FHB First Hawaiian Inc

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 StatementsThis 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 MeasuresReturn 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) 525-6268khaseyama@fhb.com

Media Contact:Lindsay Chambers(808) 525-6254lchambers@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:
Net income		$	58,221		$	62,442		$	69,018		$	187,481		$	186,097
Average total stockholders' equity		$	2,367,422		$	2,344,285		$	2,267,152		$	2,337,292		$	2,358,195
Less: average goodwill			995,492			995,492			995,492			995,492			995,492
Average tangible stockholders' equity		$	1,371,930		$	1,348,793		$	1,271,660		$	1,341,800		$	1,362,703
Average total assets		$	24,727,893		$	24,821,486		$	24,957,042		$	24,699,826		$	25,095,438
Less: average goodwill			995,492			995,492			995,492			995,492			995,492
Average tangible assets		$	23,732,401		$	23,825,994		$	23,961,550		$	23,704,334		$	24,099,946
Return on average total stockholders' equity(1)			9.76	%		10.68	%		12.08	%		10.72	%		10.55	%
Return on average tangible stockholders' equity (non-GAAP)(1)			16.84	%		18.57	%		21.53	%		18.68	%		18.26	%
Return on average total assets(1)			0.93	%		1.01	%		1.10	%		1.01	%		0.99	%
Return on average tangible assets (non-GAAP)(1)			0.97	%		1.05	%		1.14	%		1.06	%		1.03	%

		As of			As of			As of			As of
		September 30,			June 30,			December 31,			September 30,
(dollars in thousands, except per share amounts)		2023			2023			2022			2022
Balance Sheet Data:
Total stockholders' equity		$	2,351,009		$	2,359,738		$	2,269,005		$	2,200,651
Less: goodwill			995,492			995,492			995,492			995,492
Tangible stockholders' equity		$	1,355,517		$	1,364,246		$	1,273,513		$	1,205,159
Total assets		$	24,912,524		$	24,511,566		$	24,577,223		$	24,870,272
Less: goodwill			995,492			995,492			995,492			995,492
Tangible assets		$	23,917,032		$	23,516,074		$	23,581,731		$	23,874,780
Shares outstanding			127,609,934			127,608,037			127,363,327			127,357,680
Total stockholders' equity to total assets			9.44	%		9.63	%		9.23	%		8.85	%
Tangible stockholders' equity to tangible assets (non-GAAP)			5.67	%		5.80	%		5.40	%		5.05	%
Book value per share		$	18.42		$	18.49		$	17.82		$	17.28
Tangible book value per share (non-GAAP)		$	10.62		$	10.69		$	10.00		$	9.46

(1)

Annualized for the three and nine months ended September 30, 2023 and 2022 and three months ended June 30, 2023.