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First Hawaiian, Inc. Reports Fourth Quarter 2022 Financial Results and Declares Dividend

HONOLULU, Jan. 27, 2023 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended December 31, 2022.

“We are pleased to report that we closed 2022 with a solid fourth quarter,” said Bob Harrison, Chairman, President and CEO. “We saw continued earnings growth, driven by strong loan growth and excellent credit quality.”

On January 25, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on March 3, 2023, to stockholders of record at the close of business on February 17, 2023.

Additionally, the Company’s Board of Directors adopted a stock repurchase program for up to $40 million of its outstanding common stock during 2023.

Fourth Quarter 2022 Highlights:

  • Net income of $79.6 million, or $0.62 per diluted share
  • Total loans and leases increased $391.6 million versus prior quarter
  • Total deposits decreased $402.7 million versus prior quarter
  • Net interest margin increased 22 basis points to 3.15%
  • Recorded a $3.0 million provision for credit losses
  • Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet

Total assets were $24.6 billion as of December 31, 2022, compared to $24.9 billion as of September 30, 2022.

Gross loans and leases were $14.1 billion as of December 31, 2022, an increase of $391.6 million, or 2.9%, from $13.7 billion as of September 30, 2022.

Total deposits were $21.7 billion as of December 31, 2022, a decrease of $402.7 million, or 1.8%, from $22.1 billion as of September 30, 2022.

Net Interest Income

Net interest income for the fourth quarter of 2022 was $171.8 million, an increase of $9.1 million, or 5.6%, compared to $162.7 million for the prior quarter.

The net interest margin was 3.15% in the fourth quarter of 2022, an increase of 22 basis points compared to 2.93% in the prior quarter.

Provision Expense

During the quarter ended December 31, 2022, we recorded a $3.0 million provision for credit losses. In the quarter ended September 30, 2022, we recorded a $3.2 million provision for credit losses.

Noninterest Income

Noninterest income was $48.2 million in the fourth quarter of 2022, an increase of $2.3 million compared to noninterest income of $45.9 million in the prior quarter.

Noninterest Expense

Noninterest expense was $113.9 million in the fourth quarter of 2022, an increase of $0.6 million compared to noninterest expense of $113.3 million in the prior quarter.

The efficiency ratio was 51.5% and 54.0% for the quarters ended December 31, 2022 and September 30, 2022, respectively.

Taxes

The effective tax rate was 22.8% and 25.0% for the quarters ended December 31, 2022 and September 30, 2022, respectively.

Asset Quality

The allowance for credit losses was $143.9 million, or 1.02% of total loans and leases, as of December 31, 2022, compared to $148.2 million, or 1.08% of total loans and leases, as of September 30, 2022. The reserve for unfunded commitments was $33.8 million as of December 31, 2022, compared to $30.1 million as of September 30, 2022. Net charge-offs were $3.5 million, or 0.10% of average loans and leases on an annualized basis, for the quarter ended December 31, 2022, compared to net charge-offs of $2.8 million, or 0.08% of average loans and leases on an annualized basis, for the quarter ended September 30, 2022. Total non-performing assets were $12.0 million, or 0.09% of total loans and leases and other real estate owned, on December 31, 2022, compared to total non-performing assets of $8.4 million, or 0.06% of total loans and leases and other real estate owned, on September 30, 2022.

Capital

Total stockholders' equity was $2.3 billion on December 31, 2022 compared to $2.2 billion on September 30, 2022.

The tier 1 leverage, common equity tier 1 and total capital ratios were 8.11%, 11.82%, and 12.92%, respectively, on December 31, 2022, compared with 7.78%, 11.79%, and 12.92%, respectively, on September 30, 2022.

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

As to the stock repurchase program approved for 2023, repurchases of shares of the Company’s common stock may be conducted through open-market purchases, which may include purchases under a trading plan adopted pursuant to Securities and Exchange Commission Rule 10b5-1, or through privately negotiated transactions. The timing and exact amount of share repurchases, if any, will be subject to management’s discretion and various factors, including the Company’s capital position and financial performance, as well as market conditions. The repurchase program may be suspended, terminated or modified at any time for any reason.

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, 8:00 a.m. Hawaii Time.

Please note that the process for accessing the conference call has changed. Participants will need to click on the registration link provided below, register for the conference call, and then you will receive the dial-in number and a personalized PIN code.

To access the call by phone, please register via the following link: https://register.vevent.com/register/BI73d7abf351534972a54610116ab71617, 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, 2021 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022, and September 30, 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 14 at the end of this document provides a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.

