First Hawaiian, Inc.NASDAQ: FHB

First Hawaiian, Inc. Reports Second Quarter 2024 Financial Results and Declares Dividend

· Issued by First Hawaiian, Inc. via GlobeNewswire

Key figures

  • Net income of $61.9 million , or $0.48 per diluted share
  • Total loans and leases increased $39.7 million versus prior quarter
  • Total deposits decreased $350.6 million versus prior quarter
  • Net interest margin increased 1 basis point to 2.92%
  • Recorded a $1.8 million provision for credit losses

On 6ix: 6ix.com/news/first-hawaiian-inc-reports-second-quarter-2024-financial-results-and-declares

Watch First Hawaiian explain itFirst Hawaiian (NASDAQ:FHB) Q2 2024 Earnings Call · Replay · Jul 26, 2024 · From 2:41 · Second Quarter Financial Performance Summary

HONOLULU, July 26, 2024 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended June 30, 2024.

“I’m pleased to report our strong financial results for the second quarter,” said Bob Harrison, Chairman, President, and CEO.  “Our performance was driven by solid revenues, disciplined expense control and continued excellent credit quality. Additionally, we continued our support of the Maui community by partnering with the Federal Home Loan Bank of Des Moines to contribute a total of $1 million in relief funding for homeowners impacted by the Maui Wildfires.”

On July 24, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on August 30, 2024, to stockholders of record at the close of business on August 19, 2024.

Second Quarter 2024 Highlights:

  • Net income of $61.9 million, or $0.48 per diluted share
  • Total loans and leases increased $39.7 million versus prior quarter
  • Total deposits decreased $350.6 million versus prior quarter
  • Net interest margin increased 1 basis point to 2.92%
  • Recorded a $1.8 million provision for credit losses
  • Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet

Total assets were $24.0 billion as of June 30, 2024, a decrease of $287.4 million, or 1.2%, from $24.3 billion as of March 31, 2024.

Gross loans and leases were $14.4 billion as of June 30, 2024, an increase of $39.7 million, or 0.3%, from $14.3 billion as of March 31, 2024.

Total deposits were $20.3 billion as of June 30, 2024, a decrease of $350.6 million, or 1.7%, from $20.7 billion as of March 31, 2024.

Net Interest Income

Net interest income for the second quarter of 2024 was $152.9 million, a decrease of $1.6 million, or 1.0%, compared to $154.4 million for the prior quarter.

The net interest margin was 2.92% in the second quarter of 2024, an increase of 1 basis point compared to 2.91% in the prior quarter.

Provision Expense

During the quarter ended June 30, 2024, we recorded a $1.8 million provision for credit losses. In the quarter ended March 31, 2024, we recorded a $6.3 million provision for credit losses.

Noninterest Income

Noninterest income was $51.8 million in the second quarter of 2024, an increase of $0.4 million compared to noninterest income of $51.4 million in the prior quarter.

Noninterest Expense

Noninterest expense was $122.1 million in the second quarter of 2024, a decrease of $6.7 million compared to noninterest expense of $128.8 million in the prior quarter.

The efficiency ratio was 59.2% and 62.2% for the quarters ended June 30, 2024 and March 31, 2024, respectively.

Taxes

The effective tax rate was 23.3% for the quarters ended June 30, 2024 and March 31, 2024.

Asset Quality

The allowance for credit losses was $160.5 million, or 1.12% of total loans and leases, as of June 30, 2024, compared to $159.8 million, or 1.12% of total loans and leases, as of March 31, 2024. The reserve for unfunded commitments was $33.4 million as of June 30, 2024 compared to $34.8 million as of March 31, 2024. Net charge-offs were $2.5 million, or 0.07% of average loans and leases on an annualized basis, for the quarter ended June 30, 2024, compared to net charge-offs of $3.8 million, or 0.11% of average loans and leases on an annualized basis, for the quarter ended March 31, 2024. Total non-performing assets were $18.0 million, or 0.13% of total loans and leases and other real estate owned, as of both June 30, 2024 and March 31, 2024.

Capital

Total stockholders' equity increased $36.6 million in the second quarter, and stood at $2.6 billion on June 30, 2024 compared to $2.5 billion on March 31, 2024.

The tier 1 leverage, common equity tier 1 and total capital ratios were 9.03%, 12.73% and 13.92%, respectively, on June 30, 2024, compared with 8.80%, 12.55% and 13.75%, respectively, on March 31, 2024.

