First Hawaiian, Inc.NASDAQ: FHB

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

· Issued by First Hawaiian, Inc. via GlobeNewswire

Key figures

  • Net income of $59.4 million , or $0.46 per diluted share
  • Total loans and leases increased $371.0 million versus prior quarter.
  • Total deposits increased $331.0 million versus prior quarter
  • Net interest margin increased 18 basis points to 2.60%
  • Recorded a $1.0 million provision for credit losses

On 6ix: 6ix.com/news/first-hawaiian-inc-reports-second-quarter-2022-financial-results-and-declares

Watch First Hawaiian explain itFirst Hawaiian (NASDAQ:FHB) Q2 2022 Earnings Call · Replay · Jul 29, 2022 · From 1:22 · Hawaii Economic Update and Quarterly Performance Highlights

HONOLULU, July 29, 2022 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended June 30, 2022.

“I’m pleased to report that we had a very strong second quarter as the bank continued to perform well,” said Bob Harrison, Chairman, President and CEO. “We had good loan and deposit growth, credit quality remained excellent, and we successfully converted to our new core operating system.”

On July 27, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on September 2, 2022, to stockholders of record at the close of business on August 22, 2022.

Second Quarter 2022 Highlights:

  • Net income of $59.4 million, or $0.46 per diluted share
  • Total loans and leases increased $371.0 million versus prior quarter.
  • Total deposits increased $331.0 million versus prior quarter
  • Net interest margin increased 18 basis points to 2.60%
  • Recorded a $1.0 million provision for credit losses
  • Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet

Total assets were $25.4 billion as of June 30, 2022, compared to $25.0 billion as of March 31, 2022.

Gross loans and leases were $13.3 billion as of June 30, 2022, an increase of $371.0 million, or 2.9%, from $12.9 billion as of March 31, 2022.

Total deposits were $22.6 billion as of June 30, 2022, an increase of $331.0 million, or 1.5%, from $22.3 billion as of March 31, 2022.

Net Interest Income

Net interest income for the second quarter of 2022 was $145.1 million, an increase of $11.3 million, or 8.4%, compared to $133.9 million for the prior quarter.

The net interest margin was 2.60% in the second quarter of 2022, an increase of 18 basis points compared to 2.42% in the prior quarter.

Provision Expense

During the quarter ended June 30, 2022, we recorded a $1.0 million provision for credit losses. In the quarter ended March 31, 2022, we recorded a $5.7 million negative provision for credit losses.

Noninterest Income

Noninterest income was $44.1 million in the second quarter of 2022, an increase of $2.7 million compared to noninterest income of $41.4 million in the prior quarter.

Noninterest Expense

Noninterest expense was $109.2 million in the second quarter of 2022, an increase of $5.1 million compared to noninterest expense of $104.0 million in the prior quarter.

The efficiency ratio was 57.3% and 59.0% for the quarters ended June 30, 2022 and March 31, 2022, respectively.

Taxes

The effective tax rate was 25.0% for the quarters ended June 30, 2022 and March 31, 2022.

Asset Quality

The allowance for credit losses was $148.9 million, or 1.12% of total loans and leases, as of June 30, 2022, compared to $150.3 million, or 1.17% of total loans and leases, as of March 31, 2022. The reserve for unfunded commitments was $29.0 million as of June 30, 2022 and March 31, 2022. Net charge-offs were $2.3 million, or 0.07% of average loans and leases on an annualized basis, for the quarter ended June 30, 2022, compared to net charge-offs of $2.6 million, or 0.08% of average loans and leases on an annualized basis, for the quarter ended March 31, 2022. Total non-performing assets were $7.9 million, or 0.06% of total loans and leases and other real estate owned, on June 30, 2022, compared to total non-performing assets of $8.6 million, or 0.07% of total loans and leases and other real estate owned, on March 31, 2022.

Capital

Total stockholders' equity was $2.3 billion on June 30, 2022 and March 31, 2022.

The tier 1 leverage, common equity tier 1 and total capital ratios were 7.54%, 11.98%, and 13.14%, respectively, on June 30, 2022, compared with 7.50%, 12.27% and 13.48%, respectively, on March 31, 2022.

