxable     2,834.6     18.4   2.59     2,978.6     18.0   2.42     3,733.8     19.2   2.05  
Non-Taxable     2.3       5.48     5.8     0.1   5.74     45.1     0.6   5.16  
Held-to-Maturity Investment Securities                                                  
Taxable     3,544.1     15.0   1.70     3,618.7     15.3   1.69     3,573.6     14.6   1.64  
Non-Taxable     604.3     4.1   2.66     610.4     3.7   2.46     613.6     4.2   2.72  
Total Investment Securities     6,985.3     37.5   2.14     7,213.5     37.1   2.06     7,966.1     38.6   1.93  
Loans Held for Sale     0.4       6.63     0.5       5.87     0.7       3.62  
Loans and Leases(1)                                                  
Commercial and industrial     2,123.5     35.7   6.66     2,265.7     36.2   6.41     2,025.5     20.7   4.05  
Commercial real estate     4,381.8     71.4   6.47     4,183.6     64.9   6.22     4,016.7     42.3   4.18  
Construction     873.7     15.5   7.05     874.3     15.2   6.96     737.4     8.6   4.63  
Residential:                                                  
Residential mortgage     4,316.3     40.1   3.72     4,314.0     39.1   3.62     4,224.0     36.4   3.45  
Home equity line     1,154.0     10.1   3.45     1,119.3     9.2   3.31     991.1     7.2   2.87  
Consumer     1,172.8     18.3   6.19     1,196.6     17.7   5.92     1,218.0     17.1   5.57  
Lease financing     327.3     3.7   4.48     329.7     3.6   4.43     278.7     2.7   3.81  
Total Loans and Leases     14,349.4     194.8   5.39     14,283.2     185.9   5.22     13,491.4     135.0   3.98  
Other Earning Assets     116.8     0.8   2.64     119.8     0.3   0.99     75.9     0.1   0.69  
Total Earning Assets(2)     22,060.5     241.3   4.35     22,186.3     230.5   4.16     22,258.1     177.7   3.18  
Cash and Due from Banks     276.0               257.9               277.0            
Other Assets     2,391.4               2,377.3               2,421.9            
Total Assets   $ 24,727.9             $ 24,821.5             $ 24,957.0            
                                                   
Interest-Bearing Liabilities                                                  
Interest-Bearing Deposits                                                  
Savings   $ 5,982.5   $ 19.2   1.27 %   $ 6,099.4   $ 16.1   1.05 %     6,871.5   $ 6.7   0.39 %
Money Market     3,907.2     24.7   2.51     3,809.8     19.6   2.07     4,086.1     4.8   0.47  
Time     3,362.7     30.8   3.63     2,877.8     22.4   3.12     1,720.5     2.1   0.48  
Total Interest-Bearing Deposits     13,252.4     74.7   2.23     12,787.0     58.1   1.82     12,678.1     13.6   0.43  
Federal Funds Purchased               2.9       5.00     0.2       1.67  
Other Short-Term Borrowings     113.1     1.5   5.17     362.9     4.7   5.16            
Long-Term Borrowings     440.2     5.3   4.83     500.0     6.0   4.78            
Other Interest-Bearing Liabilities     89.1     1.2   5.17     54.0     0.5   4.00            
Total Interest-Bearing Liabilities     13,894.8     82.7   2.36     13,706.8     69.3   2.03     12,678.3     13.6   0.43  
Net Interest Income         $ 158.6             $ 161.2             $ 164.1      
Interest Rate Spread               1.99 %               2.13 %               2.75 %
Net Interest Margin               2.86 %               2.91 %               2.93 %
Noninterest-Bearing Demand Deposits     7,959.7               8,270.3               9,469.9            
Other Liabilities     506.0               500.1               541.6            
Stockholders' Equity     2,367.4               2,344.3               2,267.2            
Total Liabilities and Stockholders' Equity   $ 24,727.9             $ 24,821.5             $ 24,957.0            



(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 $1.5 million, $1.3 million and $1.3 million for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, respectively.


