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

HONOLULU, April 28, 2023 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended March 31, 2023.

“Our first quarter results reflect the strength of our balance sheet, the value of our customer relationships and our commitment to the communities we serve,” said Bob Harrison, Chairman, President and CEO. “Our financial results were solid, we grew capital and our credit quality metrics remained excellent. We remain well positioned to serve our customers and the community.”

On April 26, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on June 2, 2023, to stockholders of record at the close of business on May 22, 2023.  

First Quarter 2023 Highlights:

  • Net income of $66.8 million, or $0.52 per diluted share
  • Total loans and leases increased $129.3 million versus prior quarter
  • Total deposits decreased $407.5 million versus prior quarter
  • Net interest margin decreased 4 basis points to 3.11%
  • Recorded a $8.8 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 March 31, 2023, compared to $24.6 billion as of December 31, 2022.

Gross loans and leases were $14.2 billion as of March 31, 2023, an increase of $129.3 million, or 0.9%, from $14.1 billion as of December 31, 2022.

Total deposits were $21.3 billion as of March 31, 2023, a decrease of $407.5 million, or 1.9%, from $21.7 billion as of December 31, 2022.  

Net Interest Income
Net interest income for the first quarter of 2023 was $167.2 million, a decrease of $4.5 million, or 2.6%, compared to $171.8 million for the prior quarter.  

The net interest margin was 3.11% in the first quarter of 2023, a decrease of 4 basis points compared to 3.15% in the prior quarter.

Provision Expense
During the quarter ended March 31, 2023, we recorded a $8.8 million provision for credit losses. In the quarter ended December 31, 2022, we recorded a $3.0 million provision for credit losses.

Noninterest Income
Noninterest income was $49.0 million in the first quarter of 2023, an increase of $0.9 million compared to noninterest income of $48.2 million in the prior quarter.     

Noninterest Expense
Noninterest expense was $118.6 million in the first quarter of 2023, an increase of $4.6 million compared to noninterest expense of $113.9 million in the prior quarter.  

The efficiency ratio was 54.5% and 51.5% for the quarters ended March 31, 2023 and December 31, 2022, respectively.

Taxes
The effective tax rate was 24.8% and 22.8% for the quarters ended March 31, 2023 and December 31, 2022, respectively.

Asset Quality
The allowance for credit losses was $147.1 million, or 1.03% of total loans and leases, as of March 31, 2023, compared to $143.9 million, or 1.02% of total loans and leases, as of December 31, 2022. The reserve for unfunded commitments was $36.2 million as of March 31, 2023, compared to $33.8 million as of December 31, 2022.   Net charge-offs were $3.2 million, or 0.09% of average loans and leases on an annualized basis, for the quarter ended March 31, 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 December 31, 2022. Total non-performing assets were $13.8 million, or 0.10% of total loans and leases and other real estate owned, on March 31, 2023, compared to total non-performing assets of $12.0 million, or 0.09% of total loans and leases and other real estate owned, on December 31, 2022.

Capital
Total stockholders' equity was $2.3 billion on March 31, 2023 and December 31, 2022.    

The tier 1 leverage, common equity tier 1 and total capital ratios were 8.26%, 11.97%, and 13.09%, respectively, on March 31, 2023, compared with 8.11%, 11.82%, and 12.92%, respectively, on December 31, 2022.

The Company did not repurchase any shares in the first 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/BI2a46e3679b7649d98326df98e6359e6f, and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time.

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

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized” and “outlook”, or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Further, statements about the potential effects of the COVID-19 pandemic on our businesses and financial results and conditions may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, there can be no assurance that actual results will not prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements, including (without limitation) the risks and uncertainties associated with the ongoing impacts of COVID-19, the domestic and global economic environment and capital market conditions and other risk factors. For a discussion of some of these risks and important factors that could affect our future results and financial condition, see our U.S. Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2022.

Use of Non-GAAP Financial Measures
Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We believe that these measurements are useful for investors, regulators, management and others to evaluate financial performance and capital adequacy relative to other financial institutions. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results or financial condition as reported under GAAP. Investors should consider our performance and capital adequacy as reported under GAAP and all other relevant information when assessing our performance and capital adequacy.