The Company repurchased 0.3 million shares of common stock at a total cost of $7.0 million under the stock repurchase program in the second quarter. The average cost was $24.09 per share repurchased. Remaining buyback authority under the stock repurchase program was $68.0 million on June 30, 2022.

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.

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/BI2ebfe69a17064bc89a14e15354a8e329, 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. 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 Report on Form 10-Q for the quarter ended March 31, 2022.

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) 525-6268[email protected]Media Contact:Lindsay Chambers(808) 525-6254[email protected]
Financial HighlightsTable 1
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,
(dollars in thousands, except per share data)20222022202120222021
Operating Results:
Net interest income$145,147$133,872$131,481$279,019$260,639
Provision for credit losses1,000(5,747)(35,000)(4,747)(35,000)
Noninterest income44,13741,38049,37185,51793,239
Noninterest expense109,175104,04299,388213,217195,694
Net income59,36057,71986,741117,079144,434
Basic earnings per share0.460.450.670.921.11
Diluted earnings per share0.460.450.670.911.11
Dividends declared per share0.260.260.260.520.52
Dividend payout ratio56.52%57.78%38.81%57.14%46.85%
Performance Ratios(1):
Net interest margin2.60%2.42%2.46%2.51%2.50%
Efficiency ratio57.33%59.04%54.74%58.15%55.12%
Return on average total assets0.94%0.93%1.45%0.94%1.24%
Return on average tangible assets (non-GAAP)(2)0.98%0.97%1.51%0.98%1.30%
Return on average total stockholders' equity10.52%9.19%12.92%9.82%10.75%
Return on average tangible stockholders' equity (non-GAAP)(2)18.79%15.08%20.51%16.76%16.99%
Average Balances:
Average loans and leases$13,058,558$12,819,612$13,205,086$12,939,745$13,223,575
Average earning assets22,520,60522,463,20921,539,26422,492,06621,010,643
Average assets25,250,17625,080,45324,015,06525,165,78323,482,839
Average deposits22,401,55821,960,81920,638,01522,182,40620,073,676
Average stockholders' equity2,262,6542,547,8652,691,9662,404,4712,709,735
Market Value Per Share:
Closing22.8027.8928.3422.8028.34
High28.4431.1629.8531.1630.80
Low21.4926.9324.7521.4923.14
As ofAs ofAs ofAs of
June 30,March 31,December 31,June 30,
(dollars in thousands, except per share data)2022202220212021
Balance Sheet Data:
Loans and leases$13,262,781$12,891,743$12,961,999$13,103,785
Total assets25,377,53325,042,72024,992,41024,246,328
Total deposits22,601,45422,270,43021,816,14620,835,115
Long-term borrowings———200,000
Total stockholders' equity2,252,6112,285,1492,656,9122,731,341
Per Share of Common Stock:
Book value$17.67$17.90$20.84$21.17
Tangible book value (non-GAAP)(2)9.8610.1013.0313.45
Asset Quality Ratios:
Non-accrual loans and leases / total loans and leases0.06%0.07%0.05%0.07%
Allowance for credit losses for loans and leases / total loans and leases1.12%1.17%1.21%1.29%
Capital Ratios:
Common Equity Tier 1 Capital Ratio11.98%12.27%12.24%12.76%
Tier 1 Capital Ratio11.98%12.27%12.24%12.76%
Total Capital Ratio13.14%13.48%13.49%14.01%
Tier 1 Leverage Ratio7.54%7.50%7.24%7.68%
Total stockholders' equity to total assets8.88%9.13%10.63%11.26%
Tangible stockholders' equity to tangible assets (non-GAAP)(2)5.16%5.36%6.92%7.47%
Non-Financial Data:
Number of branches51515454
Number of ATMs297298299294
Number of Full-Time Equivalent Employees2,0212,0222,0362,087
(1)Except for the efficiency ratio, amounts are annualized for the three and six months ended June 30, 2022 and 2021 and the three months ended 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 14, GAAP to Non-GAAP Reconciliation.