Investor Relations Contact:
Kevin Haseyama, CFA
(808) 525-6268
khaseyama@fhb.com

Media Contact:
Lindsay Chambers
(808) 525-6254
lchambers@fhb.com


                 
Financial Highlights Table 1
  For the Three Months Ended For the Year Ended  
  December 31,  September 30,  December 31,  December 31,  
(dollars in thousands, except per share data) 2022    2022    2021 2022    2021  
Operating Results:                
Net interest income $ 171,794 $162,736 $137,327 $ 613,549 $530,559  
Provision for credit losses   2,956  3,183     1,392  (39,000) 
Noninterest income   48,151  45,857  41,573   179,525  184,916  
Noninterest expense   113,922  113,332  108,749   440,471  405,479  
Net income   79,588  69,018  57,022   265,685  265,735  
Basic earnings per share   0.62  0.54  0.45   2.08  2.06  
Diluted earnings per share   0.62  0.54  0.44   2.08  2.05  
Dividends declared per share   0.26  0.26  0.26   1.04  1.04  
Dividend payout ratio   41.94 % 48.15 % 59.09 %  50.00 % 50.73 %
Performance Ratios(1):                
Net interest margin   3.15 % 2.93 % 2.38 %  2.78 % 2.43 %
Efficiency ratio   51.47 % 53.98 % 60.50 %  55.20 % 56.45 %
Return on average total assets   1.28 % 1.10 % 0.88 %  1.06 % 1.09 %
Return on average tangible assets (non-GAAP)(2)   1.34 % 1.14 % 0.92 %  1.11 % 1.13 %
Return on average total stockholders' equity   14.27 % 12.08 % 8.46 %  11.44 % 9.81 %
Return on average tangible stockholders' equity (non-GAAP)(2)   25.93 % 21.53 % 13.47 %  20.03 % 15.51 %
Average Balances:                
Average loans and leases $ 13,876,136 $13,491,428 $12,814,316 $ 13,314,821 $13,034,295  
Average earning assets   21,856,135  22,258,066  23,100,445   22,272,795  21,921,149  
Average assets   24,575,648  24,957,042  25,650,505   24,964,422  24,426,258  
Average deposits   21,725,177  22,148,039  22,246,577   22,058,497  21,011,587  
Average stockholders' equity   2,213,030  2,267,152  2,675,513   2,321,606  2,708,370  
Market Value Per Share:                
Closing   26.04  24.63  27.33   26.04  27.33  
High   27.16  28.14  30.14   31.16  30.80  
Low   24.06  21.21  25.17   21.21  23.14  


           
  As of As of As of 
  December 31,  September 30,  December 31,  
(dollars in thousands, except per share data) 2022 2022 2021 
Balance Sheet Data:          
Loans and leases $ 14,092,012 $13,700,374 $12,961,999 
Total assets   24,577,223  24,870,272  24,992,410 
Total deposits   21,689,029  22,091,738  21,816,146 
Short-term borrowings   75,000     
Total stockholders' equity   2,269,005  2,200,651  2,656,912 
           
Per Share of Common Stock:          
Book value $ 17.82 $17.28 $20.84 
Tangible book value (non-GAAP)(2)   10.00  9.46  13.03 
           
Asset Quality Ratios:          
Non-accrual loans and leases / total loans and leases   0.08% 0.06% 0.05%
Allowance for credit losses for loans and leases / total loans and leases   1.02% 1.08% 1.21%
           
Capital Ratios:          
Common Equity Tier 1 Capital Ratio    11.82% 11.79% 12.24%
Tier 1 Capital Ratio   11.82% 11.79% 12.24%
Total Capital Ratio   12.92% 12.92% 13.49%
Tier 1 Leverage Ratio   8.11% 7.78% 7.24%
Total stockholders' equity to total assets   9.23% 8.85% 10.63%
Tangible stockholders' equity to tangible assets (non-GAAP)(2)   5.40% 5.05% 6.92%
           
Non-Financial Data:          
Number of branches   51  51  54 
Number of ATMs   294  303  299 
Number of Full-Time Equivalent Employees   2,063  2,042  2,036 

(1)   Except for the efficiency ratio, amounts are annualized for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021.

