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CST: 18/10/2019 21:02:21   

First Hawaiian, Inc. Reports Second Quarter 2019 Financial Results and Declares Dividend

85 Days ago

  • Net income of $72.4 million, or $0.54 per diluted share, core net income1 of $72.6 million or $0.54 per diluted share 1
  • Repurchased 1.5 million shares at a cost of $40 million
  • Board of Directors declared a quarterly dividend of $0.26 per share

HONOLULU, July 25, 2019 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its second quarter ended June 30, 2019.

“I’m pleased to report that the company turned in another solid performance in the second quarter, highlighted by strong earnings driven by excellent credit quality, higher net interest margin, and continued prudent expense management,” said Bob Harrison, Chairman and Chief Executive Officer.  “We also began executing our share repurchase program and returned $40 million of capital to shareholders.”

On July 24, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share.  The dividend will be payable on September 6, 2019 to stockholders of record at the close of business on August 26, 2019.

In addition, Eric Yeaman, President and Chief Operating Officer of the Company and the Bank, announced that he is resigning from his positions with the Company and the Bank, as well as his position as a director of the Bank, effective August 12, 2019.  “Eric’s leadership has been a key driver of our bank’s success over the last four years.  His experience managing public companies played an integral role in helping First Hawaiian navigate through the IPO process and transitioning the company to independence.  He has made a lasting impact on the organization, formed deep relationships with our teams and our customers, and will be missed.  We wish him continued success in the years ahead.”

Second Quarter 2019 Highlights (Comparisons Are To First Quarter 2019):

  • Profitability measures were excellent with ROA of 1.42%, core ROATA1,2 of 1.50%, ROE of 11.13%, and core ROATCE1,2 of 18.03%;

  • Loans and leases grew $67.2 million, or 0.5%, primarily in residential mortgage loans, commercial real estate loans and leases;

  • Net interest margin (“NIM”) increased 2 basis points to 3.25%;

  • Reported efficiency ratio was 48.0% and core efficiency ratio1 was 47.9%;

  • Continued excellent credit quality. The ratio of non-performing assets to total loans and leases and other real estate owned was 0.03% at the end of the second quarter;

  • Through June 30, repurchased 1.5 million shares at total cost of $40 million;

  • On July 24, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share, equal to an annual dividend yield of 3.94% based on the share price as of the close of business on that date.

Balance Sheet

Total assets were $20.5 billion as of June 30, 2019, compared to $20.4 billion as of March 31, 2019.

Gross loans and leases were $13.3 billion as of June 30, 2019, an increase of $67.2 million, or 0.5%, from $13.2 billion as of March 31, 2019.  The increase was primarily due to growth in residential mortgage loans, commercial real estate loans, and leases, partially offset by declines in construction and commercial and industrial (“C&I”) loans.

Total deposits were $16.8 billion as of June 30, 2019, unchanged from $16.8 billion as of March 31, 2019.

Net Interest Income

Net interest income for the second quarter of 2019 was $145.6 million, an increase of $0.5 million, or 0.4%, compared to $145.1 million for the prior quarter.  Net interest income in both the first and second quarters included a negative $1.8 million premium adjustment. The increase in net interest income compared to the first quarter of 2019 was primarily due to higher average balances of loans and leases, partially offset by higher rates on deposit accounts and lower average cash balances.

NIM was 3.25% in the second quarter of 2019, an increase of two basis points compared to 3.23% in the first quarter of 2019.  The negative $1.8 million premium adjustments in the first and second quarters had a negative four basis point impact on the reported NIM in each quarter.   

Provision Expense

Results for the quarter ended June 30, 2019 included a provision for credit losses of $3.9 million compared to $5.7 million in the quarter ended March 31, 2019.    

Noninterest Income

Noninterest income was $48.8 million in the second quarter of 2019, an increase of $1.7 million compared to noninterest income of $47.1 million in the first quarter of 2019. Noninterest income in the first quarter included $2.6 million of investment securities losses associated with the investment portfolio restructuring.      

Noninterest Expense

Noninterest expense was $93.3 million in the second quarter of 2019, an increase of $0.7 million from $92.6 million in the first quarter of 2019.  The increase in noninterest expense was primarily due to nonrecurring items, mostly offset by lower salaries and benefits expenses.

The efficiency ratio was 48.0% and 48.2% for the quarters ended June 30, 2019 and March 31, 2019, respectively.  Core efficiency ratio1 was 47.9% and 47.4% for the quarters ended June 30, 2019 and March 31, 2019, respectively.

Taxes

The effective tax rate was 25.5% for the quarters ended June 30, 2019 and March 31, 2019.

Asset Quality

The allowance for loan and lease losses was $138.5 million, or 1.04% of total loans and leases, as of June 30, 2019, compared to $141.5 million, or 1.07% of total loans and leases, as of March 31, 2019.  Net charge-offs were $6.9 million, or 0.21% of average loans and leases on an annualized basis for the quarter ended June 30, 2019, compared to $5.9 million, or 0.18% of average loans and leases on an annualized basis for the quarter ended March 31, 2019.  Total non-performing assets were $3.9 million, or 0.03% of total loans and leases and other real estate owned, at June 30, 2019, compared to non-performing assets of $4.4 million, or 0.03% of total loans and leases and other real estate owned, at March 31, 2019. 