Consolidated Statements of IncomeTable 2
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,
(dollars in thousands, except per share amounts)20222022202120222021
Interest income
Loans and lease financing$111,916$103,732$110,919$215,648$221,858
Available-for-sale investment securities16,64332,10724,63748,75047,783
Held-to-maturity investment securities18,289——18,289—
Other2,8967826663,6781,157
Total interest income149,744136,621136,222286,365270,798
Interest expense
Deposits4,5972,7493,3637,3467,419
Short-term and long-term borrowings——1,378—2,740
Total interest expense4,5972,7494,7417,34610,159
Net interest income145,147133,872131,481279,019260,639
Provision for credit losses1,000(5,747)(35,000)(4,747)(35,000)
Net interest income after provision for credit losses144,147139,619166,481283,766295,639
Noninterest income
Service charges on deposit accounts6,8437,5016,63214,34413,350
Credit and debit card fees17,05614,85016,74631,90631,297
Other service charges and fees9,0189,65410,30318,67219,149
Trust and investment services income8,7598,8838,70717,64217,199
Bank-owned life insurance(859)(417)3,104(1,276)5,493
Investment securities (losses) gains, net——102—102
Other3,3209093,7774,2296,649
Total noninterest income44,13741,38049,37185,51793,239
Noninterest expense
Salaries and employee benefits49,90248,22645,98298,12889,918
Contracted services and professional fees18,61717,14716,51635,76433,704
Occupancy7,3347,4107,31414,74414,484
Equipment7,7545,9776,36213,73111,853
Regulatory assessment and fees2,3012,2241,8264,5253,860
Advertising and marketing1,9942,0281,4694,0223,060
Card rewards program7,2856,8836,26214,16811,097
Other13,98814,14713,65728,13527,718
Total noninterest expense109,175104,04299,388213,217195,694
Income before provision for income taxes79,10976,957116,464156,066193,184
Provision for income taxes19,74919,23829,72338,98748,750
Net income$59,360$57,719$86,741$117,079$144,434
Basic earnings per share$0.46$0.45$0.67$0.92$1.11
Diluted earnings per share$0.46$0.45$0.67$0.91$1.11
Basic weighted-average outstanding shares127,672,244127,556,242129,392,339127,614,564129,661,228
Diluted weighted-average outstanding shares128,014,777128,121,126129,828,847128,108,630130,164,762
Consolidated Balance SheetsTable 3
June 30,March 31,December 31,June 30,
(dollars in thousands)2022202220212021
Assets
Cash and due from banks$279,629$274,022$246,716$347,861
Interest-bearing deposits in other banks1,254,0471,352,1381,011,7531,558,437
Investment securities:
Available-for-sale, at fair value (amortized cost: $4,267,809 as of June 30, 2022, $8,733,170 as of March 31, 2022, $8,560,733 as of December 31, 2021 and $6,951,153 as of June 30, 2021)3,967,7468,062,3848,428,0326,953,930
Held-to-maturity, at amortized cost (fair value: $3,910,780 as of June 30, 2022 and nil as of March 31, 2022, December 31, 2021 and June 30, 2021)4,093,215———
Loans held for sale180—5381,241
Loans and leases13,262,78112,891,74312,961,99913,103,785
Less: allowance for credit losses148,942150,280157,262169,148
Net loans and leases13,113,83912,741,46312,804,73712,934,637
Premises and equipment, net310,047315,766318,448319,452
Other real estate owned and repossessed personal property——175—
Accrued interest receivable63,24061,56163,15866,734
Bank-owned life insurance470,542471,401471,819466,402
Goodwill995,492995,492995,492995,492
Mortgage servicing rights7,1527,6508,30210,007
Other assets822,404760,843643,240592,135
Total assets$25,377,533$25,042,720$24,992,410$24,246,328
Liabilities and Stockholders' Equity
Deposits:
Interest-bearing$12,990,571$12,504,821$12,422,283$12,245,193