Table 12 at the end of this document provides a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.

Investor Relations Contact:
Kevin Haseyama, CFA
(808) 525-6268
khaseyama@fhb.com
Media Contact:
Lindsay Chambers
(808) 525-6254
lchambers@fhb.com


             
Financial Highlights Table 1
  For the Three Months Ended 
  March 31,  December 31,  March 31,  
(dollars in thousands, except per share data) 2023    2022    2022
 
Operating Results:            
Net interest income $ 167,247  $171,794  $133,872  
Provision for credit losses   8,800   2,956   (5,747) 
Noninterest income   49,023   48,151   41,380  
Noninterest expense   118,567   113,922   104,042  
Net income   66,818   79,588   57,719  
Basic earnings per share   0.52   0.62   0.45  
Diluted earnings per share   0.52   0.62   0.45  
Dividends declared per share   0.26   0.26   0.26  
Dividend payout ratio   50.00 % 41.94 % 57.78 %
Performance Ratios(1):            
Net interest margin   3.11 %   3.15 % 2.42 %
Efficiency ratio   54.46 %   51.47 % 59.04 %
Return on average total assets   1.10 %   1.28 % 0.93 %
Return on average tangible assets (non-GAAP)(2)   1.15 %   1.34 % 0.97 %
Return on average total stockholders' equity   11.78 %   14.27 % 9.19 %
Return on average tangible stockholders' equity (non-GAAP)(2)   20.78 %   25.93 % 15.08 %
Average Balances:            
Average loans and leases $ 14,079,337  $13,876,136  $12,819,612  
Average earning assets   21,873,259   21,856,135   22,463,209  
Average assets   24,548,124   24,575,648   25,080,453  
Average deposits   21,468,624   21,725,177   21,960,819  
Average stockholders' equity   2,299,422   2,213,030   2,547,865  
Market Value Per Share:            
Closing   20.63   26.04   27.89  
High   28.28   27.16   31.16  
Low   19.68   24.06   26.93  


  As of As of As of 
  March 31,  December 31,  March 31,  
(dollars in thousands, except per share data) 2023 2022 2022 
Balance Sheet Data:             
Loans and leases $ 14,221,272  $14,092,012  $12,891,743  
Total assets   24,884,207   24,577,223   25,042,720  
Total deposits   21,281,500   21,689,029   22,270,430  
Short-term borrowings   250,000   75,000     
Long-term borrowings   500,000        
Total stockholders' equity   2,329,012   2,269,005   2,285,149  
              
Per Share of Common Stock:             
Book value $ 18.26  $17.82  $17.90  
Tangible book value (non-GAAP)(2)   10.45   10.00   10.10  
              
Asset Quality Ratios:             
Non-accrual loans and leases / total loans and leases   0.10 %   0.08 % 0.07 %
Allowance for credit losses for loans and leases / total loans and leases   1.03 %   1.02 % 1.17 %
              
Capital Ratios:             
Common Equity Tier 1 Capital Ratio    11.97 %   11.82 % 12.27 %
Tier 1 Capital Ratio   11.97 %   11.82 % 12.27 %
Total Capital Ratio   13.09 %   12.92 % 13.48 %
Tier 1 Leverage Ratio   8.26 %   8.11 % 7.50 %
Total stockholders' equity to total assets   9.36 %   9.23 % 9.13 %
Tangible stockholders' equity to tangible assets (non-GAAP)(2)   5.58 %   5.40 % 5.36 %
              
Non-Financial Data:             
Number of branches   51   51   51  
Number of ATMs   296   294   298  
Number of Full-Time Equivalent Employees   2,100   2,063   2,022  

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

(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 12, GAAP to Non-GAAP Reconciliation.