(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 Year Ended
  December 31,  September 30,  December 31,  December 31, 
(dollars in thousands, except per share amounts) 2022 2022
 2021
 2022 2021
Interest income               
Loans and lease financing $ 159,526 $134,646  $111,865  $ 509,820 $444,488 
Available-for-sale investment securities   18,714  19,644   28,393    87,108  101,410 
Held-to-maturity investment securities   19,137  17,950       55,376   
Other   3,088  4,150   1,051    10,916  3,413 
Total interest income   200,465  176,390   141,309    663,220  549,311 
Interest expense               
Deposits   28,202  13,653   3,216    49,201  13,853 
Short-term and long-term borrowings   469  1   766    470  4,899 
Total interest expense   28,671  13,654   3,982    49,671  18,752 
Net interest income   171,794  162,736   137,327    613,549  530,559 
Provision for credit losses   2,956  3,183       1,392  (39,000)
Net interest income after provision for credit losses   168,838  159,553   137,327    612,157  569,559 
Noninterest income               
Service charges on deposit accounts   7,376  7,089   7,171    28,809  27,510 
Credit and debit card fees   16,376  17,746   16,266    66,028  63,580 
Other service charges and fees   9,185  9,179   9,196    37,036  38,578 
Trust and investment services income   9,023  9,800   8,895    36,465  34,719 
Bank-owned life insurance   2,865  (341)  2,851    1,248  13,185 
Investment securities gains, net            102 
Other   3,326  2,384   (2,806)   9,939  7,242 
Total noninterest income   48,151  45,857   41,573    179,525  184,916 
Noninterest expense               
Salaries and employee benefits   49,629  51,372   45,982    199,129  182,384 
Contracted services and professional fees   17,638  16,625   14,603    70,027  63,349 
Occupancy   8,175  8,115   8,074    31,034  29,348 
Equipment   9,984  10,791   6,317    34,506  24,719 
Regulatory assessment and fees   2,591  2,487   2,557    9,603  8,245 
Advertising and marketing   2,072  1,902   1,579    7,996  6,108 
Card rewards program   8,681  8,141   7,471    30,990  25,244 
Other   15,152  13,899   22,166    57,186  66,082 
Total noninterest expense   113,922  113,332   108,749    440,471  405,479 
Income before provision for income taxes   103,067  92,078   70,151    351,211  348,996 
Provision for income taxes   23,479  23,060   13,129    85,526  83,261 
Net income $ 79,588 $69,018  $57,022  $ 265,685 $265,735 
Basic earnings per share $ 0.62 $0.54  $0.45  $ 2.08 $2.06 
Diluted earnings per share $ 0.62 $0.54  $0.44  $ 2.08 $2.05 
Basic weighted-average outstanding shares   127,356,795  127,377,713   127,893,011    127,489,889  128,963,131 
Diluted weighted-average outstanding shares   127,894,773  127,796,617   128,512,257    127,981,699  129,537,922 


          
Consolidated Balance Sheets Table 3
  December 31,  September 30,  December 31, 
(dollars in thousands) 2022
 2022
 2021
Assets         
Cash and due from banks $ 297,502  $291,360  $246,716 
Interest-bearing deposits in other banks   229,122   657,574   1,011,753 
Investment securities:         
Available-for-sale, at fair value (amortized cost: $3,549,599 as of December 31, 2022, $3,673,396 as of September 30, 2022 and $8,560,733 as of December 31, 2021)   3,151,133   3,289,160   8,428,032 
Held-to-maturity, at amortized cost (fair value: $3,814,822 as of December 31, 2022, $3,960,713 as of September 30, 2022 and nil as of December 31, 2021)   4,320,639   4,406,143    
Loans held for sale     361   538 
Loans and leases   14,092,012   13,700,374   12,961,999 
Less: allowance for credit losses   143,900   148,163   157,262 
Net loans and leases   13,948,112   13,552,211   12,804,737 
          
Premises and equipment, net   280,355   299,179   318,448 
Other real estate owned and repossessed personal property   91   139   175 
Accrued interest receivable   78,194   68,545   63,158 
Bank-owned life insurance   473,067   470,202   471,819 
Goodwill   995,492   995,492   995,492 
Mortgage servicing rights   6,562   6,866   8,302 
Other assets   796,954   833,040   643,240 
Total assets $ 24,577,223  $24,870,272  $24,992,410 
Liabilities and Stockholders' Equity         
Deposits:         
Interest-bearing $ 12,824,383  $12,774,645  $12,422,283 
Noninterest-bearing   8,864,646   9,317,093   9,393,863 
Total deposits   21,689,029   22,091,738   21,816,146 
Short-term borrowings   75,000       
Retirement benefits payable   102,577   133,981   134,491 
Other liabilities   441,612   443,902   384,861 
Total liabilities   22,308,218   22,669,621   22,335,498 
          
Stockholders' equity         
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 140,963,918 / 127,363,327 shares as of December 31, 2022, issued/outstanding: 140,958,520 / 127,357,680 shares as of September 30, 2022 and issued/outstanding: 140,581,715 / 127,502,472 shares as of December 31, 2021)   1,410   1,410   1,406 
Additional paid-in capital   2,538,336   2,535,601   2,527,663 
Retained earnings   736,544   690,433   604,534 
Accumulated other comprehensive loss, net   (639,254)  (658,756)  (121,693)
Treasury stock (13,600,591 shares as of December 31, 2022, 13,600,840 shares as of September 30, 2022 and 13,079,243 shares as of December 31, 2021)   (368,031)  (368,037)  (354,998)
Total stockholders' equity   2,269,005   2,200,651   2,656,912 
Total liabilities and stockholders' equity $ 24,577,223  $24,870,272  $24,992,410 