The Company did not repurchase any shares in the second 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/BIa54af76e9f084d46ad036d683c1f6cd6, and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time.

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

Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized” and “outlook”, or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, there can be no assurance that actual results will not prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements, including (without limitation) the risks and uncertainties associated with the domestic and global economic environment and capital market conditions and other risk factors. For a discussion of some of these risks and important factors that could affect our future results and financial condition, see our U.S. Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.

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)20242024202320242023
Operating Results:
Net interest income$152,851$154,427$159,939$307,278$327,186
Provision for credit losses1,8006,3005,0008,10013,800
Noninterest income51,76851,37147,348103,13996,371
Noninterest expense122,086128,813120,881250,899239,448
Net income61,92154,22062,442116,141129,260
Basic earnings per share0.480.420.490.911.01
Diluted earnings per share0.480.420.490.911.01
Dividends declared per share0.260.260.260.520.52
Dividend payout ratio54.17%61.90%53.06%57.14%51.49%
Performance Ratios(1):
Net interest margin2.92%2.91%2.91%2.91%3.01%
Efficiency ratio59.22%62.15%57.96%60.69%56.17%
Return on average total assets1.04%0.90%1.01%0.97%1.06%
Return on average tangible assets (non-GAAP)(2)1.08%0.94%1.05%1.01%1.10%
Return on average total stockholders' equity9.91%8.73%10.68%9.32%11.23%
Return on average tangible stockholders' equity (non-GAAP)(2)16.42%14.53%18.57%15.48%19.65%
Average Balances:
Average loans and leases$14,358,049$14,312,563$14,283,222$14,335,306$14,181,842
Average earning assets21,247,70721,481,89022,186,31621,364,79922,030,652
Average assets23,958,91324,187,20724,821,48624,073,06024,685,560
Average deposits20,308,02820,571,93021,057,25920,439,97921,261,805
Average stockholders' equity2,512,4712,496,8402,344,2852,504,6562,321,977
Market Value Per Share:
Closing20.7621.9618.0120.7618.01
High22.6823.1221.0023.1228.28
Low19.4820.3715.0819.4815.08
As ofAs ofAs ofAs of
June 30,March 31,December 31,June 30,
(dollars in thousands, except per share data)2024202420232023
Balance Sheet Data:
Loans and leases$14,359,899$14,320,208$14,353,497$14,362,832
Total assets23,991,79124,279,18624,926,47424,511,566
Total deposits20,318,83220,669,48121,332,65721,078,166
Short-term borrowings500,000500,000500,000—
Long-term borrowings———500,000
Total stockholders' equity2,550,3122,513,7612,486,0662,359,738
Per Share of Common Stock:
Book value$19.94$19.66$19.48$18.49
Tangible book value (non-GAAP)(2)12.1611.8811.6810.69
Asset Quality Ratios:
Non-accrual loans and leases / total loans and leases0.13%0.13%0.13%0.09%
Allowance for credit losses for loans and leases / total loans and leases1.12%1.12%1.09%1.03%
Capital Ratios:
Common Equity Tier 1 Capital Ratio12.73%12.55%12.39%12.05%
Tier 1 Capital Ratio12.73%12.55%12.39%12.05%
Total Capital Ratio13.92%13.75%13.57%13.17%
Tier 1 Leverage Ratio9.03%8.80%8.64%8.30%
Total stockholders' equity to total assets10.63%10.35%9.97%9.63%
Tangible stockholders' equity to tangible assets (non-GAAP)(2)6.76%6.52%6.23%5.80%
Non-Financial Data:
Number of branches48505051
Number of ATMs272275275296
Number of Full-Time Equivalent Employees2,0322,0652,0892,126