            
Consolidated Statements of Income Table 2
  For the Three Months Ended
  March 31,  December 31,  March 31, 
(dollars in thousands, except per share amounts) 2023 2022 2022
Interest income           
Loans and lease financing $ 172,339  $159,526  $103,732 
Available-for-sale investment securities   18,688   18,714   32,107 
Held-to-maturity investment securities   18,957   19,137    
Other   3,561   3,088   782 
Total interest income   213,545   200,465   136,621 
Interest expense           
Deposits   43,284   28,202   2,749 
Short-term and long-term borrowings   2,563   469    
Other   451       
Total interest expense   46,298   28,671   2,749 
Net interest income   167,247   171,794   133,872 
Provision for credit losses   8,800   2,956   (5,747)
Net interest income after provision for credit losses   158,447   168,838   139,619 
Noninterest income           
Service charges on deposit accounts   7,231   7,376   7,501 
Credit and debit card fees   16,298   16,376   14,850 
Other service charges and fees   9,162   9,185   9,654 
Trust and investment services income   9,614   9,023   8,883 
Bank-owned life insurance   5,120   2,865   (417)
Other   1,598   3,326   909 
Total noninterest income   49,023   48,151   41,380 
Noninterest expense           
Salaries and employee benefits   56,032   49,629   48,226 
Contracted services and professional fees   16,313   17,638   17,147 
Occupancy   7,782   8,175   7,410 
Equipment   9,736   9,984   5,977 
Regulatory assessment and fees   3,836   2,591   2,224 
Advertising and marketing   1,994   2,072   2,028 
Card rewards program   8,085   8,681   6,883 
Other   14,789   15,152   14,147 
Total noninterest expense   118,567   113,922   104,042 
Income before provision for income taxes   88,903   103,067   76,957 
Provision for income taxes   22,085   23,479   19,238 
Net income $ 66,818  $79,588  $57,719 
Basic earnings per share $ 0.52  $0.62  $0.45 
Diluted earnings per share $ 0.52  $0.62  $0.45 
Basic weighted-average outstanding shares   127,453,820   127,356,795   127,556,242 
Diluted weighted-average outstanding shares   128,033,812   127,894,773   128,121,126 


          
Consolidated Balance Sheets Table 3
  March 31,  December 31,  March 31, 
(dollars in thousands) 2023 2022 2022
Assets         
Cash and due from banks $ 253,705  $297,502  $274,022 
Interest-bearing deposits in other banks   611,887   229,122   1,352,138 
Investment securities:         
Available-for-sale, at fair value (amortized cost: $3,427,708 as of March 31, 2023, $3,549,599 as of December 31, 2022 and $8,733,170 as of March 31, 2022)   3,054,280   3,151,133   8,062,384 
Held-to-maturity, at amortized cost (fair value: $3,824,478 as of March 31, 2023, $3,814,822 as of December 31, 2022 and nil as of March 31, 2022)   4,261,361   4,320,639    
Loans and leases   14,221,272   14,092,012   12,891,743 
Less: allowance for credit losses   147,122   143,900   150,280 
Net loans and leases   14,074,150   13,948,112   12,741,463 
          
Premises and equipment, net   278,121   280,355   315,766 
Other real estate owned and repossessed personal property   91   91    
Accrued interest receivable   79,200   78,194   61,561 
Bank-owned life insurance   473,255   473,067   471,401 
Goodwill   995,492   995,492   995,492 
Mortgage servicing rights   6,299   6,562   7,650 
Other assets   796,366   796,954   760,843 
Total assets $ 24,884,207  $24,577,223  $25,042,720 
Liabilities and Stockholders' Equity         
Deposits:         
Interest-bearing $ 12,579,155  $12,824,383  $12,504,821 
Noninterest-bearing   8,702,345   8,864,646   9,765,609 
Total deposits   21,281,500   21,689,029   22,270,430 
Short-term borrowings   250,000   75,000    
Long-term borrowings   500,000       
Retirement benefits payable   101,622   102,577   134,323 
Other liabilities   422,073   441,612   352,818 
Total liabilities   22,555,195   22,308,218   22,757,571 
          
Stockholders' equity         
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 141,291,086 / 127,573,680 shares as of March 31, 2023, issued/outstanding: 140,963,918 / 127,363,327 shares as of December 31, 2022 and issued/outstanding: 140,875,595 / 127,686,307 shares as of March 31, 2022)   1,413   1,410   1,409 
Additional paid-in capital   2,540,653   2,538,336   2,530,795 
Retained earnings   769,791   736,544   628,642 
Accumulated other comprehensive loss, net   (611,679)  (639,254)  (517,502)
Treasury stock (13,717,406 shares as of March 31, 2023, 13,600,591 shares as of December 31, 2022 and 13,189,288 shares as of March 31, 2022)   (371,166)  (368,031)  (358,195)
Total stockholders' equity   2,329,012   2,269,005   2,285,149 
Total liabilities and stockholders' equity $ 24,884,207  $24,577,223  $25,042,720 