Capital

Total stockholders' equity was $2.7 billion at June 30, 2019, compared to $2.6 billion at March 31, 2019.   

The tier 1 leverage, common equity tier 1 and total capital ratios were 8.75%, 11.84% and 12.81%, respectively, at June 30, 2019, compared with 8.71%, 12.05% and 13.06% at March 31, 2019.

During the second quarter of 2019, the Company repurchased 1.5 million shares of common stock at a total cost of $40 million under its share repurchase program. The average cost was $26.49 per share repurchased. Remaining buyback authority under the share repurchase program was $60 million at June 30, 2019.

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 5:00 p.m. Eastern Time, 11:00 a.m. Hawaii Time.  To access the call, participants should dial (844) 452-2942 (US/Canada), or (574) 990-9846 (International) ten minutes prior to the start of the call and enter the conference ID:  9479196.  A live webcast of the conference call, including a slide presentation, will be available at the following link:  www.fhb.com/earnings.  The archive of the webcast will be available at the same location.  A telephonic replay of the conference call will be available two hours after the conclusion of the call until 8:30 p.m. (Eastern Time) on August 1, 2019.  Access the replay by dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID:  9479196.

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, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.  For a discussion of some of the 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, 2018.

Use of Non-GAAP Financial Measures

We present net interest income, noninterest income, noninterest expense, net income, earnings per share (basic and diluted) and the related ratios described below, on an adjusted, or ‘‘core,’’ basis, each a non-GAAP financial measure.  These core measures exclude from the corresponding GAAP measure the impact of certain items that we do not believe are representative of our financial results.  We believe that the presentation of these non-GAAP financial measures helps identify underlying trends in our business from period to period that could otherwise be distorted by the effect of certain expenses, gains and other items included in our operating results. We believe that these core measures provide useful information about our operating results and enhance the overall understanding of our past performance and future performance.  Investors should consider our performance and financial condition as reported under GAAP and all other relevant information when assessing our performance or financial condition. 

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

Return on average tangible stockholders’ equity, core return on average tangible stockholders’ equity, return on average tangible assets, core return on average tangible assets and tangible stockholders’ equity to tangible assets are non-GAAP financial measures.  We compute our return on average tangible stockholders’ equity as the ratio of net income to average tangible stockholders’ equity, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total stockholders’ equity.  We compute our core return on average tangible stockholders’ equity as the ratio of core net income to average tangible stockholders’ equity, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total stockholders’ equity.  We compute our return on average tangible assets as the ratio of net income to average tangible assets, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total assets.  We compute our core return on average tangible assets as the ratio of core net income to average tangible assets. We compute our tangible stockholders’ equity to tangible assets as the ratio of tangible stockholders’ equity to tangible assets, each of which we calculate by subtracting (and thereby effectively excluding) the value of our goodwill. We believe that these measurements are useful for investors, regulators, management and others to evaluate financial performance and capital adequacy relative to other financial institutions.  Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results or financial condition as reported under GAAP.

Tables 13 and 14 at the end of this document provide a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.

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




1 Core measurements are non-GAAP financial measures.  Core excludes certain gains, expenses and one-time items.  See Tables 13 and 14 at the end of this document for reconciliations of core measurements, including core net income, core noninterest income, core efficiency ratio and core earnings per diluted share to the comparable GAAP measurements.

2 Return on Average Tangible Assets (“ROATA”) and Return on Average Tangible Common Equity (“ROATCE”) are non-GAAP financial measures.  A reconciliation of average tangible assets and average tangible stockholders’ equity to the comparable GAAP measurements is provided in Tables 13 at the end of this document.