______________________

(1)Except for the efficiency ratio, amounts are annualized for the three and six months ended June 30, 2024 and 2023 and three months ended March 31, 2024.
(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)20242024202320242023
Interest income
Loans and lease financing$202,068$199,844$185,340$401,912$357,679
Available-for-sale investment securities14,14314,54618,09428,68936,782
Held-to-maturity investment securities17,57517,79318,28235,36837,239
Other11,14812,7697,48923,91711,050
Total interest income244,934244,952229,205489,886442,750
Interest expense
Deposits85,60984,14358,071169,752101,355
Short-term and long-term borrowings5,9535,95310,65611,90613,219
Other521429539950990
Total interest expense92,08390,52569,266182,608115,564
Net interest income152,851154,427159,939307,278327,186
Provision for credit losses1,8006,3005,0008,10013,800
Net interest income after provision for credit losses151,051148,127154,939299,178313,386
Noninterest income
Service charges on deposit accounts7,7937,5467,24615,33914,477
Credit and debit card fees15,86116,17315,46132,03431,759
Other service charges and fees11,0369,9049,05620,94018,218
Trust and investment services income9,42610,3549,44819,78019,062
Bank-owned life insurance3,3604,2863,2717,6468,391
Other4,2923,1082,8667,4004,464
Total noninterest income51,76851,37147,348103,13996,371
Noninterest expense
Salaries and employee benefits57,73759,26257,904116,999113,936
Contracted services and professional fees16,06715,73917,49831,80633,811
Occupancy7,3776,9417,55414,31815,336
Equipment13,19613,41311,00026,60920,736
Regulatory assessment and fees3,8148,1203,67611,9347,512
Advertising and marketing1,7652,6121,8914,3773,885
Card rewards program8,7198,5087,68117,22715,766
Other13,41114,21813,67727,62928,466
Total noninterest expense122,086128,813120,881250,899239,448
Income before provision for income taxes80,73370,68581,406151,418170,309
Provision for income taxes18,81216,46518,96435,27741,049
Net income$61,921$54,220$62,442$116,141$129,260
Basic earnings per share$0.48$0.42$0.49$0.91$1.01
Diluted earnings per share$0.48$0.42$0.49$0.91$1.01
Basic weighted-average outstanding shares127,867,853127,707,354127,591,371127,787,663127,522,975
Diluted weighted-average outstanding shares128,262,594128,217,689127,832,351128,279,917127,901,225
Consolidated Balance SheetsTable 3
June 30,March 31,December 31,June 30,
(dollars in thousands, except share amount)2024202420232023
Assets
Cash and due from banks$290,501$202,121$185,015$318,333
Interest-bearing deposits in other banks824,2581,072,1451,554,882239,798
Investment securities:
Available-for-sale, at fair value (amortized cost: $2,379,004 as of June 30, 2024, $2,466,109 as of March 31, 2024, $2,558,675 as of December 31, 2023 and $3,296,825 as of June 30, 2023)2,067,9562,159,3382,255,3362,909,372
Held-to-maturity, at amortized cost (fair value: $3,401,006 as of June 30, 2024, $3,470,710 as of March 31, 2024, $3,574,856 as of December 31, 2023 and $3,697,261 as of June 30, 2023)3,917,1753,988,0114,041,4494,180,408
Loans held for sale2,820—190—
Loans and leases14,359,89914,320,20814,353,49714,362,832
Less: allowance for credit losses160,517159,836156,533148,581
Net loans and leases14,199,38214,160,37214,196,96414,214,251
Premises and equipment, net283,762281,181281,461277,817
Accrued interest receivable82,51285,71584,41780,710
Bank-owned life insurance486,261484,193479,907476,177
Goodwill995,492995,492995,492995,492
Mortgage servicing rights5,3955,5335,6996,072
Other assets836,277845,085845,662813,136
Total assets$23,991,791$24,279,186$24,926,474$24,511,566
Liabilities and Stockholders' Equity
Deposits:
Interest-bearing$13,461,365$13,620,928$13,749,095$12,911,539