                          
Average Balances and Interest Rates                 Table 4
  Three Months Ended  Three Months Ended  Three Months Ended  
  March 31, 2023 December 31, 2022 March 31, 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 $ 299.6 $ 3.4  4.60%  $321.3 $2.9 3.64%$1,138.3 $0.6 0.20%
Available-for-Sale Investment Securities                         
Taxable   3,081.4   18.4  2.39  3,180.8  18.3 2.30  7,800.3  29.2 1.50 
Non-Taxable   31.1   0.4  5.55  37.9  0.5 5.42  636.7  3.6 2.32 
Held-to-Maturity Investment Securities                         
Taxable   3,683.8   15.7  1.70  3,754.9  15.8 1.69      
Non-Taxable   612.2   4.1  2.74  613.4  4.2 2.69      
Total Investment Securities   7,408.5   38.6  2.09  7,587.0  38.8 2.04  8,437.0  32.8 1.56 
Loans Held for Sale   0.1    5.53  0.1   6.50  1.2   2.02 
Loans and Leases(1)                         
Commercial and industrial   2,192.9   32.4  5.98  2,126.3  28.1 5.24  1,973.1  14.6 3.01 
Commercial real estate   4,105.7   58.3  5.76  4,116.8  53.9 5.19  3,632.2  25.8 2.88 
Construction   873.9   14.7  6.83  804.4  11.8 5.83  766.9  5.7 3.03 
Residential:                         
Residential mortgage   4,307.0   38.4  3.57  4,280.6  38.1 3.56  4,111.0  34.8 3.38 
Home equity line   1,074.9   8.7  3.27  1,029.7  8.1 3.10  891.6  5.5 2.48 
Consumer   1,213.5   17.2  5.75  1,220.9  17.1 5.55  1,218.6  15.6 5.19 
Lease financing   311.4   3.1  4.10  297.4  2.9 3.92  226.2  1.9 3.42 
Total Loans and Leases   14,079.3   172.8  4.96  13,876.1  160.0 4.58  12,819.6  103.9 3.27 
Other Earning Assets   85.8   0.2  0.76  71.6  0.2 0.80  67.1  0.2 1.31 
Total Earning Assets(2)   21,873.3   215.0  3.97  21,856.1  201.9 3.67  22,463.2  137.5 2.47 
Cash and Due from Banks   286.1       286.4       292.1      
Other Assets   2,388.7       2,433.1       2,325.2      
Total Assets $ 24,548.1      $24,575.6      $25,080.5      
                          
Interest-Bearing Liabilities                         
Interest-Bearing Deposits                         
Savings $ 6,354.3 $ 13.9  0.89%  $6,455.5 $10.3 0.63% 6,668.4 $0.5 0.03%
Money Market   3,853.5   14.3  1.50  4,012.9  9.8 0.97  4,048.9  0.5 0.05 
Time   2,515.6   15.1  2.44  2,163.2  8.1 1.48  1,748.5  1.7 0.39 
Total Interest-Bearing Deposits   12,723.4   43.3  1.38  12,631.6  28.2 0.89  12,465.8  2.7 0.09 
Federal Funds Purchased   67.1   0.7  4.43  45.5  0.5 4.09      
Other Short-Term Borrowings   52.8   0.7  5.02           
Long-Term Borrowings   105.5   1.2  4.52           
Other Interest-Bearing Liabilities   42.8   0.4  4.27           
Total Interest-Bearing Liabilities   12,991.6   46.3  1.45  12,677.1  28.7 0.90  12,465.8  2.7 0.09 
Net Interest Income    $ 168.7      $173.2      $134.8   
Interest Rate Spread        2.52%        2.77%      2.38%
Net Interest Margin        3.11%        3.15%      2.42%
Noninterest-Bearing Demand Deposits   8,745.2       9,093.6       9,495.0      
Other Liabilities   511.9       591.9       571.8      
Stockholders' Equity   2,299.4       2,213.0       2,547.9      
Total Liabilities and Stockholders' Equity $ 24,548.1      $24,575.6      $25,080.5      

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

(2)   Interest income includes taxable-equivalent basis adjustments of $1.4 million, $1.4 million and $1.0 million for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022, respectively.