                                   
Average Balances and Interest Rates                               Table 5
    Nine Months Ended   Nine Months Ended  
    September 30, 2023   September 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   $ 493.6   $ 18.8   5.10 %   $ 1,051.7   $ 7.3   0.93 %
Available-for-Sale Investment Securities                                  
Taxable     2,964.0     54.8   2.47     5,145.3     64.9   1.68  
Non-Taxable     13.0     0.5   5.57     227.9     4.4   2.59  
Held-to-Maturity Investment Securities                                  
Taxable     3,615.0     46.0   1.70     2,382.2     29.7   1.66  
Non-Taxable     608.9     11.9   2.62     409.1     8.3   2.71  
Total Investment Securities     7,200.9     113.2   2.10     8,164.5     107.3   1.75  
Loans Held for Sale     0.3       6.11     0.7       2.92  
Loans and Leases(1)                                  
Commercial and industrial     2,193.8     104.3   6.35     1,983.5     50.3   3.39  
Commercial real estate     4,224.7     194.6   6.16     3,820.6     98.8   3.46  
Construction     874.0     45.4   6.95     738.4     20.7   3.74  
Residential:                                  
Residential mortgage     4,312.4     117.6   3.64     4,173.1     108.0   3.45  
Home equity line     1,116.4     27.9   3.35     943.2     18.5   2.62  
Consumer     1,194.1     53.2   5.95     1,218.2     48.1   5.29  
Lease financing     322.9     10.5   4.34     248.7     6.7   3.60  
Total Loans and Leases     14,238.3     553.5   5.19     13,125.7     351.1   3.57  
Other Earning Assets     107.6     1.3   1.53     70.6     0.5   0.92  
Total Earning Assets(2)     22,040.7     686.8   4.16     22,413.2     466.2   2.78  
Cash and Due from Banks     273.3               289.9            
Other Assets     2,385.8               2,392.3            
Total Assets   $ 24,699.8             $ 25,095.4            
                                   
Interest-Bearing Liabilities                                  
Interest-Bearing Deposits                                  
Savings   $ 6,144.1   $ 49.1   1.07 %   $ 6,837.8   $ 8.9   0.17 %
Money Market     3,857.0     58.6   2.03     4,087.6     6.8   0.22  
Time     2,921.8     68.3   3.12     1,713.4     5.3   0.41  
Total Interest-Bearing Deposits     12,922.9     176.0   1.82     12,638.8     21.0   0.22  
Federal Funds Purchased     23.0     0.8   4.45     0.1       1.67  
Other Short-Term Borrowings     176.5     6.8   5.15            
Long-Term Borrowings     349.8     12.5   4.78            
Other Interest-Bearing Liabilities     62.1     2.1   4.63            
Total Interest-Bearing Liabilities     13,534.3     198.2   1.96     12,638.9     21.0   0.22  
Net Interest Income         $ 488.6             $ 445.2      
Interest Rate Spread               2.20 %               2.56 %
Net Interest Margin               2.96 %               2.65 %
Noninterest-Bearing Demand Deposits     8,322.2               9,532.0            
Other Liabilities     506.0               566.3            
Stockholders' Equity     2,337.3               2,358.2            
Total Liabilities and Stockholders' Equity   $ 24,699.8             $ 25,095.4            



(1)     Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
(2)     Interest income includes taxable-equivalent basis adjustments of $4.2 million and $3.5 million for the nine months ended September 30, 2023 and 2022, respectively.