Noninterest-bearing6,857,4677,048,5537,583,5628,166,627
Total deposits20,318,83220,669,48121,332,65721,078,166
Short-term borrowings500,000500,000500,000—
Long-term borrowings———500,000
Retirement benefits payable101,304102,242103,285100,671
Other liabilities521,343493,702504,466472,991
Total liabilities21,441,47921,765,42522,440,40822,151,828
Stockholders' equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 141,728,446 / 127,879,012 shares as of June 30, 2024, issued/outstanding: 141,687,612 / 127,841,908 shares as of March 31, 2024, issued/outstanding: 141,340,539 / 127,618,761 shares as of December 31, 2023 and issued/outstanding: 141,327,860 / 127,608,037 shares as of June 30, 2023)1,4171,4171,4131,413
Additional paid-in capital2,554,7952,551,4882,548,2502,543,226
Retained earnings887,176858,494837,859799,045
Accumulated other comprehensive loss, net(519,132)(523,780)(530,210)(612,736)
Treasury stock (13,849,434 shares as of June 30, 2024, 13,845,704 shares as of March 31, 2024, 13,721,778 shares as of December 31, 2023 and 13,719,823 shares as of June 30, 2023)(373,944)(373,858)(371,246)(371,210)
Total stockholders' equity2,550,3122,513,7612,486,0662,359,738
Total liabilities and stockholders' equity$23,991,791$24,279,186$24,926,474$24,511,566
Average Balances and Interest RatesTable 4
Three Months EndedThree Months EndedThree Months Ended
June 30, 2024March 31, 2024June 30, 2023
AverageIncome/Yield/AverageIncome/Yield/AverageIncome/Yield/
(dollars in millions)BalanceExpenseRateBalanceExpenseRateBalanceExpenseRate
Earning Assets
Interest-Bearing Deposits in Other Banks$773.4$10.55.45%$858.6$11.65.45%$569.3$7.25.07%
Available-for-Sale Investment Securities
Taxable2,100.714.12.692,210.614.52.632,978.618.02.42
Non-Taxable1.5—5.761.8—5.615.80.15.74
Held-to-Maturity Investment Securities
Taxable3,358.214.41.713,416.414.61.713,618.715.31.69
Non-Taxable602.94.02.64603.44.02.65610.43.72.46
Total Investment Securities6,063.332.52.156,232.233.12.137,213.537.12.06
Loans Held for Sale1.0—6.580.7—6.920.5—5.87
Loans and Leases(1)
Commercial and industrial2,201.638.16.962,164.937.26.922,265.736.26.41
Commercial real estate4,305.671.56.684,323.570.16.534,183.664.96.22
Construction984.818.57.57924.717.47.55874.315.26.96
Residential:
Residential mortgage4,229.440.13.804,264.142.03.944,314.039.13.62
Home equity line1,164.212.64.351,172.112.04.131,119.39.23.31
Consumer1,054.117.76.741,083.518.16.711,196.617.75.92
Lease financing418.34.34.09379.83.73.91329.73.64.43
Total Loans and Leases14,358.0202.85.6714,312.6200.55.6314,283.2185.95.22
Other Earning Assets52.00.75.2577.81.25.90119.80.30.99
Total Earning Assets(2)21,247.7246.54.6621,481.9246.44.6122,186.3230.54.16
Cash and Due from Banks240.4244.3257.9
Other Assets2,470.82,461.02,377.3
Total Assets$23,958.9$24,187.2$24,821.5
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings$6,000.4$23.41.57%$6,059.7$23.41.56%6,099.4$16.11.05%
Money Market4,076.730.63.023,944.928.82.943,809.819.62.07
Time3,284.331.63.873,325.331.93.862,877.822.43.12
Total Interest-Bearing Deposits13,361.485.62.5813,329.984.12.5412,787.058.11.82
Federal Funds Purchased——————2.9—5.00
Other Short-Term Borrowings500.06.04.79500.06.04.79362.94.75.16
Long-Term Borrowings——————500.06.04.78
Other Interest-Bearing Liabilities38.20.55.4833.00.45.2254.00.54.00
Total Interest-Bearing Liabilities13,899.692.12.6613,862.990.52.6313,706.869.32.03
Net Interest Income$154.4$155.9$161.2
Interest Rate Spread(3)2.00%1.98%2.13%
Net Interest Margin(4)2.92%2.91%2.91%
Noninterest-Bearing Demand Deposits6,946.67,242.08,270.3
Other Liabilities600.2585.5500.1
Stockholders' Equity2,512.52,496.82,344.3
Total Liabilities and Stockholders' Equity$23,958.9$24,187.2$24,821.5