          
Analysis of Change in Net Interest Income Table 5
  Three Months Ended March 31, 2023
  Compared to December 31, 2022
(dollars in millions) Volume Rate Total
Change in Interest Income:         
Interest-Bearing Deposits in Other Banks $ (0.2) $ 0.7  $ 0.5 
Available-for-Sale Investment Securities         
Taxable   (0.6)   0.7    0.1 
Non-Taxable   (0.1)      (0.1)
Held-to-Maturity Investment Securities         
Taxable   (0.2)   0.1    (0.1)
Non-Taxable   (0.1)      (0.1)
Total Investment Securities   (1.0)   0.8    (0.2)
Loans and Leases         
Commercial and industrial   0.8    3.5    4.3 
Commercial real estate   (0.2)   4.6    4.4 
Construction   1.0    1.9    2.9 
Residential:         
Residential mortgage   0.2    0.1    0.3 
Home equity line   0.3    0.3    0.6 
Consumer   (0.2)   0.3    0.1 
Lease financing   0.1    0.1    0.2 
Total Loans and Leases   2.0    10.8    12.8 
Total Change in Interest Income   0.8    12.3    13.1 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   (0.2)   3.8    3.6 
Money Market   (0.4)   4.9    4.5 
Time   1.4    5.6    7.0 
Total Interest-Bearing Deposits   0.8    14.3    15.1 
Federal Funds Purchased   0.2       0.2 
Other Short-Term Borrowings   0.7       0.7 
Long-Term Borrowings   1.2       1.2 
Other Interest-Bearing Liabilities   0.4       0.4 
Total Change in Interest Expense   3.3    14.3    17.6 
Change in Net Interest Income $ (2.5) $ (2.0) $ (4.5)


          
Analysis of Change in Net Interest Income    Table 6
  Three Months Ended March 31, 2023
  Compared to March 31, 2022
(dollars in millions) Volume Rate Total
Change in Interest Income:         
Interest-Bearing Deposits in Other Banks $ (0.7) $ 3.5  $ 2.8 
Available-for-Sale Investment Securities         
Taxable   (23.0)   12.2    (10.8)
Non-Taxable   (5.5)   2.3    (3.2)
Held-to-Maturity Investment Securities         
Taxable   15.7       15.7 
Non-Taxable   4.1       4.1 
Total Investment Securities   (8.7)   14.5    5.8 
Loans and Leases         
Commercial and industrial   1.8    16.0    17.8 
Commercial real estate   3.7    28.8    32.5 
Construction   0.9    8.1    9.0 
Residential:         
Residential mortgage   1.7    1.9    3.6 
Home equity line   1.3    1.9    3.2 
Consumer   (0.1)   1.7    1.6 
Lease financing   0.8    0.4    1.2 
Total Loans and Leases   10.1    58.8    68.9 
Other Earning Assets   0.1    (0.1)   
Total Change in Interest Income   0.8    76.7    77.5 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings      13.4    13.4 
Money Market      13.8    13.8 
Time   1.0    12.4    13.4 
Total Interest-Bearing Deposits   1.0    39.6    40.6 
Federal Funds Purchased   0.7       0.7 
Other Short-Term Borrowings   0.7       0.7 
Long-Term Borrowings   1.2       1.2 
Other Interest-Bearing Liabilities   0.4       0.4 
Total Change in Interest Expense   4.0    39.6    43.6 
Change in Net Interest Income $ (3.2) $ 37.1  $ 33.9 