                          
Average Balances and Interest Rates                       Table 4
  Three Months Ended  Three Months Ended  Three Months Ended  
  December 31, 2022 September 30, 2022 December 31, 2021 
  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 $ 321.3 $ 2.9  3.64%  $724.0 $4.0 2.20%$2,074.5 $0.8 0.15%
Available-for-Sale Investment Securities                         
Taxable   3,180.8   18.3  2.30  3,733.8  19.2 2.05  7,515.2  25.8 1.37 
Non-Taxable   37.9   0.5  5.42  45.1  0.6 5.16  615.3  3.3 2.14 
Held-to-Maturity Investment Securities                         
Taxable   3,754.9   15.8  1.69  3,573.6  14.6 1.64      
Non-Taxable   613.4   4.2  2.69  613.6  4.2 2.72      
Total Investment Securities   7,587.0   38.8  2.04  7,966.1  38.6 1.93  8,130.5  29.1 1.43 
Loans Held for Sale   0.1    6.50  0.7   3.62  1.0   1.35 
Loans and Leases(1)                         
Commercial and industrial   2,126.3   28.1  5.24  2,025.5  20.7 4.05  2,084.0  21.1 4.01 
Commercial real estate   4,116.8   53.9  5.19  4,016.7  42.3 4.18  3,572.9  26.0 2.89 
Construction   804.4   11.8  5.83  737.4  8.6 4.63  806.6  6.3 3.09 
Residential:                         
Residential mortgage   4,280.6   38.1  3.56  4,224.0  36.4 3.45  4,014.9  34.9 3.48 
Home equity line   1,029.7   8.1  3.10  991.1  7.2 2.87  864.4  5.5 2.52 
Consumer   1,220.9   17.1  5.55  1,218.0  17.1 5.57  1,241.3  16.3 5.22 
Lease financing   297.4   2.9  3.92  278.7  2.7 3.81  230.2  1.9 3.27 
Total Loans and Leases   13,876.1   160.0  4.58  13,491.4  135.0 3.98  12,814.3  112.0 3.48 
Other Earning Assets   71.6   0.2  0.80  75.9  0.1 0.69  80.1  0.3 1.27 
Total Earning Assets(2)   21,856.1   201.9  3.67  22,258.1  177.7 3.18  23,100.4  142.2 2.45 
Cash and Due from Banks   286.4       277.0       282.2      
Other Assets   2,433.1       2,421.9       2,267.9      
Total Assets $ 24,575.6      $24,957.0      $25,650.5      
                          
Interest-Bearing Liabilities                         
Interest-Bearing Deposits                         
Savings $ 6,455.5 $ 10.3  0.63%  $6,871.5 $6.7 0.39% 7,086.0 $0.8 0.04%
Money Market   4,012.9   9.8  0.97  4,086.1  4.8 0.47  4,048.3  0.5 0.05 
Time   2,163.2   8.1  1.48  1,720.5  2.1 0.48  1,819.0  1.9 0.42 
Total Interest-Bearing Deposits   12,631.6   28.2  0.89  12,678.1  13.6 0.43  12,953.3  3.2 0.10 
Federal Funds Purchased   45.5   0.5  4.09  0.2   1.67      
Long-Term Borrowings            110.9  0.8 2.74 
Total Interest-Bearing Liabilities   12,677.1   28.7  0.90  12,678.3  13.6 0.43  13,064.2  4.0 0.12 
Net Interest Income    $ 173.2      $164.1      $138.2   
Interest Rate Spread        2.77%      2.75%      2.33%
Net Interest Margin        3.15%      2.93%      2.38%
Noninterest-Bearing Demand Deposits   9,093.6       9,469.9       9,293.3      
Other Liabilities   591.9       541.6       617.5      
Stockholders' Equity   2,213.0       2,267.2       2,675.5      
Total Liabilities and Stockholders' Equity $ 24,575.6      $24,957.0      $25,650.5      

(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, $1.3 million and $0.9 million for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively.

                  
Average Balances and Interest Rates               Table 5
  Year Ended  Year Ended  
  December 31, 2022 December 31, 2021 
  Average Income/ Yield/ Average Income/ Yield/ 
(dollars in millions) Balance Expense Rate Balance Expense Rate 
Earning Assets                 
Interest-Bearing Deposits in Other Banks $ 867.6 $ 10.3  1.19%  $1,723.0 $2.3 0.14%
Available-for-Sale Investment Securities                 
Taxable   4,650.1   83.2  1.79  6,608.9  93.3 1.41 
Non-Taxable   180.0   4.9  2.74  481.9  10.2 2.12 
Held-to-Maturity Investment Securities                 
Taxable   2,728.2   45.5  1.67      
Non-Taxable   460.6   12.5  2.71      
Total Investment Securities   8,018.9   146.1  1.82  7,090.8  103.5 1.46 
Loans Held for Sale   0.6    3.14  3.6  0.1 2.24 
Loans and Leases(1)                 
Commercial and industrial   2,019.5   78.4  3.88  2,586.8  82.2 3.18 
Commercial real estate   3,895.3   153.2  3.93  3,456.7  101.6 2.94 
Construction   755.0   32.5  4.30  804.5  25.4 3.16 
Residential:                 
Residential mortgage   4,200.2   145.5  3.46  3,836.6  138.3 3.60 
Home equity line   965.0   26.5  2.75  834.3  22.2 2.66 
Consumer   1,218.9   65.3  5.35  1,275.5  67.8 5.31 
Lease financing   260.9   9.7  3.69  239.9  7.6 3.14 
Total Loans and Leases   13,314.8   511.1  3.84  13,034.3  445.1 3.42 
Other Earning Assets   70.9   0.6  0.89  69.4  1.1 1.54 
Total Earning Assets(2)   22,272.8   668.1  3.00  21,921.1  552.1 2.52 
Cash and Due from Banks   289.0       289.3      
Other Assets   2,402.6       2,215.9      
Total Assets $ 24,964.4      $24,426.3      
                  