Noninterest-bearing9,610,8839,765,6099,393,8638,589,922
Total deposits22,601,45422,270,43021,816,14620,835,115
Long-term borrowings———200,000
Retirement benefits payable134,151134,323134,491144,101
Other liabilities389,317352,818384,861335,771
Total liabilities23,124,92222,757,57122,335,49821,514,987
Stockholders' equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 140,943,908 / 127,451,087 shares as of June 30, 2022, issued/outstanding: 140,875,595 / 127,686,307 shares as of March 31, 2022, issued/outstanding: 140,581,715 / 127,502,472 shares as of December 31, 2021 and issued/outstanding: 140,542,398 / 129,019,871 shares as of June 30, 2021)1,4091,4091,4061,405
Additional paid-in capital2,533,4072,530,7952,527,6632,520,790
Retained earnings654,777628,642604,534550,511
Accumulated other comprehensive loss, net(571,457)(517,502)(121,693)(29,702)
Treasury stock (13,492,821 shares as of June 30, 2022, 13,189,288 shares as of March 31, 2022, 13,079,243 shares as of December 31, 2021 and 11,522,527 shares as of June 30, 2021)(365,525)(358,195)(354,998)(311,663)
Total stockholders' equity2,252,6112,285,1492,656,9122,731,341
Total liabilities and stockholders' equity$25,377,533$25,042,720$24,992,410$24,246,328
Average Balances and Interest RatesTable 4
Three Months EndedThree Months EndedThree Months Ended
June 30, 2022March 31, 2022June 30, 2021
AverageIncome/Yield/AverageIncome/Yield/AverageIncome/Yield/
(dollars in millions)BalanceExpenseRateBalanceExpenseRateBalanceExpenseRate
Earning Assets
Interest-Bearing Deposits in Other Banks$1,297.3$2.80.85%$1,138.3$0.60.20%$1,503.0$0.40.10%
Available-for-Sale Investment Securities
Taxable3,946.416.61.687,800.329.21.506,298.322.51.43
Non-Taxable8.40.15.26636.73.62.32468.42.72.30
Held-to-Maturity Investment Securities
Taxable3,533.615.01.70——————
Non-Taxable607.04.12.71——————
Total Investment Securities8,095.435.81.778,437.032.81.566,766.725.21.49
Loans Held for Sale0.3—5.061.2—2.022.0—1.44
Loans and Leases(1)
Commercial and industrial1,951.315.03.091,973.114.63.012,882.121.12.94
Commercial real estate3,808.930.73.233,632.225.82.883,419.725.32.97
Construction711.36.33.57766.95.73.03800.96.33.15
Residential:
Residential mortgage4,183.036.73.514,111.034.83.383,765.434.03.62
Home equity line945.75.92.49891.65.52.48812.65.52.72
Consumer1,218.015.55.091,218.615.65.191,277.916.95.32
Lease financing240.42.13.53226.21.93.42246.51.93.06
Total Loans and Leases13,058.6112.23.4412,819.6103.93.2713,205.1111.03.37
Other Earning Assets69.00.10.7967.10.21.3162.50.31.91
Total Earning Assets(2)22,520.6150.92.6822,463.2137.52.4721,539.3136.92.55
Cash and Due from Banks300.8292.1290.7
Other Assets2,428.82,325.22,185.1
Total Assets$25,250.2$25,080.5$24,015.1
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings$6,971.3$1.70.10%$6,668.4$0.50.03%6,361.8$0.50.03%
Money Market4,127.41.40.144,048.90.50.053,783.10.50.06
Time1,671.41.50.361,748.51.70.392,034.52.30.45
Total Interest-Bearing Deposits12,770.14.60.1412,465.82.70.0912,179.43.30.11
Long-Term Borrowings——————200.01.42.76
Total Interest-Bearing Liabilities12,770.14.60.1412,465.82.70.0912,379.44.70.15
Net Interest Income$146.3$134.8$132.2
Interest Rate Spread2.54%2.38%2.40%
Net Interest Margin2.60%2.42%2.46%
Noninterest-Bearing Demand Deposits9,631.49,495.08,458.6
Other Liabilities586.0571.8485.1
Stockholders' Equity2,262.72,547.92,692.0
Total Liabilities and Stockholders' Equity$25,250.2$25,080.5$24,015.1
(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 $1.2 million, $1.0 million and $0.7 million for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively.
Average Balances and Interest RatesTable 5