             
Loans and Leases         Table 7
  March 31,  December 31,  March 31, 
(dollars in thousands) 2023    2022    2022
Commercial and industrial:            
Commercial and industrial excluding Paycheck Protection Program loans $ 2,254,506  $2,217,604  $1,817,346 
Paycheck Protection Program loans   13,826   18,293   106,188 
Total commercial and industrial   2,268,332   2,235,897   1,923,534 
Commercial real estate   4,106,200   4,132,309   3,759,980 
Construction   913,959   844,643   708,300 
Residential:            
Residential mortgage   4,318,742   4,302,788   4,153,824 
Home equity line   1,095,365   1,055,351   918,101 
Total residential   5,414,107   5,358,139   5,071,925 
Consumer   1,191,552   1,222,934   1,204,834 
Lease financing   327,122   298,090   223,170 
Total loans and leases $ 14,221,272  $14,092,012  $12,891,743 


             
Deposits         Table 8
  March 31,  December 31,  March 31, 
(dollars in thousands) 2023    2022    2022
Demand $ 8,702,345  $8,864,646  $9,765,609 
Savings   6,173,398   6,382,910   6,812,758 
Money Market   3,818,355   3,965,423   3,990,225 
Time   2,587,402   2,476,050   1,701,838 
Total Deposits $ 21,281,500  $21,689,029  $22,270,430 


             
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More         Table 9
  March 31,  December 31,  March 31, 
(dollars in thousands) 2023    2022    2022
Non-Performing Assets            
Non-Accrual Loans and Leases            
Commercial Loans:            
Commercial and industrial $ 1,158  $1,215  $707 
Commercial real estate   727   727   727 
Lease financing        75 
Total Commercial Loans   1,885   1,942   1,509 
Residential Loans:            
Residential mortgage   6,896   6,166   7,092 
Home equity line   4,903   3,797    
Total Residential Loans   11,799   9,963   7,092 
Total Non-Accrual Loans and Leases   13,684   11,905   8,601 
Other Real Estate Owned   91   91    
Total Non-Performing Assets $ 13,775  $11,996  $8,601 
             
Accruing Loans and Leases Past Due 90 Days or More            
Commercial Loans:            
Commercial and industrial $ 461  $291  $591 
Commercial real estate   1,346       
Construction   102       
Total Commercial Loans   1,909   291   591 
Residential Loans:            
Residential mortgage   58   58   13 
Home equity line        2,252 
Total Residential Loans   58   58   2,265 
Consumer   2,502   2,885   1,588 
Total Accruing Loans and Leases Past Due 90 Days or More $ 4,469  $3,234  $4,444 
             
Total Loans and Leases $ 14,221,272  $14,092,012  $12,891,743 


           
Allowance for Credit Losses and Reserve for Unfunded Commitments Table 10
  For the Three Months Ended  
  March 31,  December 31,  March 31,  
(dollars in thousands) 2023 2022    2022    
Balance at Beginning of Period $ 177,735  $178,304  $187,584  
Loans and Leases Charged-Off          
Commercial and industrial   (791)  (735)  (706) 
Residential Loans:          
Residential mortgage   (122)  (102)    
Home equity line   (135)  (12)  (43) 
Total Residential Loans   (257)  (114)  (43) 
Consumer   (4,782)  (5,094)  (4,109) 
Total Loans and Leases Charged-Off   (5,830)  (5,943)  (4,858) 
Recoveries on Loans and Leases Previously Charged-Off          
Commercial Loans:          
Commercial and industrial   246   303   53  
Commercial real estate        14  
Total Commercial Loans   246   303   67  
Residential Loans:          
Residential mortgage   27   173   16  
Home equity line   177   138   28  
Total Residential Loans   204   311   44  
Consumer   2,166   1,804   2,148  
Total Recoveries on Loans and Leases Previously Charged-Off   2,616   2,418   2,259  
Net Loans and Leases Charged-Off   (3,214)  (3,525)  (2,599) 
Provision for Credit Losses   8,800   2,956   (5,747) 
Balance at End of Period $ 183,321  $177,735  $179,238  
Components:          
Allowance for Credit Losses $ 147,122  $143,900  $150,280  
Reserve for Unfunded Commitments   36,199   33,835   28,958  
Total Allowance for Credit Losses and Reserve for Unfunded Commitments $ 183,321  $177,735  $179,238  
Average Loans and Leases Outstanding $ 14,079,337  $13,876,136  $12,819,612  
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)   0.09 %   0.10 % 0.08 %
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding   1.03 %   1.02 % 1.17 %
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases  10.75x   12.09x   17.47x  