                                 
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)   2019   2019   2018   2019   2018  
Operating Results:                                
Net interest income   $   145,613   $ 145,089   $ 141,403   $   290,702   $ 281,075  
Provision for loan and lease losses       3,870     5,680     6,020       9,550     11,970  
Noninterest income       48,773     47,072     49,797       95,845     98,497  
Noninterest expense       93,290     92,623     91,865       185,913     182,452  
Net income       72,433     69,924     69,053       142,357     137,011  
Basic earnings per share       0.54     0.52     0.50       1.06     0.99  
Diluted earnings per share       0.54     0.52     0.50       1.06     0.99  
Dividends declared per share       0.26     0.26     0.24       0.52     0.48  
Dividend payout ratio       48.15 %   50.00 %   48.00 %     49.06 %   48.48 %
Supplemental Income Statement Data (non-GAAP) :                                
Core net interest income   $   145,613   $ 145,089   $ 141,403   $   290,702   $ 281,075  
Core noninterest income       48,752     49,685     49,797       98,437     98,497  
Core noninterest expense       93,029     92,362     90,951       185,391     181,131  
Core net income       72,612     72,052     69,720       144,664     137,979  
Core basic earnings per share       0.54     0.53     0.51       1.07     0.99  
Core diluted earnings per share       0.54     0.53     0.50       1.07     0.99  
Performance Ratio :                                
Net interest margin       3.25 3.23 %   3.18 %     3.24 3.16 %
Core net interest margin (non-GAAP)       3.25 3.23 %   3.18 %     3.24 3.16 %
Efficiency ratio       47.99 48.20 %   48.04 %     48.09 48.06 %
Core efficiency ratio (non-GAAP)       47.86 47.42 %   47.56 %     47.64 47.71 %
Return on average total assets       1.42 1.38 %   1.38 %     1.40 1.36 %
Core return on average total assets (non-GAAP)       1.43 1.43 %   1.39 %     1.43 1.37 %
Return on average tangible assets (non-GAAP)       1.50 1.45 %   1.45 %     1.48 1.43 %
Core return on average tangible assets (non-GAAP)(1)       1.50 1.50 %   1.46 %     1.50 1.44 %
Return on average total stockholders' equity       11.13 11.16 %   11.23 %     11.15 11.13 %
Core return on average total stockholders' equity (non-GAAP)       11.16 11.50 %   11.34 %     11.33 11.20 %
Return on average tangible stockholders' equity (non-GAAP)       17.99 18.35 %   18.83 %     18.17 18.57 %
Core return on average tangible stockholders’ equity (non-GAAP)(2)       18.03 18.91 %   19.01 %     18.46 18.70 %
Average Balances:                                
Average loans and leases   $   13,209,655   $ 13,073,708   $ 12,552,610   $   13,142,057   $ 12,425,351  
Average earning assets       17,971,615     18,091,424     17,817,943       18,031,189     17,952,365  
Average assets       20,390,273     20,494,837     20,121,504       20,442,266     20,263,820  
Average deposits       16,664,837     16,865,673     17,199,368       16,764,700     17,350,869  
Average stockholders' equity       2,610,565     2,540,600     2,466,392       2,575,775     2,483,252  
Market Value Per Share:                                
Closing       25.87     26.05     29.02       25.87     29.02  
High       28.20     27.67     31.28       28.20     32.36  
Low       24.83     22.13     27.09       22.13     26.92  
                                 

 

                         
    As of       As of       As of       As of    
    June 30,        March 31,        December 31,        June 30,     
  2019   2019   2018   2018  
Balance Sheet Data:                        
Loans and leases $   13,264,609   $ 13,197,454   $ 13,076,191   $ 12,637,686  
Total assets     20,526,367     20,441,136     20,695,678     20,479,719  
Total deposits     16,792,078     16,795,244     17,150,068     17,395,538  
Short-term borrowings     200,000              
Long-term borrowings     400,028     600,028     600,026     200,034  
Total stockholders' equity     2,659,441     2,613,202     2,524,839     2,459,175  
                         
Per Share of Common Stock:                        
Book value $   19.92   $ 19.36   $ 18.72   $ 18.00  
Tangible book value (non-GAAP)(3)     12.46     11.98     11.34     10.71  
                         
Asset Quality Ratios:                        
Non-accrual loans and leases / total loans and leases     0.03 0.03 %   0.05 %   0.11 %
Allowance for loan and lease losses / total loans and leases     1.04 1.07 %   1.08 %   1.11 %
                         
Capital Ratios:                        
Common Equity Tier 1 Capital Ratio         11.84   12.05 %   11.97 %   12.19 %
Tier 1 Capital Ratio     11.84 12.05 %   11.97 %   12.19 %
Total Capital Ratio     12.81 13.06 %   12.99 %   13.23 %
Tier 1 Leverage Ratio     8.75 8.71 %   8.72 %   8.61 %
Total stockholders' equity to total assets     12.96 12.78 %   12.20 %   12.01 %
Tangible stockholders' equity to tangible assets (non-GAAP)     8.52 8.32 %   7.76 %   7.51 %
                         
Non-Financial Data:                        
Number of branches     59     60     60     61  
Number of ATMs     292     296     295     303  
Number of Full-Time Equivalent Employees     2,123     2,130     2,155     2,189  
                         

 