Interest-Bearing Liabilities                 
Interest-Bearing Deposits                 
Savings $ 6,741.5 $ 19.2  0.29%  $6,581.1 $2.5 0.04%
Money Market   4,068.8   16.6  0.41  3,831.4  2.1 0.05 
Time   1,826.7   13.4  0.73  2,005.0  9.3 0.47 
Total Interest-Bearing Deposits   12,637.0   49.2  0.39  12,417.5  13.9 0.11 
Federal Funds Purchased   11.5   0.5  4.08      
Long-Term Borrowings       177.5  4.9 2.76 
Total Interest-Bearing Liabilities   12,648.5   49.7  0.39  12,595.0  18.8 0.15 
Net Interest Income    $ 618.4      $533.3   
Interest Rate Spread        2.61%        2.37%
Net Interest Margin        2.78%        2.43%
Noninterest-Bearing Demand Deposits   9,421.5       8,594.1      
Other Liabilities   572.8       528.8      
Stockholders' Equity   2,321.6       2,708.4      
Total Liabilities and Stockholders' Equity $ 24,964.4      $24,426.3      

(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 $4.9 million and $2.8 million for the year ended December 31, 2022 and 2021, respectively.

          
Analysis of Change in Net Interest Income        Table 6
  Three Months Ended December 31, 2022
  Compared to September 30, 2022
(dollars in millions) Volume Rate Total
Change in Interest Income:         
Interest-Bearing Deposits in Other Banks $ (2.9) $ 1.8 $ (1.1)
Available-for-Sale Investment Securities         
Taxable   (3.0)   2.1   (0.9)
Non-Taxable   (0.1)     (0.1)
Held-to-Maturity Investment Securities         
Taxable   0.8    0.4   1.2 
Total Investment Securities   (2.3)   2.5   0.2 
Loans and Leases         
Commercial and industrial   1.1    6.3   7.4 
Commercial real estate   1.1    10.5   11.6 
Construction   0.8    2.4   3.2 
Residential:         
Residential mortgage   0.5    1.2   1.7 
Home equity line   0.3    0.6   0.9 
Lease financing   0.2      0.2 
Total Loans and Leases   4.0    21.0   25.0 
Other Earning Assets      0.1   0.1 
Total Change in Interest Income   (1.2)   25.4   24.2 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   (0.4)   4.0   3.6 
Money Market   (0.1)   5.1   5.0 
Time   0.7    5.3   6.0 
Total Interest-Bearing Deposits   0.2    14.4   14.6 
Federal Funds Purchased   0.5      0.5 
Total Change in Interest Expense   0.7    14.4   15.1 
Change in Net Interest Income $ (1.9) $ 11.0 $ 9.1 


          
Analysis of Change in Net Interest Income        Table 7
  Three Months Ended December 31, 2022
  Compared to December 31, 2021
(dollars in millions) Volume Rate Total
Change in Interest Income:         
Interest-Bearing Deposits in Other Banks $ (1.2) $ 3.3  $ 2.1 
Available-for-Sale Investment Securities         
Taxable   (19.5)   12.0    (7.5)
Non-Taxable   (4.9)   2.1    (2.8)
Held-to-Maturity Investment Securities         
Taxable   15.8       15.8 
Non-Taxable   4.2       4.2 
Total Investment Securities   (4.4)   14.1    9.7 
Loans and Leases         
Commercial and industrial   0.4    6.6    7.0 
Commercial real estate   4.5    23.4    27.9 
Construction      5.5    5.5 
Residential:         
Residential mortgage   2.3    0.9    3.2 
Home equity line   1.2    1.4    2.6 
Consumer   (0.2)   1.0    0.8 
Lease financing   0.6    0.4    1.0 
Total Loans and Leases   8.8    39.2    48.0 
Other Earning Assets      (0.1)   (0.1)
Total Change in Interest Income   3.2    56.5    59.7 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   (0.1)   9.6    9.5 
Money Market      9.3    9.3 
Time   0.5    5.7    6.2 
Total Interest-Bearing Deposits   0.4    24.6    25.0 
Federal Funds Purchased   0.5       0.5 
Long-Term Borrowings   (0.4)   (0.4)   (0.8)
Total Change in Interest Expense   0.5    24.2    24.7 
Change in Net Interest Income $ 2.7  $ 32.3  $ 35.0 