________________________
(1)   Annualized for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022.


                            
Loans and Leases by Year of Origination and Credit Quality Indicator  Table 11
                       Revolving   
                       Loans   
                       Converted   
                       to Term   
  Term Loans Revolving Loans   
  Amortized Cost Basis by Origination Year Loans Amortized   
                    Amortized Cost   
(dollars in thousands) 2023 2022 2021 2020 2019 Prior Cost Basis Basis Total
Commercial Lending                           
Commercial and Industrial                           
Risk rating:                           
Pass $ 66,587 $ 338,534 $ 412,459 $ 48,560 $ 167,698 $ 178,991 $ 921,651 $ 13,566 $ 2,148,046
Special Mention   152   16,591   202   994   2,526   1,548   2,557   283   24,853
Substandard     594   274   1,058   958   1,422   11,043   41   15,390
Other (1)   5,223   14,426   6,965   3,780   3,312   2,287   44,050     80,043
Total Commercial and Industrial   71,962   370,145   419,900   54,392   174,494   184,248   979,301   13,890   2,268,332
Current period gross charge-offs     60       20   711       791
                            
Commercial Real Estate                           
Risk rating:                           
Pass   105,554   880,292   661,523   321,162   521,596   1,533,711   56,034     4,079,872
Special Mention     163     551   7,031   11,490   659     19,894
Substandard         172     5,808   305     6,285
Other (1)             149       149
Total Commercial Real Estate   105,554   880,455   661,523   321,885   528,627   1,551,158   56,998     4,106,200
Current period gross charge-offs                  
                            
Construction                           
Risk rating:                           
Pass   15,219   152,263   333,608   89,515   103,855   141,243   20,349     856,052
Special Mention           213         213
Substandard             486       486
Other (1)   817   29,615   16,206   2,991   2,160   4,478   941     57,208
Total Construction   16,036   181,878   349,814   92,506   106,228   146,207   21,290     913,959
Current period gross charge-offs                  
                            
Lease Financing                           
Risk rating:                           
Pass   51,664   99,102   22,653   42,081   37,333   72,254       325,087
Special Mention       388   82           470
Substandard         184   9   1,372       1,565
Total Lease Financing   51,664   99,102   23,041   42,347   37,342   73,626       327,122
Current period gross charge-offs                  
                            
Total Commercial Lending $ 245,216 $ 1,531,580 $ 1,454,278 $ 511,130 $ 846,691 $ 1,955,239 $ 1,057,589 $ 13,890 $ 7,615,613
Current period gross charge-offs $ $ 60 $ $ $ 20 $ 711 $ $ $ 791


                       Revolving   
                       Loans   
                       Converted   
                       to Term   
  Term Loans Revolving Loans   
  Amortized Cost Basis by Origination Year Loans Amortized   
(continued)                   Amortized Cost   
(dollars in thousands) 2023 2022 2021 2020 2019 Prior Cost Basis Basis Total
Residential Lending                           
Residential Mortgage                           
FICO:                           
740 and greater $ 61,686 $ 550,291 $ 1,044,555 $ 546,035 $ 235,535 $ 1,057,166 $ $ $ 3,495,268
680 - 739   11,937   75,088   118,790   86,202   35,379   145,363       472,759
620 - 679   2,776   11,464   17,424   9,946   9,243   36,678       87,531
550 - 619     2,613   2,865   2,447   825   12,487       21,237
Less than 550     530   2,445   1,498   275   7,276       12,024
No Score (3)   4,909   19,766   14,573   6,773   10,494   61,168       117,683
Other (2)   4,425   18,205   18,013   13,511   9,064   35,164   13,306   552   112,240
Total Residential Mortgage   85,733   677,957   1,218,665   666,412   300,815   1,355,302   13,306   552   4,318,742
Current period gross charge-offs             122       122
                            