                               
Consolidated Statements of Income   Table 2
    Three Months Ended   For the Six Months Ended  
    June 30,    March 31,    June 30,    June 30, 
(dollars in thousands, except per share amounts)   2019   2019   2018   2019   2018
Interest income                              
Loans and lease financing   $   146,883   $ 144,406     $ 130,283   $   291,289     $ 253,834
Available-for-sale securities       24,784     24,486       27,397       49,270       56,390
Other       2,151     3,669       1,339       5,820       3,731
Total interest income       173,818     172,561       159,019       346,379       313,955
Interest expense                              
Deposits       23,693     23,197       17,355       46,890       32,619
Short-term and long-term borrowings       4,512     4,275       261       8,787       261
Total interest expense       28,205     27,472       17,616       55,677       32,880
Net interest income       145,613     145,089       141,403       290,702       281,075
Provision for loan and lease losses       3,870     5,680       6,020       9,550       11,970
Net interest income after provision for loan and lease losses       141,743     139,409       135,383       281,152       269,105
Noninterest income                              
Service charges on deposit accounts       8,123     8,060       7,721       16,183       15,676
Credit and debit card fees       16,629     16,655       16,929       33,284       32,426
Other service charges and fees       9,403     9,129       9,633       18,532       18,975
Trust and investment services income       8,931     8,618       7,711       17,549       15,942
Bank-owned life insurance       3,390     3,813       2,395       7,203       4,439
Investment securities gains (losses), net       21     (2,613 )           (2,592 )    
Other       2,276     3,410       5,408       5,686       11,039
Total noninterest income       48,773     47,072       49,797       95,845       98,497
Noninterest expense                              
Salaries and employee benefits       42,185     44,860       41,636       87,045       83,796
Contracted services and professional fees       14,303     13,645       13,005       27,948       25,292
Occupancy       7,286     6,986       6,908       14,272       13,392
Equipment       4,544     4,284       4,335       8,828       8,923
Regulatory assessment and fees       2,149     1,447       4,225       3,596       8,198
Advertising and marketing       1,980     1,966       1,115       3,946       2,066
Card rewards program       7,664     6,732       6,359       14,396       12,077
Other       13,179     12,703       14,282       25,882       28,708
Total noninterest expense       93,290     92,623       91,865       185,913       182,452
Income before provision for income taxes       97,226     93,858       93,315       191,084       185,150
Provision for income taxes       24,793     23,934       24,262       48,727       48,139
Net income   $   72,433   $ 69,924     $ 69,053   $   142,357     $ 137,011
Basic earnings per share   $   0.54   $ 0.52     $ 0.50   $   1.06     $ 0.99
Diluted earnings per share   $   0.54   $ 0.52     $ 0.50   $   1.06     $ 0.99
Basic weighted-average outstanding shares       134,420,380     134,879,336       137,907,063       134,655,217       138,749,209
Diluted weighted-average outstanding shares       134,652,008     135,198,345       138,065,879       134,924,331       138,891,955
                               

 

     
Consolidated Balance Sheets   Table 3
    June 30,    March 31,    December 31,    June 30, 
(dollars in thousands)   2019   2019     2018   2018
Assets                        
Cash and due from banks   $   423,802     $ 336,555     $ 396,836     $ 332,102  
Interest-bearing deposits in other banks       259,713       281,312       606,801       611,698  
Investment securities       4,395,476       4,485,660       4,498,342       4,842,551  
Loans held for sale       215             432       2,037  
Loans and leases       13,264,609       13,197,454       13,076,191       12,637,686  
Less: allowance for loan and lease losses       138,535       141,546       141,718       140,601  
Net loans and leases       13,126,074       13,055,908       12,934,473       12,497,085  
                         
Premises and equipment, net       313,200       310,902       304,996       287,746  
Other real estate owned and repossessed personal property             124       751       325  
Accrued interest receivable       49,205       49,489       48,920       48,528  
Bank-owned life insurance       450,722       447,936       446,076       442,449  
Goodwill       995,492       995,492       995,492       995,492  
Mortgage servicing rights       14,573       15,399       16,155       17,660  
Other assets       497,895       462,359       446,404       402,046  
Total assets   $   20,526,367     $ 20,441,136     $ 20,695,678     $ 20,479,719  
Liabilities and Stockholders' Equity                        
Deposits:                        
Interest-bearing   $   11,028,921     $ 10,951,764     $ 11,142,127     $ 11,430,455  
Noninterest-bearing       5,763,157       5,843,480       6,007,941       5,965,083  
Total deposits       16,792,078       16,795,244       17,150,068       17,395,538  
Short-term borrowings       200,000                    
Long-term borrowings       400,028       600,028       600,026       200,034  
Retirement benefits payable       128,610       127,845       127,909       135,139  
Other liabilities       346,210       304,817       292,836       289,833  
Total liabilities       17,866,926       17,827,934       18,170,839       18,020,544  
                         
Stockholders' equity                        
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 139,857,673 / 133,508,212 shares as of June 30, 2019, issued/outstanding: 139,851,508 / 135,012,015 shares as of March 31, 2019, issued/outstanding: 139,656,674 / 134,874,302 shares as of December 31, 2018 and issued/outstanding: 139,620,801 / 136,642,060 shares as of June 30, 2018)       1,399       1,399       1,397       1,396  
Additional paid-in capital       2,499,946       2,497,770       2,495,853       2,492,656  
Retained earnings       363,748       326,451       291,919       229,615  
Accumulated other comprehensive loss, net       (31,984 )     (78,754 )     (132,195 )     (182,410 )
Treasury stock (6,349,461 shares as of June 30, 2019, 4,839,493 shares as of March 31, 2019, 4,782,372 shares as of December 31, 2018 and 2,978,741 shares as of June 30, 2018)       (173,668 )     (133,664 )     (132,135 )     (82,082 )
Total stockholders' equity       2,659,441       2,613,202       2,524,839       2,459,175  
Total liabilities and stockholders' equity   $   20,526,367     $ 20,441,136     $ 20,695,678     $ 20,479,719  
                         

 