          
Analysis of Change in Net Interest Income        Table 8
  Year Ended December 31, 2022
  Compared to December 31, 2021
(dollars in millions) Volume Rate Total
Change in Interest Income:         
Interest-Bearing Deposits in Other Banks $ (1.7) $ 9.7  $ 8.0 
Available-for-Sale Investment Securities         
Taxable   (31.6)   21.5    (10.1)
Non-Taxable   (7.7)   2.4    (5.3)
Held-to-Maturity Investment Securities         
Taxable   45.5       45.5 
Non-Taxable   12.5       12.5 
Total Investment Securities   18.7    23.9    42.6 
Loans Held for Sale   (0.1)      (0.1)
Loans and Leases         
Commercial and industrial   (20.0)   16.2    (3.8)
Commercial real estate   14.1    37.5    51.6 
Construction   (1.6)   8.7    7.1 
Residential:         
Residential mortgage   12.7    (5.5)   7.2 
Home equity line   3.5    0.8    4.3 
Consumer   (3.0)   0.5    (2.5)
Lease financing   0.7    1.4    2.1 
Total Loans and Leases   6.4    59.6    66.0 
Other Earning Assets      (0.5)   (0.5)
Total Change in Interest Income   23.3    92.7    116.0 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings      16.7    16.7 
Money Market   0.1    14.4    14.5 
Time   (0.8)   4.9    4.1 
Total Interest-Bearing Deposits   (0.7)   36.0    35.3 
Federal Funds Purchased   0.5       0.5 
Long-Term Borrowings   (2.5)   (2.4)   (4.9)
Total Change in Interest Expense   (2.7)   33.6    30.9 
Change in Net Interest Income $ 26.0  $ 59.1  $ 85.1 


          
Loans and Leases        Table 9
  December 31,  September 30,  December 31, 
(dollars in thousands) 2022    2022    2021
Commercial and industrial:         
Commercial and industrial excluding Paycheck Protection Program loans $ 2,217,604 $2,017,095 $1,870,657
Paycheck Protection Program loans   18,293  26,712  216,442
Total commercial and industrial   2,235,897  2,043,807  2,087,099
Commercial real estate   4,132,309  4,103,310  3,639,623
Construction   844,643  765,862  813,969
Residential:         
Residential mortgage   4,302,788  4,252,041  4,083,367
Home equity line   1,055,351  1,010,631  876,608
Total residential   5,358,139  5,262,672  4,959,975
Consumer   1,222,934  1,218,885  1,229,939
Lease financing   298,090  305,838  231,394
Total loans and leases $ 14,092,012 $13,700,374 $12,961,999


          
Deposits        Table 10
  December 31,  September 30,  December 31, 
(dollars in thousands) 2022    2022    2021
Demand $ 8,864,646 $9,317,093 $9,393,863
Savings   6,382,910  6,724,783  6,612,775
Money Market   3,965,423  4,150,940  4,033,070
Time   2,476,050  1,898,922  1,776,438
Total Deposits $ 21,689,029 $22,091,738 $21,816,146


          
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More        Table 11
  December 31,  September 30,  December 31, 
(dollars in thousands) 2022    2022    2021
Non-Performing Assets         
Non-Accrual Loans and Leases         
Commercial Loans:         
Commercial and industrial $ 1,215 $1,528 $718
Commercial real estate   727  727  727
Total Commercial Loans   1,942  2,255  1,445
Residential Loans:         
Residential mortgage   6,166  6,028  5,637
Home equity line   3,797    
Total Residential Loans   9,963  6,028  5,637
Total Non-Accrual Loans and Leases   11,905  8,283  7,082
Other Real Estate Owned   91  139  175
Total Non-Performing Assets $ 11,996 $8,422 $7,257
          
Accruing Loans and Leases Past Due 90 Days or More         
Commercial Loans:         
Commercial and industrial $ 291 $1,445 $740
Construction    390  
Total Commercial Loans   291  1,835  740
Residential Loans:         
Residential mortgage   58    987
Home equity line    1,832  3,681
Total Residential Loans   58  1,832  4,668
Consumer   2,885  1,976  1,800
Total Accruing Loans and Leases Past Due 90 Days or More $ 3,234 $5,643 $7,208
          
Restructured Loans on Accrual Status and Not Past Due 90 Days or More $ 25,399 $27,342 $34,893
Total Loans and Leases $ 14,092,012 $13,700,374 $12,961,999


                 
Allowance for Credit Losses and Reserve for Unfunded Commitments Table 12
  For the Three Months Ended  For the Year Ended  
  December 31,  September 30,  December 31,  December 31,  December 31,  
(dollars in thousands) 2022
 2022
 2021
 2022
 2021
 