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(1)Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
(2)Interest income includes taxable-equivalent basis adjustments of $1.5 million, $1.5 million and $1.3 million for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively.
(3)Interest rate spread is the difference between the average yield on earning assets and the average rate paid on interest-bearing liabilities, on a fully taxable-equivalent basis.
(4)Net interest margin is net interest income annualized for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, on a fully taxable-equivalent basis, divided by average total earning assets.
Average Balances and Interest RatesTable 5
Six Months EndedSix Months Ended
June 30, 2024June 30, 2023
AverageIncome/Yield/AverageIncome/Yield/
(dollars in millions)BalanceExpenseRateBalanceExpenseRate
Earning Assets
Interest-Bearing Deposits in Other Banks$815.9$22.15.45%$435.2$10.64.91%
Available-for-Sale Investment Securities
Taxable2,155.728.72.663,029.736.42.41
Non-Taxable1.6—5.6818.40.55.58
Held-to-Maturity Investment Securities
Taxable3,387.329.01.713,651.130.91.70
Non-Taxable603.27.92.65611.37.92.60
Total Investment Securities6,147.865.62.147,310.575.72.08
Loans Held for Sale0.9—6.720.3—5.79
Loans and Leases(1)
Commercial and industrial2,183.375.36.942,229.568.66.20
Commercial real estate4,314.6141.76.604,144.9123.25.99
Construction954.835.97.56874.129.96.89
Residential:
Residential mortgage4,246.782.13.874,310.577.53.59
Home equity line1,168.124.74.241,097.217.93.29
Consumer1,068.835.76.721,205.034.85.84
Lease financing399.08.04.00320.66.84.27
Total Loans and Leases14,335.3403.45.6514,181.8358.75.09
Other Earning Assets64.91.85.64102.90.50.90
Total Earning Assets(2)21,364.8492.94.6322,030.7445.54.07
Cash and Due from Banks242.4271.9
Other Assets2,465.92,383.0
Total Assets$24,073.1$24,685.6
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings$6,030.1$46.91.56%$6,226.2$30.00.97%
Money Market4,010.859.42.983,831.533.91.78
Time3,304.863.53.862,697.737.52.80
Total Interest-Bearing Deposits13,345.7169.82.5612,755.4101.41.60
Federal Funds Purchased———34.80.84.45
Other Short-Term Borrowings500.011.94.79208.75.35.14
Long-Term Borrowings———303.87.14.73
Other Interest-Bearing Liabilities35.60.95.3648.51.04.12
Total Interest-Bearing Liabilities13,881.3182.62.6513,351.2115.61.75
Net Interest Income$310.3$329.9
Interest Rate Spread(3)1.98%2.32%
Net Interest Margin(4)2.91%3.01%
Noninterest-Bearing Demand Deposits7,094.38,506.4
Other Liabilities592.8506.0
Stockholders' Equity2,504.72,322.0
Total Liabilities and Stockholders' Equity$24,073.1$24,685.6

______________________

(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 $3.0 million and $2.7 million for the six months ended June 30, 2024 and 2023, respectively.
(3)Interest rate spread is the difference between the average yield on earning assets and the average rate paid on interest-bearing liabilities, on a fully taxable-equivalent basis.
(4)Net interest margin is net interest income annualized for the six months ended June 30, 2024 and 2023, on a fully taxable-equivalent basis, divided by average total earning assets.
Analysis of Change in Net Interest IncomeTable 6
Three Months Ended June 30, 2024
Compared to March 31, 2024
(dollars in millions)VolumeRateTotal
Change in Interest Income:
Interest-Bearing Deposits in Other Banks$(1.1)$—$(1.1)
Available-for-Sale Investment Securities
Taxable(0.7)0.3(0.4)
Held-to-Maturity Investment Securities
Taxable(0.2)—(0.2)
Total Investment Securities(0.9)0.3(0.6)
Loans and Leases
Commercial and industrial0.70.20.9
Commercial real estate(0.3)1.71.4
Construction1.1—1.1
Residential:
Residential mortgage(0.4)(1.5)(1.9)
Home equity line(0.1)0.70.6
Consumer(0.5)0.1(0.4)
Lease financing0.40.20.6
Total Loans and Leases0.91.42.3
Other Earning Assets(0.4)(0.1)(0.5)
Total Change in Interest Income(1.5)1.60.1
Change in Interest Expense:
Interest-Bearing Deposits
Savings(0.2)0.2—
Money Market1.00.81.8
Time(0.4)0.1(0.3)
Total Interest-Bearing Deposits0.41.11.5
Other Interest-Bearing Liabilities0.1—0.1
Total Change in Interest Expense0.51.11.6
Change in Net Interest Income$(2.0)$0.5$(1.5)
Analysis of Change in Net Interest IncomeTable 7
Three Months Ended June 30, 2024
Compared to June 30, 2023
(dollars in millions)VolumeRateTotal
Change in Interest Income:
Interest-Bearing Deposits in Other Banks$2.7$0.6$3.3
Available-for-Sale Investment Securities
Taxable(5.7)1.8(3.9)
Non-Taxable(0.1)—(0.1)
Held-to-Maturity Investment Securities
Taxable(1.1)0.2(0.9)
Non-Taxable—0.30.3
Total Investment Securities(6.9)2.3(4.6)
Loans and Leases
Commercial and industrial(1.1)3.01.9
Commercial real estate1.94.76.6
Construction2.01.33.3
Residential:
Residential mortgage(0.8)1.81.0
Home equity line0.43.03.4
Consumer(2.3)2.3—
Lease financing0.9(0.2)0.7
Total Loans and Leases1.015.916.9
Other Earning Assets(0.2)0.60.4
Total Change in Interest Income(3.4)19.416.0
Change in Interest Expense:
Interest-Bearing Deposits
Savings(0.3)7.67.3
Money Market1.59.511.0
Time3.45.89.2
Total Interest-Bearing Deposits4.622.927.5
Other Short-Term Borrowings1.7(0.4)1.3
Long-Term Borrowings(3.0)(3.0)(6.0)
Other Interest-Bearing Liabilities(0.2)0.2—
Total Change in Interest Expense3.119.722.8
Change in Net Interest Income$(6.5)$(0.3)$(6.8)
Analysis of Change in Net Interest IncomeTable 8
Six Months Ended June 30, 2024
Compared to June 30, 2023
(dollars in millions)VolumeRateTotal
Change in Interest Income:
Interest-Bearing Deposits in Other Banks$10.2$1.3$11.5
Available-for-Sale Investment Securities
Taxable(11.2)3.5(7.7)
Non-Taxable(0.5)—(0.5)
Held-to-Maturity Investment Securities
Taxable(2.1)0.2(1.9)
Non-Taxable(0.1)0.1—
Total Investment Securities(13.9)3.8(10.1)
Loans and Leases
Commercial and industrial(1.4)8.16.7
Commercial real estate5.313.218.5
Construction2.93.16.0
Residential:
Residential mortgage(1.2)5.84.6
Home equity line1.35.56.8
Consumer(4.1)5.00.9
Lease financing1.6(0.4)1.2
Total Loans and Leases4.440.344.7
Other Earning Assets(0.3)1.61.3
Total Change in Interest Income0.447.047.4
Change in Interest Expense:
Interest-Bearing Deposits
Savings(1.0)17.916.9
Money Market1.723.825.5
Time9.716.326.0
Total Interest-Bearing Deposits10.458.068.4
Federal Funds Purchased(0.4)(0.4)(0.8)
Other Short-Term Borrowings7.0(0.4)6.6
Long-Term Borrowings(3.6)(3.5)(7.1)
Other Interest-Bearing Liabilities(0.3)0.2(0.1)
Total Change in Interest Expense13.153.967.0
Change in Net Interest Income$(12.7)$(6.9)$(19.6)
Loans and LeasesTable 9
June 30,March 31,December 31,June 30,
(dollars in thousands)2024202420232023
Commercial and industrial$2,208,690$2,189,8752,165,349$2,187,831
Commercial real estate4,305,0174,301,3004,340,2434,290,948
Construction1,017,649972,517900,292913,837
Residential:
Residential mortgage4,216,4164,242,5024,283,3154,317,537
Home equity line1,159,8331,165,7781,174,5881,138,163
Total residential5,376,2495,408,2805,457,9035,455,700
Consumer1,027,1041,054,2271,109,9011,182,116
Lease financing425,190394,009379,809332,400
Total loans and leases$14,359,899$14,320,208$14,353,497$14,362,832
DepositsTable 10
June 30,March 31,December 31,June 30,
(dollars in thousands)2024202420232023
Demand$6,857,467$7,048,553$7,583,562$8,166,627
Savings6,055,0516,277,6796,445,0845,835,975
Money Market4,111,6094,059,2043,847,8533,767,792
Time3,294,7053,284,0453,456,1583,307,772
Total Deposits$20,318,832$20,669,481$21,332,657$21,078,166
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)2024202420232023
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial Loans:
Commercial and industrial$1,084$942$970$1,024
Commercial real estate3,0852,9532,953—
Construction447———
Total Commercial Loans4,6163,8953,9231,024
Residential Loans:
Residential mortgage7,2737,7777,6206,097
Home equity line6,1246,3457,0526,107
Total Residential Loans13,39714,12214,67212,204
Total Non-Accrual Loans and Leases18,01318,01718,59513,228
Total Non-Performing Assets$18,013$18,017$18,595$13,228
Accruing Loans and Leases Past Due 90 Days or More
Commercial Loans:
Commercial and industrial$110$529$494$599
Commercial real estate——300619
Construction—606——
Total Commercial Loans1101,1357941,218
Residential mortgage1,820359—58
Consumer1,8352,1262,7021,975
Total Accruing Loans and Leases Past Due 90 Days or More$3,765$3,620$3,496$3,251
Total Loans and Leases$14,359,899$14,320,208$14,353,497$14,362,832
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)20242024202320242023
Balance at Beginning of Period$194,649$192,138$183,321$192,138$177,735
Loans and Leases Charged-Off
Commercial and industrial(677)(909)(997)(1,586)(1,788)
Residential Loans:
Residential mortgage————(122)
Home equity line——(137)—(272)
Total Residential Loans——(137)—(394)
Consumer(4,182)(4,854)(4,516)(9,036)(9,298)
Total Loans and Leases Charged-Off(4,859)(5,763)(5,650)(10,622)(11,480)
Recoveries on Loans and Leases Previously Charged-Off
Commercial and industrial250211292461538
Residential Loans:
Residential mortgage2830305857
Home equity line1124459156236
Total Residential Loans1407489214293
Consumer1,9501,6891,7283,6393,894
Total Recoveries on Loans and Leases Previously Charged-Off2,3401,9742,1094,3144,725
Net Loans and Leases Charged-Off(2,519)(3,789)(3,541)(6,308)(6,755)
Provision for Credit Losses1,8006,3005,0008,10013,800
Balance at End of Period$193,930$194,649$184,780$193,930$184,780
Components:
Allowance for Credit Losses$160,517$159,836$148,581$160,517$148,581
Reserve for Unfunded Commitments33,41334,81336,19933,41336,199
Total Allowance for Credit Losses and Reserve for Unfunded Commitments$193,930$194,649$184,780$193,930$184,780
Average Loans and Leases Outstanding$14,358,049$14,312,563$14,283,222$14,335,306$14,181,842
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)0.07%0.11%0.10%0.09%0.10%
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding1.12%1.12%1.03%1.12%1.03%
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases8.91x8.87x11.23x8.91x11.23x

______________________

(1)Annualized for the three and six months ended June 30, 2024 and 2023 and three months ended March 31, 2024.
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)20242023202220212020PriorCost BasisCost BasisTotal
Commercial Lending
Commercial and Industrial
Risk rating:
Pass$66,318$88,879$228,354$276,824$23,556$274,582$1,101,721$3,199$2,063,433
Special Mention315110,547545641,31318,727—31,521
Substandard——6,2302424172,03823,145—32,072
Other (1)9,35111,5808,7373,6321,6961,79244,876—81,664
Total Commercial and Industrial75,984100,460253,868280,75226,233279,7251,188,4693,1992,208,690
Current period gross charge-offs—2163196152938——1,586
Commercial Real Estate
Risk rating:
Pass98,062347,143863,033676,256331,7371,798,62689,0696,9104,210,836
Special Mention3,3382,2757,56541,3691,35319,3296,965—82,194
Substandard——5,0161,003—5,331499—11,849
Other (1)—————138——138
Total Commercial Real Estate101,400349,418875,614718,628333,0901,823,42496,5336,9104,305,017
Current period gross charge-offs—————————
Construction
Risk rating:
Pass35,785206,622348,241256,82159,45361,30810,800—979,030
Special Mention—————825——825
Other (1)2,1779,96313,6224,9511,1995,176706—37,794
Total Construction37,962216,585361,863261,77260,65267,30911,506—1,017,649
Current period gross charge-offs—————————
Lease Financing
Risk rating:
Pass105,719107,49272,98616,41925,90890,013——418,537
Special Mention—4711333812———510
Substandard5,136639368—————6,143
Total Lease Financing110,855108,17873,46716,75725,92090,013——425,190
Current period gross charge-offs—————————
Total Commercial Lending$326,201$774,641$1,564,812$1,277,909$445,895$2,260,471$1,296,508$10,109$7,956,546
Current period gross charge-offs$—$216$319$61$52$938$—$—$1,586
Revolving
Loans
Converted
Term LoansRevolvingto Term
Amortized Cost Basis by Origination YearLoansLoans
(continued)AmortizedAmortized
(dollars in thousands)20242023202220212020PriorCost BasisCost BasisTotal
Residential Lending
Residential Mortgage
FICO:
740 and greater$70,514$210,915$514,686$975,554$505,850$1,165,042$—$—$3,442,561
680 - 7399,65327,66164,910109,30668,491150,793——430,814
620 - 6798131,61918,12520,11716,09735,943——92,714
550 - 619—2,0456,3363,8222,85312,349——27,405
Less than 550——2,6893,9392,8338,662——18,123
No Score (3)5448,30018,47210,6015,80454,420——98,141
Other (2)7,38413,00316,80215,58211,33130,24512,311—106,658
Total Residential Mortgage88,908263,543642,0201,138,921613,2591,457,45412,311—4,216,416
Current period gross charge-offs—————————
Home Equity Line
FICO:
740 and greater——————937,3491,244938,593
680 - 739——————158,8771,713160,590
620 - 679——————38,3621,36239,724
550 - 619——————13,06545713,522
Less than 550——————5,4556206,075
No Score (3)——————1,329—1,329
Total Home Equity Line——————1,154,4375,3961,159,833
Current period gross charge-offs—————————
Total Residential Lending$88,908$263,543$642,020$1,138,921$613,259$1,457,454$1,166,748$5,396$5,376,249
Current period gross charge-offs$—$—$—$—$—$—$—$—$—
Consumer Lending
FICO:
740 and greater40,21677,383104,37859,69823,38016,094117,299154438,602
680 - 73929,90657,53458,14228,10012,37910,58475,643466272,754
620 - 67912,11322,99523,17213,8715,9397,72934,769777121,365
550 - 6191,8827,70611,3666,8373,4554,71913,09684349,904
Less than 5506823,2426,6734,2782,1893,1895,24959126,093
No Score (3)1,730457135—92240,19321642,762
Other (2)——3309363241,00873,026—75,624
Total Consumer Lending$86,529$169,317$204,196$113,720$47,675$43,345$359,275$3,047$1,027,104
Current period gross charge-offs$—$941$1,437$800$345$1,471$3,652$390$9,036
Total Loans and Leases$501,638$1,207,501$2,411,028$2,530,550$1,106,829$3,761,270$2,822,531$18,552$14,359,899
Current period gross charge-offs$—$1,157$1,756$861$397$2,409$3,652$390$10,622

______________________

(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)20242024202320242023
Income Statement Data:
Net income$61,921$54,220$62,442$116,141$129,260
Average total stockholders' equity$2,512,471$2,496,840$2,344,285$2,504,656$2,321,977
Less: average goodwill995,492995,492995,492995,492995,492
Average tangible stockholders' equity$1,516,979$1,501,348$1,348,793$1,509,164$1,326,485
Average total assets$23,958,913$24,187,207$24,821,486$24,073,060$24,685,560
Less: average goodwill995,492995,492995,492995,492995,492
Average tangible assets$22,963,421$23,191,715$23,825,994$23,077,568$23,690,068
Return on average total stockholders' equity(1)9.91%8.73%10.68%9.32%11.23%
Return on average tangible stockholders' equity (non-GAAP)(1)16.42%14.53%18.57%15.48%19.65%
Return on average total assets(1)1.04%0.90%1.01%0.97%1.06%
Return on average tangible assets (non-GAAP)(1)1.08%0.94%1.05%1.01%1.10%
As ofAs ofAs ofAs of
June 30,March 31,December 31,June 30,
(dollars in thousands, except per share amounts)2024202420232023
Balance Sheet Data:
Total stockholders' equity$2,550,312$2,513,761$2,486,066$2,359,738
Less: goodwill995,492995,492995,492995,492
Tangible stockholders' equity$1,554,820$1,518,269$1,490,574$1,364,246
Total assets$23,991,791$24,279,186$24,926,474$24,511,566
Less: goodwill995,492995,492995,492995,492
Tangible assets$22,996,299$23,283,694$23,930,982$23,516,074
Shares outstanding127,879,012127,841,908127,618,761127,608,037
Total stockholders' equity to total assets10.63%10.35%9.97%9.63%
Tangible stockholders' equity to tangible assets (non-GAAP)6.76%6.52%6.23%5.80%
Book value per share$19.94$19.66$19.48$18.49
Tangible book value per share (non-GAAP)$12.16$11.88$11.68$10.69

______________________

(1)Annualized for the three and six months ended June 30, 2024 and 2023 and three months ended March 31, 2024.

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