                                                   
Average Balances and Interest Rates                                               Table 4    
    Three Months Ended     Three Months Ended     Three Months Ended    
    June 30, 2019   March 31, 2019   June 30, 2018  
      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   $   247.2   $   1.4     2.35 $ 507.3   $ 3.2   2.56 % $ 281.2   $ 1.2   1.74 %
Available-for-Sale Investment Securities       4,438.1       24.8     2.23     4,417.8     24.5   2.22     4,961.2     27.4   2.21  
Loans Held for Sale       0.7           2.76     0.3       2.79     1.9       3.44  
Loans and Leases(1)                                                  
Commercial and industrial       3,235.0       34.3     4.26     3,166.4     33.2   4.25     3,177.4     30.5   3.84  
Commercial real estate       3,094.4       36.0     4.67     3,005.2     35.4   4.77     2,883.0     28.9   4.02  
Construction       583.6       6.9     4.73     636.7     7.5   4.77     620.7     6.2   4.03  
Residential:                                                  
Residential mortgages       3,581.2       37.2     4.16     3,535.2     36.0   4.07     3,228.5     34.1   4.24  
Home equity lines       908.5       8.6     3.79     915.7     8.7   3.85     858.7     7.8   3.62  
Consumer       1,657.7       22.7     5.48     1,667.3     22.5   5.48     1,624.6     21.7   5.35  
Lease financing       149.3       1.2     3.31     147.2     1.1   2.99     159.7     1.1   2.83  
Total Loans and Leases       13,209.7       146.9     4.46     13,073.7     144.4   4.46     12,552.6     130.3   4.16  
Other Earning Assets       76.0       0.7     3.71     92.3     0.5   2.06     21.0     0.1   2.21  
Total Earning Assets(2)       17,971.7       173.8     3.88     18,091.4     172.6   3.85     17,817.9     159.0   3.58  
Cash and Due from Banks       342.6               360.3               317.7            
Other Assets       2,076.0               2,043.1               1,985.9            
Total Assets   $   20,390.3             $ 20,494.8             $ 20,121.5            
                                                   
Interest-Bearing Liabilities                                                  
Interest-Bearing Deposits                                                  
Savings   $   4,712.2   $   4.0     0.34 $ 4,815.8   $ 4.2   0.36 %   4,573.0   $ 2.4   0.21 %
Money Market       3,126.7       7.4     0.95     3,181.3     7.7   0.98     2,725.9     2.7   0.40  
Time       3,084.6       12.3     1.60     3,041.8     11.3   1.51     4,003.5     12.2   1.22  
Total Interest-Bearing Deposits       10,923.5       23.7     0.87     11,038.9     23.2   0.85     11,302.4     17.3   0.62  
Short-Term Borrowings       50.4       0.3     2.25     12.8     0.1   2.45     42.7     0.2   1.85  
Long-Term Borrowings       593.5       4.2     2.86     600.0     4.2   2.84     6.6     0.1   3.79  
Total Interest-Bearing Liabilities       11,567.4       28.2     0.98     11,651.7     27.5   0.96     11,351.7     17.6   0.62  
Net Interest Income         $   145.6             $ 145.1             $ 141.4      
Interest Rate Spread                 2.90             2.89 %             2.96 %
Net Interest Margin                 3.25             3.23 %             3.18 %
Noninterest-Bearing Demand Deposits       5,741.3               5,826.8               5,897.0            
Other Liabilities       471.0               475.7               406.4            
Stockholders' Equity       2,610.6               2,540.6               2,466.4            
Total Liabilities and Stockholders' Equity $   20,390.3             $ 20,494.8             $ 20,121.5            
                                                   

 

                                   
Average Balances and Interest Rates                                 Table 5    
    Six Months Ended     Six Months Ended    
    June 30, 2019   June 30, 2018  
      Average       Income/       Yield/       Average       Income/       Yield/    
(dollars in millions)     Balance       Expense       Rate       Balance       Expense       Rate    
Earning Assets                                  
Interest-Bearing Deposits in Other Banks   $   376.5   $   4.6     2.49 $ 448.0   $ 3.6   1.60 %
Available-for-Sale Investment Securities       4,428.0       49.3     2.23     5,060.2     56.4   2.25  
Loans Held for Sale       0.5           2.76     1.1       3.40  
Loans and Leases(1)                                  
Commercial and industrial       3,200.9       67.5     4.25     3,141.0     58.2   3.74  
Commercial real estate       3,044.9       70.7     4.68     2,841.7     55.3   3.93  
Construction       610.2       14.4     4.75     620.8     12.0   3.89  
Residential:                                  
Residential mortgages       3,563.2       73.9     4.14     3,188.2     67.5   4.27  
Home equity lines       912.1       17.3     3.82     860.7     15.4   3.61  
Consumer       1,662.5       45.2     5.48     1,612.3     43.0   5.38  
Lease financing       148.3       2.3     3.15     160.7     2.4   2.97  
Total Loans and Leases       13,142.1       291.3     4.46     12,425.4     253.8   4.12  
Other Earning Assets       84.1       1.2     2.81     17.7     0.2   2.00  
Total Earning Assets(2)       18,031.2       346.4     3.86     17,952.4     314.0   3.53  
Cash and Due from Banks       351.4               318.3            
Other Assets       2,059.7               1,993.1            
Total Assets   $   20,442.3             $ 20,263.8            
                                   