Balance at Beginning of Period $ 178,304  $177,900  $193,768    187,584   239,057  
Loans and Leases Charged-Off                
Commercial Loans:                
Commercial and industrial   (735)  (328)  (4,432)   (2,012)  (5,949) 
Commercial real estate     (750)      (750)  (66) 
Total Commercial Loans   (735)  (1,078)  (4,432)   (2,762)  (6,015) 
Residential Loans:                
Residential mortgage   (102)  (1)  (534)   (103)  (632) 
Home equity line   (12)     (107)   (1,175)  (342) 
Total Residential Loans   (114)  (1)  (641)   (1,278)  (974) 
Consumer   (5,094)  (3,986)  (3,250)   (16,848)  (16,634) 
Total Loans and Leases Charged-Off   (5,943)  (5,065)  (8,323)   (20,888)  (23,623) 
Recoveries on Loans and Leases Previously Charged-Off                
Commercial Loans:                
Commercial and industrial   303   240   244    897   867  
Commercial real estate        9    14   39  
Construction        100      266  
Lease financing            60     
Total Commercial Loans   303   240   353    971   1,172  
Residential Loans:                
Residential mortgage   173   37   15    418   261  
Home equity line   138   356   28    713   117  
Total Residential Loans   311   393   43    1,131   378  
Consumer   1,804   1,653   1,743    7,545   9,600  
Total Recoveries on Loans and Leases Previously Charged-Off   2,418   2,286   2,139    9,647   11,150  
Net Loans and Leases Charged-Off   (3,525)  (2,779)  (6,184)   (11,241)  (12,473) 
Provision for Credit Losses   2,956   3,183       1,392   (39,000) 
Balance at End of Period $ 177,735  $178,304  $187,584  $ 177,735  $187,584  
Components:                
Allowance for Credit Losses $ 143,900  $148,163  $157,262  $ 143,900  $157,262  
Reserve for Unfunded Commitments   33,835   30,141   30,322    33,835   30,322  
Total Allowance for Credit Losses and Reserve for Unfunded Commitments $ 177,735  $178,304  $187,584  $ 177,735  $187,584  
Average Loans and Leases Outstanding $ 13,876,136  $13,491,428  $12,814,316  $ 13,314,821  $13,034,295  
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)   0.10 % 0.08 % 0.19 %  0.08 % 0.10 %
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding   1.02 % 1.08 % 1.21 %  1.02 % 1.21 %
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases  12.09x  17.89x  22.21x  12.09x  22.21x 

(1)   Annualized for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021.


                            
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) 2022 2021 2020 2019 2018 Prior Cost Basis Cost Basis Total
Commercial Lending                           
Commercial and Industrial                           
Risk rating:                           
Pass $ 359,881 $ 422,567 $ 54,656 $ 170,222 $ 51,476 $ 137,257 $ 894,384 $ 15,715 $ 2,106,158
Special Mention   2,059   240   1,371   2,643   184   1,431   22,897   378   31,203
Substandard   625   289   1,117   1,092   668   885   14,733   65   19,474
Other (1)   17,679   7,721   4,329   3,965   1,881   1,167   42,320     79,062
Total Commercial and Industrial   380,244   430,817   61,473   177,922   54,209   140,740   974,334   16,158   2,235,897
                            
Commercial Real Estate                           
Risk rating:                           
Pass   889,583   695,882   319,838   565,587   395,474   1,173,163   48,081     4,087,608
Special Mention   170     555   14,878   512   11,398   675     28,188
Substandard       173     1,704   14,485       16,362
Other (1)             151       151
Total Commercial Real Estate   889,753   695,882   320,566   580,465   397,690   1,199,197   48,756     4,132,309
                            
Construction                           
Risk rating:                           
Pass   124,464   261,536   96,423   97,000   88,973   84,704   25,957     779,057
Special Mention         221           221
Substandard           21   490       511
Other (1)   29,694   21,339   4,686   2,201   3,784   2,196   954     64,854
Total Construction   154,158   282,875   101,109   99,422   92,778   87,390   26,911     844,643
                            
Lease Financing                           
Risk rating:                           
Pass   113,563   24,052   43,497   37,502   6,004   67,687       292,305
Special Mention     411   2,498   1,299           4,208
Substandard       197   12   11   1,357       1,577
Total Lease Financing   113,563   24,463   46,192   38,813   6,015   69,044       298,090
                            
Total Commercial Lending $ 1,537,718 $ 1,434,037 $ 529,340 $ 896,622 $ 550,692 $ 1,496,371 $ 1,050,001 $ 16,158 $ 7,510,939


                            
                       Revolving   
                       Loans   
                       Converted   
  Term Loans Revolving to Term   
  Amortized Cost Basis by Origination Year Loans Loans   
(continued)                   Amortized Amortized   
(dollars in thousands) 2022 2021 2020 2019 2018 Prior Cost Basis Cost Basis Total
Residential Lending                           
Residential Mortgage                           
FICO:                           
740 and greater $ 557,636 $ 1,064,444 $ 560,463 $ 245,241 $ 165,258 $ 920,100 $ $ $ 3,513,142
680 - 739   73,929   112,672   82,416   40,355   22,126   130,508       462,006
620 - 679   12,320   13,804   9,881   3,649   3,054   35,441       78,149
550 - 619   2,455   2,246   1,791   263   601   6,955       14,311
Less than 550     1,321   367     966   5,304       7,958
No Score (3)   22,289   14,671   6,820   10,599   15,921   47,245       117,545
Other (2)   18,970   18,211   15,287   9,201   9,124   29,128   9,202   554   109,677
Total Residential Mortgage   687,599   1,227,369   677,025   309,308   217,050   1,174,681   9,202   554   4,302,788
                            
Home Equity Line                           
FICO:                           
740 and greater               817,123   2,059   819,182
680 - 739               171,117   2,714   173,831
620 - 679               45,368   2,100   47,468
550 - 619               7,485   1,029   8,514
Less than 550               1,151   481   1,632
No Score (3)               4,724     4,724
Total Home Equity Line               1,046,968   8,383   1,055,351
Total Residential Lending   687,599   1,227,369   677,025   309,308   217,050   1,174,681   1,056,170   8,937   5,358,139
                            
Consumer Lending                           
FICO:                           
740 and greater   200,887   111,047   53,534   43,912   24,951   8,432   125,126   185   568,074
680 - 739   99,787   67,140   37,260   31,751   15,874   7,665   72,101   514   332,092
620 - 679   25,949   29,587   14,226   16,872   9,672   6,488   31,854   937   135,585
550 - 619   3,017   5,475   5,226   8,056   5,396   3,924   11,269   854   43,217
Less than 550   656   1,351   2,286   3,779   1,869   1,593   3,541   443   15,518
No Score (3)   3,205   258     51   24   29   38,805   227   42,599
Other (2)   1,615   4,082   353   1,368       78,430   1   85,849
Total Consumer Lending   335,116   218,940   112,885   105,789   57,786   28,131   361,126   3,161   1,222,934
                            
Total Loans and Leases $ 2,560,433 $ 2,880,346 $ 1,319,250 $ 1,311,719 $ 825,528 $ 2,699,183 $ 2,467,297 $ 28,256 $ 14,092,012

(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 Year Ended  
  December 31,  September 30,  December 31,  December 31,  
(dollars in thousands, except per share amounts) 2022 2022 2021 2022 2021 
Income Statement Data:                
Net income $ 79,588 $69,018 $57,022 $ 265,685 $265,735 
                 
Average total stockholders' equity $ 2,213,030 $2,267,152 $2,675,513 $ 2,321,606 $2,708,370 
Less: average goodwill   995,492  995,492  995,492   995,492  995,492 
Average tangible stockholders' equity $ 1,217,538 $1,271,660 $1,680,021 $ 1,326,114 $1,712,878 
                 
Average total assets $ 24,575,648 $24,957,042 $25,650,505 $ 24,964,422 $24,426,258 
Less: average goodwill   995,492  995,492  995,492   995,492  995,492 
Average tangible assets $ 23,580,156 $23,961,550 $24,655,013 $ 23,968,930 $23,430,766 
                 
Return on average total stockholders' equity(1)   14.27% 12.08% 8.46%  11.44% 9.81%
Return on average tangible stockholders' equity (non-GAAP)(1)   25.93% 21.53% 13.47%  20.03% 15.51%
                 
Return on average total assets(1)   1.28% 1.10% 0.88%  1.06% 1.09%
Return on average tangible assets (non-GAAP)(1)   1.34% 1.14% 0.92%  1.11% 1.13%


           
         
  As of As of As of 
  December 31,  September 30,  December 31,  
(dollars in thousands, except per share amounts) 2022 2022 2021 
Balance Sheet Data:          
Total stockholders' equity $ 2,269,005 $2,200,651 $2,656,912 
Less: goodwill   995,492  995,492  995,492 
Tangible stockholders' equity $ 1,273,513 $1,205,159 $1,661,420 
           
Total assets $ 24,577,223 $24,870,272 $24,992,410 
Less: goodwill   995,492  995,492  995,492 
Tangible assets $ 23,581,731 $23,874,780 $23,996,918 
           
Shares outstanding   127,363,327  127,357,680  127,502,472 
           
Total stockholders' equity to total assets   9.23% 8.85% 10.63%
Tangible stockholders' equity to tangible assets (non-GAAP)   5.40% 5.05% 6.92%
           
Book value per share $ 17.82 $17.28 $20.84 
Tangible book value per share (non-GAAP) $ 10.00 $9.46 $13.03 

(1)   Annualized for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021.


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