Home Equity Line                           
FICO:                           
740 and greater               824,038   1,304   825,342
680 - 739               190,187   2,440   192,627
620 - 679               52,239   1,728   53,967
550 - 619               12,734   1,566   14,300
Less than 550               5,370   661   6,031
No Score (3)               3,098     3,098
Total Home Equity Line               1,087,666   7,699   1,095,365
Current period gross charge-offs               116   19   135
                            
Total Residential Lending $ 85,733 $ 677,957 $ 1,218,665 $ 666,412 $ 300,815 $ 1,355,302 $ 1,100,972 $ 8,251 $ 5,414,107
Current period gross charge-offs $ $ $ $ $ $ 122 $ 116 $ 19 $ 257
                            
Consumer Lending                           
FICO:                           
740 and greater   40,337   158,451   96,174   46,618   37,211   24,636   114,058   161   517,646
680 - 739   23,366   97,741   56,306   29,741   24,169   15,970   70,708   441   318,442
620 - 679   7,022   44,839   26,924   12,728   14,484   11,731   33,772   860   152,360
550 - 619   750   10,172   9,698   6,475   7,647   7,519   11,937   855   55,053
Less than 550   122   4,446   5,400   4,078   4,951   4,518   4,329   526   28,370
No Score (3)   866   2,376   8     16   36   36,396   167   39,865
Other (2)   76   1,588   4,060   348   1,136     72,608     79,816
Total Consumer Lending $ 72,539 $ 319,613 $ 198,570 $ 99,988 $ 89,614 $ 64,410 $ 343,808 $ 3,010 $ 1,191,552
Current period gross charge-offs $ $ 635 $ 681 $ 312 $ 614 $ 867 $ 1,471 $ 202 $ 4,782
                            
Total Loans and Leases $ 403,488 $ 2,529,150 $ 2,871,513 $ 1,277,530 $ 1,237,120 $ 3,374,951 $ 2,502,369 $ 25,151 $ 14,221,272
Current period gross charge-offs $ $ 695 $ 681 $ 312 $ 634 $ 1,700 $ 1,587 $ 221 $ 5,830

________________________
(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 12
  For the Three Months Ended  
  March 31,  December 31,  March 31,  
(dollars in thousands, except per share amounts) 2023     2022    2022    
Income Statement Data:             
Net income $ 66,818  $79,588  $57,719  
              
Average total stockholders' equity $ 2,299,422  $2,213,030  $2,547,865  
Less: average goodwill   995,492   995,492   995,492  
Average tangible stockholders' equity $ 1,303,930  $1,217,538  $1,552,373  
              
Average total assets $ 24,548,124  $24,575,648  $25,080,453  
Less: average goodwill   995,492   995,492   995,492  
Average tangible assets $ 23,552,632  $23,580,156  $24,084,961  
              
Return on average total stockholders' equity(1)   11.78 %   14.27 % 9.19 %
Return on average tangible stockholders' equity (non-GAAP)(1)   20.78 %   25.93 % 15.08 %
              
Return on average total assets(1)   1.10 %   1.28 % 0.93 %
Return on average tangible assets (non-GAAP)(1)   1.15 %   1.34 % 0.97 %


  As of As of As of 
  March 31,  December 31,  March 31,  
(dollars in thousands, except per share amounts) 2023    2022    2022 
Balance Sheet Data:             
Total stockholders' equity $ 2,329,012  $2,269,005  $2,285,149  
Less: goodwill   995,492   995,492   995,492  
Tangible stockholders' equity $ 1,333,520  $1,273,513  $1,289,657  
              
Total assets $ 24,884,207  $24,577,223  $25,042,720  
Less: goodwill   995,492   995,492   995,492  
Tangible assets $ 23,888,715  $23,581,731  $24,047,228  
              
Shares outstanding   127,573,680   127,363,327   127,686,307  
              
Total stockholders' equity to total assets   9.36 %   9.23 % 9.13 %
Tangible stockholders' equity to tangible assets (non-GAAP)   5.58 %   5.40 % 5.36 %
              
Book value per share $ 18.26  $17.82  $17.90  
Tangible book value per share (non-GAAP) $ 10.45  $10.00  $10.10  

________________________
(1)   Annualized for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022.


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