Interest-Bearing Liabilities                                  
Interest-Bearing Deposits                                  
Savings   $   4,762.6   $   8.2     0.35 $ 4,558.2   $ 4.1   0.18 %
Money Market       3,155.0       15.0     0.96     2,718.4     4.5   0.33  
Time       3,063.3       23.7     1.56     4,127.2     24.0   1.17  
Total Interest-Bearing Deposits       10,980.9       46.9     0.86     11,403.8     32.6   0.58  
Short-Term Borrowings       31.7       0.4     2.29     21.5     0.2   1.85  
Long-Term Borrowings       596.7       8.4     2.85     3.3     0.1   3.81  
Total Interest-Bearing Liabilities       11,609.3       55.7     0.97     11,428.6     32.9   0.58  
Net Interest Income         $   290.7             $ 281.1      
Interest Rate Spread                 2.89           2.95 %
Net Interest Margin                 3.24           3.16 %
Noninterest-Bearing Demand Deposits       5,783.8               5,947.1            
Other Liabilities       473.4               404.8            
Stockholders' Equity       2,575.8               2,483.3            
Total Liabilities and Stockholders' Equity   $   20,442.3             $ 20,263.8            
                                   

 

                     
Analysis of Change in Net Interest Income                   Table 6    
    Three Months Ended June 30, 2019  
    Compared to March 31, 2019  
(dollars in millions)     Volume       Rate     Total  
Change in Interest Income:                    
Interest-Bearing Deposits in Other Banks   $   (1.5 )   $   (0.2 )   $   (1.7 )  
Available-for-Sale Investment Securities       0.2         0.1         0.3    
Loans and Leases                    
Commercial and industrial       1.0         0.1         1.1    
Commercial real estate       1.3         (0.6 )       0.7    
Construction       (0.6 )               (0.6 )  
Residential:                    
Residential mortgage       0.4         0.7         1.1    
Home equity line               (0.1 )       (0.1 )  
Consumer       0.1                 0.1    
Lease financing               0.1         0.1    
Total Loans and Leases       2.2         0.2         2.4    
Other Earning Assets       (0.1 )       0.3         0.2    
Total Change in Interest Income       0.8         0.4         1.2    
                     
Change in Interest Expense:                    
Interest-Bearing Deposits                    
Savings       (0.1 )       (0.1 )       (0.2 )  
Money Market       (0.1 )       (0.2 )       (0.3 )  
Time       0.2         0.8         1.0    
Total Interest-Bearing Deposits               0.5         0.5    
Short-Term Borrowings       0.2                 0.2    
Total Change in Interest Expense       0.2         0.5         0.7    
Change in Net Interest Income   $   0.6     $   (0.1 )   $   0.5    
                     

 

                   
Analysis of Change in Net Interest Income                   Table 7  
    Three Months Ended June 30, 2019
    Compared to June 30, 2018
(dollars in millions)     Volume       Rate     Total
Change in Interest Income:                  
Interest-Bearing Deposits in Other Banks   $   (0.2 )   $   0.4     $   0.2  
Available-for-Sale Investment Securities       (2.9 )       0.3         (2.6 )
Loans and Leases                  
Commercial and industrial       0.6         3.3         3.9  
Commercial real estate       2.2         4.9         7.1  
Construction       (0.4 )       1.0         0.6  
Residential:                  
Residential mortgage       3.6         (0.5 )       3.1  
Home equity line       0.5         0.4         0.9  
Consumer       0.4         0.5         0.9  
Lease financing       (0.1 )       0.2         0.1  
Total Loans and Leases       6.8         9.8         16.6  
Other Earning Assets       0.5         0.1         0.6  
Total Change in Interest Income       4.2         10.6         14.8  
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings       0.1         1.5         1.6  
Money Market       0.5         4.1         4.6  
Time       (3.2 )       3.3         0.1  
Total Interest-Bearing Deposits       (2.6 )       8.9         6.3  
Short-Term Borrowings               0.1         0.1  
Long-Term Borrowings       4.2                 4.2  
Total Change in Interest Expense       1.6         9.0         10.6  
Change in Net Interest Income   $   2.6     $   1.6     $   4.2  
                   

 

                     
Analysis of Change in Net Interest Income                   Table 8    
    Six Months Ended June 30, 2019  
    Compared to June 30, 2018  
(dollars in millions)     Volume       Rate     Total  
Change in Interest Income:                    
Interest-Bearing Deposits in Other Banks   $   (0.6 )   $   1.7     $   1.1    
Available-for-Sale Investment Securities       (6.7 )       (0.4 )       (7.1 )  
Loans and Leases                    
Commercial and industrial       1.1         8.2         9.3    
Commercial real estate       4.2         11.2         15.4    
Construction       (0.2 )       2.6         2.4    
Residential:                    
Residential mortgage       8.3         (2.0 )       6.3    
Home equity line       1.0         0.9         1.9    
Consumer       1.3         0.8         2.1    
Lease financing       (0.2 )       0.2            
Total Loans and Leases       15.5         21.9         37.4    
Other Earning Assets       0.9         0.1         1.0    
Total Change in Interest Income       9.1         23.3         32.4    
                     
Change in Interest Expense:                    
Interest-Bearing Deposits                    
Savings       0.2         4.0         4.2    
Money Market       0.8         9.7         10.5    
Time       (7.1 )       6.7         (0.4 )  
Total Interest-Bearing Deposits       (6.1 )       20.4         14.3    
Short-Term Borrowings       0.1                 0.1    
Long-Term Borrowings       8.4                 8.4    
Total Change in Interest Expense       2.4         20.4         22.8    
Change in Net Interest Income   $   6.7     $   2.9     $   9.6    
                     