                   
Analysis of Change in Net Interest Income                 Table 6
    Three Months Ended September 30, 2023
    Compared to June 30, 2023
(dollars in millions)   Volume   Rate   Total
Change in Interest Income:                           
Interest-Bearing Deposits in Other Banks   $ 0.6     $ 0.4     $ 1.0  
Available-for-Sale Investment Securities                  
Taxable     (0.9 )     1.3       0.4  
Non-Taxable     (0.1 )           (0.1 )
Held-to-Maturity Investment Securities                  
Taxable     (0.3 )           (0.3 )
Non-Taxable           0.4       0.4  
Total Investment Securities     (1.3 )     1.7       0.4  
Loans and Leases                  
Commercial and industrial     (2.1 )     1.6       (0.5 )
Commercial real estate     3.5       3.0       6.5  
Construction           0.3       0.3  
Residential:                  
Residential mortgage           1.0       1.0  
Home equity line     0.4       0.5       0.9  
Consumer     (0.3 )     0.9       0.6  
Lease financing           0.1       0.1  
Total Loans and Leases     1.5       7.4       8.9  
Other Earning Assets           0.5       0.5  
Total Change in Interest Income     0.8       10.0       10.8  
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings     (0.3 )     3.4       3.1  
Money Market     0.5       4.6       5.1  
Time     4.3       4.1       8.4  
Total Interest-Bearing Deposits     4.5       12.1       16.6  
Other Short-Term Borrowings     (3.2 )           (3.2 )
Long-Term Borrowings     (0.7 )           (0.7 )
Other Interest-Bearing Liabilities     0.5       0.2       0.7  
Total Change in Interest Expense     1.1       12.3       13.4  
Change in Net Interest Income   $ (0.3 )   $ (2.3 )   $ (2.6 )


                   
Analysis of Change in Net Interest Income                 Table 7
    Three Months Ended September 30, 2023
    Compared to September 30, 2022
(dollars in millions)   Volume   Rate   Total
Change in Interest Income:                           
Interest-Bearing Deposits in Other Banks   $ (0.7 )   $ 4.9     $ 4.2  
Available-for-Sale Investment Securities                  
Taxable     (5.2 )     4.4       (0.8 )
Non-Taxable     (0.6 )           (0.6 )
Held-to-Maturity Investment Securities                  
Taxable     (0.1 )     0.5       0.4  
Non-Taxable           (0.1 )     (0.1 )
Total Investment Securities     (5.9 )     4.8       (1.1 )
Loans and Leases                  
Commercial and industrial     1.0       14.0       15.0  
Commercial real estate     4.1       25.0       29.1  
Construction     1.8       5.1       6.9  
Residential:                  
Residential mortgage     0.8       2.9       3.7  
Home equity line     1.3       1.6       2.9  
Consumer     (0.6 )     1.8       1.2  
Lease financing     0.5       0.5       1.0  
Total Loans and Leases     8.9       50.9       59.8  
Other Earning Assets     0.1       0.6       0.7  
Total Change in Interest Income     2.4       61.2       63.6  
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings     (1.0 )     13.5       12.5  
Money Market     (0.2 )     20.1       19.9  
Time     3.7       25.0       28.7  
Total Interest-Bearing Deposits     2.5       58.6       61.1  
Other Short-Term Borrowings     1.5             1.5  
Long-Term Borrowings     5.3             5.3  
Other Interest-Bearing Liabilities     1.2             1.2  
Total Change in Interest Expense     10.5       58.6       69.1  
Change in Net Interest Income   $ (8.1 )   $ 2.6     $ (5.5 )


                   
Analysis of Change in Net Interest Income                 Table 8
    Nine Months Ended September 30, 2023
    Compared to September 30, 2022
(dollars in millions)      Volume      Rate      Total
Change in Interest Income:                  
Interest-Bearing Deposits in Other Banks   $ (5.7 )   $ 17.2     $ 11.5  
Available-for-Sale Investment Securities                  
Taxable     (33.6 )     23.5       (10.1 )
Non-Taxable     (6.3 )     2.4       (3.9 )
Held-to-Maturity Investment Securities                  
Taxable     15.6       0.7       16.3  
Non-Taxable     3.9       (0.3 )     3.6  
Total Investment Securities     (20.4 )     26.3       5.9  
Loans and Leases                  
Commercial and industrial     5.9       48.1       54.0  
Commercial real estate     11.4       84.4       95.8  
Construction     4.3       20.4       24.7  
Residential:                  
Residential mortgage     3.6       6.0       9.6  
Home equity line     3.7       5.7       9.4  
Consumer     (0.9 )     6.0       5.1  
Lease financing     2.3       1.5       3.8  
Total Loans and Leases     30.3       172.1       202.4  
Other Earning Assets     0.3       0.5       0.8  
Total Change in Interest Income     4.5       216.1       220.6  
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings     (1.0 )     41.2       40.2  
Money Market     (0.4 )     52.2       51.8  
Time     6.1       56.9       63.0  
Total Interest-Bearing Deposits     4.7       150.3       155.0  
Federal Funds Purchased     0.8             0.8  
Other Short-Term Borrowings     6.8             6.8  
Long-Term Borrowings     12.5             12.5  
Other Interest-Bearing Liabilities     2.1             2.1  
Total Change in Interest Expense     26.9       150.3       177.2  
Change in Net Interest Income   $ (22.4 )   $ 65.8     $ 43.4  