Six Months EndedSix Months Ended
June 30, 2022June 30, 2021
AverageIncome/Yield/AverageIncome/Yield/
(dollars in millions)BalanceExpenseRateBalanceExpenseRate
Earning Assets
Interest-Bearing Deposits in Other Banks$1,218.3$3.30.55%$1,222.4$0.60.10%
Available-for-Sale Investment Securities
Taxable5,862.745.71.566,125.144.61.46
Non-Taxable320.83.92.41373.74.02.11
Held-to-Maturity Investment Securities
Taxable1,776.615.01.69———
Non-Taxable305.24.12.71———
Total Investment Securities8,265.368.71.666,498.848.61.49
Loans Held for Sale0.8—2.605.60.12.28
Loans and Leases(1)
Commercial and industrial1,962.129.73.052,954.041.52.84
Commercial real estate3,721.056.43.063,402.650.22.98
Construction738.912.13.30774.012.13.16
Residential:
Residential mortgage4,147.271.53.453,730.968.73.68
Home equity line918.811.32.48817.311.22.76
Consumer1,218.331.15.141,300.734.75.37
Lease financing233.44.03.48244.13.73.04
Total Loans and Leases12,939.7216.13.3613,223.6222.13.38
Other Earning Assets68.00.41.0560.20.51.85
Total Earning Assets(2)22,492.1288.52.5821,010.6271.92.60
Cash and Due from Banks296.5292.3
Other Assets2,377.22,179.9
Total Assets$25,165.8$23,482.8
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings$6,820.7$2.20.07%$6,169.5$1.10.04%
Money Market4,088.32.00.093,657.31.00.05
Time1,709.83.20.382,160.85.30.49
Total Interest-Bearing Deposits12,618.87.40.1211,987.67.40.12
Long-Term Borrowings———200.02.72.76
Total Interest-Bearing Liabilities12,618.87.40.1212,187.610.10.17
Net Interest Income$281.1$261.8
Interest Rate Spread2.46%2.43%
Net Interest Margin2.51%2.50%
Noninterest-Bearing Demand Deposits9,563.68,086.1
Other Liabilities578.9499.4
Stockholders' Equity2,404.52,709.7
Total Liabilities and Stockholders' Equity$25,165.8$23,482.8
(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 $2.1 million and $1.1 million for the six months ended June 30, 2022 and 2021, respectively.
Analysis of Change in Net Interest IncomeTable 6
Three Months Ended June 30, 2022
Compared to March 31, 2022
(dollars in millions)VolumeRateTotal
Change in Interest Income:
Interest-Bearing Deposits in Other Banks$0.1$2.1$2.2
Available-for-Sale Investment Securities
Taxable(15.8)3.2(12.6)
Non-Taxable(5.6)2.1(3.5)
Held-to-Maturity Investment Securities
Taxable15.0—15.0
Non-Taxable4.1—4.1
Total Investment Securities(2.3)5.33.0
Loans and Leases
Commercial and industrial(0.1)0.50.4
Commercial real estate1.43.54.9
Construction(0.4)1.00.6
Residential:
Residential mortgage0.61.31.9
Home equity line0.4—0.4
Consumer—(0.1)(0.1)
Lease financing0.10.10.2
Total Loans and Leases2.06.38.3
Other Earning Assets—(0.1)(0.1)
Total Change in Interest Income(0.2)13.613.4
Change in Interest Expense:
Interest-Bearing Deposits
Savings0.11.11.2
Money Market—0.90.9
Time(0.1)(0.1)(0.2)
Total Interest-Bearing Deposits—1.91.9
Total Change in Interest Expense—1.91.9
Change in Net Interest Income$(0.2)$11.7$11.5
Analysis of Change in Net Interest IncomeTable 7
Three Months Ended June 30, 2022
Compared to June 30, 2021
(dollars in millions)VolumeRateTotal
Change in Interest Income:
Interest-Bearing Deposits in Other Banks$—$2.4$2.4
Available-for-Sale Investment Securities
Taxable(9.4)3.5(5.9)
Non-Taxable(4.1)1.5(2.6)
Held-to-Maturity Investment Securities
Taxable15.0—15.0
Non-Taxable4.1—4.1
Total Investment Securities5.65.010.6
Loans and Leases
Commercial and industrial(7.1)1.0(6.1)
Commercial real estate3.02.45.4
Construction(0.8)0.8—
Residential:
Residential mortgage3.7(1.0)2.7
Home equity line0.9(0.5)0.4
Consumer(0.7)(0.7)(1.4)
Lease financing(0.1)0.30.2
Total Loans and Leases(1.1)2.31.2
Other Earning Assets—(0.2)(0.2)
Total Change in Interest Income4.59.514.0