 

                         
Loans and Leases                       Table 9
    June 30,    March 31,    December 31,    June 30, 
(dollars in thousands)   2019   2019   2018   2018
Commercial and industrial   $   3,177,844   $ 3,203,770   $ 3,208,760   $ 3,116,145
Commercial real estate       3,194,219     3,147,304     2,990,783     2,837,520
Construction       549,578     595,491     626,757     654,084
Residential:                        
Residential mortgage       3,618,433     3,543,964     3,527,101     3,383,130
Home equity line       908,452     907,829     912,517     852,953
Total residential       4,526,885     4,451,793     4,439,618     4,236,083
Consumer       1,650,713     1,653,109     1,662,504     1,632,088
Lease financing       165,370     145,987     147,769     161,766
Total loans and leases   $   13,264,609   $ 13,197,454   $ 13,076,191   $ 12,637,686
                         

 

                         
Deposits                       Table 10
    June 30,    March 31,    December 31,    June 30, 
(dollars in thousands)   2019   2019   2018   2018
Demand   $   5,763,157   $ 5,843,480   $ 6,007,941   $ 5,965,083
Savings       4,908,000     4,884,418     4,853,285     4,772,922
Money Market       3,050,843     3,156,056     3,196,678     2,768,190
Time       3,070,078     2,911,290     3,092,164     3,889,343
Total Deposits   $   16,792,078   $ 16,795,244   $ 17,150,068   $ 17,395,538
                         

 

                         
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)   2019   2019   2018   2018
Non-Performing Assets                        
Non-Accrual Loans and Leases                        
Commercial Loans:                        
Commercial and industrial   $   119   $ 190   $ 274   $ 1,821
Commercial real estate               1,658     2,844
Construction                   2,238
Total Commercial Loans       119     190     1,932     6,903
Residential Loans:                        
Residential mortgage       3,771     4,090     4,611     6,541
Total Residential Loans       3,771     4,090     4,611     6,541
Total Non-Accrual Loans and Leases       3,890     4,280     6,543     13,444
Other Real Estate Owned           124     751     325
Total Non-Performing Assets   $   3,890   $ 4,404   $ 7,294   $ 13,769
                         
Accruing Loans and Leases Past Due 90 Days or More                        
Commercial Loans:                        
Commercial and industrial   $   807   $ 350   $ 141   $ 163
Construction           89        
Total Commercial Loans       807     439     141     163
Residential Loans:                        
Residential mortgage               32     339
Home equity line       1,635     2,448     2,842     1,242
Total Residential Loans       1,635     2,448     2,874     1,581
Consumer       3,295     3,538     3,373     1,451
Total Accruing Loans and Leases Past Due 90 Days or More   $   5,737   $ 6,425   $ 6,388   $ 3,195
                         
Restructured Loans on Accrual Status and Not Past Due 90 Days or More       23,466     25,229     24,033     32,277
Total Loans and Leases     $   13,264,609   $ 13,197,454   $ 13,076,191   $ 12,637,686
                         

 

                         
Allowance for Loan and Lease Losses                             Table 12  
    For the Three Months Ended     For the Six Months Ended    
    June 30,    March 31,    June 30,    June 30,    June 30,   
(dollars in thousands)   2019   2019   2018   2019   2018  
Balance at Beginning of Period   $   141,546     $ 141,718     $ 138,574     $   141,718     $ 137,253    
Loans and Leases Charged-Off                                
Commercial Loans:                                
Commercial and industrial       (2,000 )                   (2,000 )     (475 )  
Lease financing             (24 )             (24 )        
Total Commercial Loans       (2,000 )     (24 )             (2,024 )     (475 )  
Residential                   (34 )             (34 )  
Consumer       (7,505 )     (8,598 )     (6,290 )       (16,103 )     (12,915 )  
Total Loans and Leases Charged-Off       (9,505 )     (8,622 )     (6,324 )       (18,127 )     (13,424 )  
Recoveries on Loans and Leases Previously Charged-Off                                
Commercial Loans:                                
Commercial and industrial       25       37       39         62       103    
Commercial real estate       32       31       32         63       154    
Total Commercial Loans       57       68       71         125       257    
Residential       185       250       60         435       242    
Consumer       2,382       2,452       2,200         4,834       4,303    
Total Recoveries on Loans and Leases Previously Charged-Off       2,624       2,770       2,331         5,394       4,802    
Net Loans and Leases Charged-Off       (6,881 )     (5,852 )     (3,993 )       (12,733 )     (8,622 )  
Provision for Loan and Lease Losses       3,870       5,680       6,020         9,550       11,970    
Balance at End of Period   $   138,535     $ 141,546     $ 140,601     $   138,535     $ 140,601    
Average Loans and Leases Outstanding   $   13,209,655     $ 13,073,708     $ 12,552,610     $   13,142,057     $ 12,425,351    
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding       0.21   0.18   % 0.13   %   0.20   0.14   %
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding       1.04   1.07   % 1.11   %   1.04   1.11   %
                                   