                         
Loans and Leases                       Table 9
    September 30   June 30   December 31   September 30
(dollars in thousands)      2023      2023      2022      2022
Commercial and industrial:                        
Commercial and industrial excluding Paycheck Protection Program loans   $ 2,091,379   $ 2,175,841      $ 2,217,604   $ 2,017,095
Paycheck Protection Program loans     10,063     11,990     18,293     26,712
Total commercial and industrial     2,101,442     2,187,831     2,235,897     2,043,807
Commercial real estate     4,387,751     4,290,948     4,132,309     4,103,310
Construction     885,112     913,837     844,643     765,862
Residential:                        
Residential mortgage     4,303,924     4,317,537     4,302,788     4,252,041
Home equity line     1,167,388     1,138,163     1,055,351     1,010,631
Total residential     5,471,312     5,455,700     5,358,139     5,262,672
Consumer     1,154,203     1,182,116     1,222,934     1,218,885
Lease financing     332,515     332,400     298,090     305,838
Total loans and leases   $ 14,332,335   $ 14,362,832   $ 14,092,012   $ 13,700,374


                         
Deposits                       Table 10
    September 30   June 30   December 31   September 30
(dollars in thousands)      2023      2023      2022      2022
Demand   $ 7,898,996   $ 8,166,627   $ 8,864,646   $ 9,317,093
Savings     6,028,308     5,835,975     6,382,910     6,724,783
Money Market     3,923,054     3,767,792     3,965,423     4,150,940
Time     3,661,131     3,307,772     2,476,050     1,898,922
Total Deposits   $ 21,511,489   $ 21,078,166   $ 21,689,029   $ 22,091,738


                         
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More                       Table 11
    September 30   June 30   December 31   September 30
(dollars in thousands)      2023      2023      2022      2022
Non-Performing Assets                        
Non-Accrual Loans and Leases                        
Commercial Loans:                        
Commercial and industrial   $ 988   $ 1,024   $ 1,215   $ 1,528
Commercial real estate             727     727
Total Commercial Loans     988     1,024     1,942     2,255
Residential Loans:                        
Residential mortgage     7,435     6,097     6,166     6,028
Home equity line     6,200     6,107     3,797    
Total Residential Loans     13,635     12,204     9,963     6,028
Total Non-Accrual Loans and Leases     14,623     13,228     11,905     8,283
Other Real Estate Owned             91     139
Total Non-Performing Assets   $ 14,623   $ 13,228   $ 11,996   $ 8,422
                         
Accruing Loans and Leases Past Due 90 Days or More                        
Commercial Loans:                        
Commercial and industrial   $ 289   $ 599   $ 291   $ 1,445
Commercial real estate     170     619        
Construction                 390
Total Commercial Loans     459     1,218     291     1,835
Residential Loans:                        
Residential mortgage     1,430     58     58    
Home equity line                 1,832
Total Residential Loans     1,430     58     58     1,832
Consumer     1,681     1,975     2,885     1,976
Total Accruing Loans and Leases Past Due 90 Days or More   $ 3,570   $ 3,251   $ 3,234   $ 5,643
                         
Total Loans and Leases   $ 14,332,335   $ 14,362,832   $ 14,092,012   $ 13,700,374