Change in Interest Expense:
Interest-Bearing Deposits
Savings0.11.11.2
Money Market0.10.80.9
Time(0.4)(0.4)(0.8)
Total Interest-Bearing Deposits(0.2)1.51.3
Long-Term Borrowings(0.7)(0.7)(1.4)
Total Change in Interest Expense(0.9)0.8(0.1)
Change in Net Interest Income$5.4$8.7$14.1
Analysis of Change in Net Interest IncomeTable 8
Six Months Ended June 30, 2022
Compared to June 30, 2021
(dollars in millions)VolumeRateTotal
Change in Interest Income:
Interest-Bearing Deposits in Other Banks$—$2.7$2.7
Available-for-Sale Investment Securities
Taxable(1.9)3.01.1
Non-Taxable(0.6)0.5(0.1)
Held-to-Maturity Investment Securities
Taxable15.0—15.0
Non-Taxable4.1—4.1
Total Investment Securities16.63.520.1
Loans Held for Sale(0.1)—(0.1)
Loans and Leases
Commercial and industrial(14.7)2.9(11.8)
Commercial real estate4.81.46.2
Construction(0.5)0.5—
Residential:
Residential mortgage7.2(4.4)2.8
Home equity line1.3(1.2)0.1
Consumer(2.1)(1.5)(3.6)
Lease financing(0.2)0.50.3
Total Loans and Leases(4.2)(1.8)(6.0)
Other Earning Assets0.1(0.2)(0.1)
Total Change in Interest Income12.44.216.6
Change in Interest Expense:
Interest-Bearing Deposits
Savings0.11.01.1
Money Market0.20.81.0
Time(1.0)(1.1)(2.1)
Total Interest-Bearing Deposits(0.7)0.7—
Long-Term Borrowings(1.4)(1.3)(2.7)
Total Change in Interest Expense(2.1)(0.6)(2.7)
Change in Net Interest Income$14.5$4.8$19.3
Loans and LeasesTable 9
June 30,March 31,December 31,June 30,
(dollars in thousands)2022202220212021
Commercial and industrial:
Commercial and industrial excluding Paycheck Protection Program loans$1,898,899$1,817,346$1,870,657$1,753,444
Paycheck Protection Program loans43,233106,188216,442811,103
Total commercial and industrial1,942,1321,923,5342,087,0992,564,547
Commercial real estate3,956,8283,759,9803,639,6233,528,068
Construction727,771708,300813,969853,865
Residential:
Residential mortgage4,212,7684,153,8244,083,3673,821,407
Home equity line971,569918,101876,608825,368
Total residential5,184,3375,071,9254,959,9754,646,775
Consumer1,207,0511,204,8341,229,9391,267,559
Lease financing244,662223,170231,394242,971
Total loans and leases$13,262,781$12,891,743$12,961,999$13,103,785
DepositsTable 10
June 30,March 31,December 31,June 30,
(dollars in thousands)2022202220212021
Demand$9,610,883$9,765,609$9,393,863$8,589,922
Savings7,243,1856,812,7586,612,7756,421,053
Money Market4,079,7063,990,2254,033,0703,920,477
Time1,667,6801,701,8381,776,4381,903,663
Total Deposits$22,601,454$22,270,430$21,816,146$20,835,115
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or MoreTable 11
June 30,March 31,December 31,June 30,
(dollars in thousands)2022202220212021
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial Loans:
Commercial and industrial$682$707$718$828
Commercial real estate727727727937
Lease financing—75——
Total Commercial Loans1,4091,5091,4451,765
Residential Loans:
Residential mortgage6,4507,0925,6377,140
Total Residential Loans6,4507,0925,6377,140
Total Non-Accrual Loans and Leases7,8598,6017,0828,905
Other Real Estate Owned——175—
Total Non-Performing Assets$7,859$8,601$7,257$8,905
Accruing Loans and Leases Past Due 90 Days or More
Commercial Loans:
Commercial and industrial$2,230$591$740$494
Commercial real estate176———
Construction352——60
Total Commercial Loans2,758591740554
Residential Loans:
Residential mortgage75013987—
Home equity line1,0392,2523,6814,680
Total Residential Loans1,7892,2654,6684,680
Consumer1,2181,5881,8001,134
Total Accruing Loans and Leases Past Due 90 Days or More$5,765$4,444$7,208$6,368
Restructured Loans on Accrual Status and Not Past Due 90 Days or More$29,440$32,590$34,893$36,668
Total Loans and Leases$13,262,781$12,891,743$12,961,999$13,103,785