 

                                 
GAAP to Non-GAAP Reconciliation                     Table 13  
    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)   2019     2019   2018   2019     2018  
Income Statement Data:                                
Net income   $   72,433   $ 69,924   $ 69,053   $   142,357   $ 137,011  
                                 
Average total stockholders' equity   $   2,610,565   $ 2,540,600   $ 2,466,392   $   2,575,775   $ 2,483,252  
Less: average goodwill       995,492     995,492     995,492       995,492     995,492  
Average tangible stockholders' equity   $   1,615,073   $ 1,545,108   $ 1,470,900   $   1,580,283   $ 1,487,760  
                                 
Average total assets   $   20,390,273   $ 20,494,837   $ 20,121,504   $   20,442,266   $ 20,263,820  
Less: average goodwill       995,492     995,492     995,492       995,492     995,492  
Average tangible assets   $   19,394,781   $ 19,499,345   $ 19,126,012   $   19,446,774   $ 19,268,328  
                                 
Return on average total stockholders' equity(1)       11.13   11.16 %   11.23 %     11.15   11.13 %
Return on average tangible stockholders' equity (non-GAAP)(1)       17.99   18.35 %   18.83 %     18.17   18.57 %
                                 
Return on average total assets(1)       1.42   1.38 %   1.38 %     1.40   1.36 %
Return on average tangible assets (non-GAAP)(1)       1.50   1.45 %   1.45 %     1.48   1.43 %
                                 
Average stockholders' equity to average assets       12.80   12.40 %   12.26 %     12.60   12.25 %
Average tangible stockholders' equity to average tangible assets (non-GAAP)       8.33   7.92 %   7.69 %     8.13   7.72 %
                                 

 

                     
      As of       As of       As of       As of    
    June 30,    March 31,    December 31,    June 30,   
    2019   2019   2018   2018  
Balance Sheet Data:                          
Total stockholders' equity   $   2,659,441   $ 2,613,202   $ 2,524,839   $ 2,459,175  
Less: goodwill       995,492     995,492     995,492     995,492  
Tangible stockholders' equity   $   1,663,949   $ 1,617,710   $ 1,529,347   $ 1,463,683  
                           
Total assets   $   20,526,367   $ 20,441,136   $ 20,695,678   $ 20,479,719  
Less: goodwill       995,492     995,492     995,492     995,492  
Tangible assets   $   19,530,875   $ 19,445,644   $ 19,700,186   $ 19,484,227  
                           
Shares outstanding       133,508,212     135,012,015     134,874,302     136,642,060  
                           
Total stockholders' equity to total assets       12.96   12.78 %   12.20 %   12.01 %
Tangible stockholders' equity to tangible assets (non-GAAP)       8.52   8.32 %   7.76 %   7.51 %
                           
Book value per share   $   19.92   $ 19.36   $ 18.72   $ 18.00  
Tangible book value per share (non-GAAP)   $   12.46   $ 11.98   $ 11.34   $ 10.71  
                           

 

                                 
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, except per share amounts)   2019   2019   2018   2019   2018  
Net interest income   $   145,613     $ 145,089     $ 141,403     $   290,702     $ 281,075    
Core net interest income (non-GAAP)   $   145,613     $ 145,089     $ 141,403     $   290,702     $ 281,075    
                                 
Noninterest income   $   48,773     $ 47,072     $ 49,797     $   95,845     $ 98,497    
(Gain) loss on sale of securities       (21 )     2,613               2,592          
Core noninterest income (non-GAAP)   $   48,752     $ 49,685     $ 49,797     $   98,437     $ 98,497    
                                 
Noninterest expense   $   93,290     $ 92,623     $ 91,865     $   185,913     $ 182,452    
One-time items(1)       (261 )     (261 )     (914 )       (522 )     (1,321 )  
Core noninterest expense (non-GAAP)   $   93,029     $ 92,362     $ 90,951     $   185,391     $ 181,131    
                                 
Net income   $   72,433     $ 69,924     $ 69,053     $   142,357     $ 137,011    
(Gain) loss on sale of securities       (21 )     2,613               2,592          
One-time noninterest expense items(1)       261       261       914         522       1,321    
Tax adjustments(2)       (61 )     (746 )     (247 )       (807 )     (353 )  
Total core adjustments       179       2,128       667         2,307       968    
Core net income (non-GAAP)   $   72,612     $ 72,052     $ 69,720     $   144,664     $ 137,979    
Core basic earnings per share (non-GAAP)   $   0.54     $ 0.53     $ 0.51     $   1.07     $ 0.99    
Core diluted earnings per share (non-GAAP)   $   0.54     $ 0.53     $ 0.50     $   1.07     $ 0.99    
Core efficiency ratio (non-GAAP)       47.86   %   47.42   %   47.56   %     47.64   %   47.71   %
                                 
Basic earnings per share   $   0.54     $ 0.52     $ 0.50     $   1.06     $ 0.99    
Diluted earnings per share   $   0.54     $ 0.52     $ 0.50     $   1.06     $ 0.99    
Efficiency ratio       47.99   %   48.20   %   48.04   %     48.09   %   48.06   %