                                 
Allowance for Credit Losses and Reserve for Unfunded Commitments   Table 12
    For the Three Months Ended   For the Nine Months Ended  
    September 30   June 30   September 30   September 30   September 30  
(dollars in thousands)      2023        2023        2022        2023     2022     
Balance at Beginning of Period   $ 184,780     $ 183,321     $ 177,900       177,735       187,584    
Loans and Leases Charged-Off                                
Commercial Loans:                                
Commercial and industrial     (784 )     (997 )     (328 )     (2,572 )     (1,277 )  
Commercial real estate                 (750 )           (750 )  
Total Commercial Loans     (784 )     (997 )     (1,078 )     (2,572 )     (2,027 )  
Residential Loans:                                
Residential mortgage                 (1 )     (122 )     (1 )  
Home equity line           (137 )           (272 )     (1,163 )  
Total Residential Loans           (137 )     (1 )     (394 )     (1,164 )  
Consumer     (3,665 )     (4,516 )     (3,986 )     (12,963 )     (11,754 )  
Total Loans and Leases Charged-Off     (4,449 )     (5,650 )     (5,065 )     (15,929 )     (14,945 )  
Recoveries on Loans and Leases Previously Charged-Off                                
Commercial Loans:                                
Commercial and industrial     2,637       292       240       3,175       594    
Commercial real estate                             14    
Lease financing                             60    
Total Commercial Loans     2,637       292       240       3,175       668    
Residential Loans:                                
Residential mortgage     53       30       37       110       245    
Home equity line     303       59       356       539       575    
Total Residential Loans     356       89       393       649       820    
Consumer     1,746       1,728       1,653       5,640       5,741    
Total Recoveries on Loans and Leases Previously Charged-Off     4,739       2,109       2,286       9,464       7,229    
Net Loans and Leases Recovered (Charged-Off)     290       (3,541 )     (2,779 )     (6,465 )     (7,716 )  
Provision for Credit Losses     7,500       5,000       3,183       21,300       (1,564 )  
Balance at End of Period   $ 192,570     $ 184,780     $ 178,304     $ 192,570     $ 178,304    
Components:                                
Allowance for Credit Losses   $ 154,795     $ 148,581     $ 148,163     $ 154,795     $ 148,163    
Reserve for Unfunded Commitments     37,775       36,199       30,141       37,775       30,141    
Total Allowance for Credit Losses and Reserve for Unfunded Commitments   $ 192,570     $ 184,780     $ 178,304     $ 192,570     $ 178,304    
Average Loans and Leases Outstanding   $ 14,349,402     $ 14,283,222     $ 13,491,428     $ 14,238,309     $ 13,125,660    
Ratio of Net Loans and Leases (Recovered) Charged-Off to Average Loans and Leases Outstanding(1)     (0.01 ) %     0.10   %     0.08   %     0.06   %     0.08   %
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding     1.08   %     1.03   %     1.08   %     1.08   %     1.08   %
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases     10.59x     11.23x     17.89x     10.59x     17.89x  



(1)      Annualized for the three and nine months ended September 30, 2023 and 2022 and three months ended June 30, 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   $ 55,062   $ 294,558   $ 368,460   $ 35,603   $ 150,195   $ 147,197   $ 906,094   $ 3,427   $ 1,960,596
Special Mention     1     31,427     95     730     1,125     1,569     2,677     87     37,711
Substandard     217     532     245     847     1,839     1,034     13,947         18,661
Other (1)     13,438     12,424     5,575     2,856     2,226     1,513     46,442         84,474
Total Commercial and Industrial     68,718     338,941     374,375     40,036     155,385     151,313     969,160     3,514     2,101,442
Current period gross charge-offs     130     69     74     28     108     2,163             2,572
                                                       
Commercial Real Estate                                                      
Risk rating:                                                      
Pass     288,996     881,117     665,048     329,663     559,287     1,508,430     60,613         4,293,154
Special Mention     2,322     7,643     41,304     543     6,935     13,039     12,483         84,269
Substandard         5,110     2,004     170         2,599     300         10,183
Other (1)                         145             145
Total Commercial Real Estate     291,318     893,870     708,356     330,376     566,222     1,524,213     73,396         4,387,751
Current period gross charge-offs                                    
                                                       
Construction                                                      
Risk rating:                                                      
Pass     129,160     209,227     335,433     59,164     64,168     28,916     3,826         829,894
Special Mention                     197     669             866
Other (1)     10,194     24,825     10,313     2,260     2,115     3,932     713         54,352
Total Construction     139,354     234,052     345,746     61,424     66,480     33,517     4,539         885,112
Current period gross charge-offs                                    
                                                       