Allowance for Credit Losses and Reserve for Unfunded CommitmentsTable 12
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
(dollars in thousands)20222022202120222021
Balance at Beginning of Period$179,238$187,584$234,469187,584239,057
Loans and Leases Charged-Off
Commercial Loans:
Commercial and industrial(243)(706)(330)(949)(1,293)
Commercial real estate————(66)
Total Commercial Loans(243)(706)(330)(949)(1,359)
Residential Loans:
Residential mortgage————(98)
Home equity line(1,120)(43)—(1,163)—
Total Residential Loans(1,120)(43)—(1,163)(98)
Consumer(3,659)(4,109)(3,917)(7,768)(10,458)
Total Loans and Leases Charged-Off(5,022)(4,858)(4,247)(9,880)(11,915)
Recoveries on Loans and Leases Previously Charged-Off
Commercial Loans:
Commercial and industrial30153287354502
Commercial real estate—14121415
Construction————166
Lease financing60——60—
Total Commercial Loans36167299428683
Residential Loans:
Residential mortgage192161420831
Home equity line191283821962
Total Residential Loans383445242793
Consumer1,9402,1482,7974,0885,452
Total Recoveries on Loans and Leases Previously Charged-Off2,6842,2593,1484,9436,228
Net Loans and Leases Charged-Off(2,338)(2,599)(1,099)(4,937)(5,687)
Provision for Credit Losses1,000(5,747)(35,000)(4,747)(35,000)
Balance at End of Period$177,900$179,238$198,370$177,900$198,370
Components:
Allowance for Credit Losses$148,942$150,280$169,148$148,942$169,148
Reserve for Unfunded Commitments28,95828,95829,22228,95829,222
Total Allowance for Credit Losses and Reserve for Unfunded Commitments$177,900$179,238$198,370$177,900$198,370
Average Loans and Leases Outstanding$13,058,558$12,819,612$13,205,086$12,939,745$13,223,575
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)0.07%0.08%0.03%0.08%0.09%
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding1.12%1.17%1.29%1.12%1.29%
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases18.95x17.47x18.99x18.95x18.99x
(1)Annualized for the three and six months ended June 30, 2022 and 2021, and three months ended March 31, 2022.
Loans and Leases by Year of Origination and Credit Quality IndicatorTable 13
Revolving
Loans
Converted
Term LoansRevolvingto Term
Amortized Cost Basis by Origination YearLoansLoans
AmortizedAmortized
(dollars in thousands)20222021202020192018PriorCost BasisCost BasisTotal
Commercial Lending
Commercial and Industrial
Risk rating:
Pass$216,303$421,981$66,601$182,175$60,586$156,647$697,256$19,128$1,820,677
Special Mention2,8163161,6282,8227485,2951,07384115,539
Substandard—3201,1031,6051,01987916,21411421,254
Other (1)12,8079,61311,5315,3663,0751,57640,694—84,662
Total Commercial and Industrial231,926432,23080,863191,96865,428164,397755,23720,0831,942,132
Commercial Real Estate
Risk rating:
Pass516,062695,446338,391516,210459,3721,270,43884,174—3,880,093
Special Mention——56247,781—11,140695—60,178
Substandard——180—1,74214,4763—16,401
Other (1)—————156——156
Total Commercial Real Estate516,062695,446339,133563,991461,1141,296,21084,872—3,956,828
Construction
Risk rating:
Pass39,575193,588127,67785,471115,88188,50914,965—665,666
Special Mention———236—350——586
Substandard————351498——849
Other (1)13,22829,5296,0492,8493,9134,151951—60,670
Total Construction52,803223,117133,72688,556120,14593,50815,916—727,771
Lease Financing
Risk rating:
Pass41,65626,81349,88943,9897,80168,457——238,605
Special Mention—4572,6421,3581117——4,485
Substandard——19516141,347——1,572
Total Lease Financing41,65627,27052,72645,3637,82669,821——244,662
Total Commercial Lending$842,447$1,378,063$606,448$889,878$654,513$1,623,936$856,025$20,083$6,871,393
Revolving
Loans
Converted
Term LoansRevolvingto Term
Amortized Cost Basis by Origination YearLoansLoans
(continued)AmortizedAmortized
(dollars in thousands)20222021202020192018PriorCost BasisCost BasisTotal
Residential Lending
Residential Mortgage
FICO:
740 and greater$352,342$1,069,214$587,478$252,428$178,752$974,057$—$—$3,414,271
680 - 73946,224124,30679,42245,11721,882144,226——461,177
620 - 6795,30519,14314,2915,4053,89238,470——86,506
550 - 6191691,9432942262,0738,017——12,722
Less than 5502,0851,24260—3404,656——8,383
No Score (3)10,65214,8687,54413,47116,48854,373——117,396
Other (2)20,36519,44515,5809,5529,75731,3044,9991,311112,313
Total Residential Mortgage437,1421,250,161704,669326,199233,1841,255,1034,9991,3114,212,768
Home Equity Line
FICO:
740 and greater——————748,1482,227750,375
680 - 739——————157,0423,106160,148
620 - 679——————40,0702,45442,524
550 - 619——————9,2021,60110,803
Less than 550——————1,1594911,650
No Score (3)——————6,069—6,069
Total Home Equity Line——————961,6909,879971,569
Total Residential Lending437,1421,250,161704,669326,199233,1841,255,103966,68911,1905,184,337
Consumer Lending
FICO:
740 and greater115,911132,56566,82859,15538,00117,426117,266203547,355
680 - 73953,59080,24045,78341,39323,56213,94767,636566326,717
620 - 67911,76035,43017,74622,18013,92811,37430,0791,018143,515
550 - 6191,0006,5486,57610,4007,6526,80110,0441,02650,047
Less than 5503791,7582,9735,0222,5472,5253,04748318,734
No Score (3)1,087402952314537,53630339,465
Other (2)1,6754,2183581,674—2,15271,141—81,218
Total Consumer Lending185,402261,161140,273139,87685,72154,270336,7493,5991,207,051
Total Loans and Leases$1,464,991$2,889,385$1,451,390$1,355,953$973,418$2,933,309$2,159,463$34,872$13,262,781
(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 ReconciliationTable 14
For the Three Months EndedFor the Six Months Ended
June 30,March 31,June 30,June 30,
(dollars in thousands, except per share amounts)20222022202120222021
Income Statement Data:
Net income$59,360$57,719$86,741$117,079$144,434
Average total stockholders' equity$2,262,654$2,547,865$2,691,966$2,404,471$2,709,735
Less: average goodwill995,492995,492995,492995,492995,492
Average tangible stockholders' equity$1,267,162$1,552,373$1,696,474$1,408,979$1,714,243
Average total assets$25,250,176$25,080,453$24,015,065$25,165,783$23,482,839
Less: average goodwill995,492995,492995,492995,492995,492
Average tangible assets$24,254,684$24,084,961$23,019,573$24,170,291$22,487,347
Return on average total stockholders' equity(1)10.52%9.19%12.92%9.82%10.75%
Return on average tangible stockholders' equity (non-GAAP)(1)18.79%15.08%20.51%16.76%16.99%
Return on average total assets(1)0.94%0.93%1.45%0.94%1.24%
Return on average tangible assets (non-GAAP)(1)0.98%0.97%1.51%0.98%1.30%
As ofAs ofAs ofAs of
June 30,March 31,December 31,June 30,
(dollars in thousands, except per share amounts)2022202220212021
Balance Sheet Data:
Total stockholders' equity$2,252,611$2,285,149$2,656,912$2,731,341
Less: goodwill995,492995,492995,492995,492
Tangible stockholders' equity$1,257,119$1,289,657$1,661,420$1,735,849
Total assets$25,377,533$25,042,720$24,992,410$24,246,328
Less: goodwill995,492995,492995,492995,492
Tangible assets$24,382,041$24,047,228$23,996,918$23,250,836
Shares outstanding127,451,087127,686,307127,502,472129,019,871
Total stockholders' equity to total assets8.88%9.13%10.63%11.26%
Tangible stockholders' equity to tangible assets (non-GAAP)5.16%5.36%6.92%7.47%
Book value per share$17.67$17.90$20.84$21.17
Tangible book value per share (non-GAAP)$9.86$10.10$13.03$13.45
(1)Annualized for the three and six months ended June 30, 2022 and 2021, and three months ended March 31, 2022.

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