Lease Financing                                                      
Risk rating:                                                      
Pass     83,255     88,367     19,869     35,583     34,828     69,043             330,945
Special Mention             341     38                     379
Substandard     747     440             4                 1,191
Total Lease Financing     84,002     88,807     20,210     35,621     34,832     69,043             332,515
Current period gross charge-offs                                    
                                                       
Total Commercial Lending   $ 583,392   $ 1,555,670   $ 1,448,687   $ 467,457   $ 822,919   $ 1,778,086   $ 1,047,095   $ 3,514   $ 7,706,820
Current period gross charge-offs   $ 130   $ 69   $ 74   $ 28   $ 108   $ 2,163   $   $   $ 2,572


                                                       
                                              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   $ 195,053   $ 527,072   $ 1,018,441   $ 536,878   $ 231,038   $ 1,012,924   $   $   $ 3,521,406
680 - 739     29,006     78,642     116,247     73,209     32,906     131,547             461,557
620 - 679     2,847     11,153     15,830     10,678     5,705     36,289             82,502
550 - 619     269     3,343     4,037     2,458     249     11,724             22,080
Less than 550         196     2,362     1,573     50     5,373             9,554
No Score (3)     5,589     19,402     11,729     6,343     9,757     53,515             106,335
Other (2)     10,518     17,079     17,682     12,840     8,733     26,171     7,467         100,490
Total Residential Mortgage     243,282     656,887     1,186,328     643,979     288,438     1,277,543     7,467         4,303,924
Current period gross charge-offs                         122             122
                                                       
Home Equity Line                                                      
FICO:                                                      
740 and greater                             961,974     1,503     963,477
680 - 739                             148,629     2,382     151,011
620 - 679                             34,333     1,326     35,659
550 - 619                             9,099     948     10,047
Less than 550                             5,257     264     5,521
No Score (3)                             1,673         1,673
Total Home Equity Line                             1,160,965     6,423     1,167,388
Current period gross charge-offs                             254     18     272
                                                       
Total Residential Lending   $ 243,282   $ 656,887   $ 1,186,328   $ 643,979   $ 288,438   $ 1,277,543   $ 1,168,432   $ 6,423   $ 5,471,312
Current period gross charge-offs   $   $   $   $   $   $ 122   $ 254   $ 18   $ 394
                                                       
Consumer Lending                                                      
FICO:                                                      
740 and greater     85,839     139,753     84,741     39,390     27,790     13,589     116,342     153     507,597
680 - 739     60,184     79,628     43,948     20,531     16,192     8,577     74,428     416     303,904
620 - 679     21,797     32,632     18,094     8,650     9,214     6,191     33,543     892     131,013
550 - 619     3,745     10,422     7,898     4,953     5,597     4,069     12,456     684     49,824
Less than 550     774     5,629     4,519     3,175     3,048     2,459     4,567     560     24,731
No Score (3)     1,455     297             5     13     41,852     150     43,772
Other (2)         1,188     1,007     340     1,086     1     89,740         93,362
Total Consumer Lending   $ 173,794   $ 269,549   $ 160,207   $ 77,039   $ 62,932   $ 34,899   $ 372,928   $ 2,855   $ 1,154,203
Current period gross charge-offs   $ 152   $ 1,710   $ 1,723   $ 880   $ 1,500   $ 1,995   $ 4,541   $ 462   $ 12,963
                                                       
Total Loans and Leases   $ 1,000,468   $ 2,482,106   $ 2,795,222   $ 1,188,475   $ 1,174,289   $ 3,090,528   $ 2,588,455   $ 12,792   $ 14,332,335
Current period gross charge-offs   $ 282   $ 1,779   $ 1,797   $ 908   $ 1,608   $ 4,280   $ 4,795   $ 480   $ 15,929



(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 Nine Months Ended  
    September 30   June 30   September 30   September 30  
(dollars in thousands)      2023       2023      2022      2023       2022  
Income Statement Data: