First Hawaiian, Inc. Reports Third Quarter 2020 Financial Results and Declares Dividend

First Hawaiian, Inc.
·20 min read

HONOLULU, Oct. 23, 2020 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ: FHB ), (First Hawaiian or the Company) today reported financial results for its quarter ended September 30, 2020.

In spite of the current economic environment, we reported solid financial results for the third quarter, said Bob Harrison, Chairman, President and CEO. These are still challenging times, but the re-opening of the local economy, and more recently, the pre-testing program for trans-Pacific travel, are important steps toward the states economic recovery.

On October 21, 2020 the Companys Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on December 4, 2020 to stockholders of record at the close of business on November 23, 2020.

Third Quarter 20 20 Highlights :

  • Net income of $65.1 million, or $0.50 per diluted share

  • Net interest income increased $6.2 million, or 4.8% versus prior quarter

  • Noninterest income increased $3.2 million, or 7.1% versus prior quarter

  • Consumer and commercial deposits increased $166.0 million and public deposits decreased $629.9 million versus the prior quarter

  • Net interest margin (NIM) was 2.70%, a 12 basis point increase versus the prior quarter

  • Recorded a $5.1 million provision for credit losses

  • Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet

Total assets were $22.3 billion as of September 30, 2020, compared to $23.0 billion as of June 30, 2020.

Gross loans and leases were $13.5 billion as of September 30, 2020, a decrease of $264.1 million, or 1.9%, from $13.8 billion as of June 30, 2020.

Total deposits were $18.9 billion as of September 30, 2020, a decrease of $463.9 million, or 2.4%, from $19.4 billion as of June 30, 2020.

Net Interest Income

Net interest income for the third quarter of 2020 was $134.0 million, an increase of $6.2 million, or 4.8%, compared to $127.8 million for the prior quarter.

The NIM was 2.70% in the third quarter of 2020, an increase of 12 basis points compared to 2.58% in the second quarter of 2020.

Provision Expense

During the quarter ended September 30, 2020, the Bank recorded a total provision for credit losses of $5.1 million. In the quarter ended June 30, 2020, the total provision for credit losses was $55.4 million.

Noninterest Income

Noninterest income was $48.9 million in the third quarter of 2020, an increase of $3.2 million compared to noninterest income of $45.7 million in the second quarter of 2020.

Noninterest Expense

Noninterest expense was $91.6 million in the third quarter of 2020, essentially unchanged from $91.5 million in the second quarter of 2020.

The efficiency ratio was 50.0% and 52.7% for the quarters ended September 30, 2020 and June 30, 2020, respectively.

Taxes

The effective tax rate was 24.5% for the quarter ended September 30, 2020 and 24.6% for the quarter ended June 30, 2020.

Asset Quality

The allowance for credit losses was $195.9 million, or 1.45% of total loans and leases, as of September 30, 2020, compared to $192.1 million, or 1.40% of total loans and leases, as of June 30, 2020. The reserve for unfunded commitments was $24.6 million as of September 30, 2020 compared to $23.2 million as of June 30, 2020. Net recoveries were $0.1 million, or 0.0% of average loans and leases on an annualized basis for the quarter ended September 30, 2020, compared to $23.4 million, or 0.67% of average loans and leases on an annualized basis for the quarter ended June 30, 2020. Total non-performing assets were $17.6 million, or 0.13% of total loans and leases and other real estate owned, at September 30, 2020, compared to non-performing assets of $33.3 million, or 0.24% of total loans and leases and other real estate owned, at June 30, 2020.

Capital

Total stockholders' equity was $2.7 billion at both September 30 and June 30, 2020.

The tier 1 leverage, common equity tier 1 and total capital ratios were 7.91%, 12.22% and 13.47%, respectively, at September 30, 2020, compared with 7.75%, 11.86% and 13.11%, respectively, at June 30, 2020.

The Company suspended its stock repurchase program during the first quarter and did not repurchase any shares of common stock in the third quarter.

First Hawaiian, Inc.

First Hawaiian, Inc. (NASDAQ: FHB ) is a bank holding company headquartered in Honolulu, Hawaii. Its principal subsidiary, First Hawaiian Bank, founded in 1858 under the name Bishop & Company, is Hawaiis 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 Companys website, www.fhb.com.

Conference Call Information

First Hawaiian will host a conference call to discuss the Companys results today at 1:00 p.m. Eastern Time, 7:00 a.m. Hawaii Time. To access the call, participants should dial (844) 452-2942 (US/Canada), or (574) 990-9846 (International) ten minutes prior to the start of the call and enter the conference ID: 5358159. 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. A telephonic replay of the conference call will be available two hours after the conclusion of the call until 4:30 p.m. (Eastern Time) on October 30, 2020. Access the replay by dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID: 5358159.

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, 2019 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020.

Use of Non-GAAP Financial Measures

We present net interest income, noninterest income, noninterest expense, net income, earnings per share (basic and diluted) and the related ratios described below, on an adjusted, or core, basis, each a non-GAAP financial measure. These core measures exclude from the corresponding GAAP measure the impact of certain items that we do not believe are representative of our financial results. We believe that the presentation of these non-GAAP financial measures helps identify underlying trends in our business from period to period that could otherwise be distorted by the effect of certain expenses, gains and other items included in our operating results. We believe that these core measures provide useful information about our operating results and enhance the overall understanding of our past performance and future performance. Investors should consider our performance and financial condition as reported under GAAP and all other relevant information when assessing our performance or financial condition.

Core net interest margin, core efficiency ratio, core return on average total assets and core return on average total stockholders equity are non-GAAP financial measures. We compute our core net interest margin as the ratio of core net interest income to average earning assets. We compute our core efficiency ratio as the ratio of core noninterest expense to the sum of core net interest income and core noninterest income. We compute our core return on average total assets as the ratio of core net income to average total assets. We compute our core return on average total stockholders equity as the ratio of core net income to average total stockholders equity.

Return on average tangible stockholders equity, core return on average tangible stockholders equity, return on average tangible assets, core return on average tangible assets and tangible stockholders equity to tangible assets are non-GAAP financial measures. 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 core return on average tangible stockholders equity as the ratio of core 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 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 core return on average tangible assets as the ratio of core net income to average tangible assets. 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. 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.

Tables 14 and 15 at the end of this document provide 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:
Susan Kam
(808) 525-6254
skam@fhb.com



Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 1

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

(dollars in thousands, except per share data)

 

2020

 

2020

 

2019

 

2020

 

2019

 

Operating Results:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

134,002

 

$

127,822

 

$

143,081

 

$

400,507

 

$

433,783

 

Provision for credit losses

 

 

5,072

 

 

55,446

 

 

 

 

101,718

 

 

9,550

 

Noninterest income

 

 

48,898

 

 

45,656

 

 

49,980

 

 

143,782

 

 

145,825

 

Noninterest expense

 

 

91,629

 

 

91,450

 

 

93,466

 

 

279,545

 

 

279,379

 

Net income

 

 

65,101

 

 

20,049

 

 

74,199

 

 

124,015

 

 

216,556

 

Basic earnings per share

 

 

0.50

 

 

0.15

 

 

0.56

 

 

0.95

 

 

1.62

 

Diluted earnings per share

 

 

0.50

 

 

0.15

 

 

0.56

 

 

0.95

 

 

1.61

 

Dividends declared per share

 

 

0.26

 

 

0.26

 

 

0.26

 

 

0.78

 

 

0.78

 

Dividend payout ratio

 

 

52.00

%

 

173.33

%

 

46.43

%

 

82.11

%

 

48.45

%

Supplemental Income Statement Data (non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core net interest income

 

$

134,002

 

$

127,822

 

$

143,081

 

$

400,507

 

$

433,783

 

Core noninterest income

 

 

48,874

 

 

45,867

 

 

49,980

 

 

143,884

 

 

148,417

 

Core noninterest expense

 

 

91,629

 

 

91,450

 

 

91,222

 

 

279,545

 

 

276,613

 

Core net income

 

 

65,083

 

 

20,204

 

 

75,871

 

 

124,090

 

 

220,535

 

Core basic earnings per share

 

 

0.50

 

 

0.16

 

 

0.57

 

 

0.96

 

 

1.65

 

Core diluted earnings per share

 

 

0.50

 

 

0.16

 

 

0.57

 

 

0.95

 

 

1.64

 

Performance Ratio (1) :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

2.70

%

 

2.58

%

 

3.19

%

 

2.79

%

 

3.22

%

Core net interest margin (non-GAAP)

 

 

2.70

%

 

2.58

%

 

3.19

%

 

2.79

%

 

3.22

%

Efficiency ratio

 

 

50.01

%

 

52.70

%

 

48.41

%

 

51.32

%

 

48.20

%

Core efficiency ratio (non-GAAP)

 

 

50.02

%

 

52.64

%

 

47.25

%

 

51.31

%

 

47.51

%

Return on average total assets

 

 

1.16

%

 

0.36

%

 

1.45

%

 

0.76

%

 

1.42

%

Core return on average total assets (non-GAAP)

 

 

1.16

%

 

0.36

%

 

1.48

%

 

0.76

%

 

1.44

%

Return on average tangible assets (non-GAAP)

 

 

1.21

%

 

0.38

%

 

1.52

%

 

0.80

%

 

1.49

%

Core return on average tangible assets (non-GAAP) (2)

 

 

1.21

%

 

0.38

%

 

1.56

%

 

0.80

%

 

1.52

%

Return on average total stockholders' equity

 

 

9.58

%

 

2.99

%

 

11.12

%

 

6.16

%

 

11.13

%

Core return on average total stockholders' equity (non-GAAP)

 

 

9.57

%

 

3.01

%

 

11.37

%

 

6.17

%

 

11.34

%

Return on average tangible stockholders' equity (non-GAAP)

 

 

15.16

%

 

4.74

%

 

17.81

%

 

9.79

%

 

18.04

%

Core return on average tangible stockholders equity (non-GAAP) (3)

 

 

15.15

%

 

4.77

%

 

18.21

%

 

9.80

%

 

18.37

%

Average Balances:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average loans and leases

 

$

13,559,367

 

$

13,956,669

 

$

13,032,349

 

$

13,569,119

 

$

13,105,086

 

Average earning assets

 

 

19,846,674

 

 

19,854,795

 

 

17,862,564

 

 

19,174,349

 

 

17,974,363

 

Average assets

 

 

22,341,485

 

 

22,341,654

 

 

20,332,457

 

 

21,667,948

 

 

20,405,261

 

Average deposits

 

 

18,892,033

 

 

18,540,394

 

 

16,573,796

 

 

17,995,196

 

 

16,700,366

 

Average stockholders' equity

 

 

2,704,129

 

 

2,697,775

 

 

2,648,428

 

 

2,687,632

 

 

2,600,259

 

Market Value Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Closing

 

 

14.47

 

 

17.24

 

 

26.70

 

 

14.47

 

 

26.70

 

High

 

 

18.96

 

 

21.50

 

 

27.84

 

 

31.25

 

 

28.20

 

Low

 

 

14.32

 

 

13.56

 

 

24.25

 

 

13.56

 

 

22.13

 



 

 

As of

 

As of

 

As of

 

As of

 

 

 

September 30,

 

June 30,

 

December 31,

 

September 30,

 

 

 

2020

 

2020

 

2019

 

2019

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and leases

 

$

13,499,969

 

$

13,764,030

 

$

13,211,650

 

$

12,843,396

 

Total assets

 

 

22,310,701

 

 

22,993,715

 

 

20,166,734

 

 

20,598,220

 

Total deposits

 

 

18,897,762

 

 

19,361,634

 

 

16,444,994

 

 

16,857,246

 

Short-term borrowings

 

 

 

 

200,000

 

 

400,000

 

 

400,000

 

Long-term borrowings

 

 

200,010

 

 

200,019

 

 

200,019

 

 

200,018

 

Total stockholders' equity

 

 

2,733,934

 

 

2,701,897

 

 

2,640,258

 

 

2,654,558

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share of Common Stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value

 

$

21.04

 

$

20.81

 

$

20.32

 

$

20.22

 

Tangible book value (non-GAAP) (4)

 

 

13.38

 

 

13.14

 

 

12.66

 

 

12.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans and leases / total loans and leases

 

 

0.13

%

 

0.24

%

 

0.04

%

 

0.03

%

Allowance for credit losses for loans and leases / total loans and leases

 

 

1.45

%

 

1.40

%

 

0.99

%

 

1.04

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital Ratio

 

  

12.22

%

 

11.86

%

 

11.88

%

 

12.15

%

Tier 1 Capital Ratio

 

 

12.22

%

 

11.86

%

 

11.88

%

 

12.15

%

Total Capital Ratio

 

 

13.47

%

 

13.11

%

 

12.81

%

 

13.11

%

Tier 1 Leverage Ratio

 

 

7.91

%

 

7.75

%

 

8.79

%

 

8.68

%

Total stockholders' equity to total assets

 

 

12.25

%

 

11.75

%

 

13.09

%

 

12.89

%

Tangible stockholders' equity to tangible assets (non-GAAP)

 

 

8.16

%

 

7.76

%

 

8.58

%

 

8.46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Financial Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of branches

 

 

58

 

 

58

 

 

58

 

 

58

 

Number of ATMs

 

 

302

 

 

295

 

 

301

 

 

293

 

Number of Full-Time Equivalent Employees

 

 

2,099

 

 

2,100

 

 

2,092

 

 

2,099

 

(1)

Except for the efficiency ratio and the core efficiency ratio, amounts are annualized for the three and nine months ended September 30, 2020 and 2019 and the three months ended June 30, 2020.

(2)

Core return on average tangible assets is a non-GAAP financial measure. We compute our core return on average tangible assets as the ratio of core 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. For a reconciliation to the most directly comparable GAAP financial measure for core net income, see Table 14, GAAP to Non-GAAP Reconciliation.

(3)

Core return on average tangible stockholders equity is a non-GAAP financial measure. We compute our core return on average tangible stockholders equity as the ratio of core 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. For a reconciliation to the most directly comparable GAAP financial measure for core net income, see Table 14, GAAP to Non-GAAP Reconciliation.

(4)

Tangible book value is a non-GAAP financial measure. We compute our tangible book value as the ratio of tangible stockholders equity to shares outstanding. Tangible stockholders equity is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our total stockholders equity. For a reconciliation to the most directly comparable GAAP financial measure for core net income, see Table 14, GAAP to Non-GAAP Reconciliation.



Consolidated Statements of Income

 

Table 2

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

(dollars in thousands, except per share amounts)

 

2020

 

2020

 

 

2019

 

2020

 

 

2019

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and lease financing

 

$

120,940

 

$

122,298

 

 

$

144,691

 

$

378,209

 

 

$

435,980

 

Available-for-sale securities

 

 

20,317

 

 

17,529

 

 

 

22,256

 

 

59,056

 

 

 

71,526

 

Other

 

 

670

 

 

792

 

 

 

3,234

 

 

3,813

 

 

 

9,054

 

Total interest income

 

 

141,927

 

 

140,619

 

 

 

170,181

 

 

441,078

 

 

 

516,560

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

6,227

 

 

8,583

 

 

 

22,753

 

 

30,410

 

 

 

69,643

 

Short-term and long-term borrowings

 

 

1,698

 

 

4,214

 

 

 

4,347

 

 

10,161

 

 

 

13,134

 

Total interest expense

 

 

7,925

 

 

12,797

 

 

 

27,100

 

 

40,571

 

 

 

82,777

 

Net interest income

 

 

134,002

 

 

127,822

 

 

 

143,081

 

 

400,507

 

 

 

433,783

 

Provision for credit losses

 

 

5,072

 

 

55,446

 

 

 

 

 

101,718

 

 

 

9,550

 

Net interest income after provision for credit losses

 

 

128,930

 

 

72,376

 

 

 

143,081

 

 

298,789

 

 

 

424,233

 

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

6,523

 

 

5,927

 

 

 

8,554

 

 

21,400

 

 

 

24,737

 

Credit and debit card fees

 

 

14,049

 

 

10,870

 

 

 

16,839

 

 

39,868

 

 

 

50,123

 

Other service charges and fees

 

 

9,021

 

 

7,912

 

 

 

8,903

 

 

25,472

 

 

 

27,435

 

Trust and investment services income

 

 

8,664

 

 

8,664

 

 

 

8,698

 

 

26,919

 

 

 

26,247

 

Bank-owned life insurance

 

 

4,903

 

 

4,432

 

 

 

5,743

 

 

11,595

 

 

 

12,946

 

Investment securities gains (losses), net

 

 

24

 

 

(211

)

 

 

 

 

(102

)

 

 

(2,592

)

Other

 

 

5,714

 

 

8,062

 

 

 

1,243

 

 

18,630

 

 

 

6,929

 

Total noninterest income

 

 

48,898

 

 

45,656

 

 

 

49,980

 

 

143,782

 

 

 

145,825

 

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

44,291

 

 

42,414

 

 

 

44,955

 

 

131,534

 

 

 

132,000

 

Contracted services and professional fees

 

 

15,073

 

 

15,478

 

 

 

14,649

 

 

46,606

 

 

 

42,597

 

Occupancy

 

 

6,921

 

 

7,302

 

 

 

7,250

 

 

21,466

 

 

 

21,522

 

Equipment

 

 

5,137

 

 

5,207

 

 

 

4,024

 

 

15,052

 

 

 

12,852

 

Regulatory assessment and fees

 

 

2,445

 

 

2,100

 

 

 

1,992

 

 

6,491

 

 

 

5,588

 

Advertising and marketing

 

 

1,374

 

 

1,402

 

 

 

1,647

 

 

4,599

 

 

 

5,593

 

Card rewards program

 

 

5,046

 

 

5,163

 

 

 

6,930

 

 

17,224

 

 

 

21,326

 

Other

 

 

11,342

 

 

12,384

 

 

 

12,019

 

 

36,573

 

 

 

37,901

 

Total noninterest expense

 

 

91,629

 

 

91,450

 

 

 

93,466

 

 

279,545

 

 

 

279,379

 

Income before provision for income taxes

 

 

86,199

 

 

26,582

 

 

 

99,595

 

 

163,026

 

 

 

290,679

 

Provision for income taxes

 

 

21,098

 

 

6,533

 

 

 

25,396

 

 

39,011

 

 

 

74,123

 

Net income

 

$

65,101

 

$

20,049

 

 

$

74,199

 

$

124,015

 

 

$

216,556

 

Basic earnings per share

 

$

0.50

 

$

0.15

 

 

$

0.56

 

$

0.95

 

 

$

1.62

 

Diluted earnings per share

 

$

0.50

 

$

0.15

 

 

$

0.56

 

$

0.95

 

 

$

1.61

 

Basic weighted-average outstanding shares

 

 

129,896,054

 

 

129,856,730

 

 

 

132,583,902

 

 

129,882,878

 

 

 

133,957,192

 

Diluted weighted-average outstanding shares

 

 

130,085,534

 

 

130,005,195

 

 

 

132,877,769

 

 

130,129,690

 

 

 

134,231,762

 



Consolidated Balance Sheets

 

Table 3

 

 

September 30,

 

June 30,

 

December 31,

 

September 30,

(dollars in thousands)

 

2020

 

 

2020

 

 

2019

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

333,744

 

 

$

347,592

 

 

$

360,375

 

 

$

358,863

 

Interest-bearing deposits in other banks

 

 

482,585

 

 

 

1,507,630

 

 

 

333,642

 

 

 

985,154

 

Investment securities, at fair value (amortized cost: $5,584,556 as of September 30, 2020, $5,025,433 as of June 30, 2020, $4,080,663 as of December 31, 2019 and $4,143,124 as of September 30, 2019)

 

 

5,692,883

 

 

 

5,135,775

 

 

 

4,075,644

 

 

 

4,157,082

 

Loans held for sale

 

 

34,669

 

 

 

6,698

 

 

 

904

 

 

 

1,594

 

Loans and leases

 

 

13,499,969

 

 

 

13,764,030

 

 

 

13,211,650

 

 

 

12,843,396

 

Less: allowance for credit losses

 

 

195,876

 

 

 

192,120

 

 

 

130,530

 

 

 

132,964

 

Net loans and leases

 

 

13,304,093

 

 

 

13,571,910

 

 

 

13,081,120

 

 

 

12,710,432

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premises and equipment, net

 

 

321,229

 

 

 

322,919

 

 

 

316,885

 

 

 

315,309

 

Other real estate owned and repossessed personal property

 

 

 

 

 

446

 

 

 

319

 

 

 

82

 

Accrued interest receivable

 

 

66,005

 

 

 

58,420

 

 

 

45,239

 

 

 

44,671

 

Bank-owned life insurance

 

 

462,422

 

 

 

458,720

 

 

 

453,873

 

 

 

453,410

 

Goodwill

 

 

995,492

 

 

 

995,492

 

 

 

995,492

 

 

 

995,492

 

Mortgage servicing rights

 

 

10,922

 

 

 

11,595

 

 

 

12,668

 

 

 

13,630

 

Other assets

 

 

606,657

 

 

 

576,518

 

 

 

490,573

 

 

 

562,501

 

Total assets

 

$

22,310,701

 

 

$

22,993,715

 

 

$

20,166,734

 

 

$

20,598,220

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing

 

$

11,989,492

 

 

$

12,481,543

 

 

$

10,564,922

 

 

$

11,136,424

 

Noninterest-bearing

 

 

6,908,270

 

 

 

6,880,091

 

 

 

5,880,072

 

 

 

5,720,822

 

Total deposits

 

 

18,897,762

 

 

 

19,361,634

 

 

 

16,444,994

 

 

 

16,857,246

 

Short-term borrowings

 

 

 

 

 

200,000

 

 

 

400,000

 

 

 

400,000

 

Long-term borrowings

 

 

200,010

 

 

 

200,019

 

 

 

200,019

 

 

 

200,018

 

Retirement benefits payable

 

 

138,806

 

138,624 138,222 128,442 Other liabilities 340,189 391,541 343,241 357,956 Total liabilities 19,576,767 20,291,818 17,526,476 17,943,662 Stockholders' equity Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 140,190,428 / 129,911,789 shares as of September 30, 2020, issued/outstanding: 140,140,542 / 129,866,898 shares as of June 30, 2020, issued/outstanding: 139,917,150 / 129,928,479 shares as of December 31, 2019 and issued/outstanding: 139,908,699 / 131,260,900 shares as of September 30, 2019) 1,402 1,401 1,399 1,399 Additional paid-in capital 2,511,849 2,509,271 2,503,677 2,501,324 Retained earnings 446,315 415,296 437,072 403,317 Accumulated other comprehensive income (loss), net 51,254 52,731 (31,749) (18,774)Treasury stock (10,278,639 shares as of September 30, 2020, 10,273,644 shares as of June 30, 2020, 9,988,671 shares as of December 31, 2019 and 8,647,799 shares as of September 30, 2019) (276,886) (276,802) (270,141) (232,708)Total stockholders' equity 2,733,934 2,701,897 2,640,258 2,654,558 Total liabilities and stockholders' equity $ 22,310,701 $22,993,715 $20,166,734 $20,598,220



Average Balances and Interest Rates

Table 4

Three Months Ended

Three Months Ended

Three Months Ended

September 30, 2020

June 30, 2020

September 30, 2019

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

$

889.6

$

0.2

0.10

%

$

1,436.2

$

0.4

0.10

%

$

447.8

$

2.3

2.02

%

Available-for-Sale Investment Securities

5,334.2

20.3

1.53

4,390.4

17.5

1.60

4,296.3

22.3

2.07

Loans Held for Sale

10.2

0.1

2.67

9.8

0.1

2.93

1.4

2.36

Loans and Leases(1)

Commercial and industrial

3,230.4

21.6

2.67

3,601.0

24.3

2.71

2,885.9

30.0

4.12

Commercial real estate

3,418.0

27.8

3.23

3,438.8

28.3

3.31

3,294.7

37.3

4.49

Construction

637.6

5.2

3.22

584.1

4.9

3.35

477.2

5.6

4.67

Residential:

Residential mortgage

3,680.5

37.9

4.12

3,682.7

35.7

3.88

3,644.9

38.6

4.23

Home equity line

871.1

6.6

3.02

885.2

6.8

3.07

912.8

8.6

3.74

Consumer

1,474.4

20.2

5.46

1,526.5

20.6

5.42

1,651.4

23.3

5.61

Lease financing

247.4

1.8

2.90

238.4

1.7

2.88

165.4

1.3

3.14

Total Loans and Leases

13,559.4

121.1

3.56

13,956.7

122.3

3.52

13,032.3

144.7

4.41

Other Earning Assets

53.3

0.5

3.32

61.7

0.4

2.79

84.8

0.9

4.47

Total Earning Assets(2)

19,846.7

142.2

2.86

19,854.8

140.7

2.84

17,862.6

170.2

3.79

Cash and Due from Banks

307.9

295.1

341.7

Other Assets

2,186.9

2,191.8

2,128.2

Total Assets

$

22,341.5

$

22,341.7

$

20,332.5

Interest-Bearing Liabilities

Interest-Bearing Deposits

Savings

$

5,768.3

$

0.6

0.04

%

$

5,501.9

$

0.9

0.07

%

4,891.5

$

4.6

0.37

%

Money Market

3,288.2

0.4

0.05

3,270.3

1.1

0.13

3,067.4

7.1

0.92

Time

3,029.8

5.2

0.69

3,335.6

6.6

0.79

2,872.6

11.1

1.54

Total Interest-Bearing Deposits

12,086.3

6.2

0.20

12,107.8

8.6

0.29

10,831.5

22.8

0.83

Short-Term Borrowings

45.1

0.3

2.69

395.6

2.8

2.88

370.0

2.6

2.84

Long-Term Borrowings

200.0

1.4

2.77

200.0

1.4

2.77

239.1

1.7

2.82

Total Interest-Bearing Liabilities

12,331.4

7.9

0.26

12,703.4

12.8

0.41

11,440.6

27.1

0.94

Net Interest Income

$

134.3

$

127.9

$

143.1

Interest Rate Spread

2.60

%

2.43

%

2.85

%

Net Interest Margin

2.70

%

2.58

%

3.19

%

Noninterest-Bearing Demand Deposits

6,805.7

6,432.6

5,742.3

Other Liabilities

500.3

507.9

501.2

Stockholders' Equity

2,704.1

2,697.8

2,648.4

Total Liabilities and Stockholders' Equity

$

22,341.5

$

22,341.7

$

20,332.5



(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 $0.3 million, $0.1 million and nil for the three months ended September 30, 2020, June 30, 2020 and September 30, 2019, respectively.



Average Balances and Interest Rates

Table 5

Nine Months Ended

Nine Months Ended

September 30, 2020

September 30, 2019

Average

Income/

Yield/

Average

Income/

Yield/

(dollars in millions)

Balance

Expense

Rate

Balance

Expense

Rate

Earning Assets

Interest-Bearing Deposits in Other Banks

$

947.3

$

2.2

0.31

%

$

400.6

$

6.9

2.31

%

Available-for-Sale Investment Securities

4,588.7

59.1

1.72

4,383.6

71.5

2.18

Loans Held for Sale

11.9

0.2

2.31

0.8

2.52

Loans and Leases(1)

Commercial and industrial

3,202.4

70.5

2.94

3,094.8

97.5

4.21

Commercial real estate

3,423.9

90.7

3.54

3,129.8

108.1

4.62

Construction

586.9

15.8

3.59

565.2

20.0

4.73

Residential:

Residential mortgage

3,700.8

111.3

4.01

3,590.2

112.4

4.17

Home equity line

881.2

21.1

3.20

912.4

25.9

3.79

Consumer

1,537.5

63.9

5.55

1,658.7

68.5

5.52

Lease financing

236.4

5.1

2.90

154.0

3.6

3.15

Total Loans and Leases

13,569.1

378.4

3.72

13,105.1

436.0

4.44

Other Earning Assets

57.3

1.6

3.78

84.3

2.2

3.37

Total Earning Assets(2)

19,174.3

441.5

3.07

17,974.4

516.6

3.84

Cash and Due from Banks

310.1

348.1

Other Assets

2,183.5

2,082.8

Total Assets

$

21,667.9

$

20,405.3

Interest-Bearing Liabilities

Interest-Bearing Deposits

Savings

$

5,454.7

$

4.7

0.12

%

$

4,806.0

$

12.8

0.35

%

Money Market

3,208.1

6.1

0.25

3,125.5

22.1

0.95

Time

2,966.9

19.6

0.88

2,999.0

34.8

1.55

Total Interest-Bearing Deposits

11,629.7

30.4

0.35

10,930.5

69.7

0.85

Short-Term Borrowings

279.9

6.0

2.87

145.7

3.0

2.76

Long-Term Borrowings

200.0

4.2

2.77

476.2

10.1

2.84

Total Interest-Bearing Liabilities

12,109.6

40.6

0.45

11,552.4

82.8

0.96

Net Interest Income

$

400.9

$

433.8

Interest Rate Spread

2.62

%

2.88

%

Net Interest Margin

2.79

%

3.22

%

Noninterest-Bearing Demand Deposits

6,365.5

5,769.9

Other Liabilities

505.2

482.7

Stockholders' Equity

2,687.6

2,600.3

Total Liabilities and Stockholders' Equity

$

21,667.9

$

20,405.3


(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 $0.4 million and nil for the nine months ended September 30, 2020 and 2019, respectively.



Analysis of Change in Net Interest Income

Table 6

Three Months Ended September 30, 2020

Compared to June 30, 2020

(dollars in millions)

Volume

Rate

Total

Change in Interest Income:

Interest-Bearing Deposits in Other Banks

$

(0.2

)

$

$

(0.2

)

Available-for-Sale Investment Securities

3.6

(0.8

)

2.8

Loans and Leases

Commercial and industrial

(2.3

)

(0.4

)

(2.7

)

Commercial real estate

(0.1

)

(0.4

)

(0.5

)

Construction

0.5

(0.2

)

0.3

Residential:

Residential mortgage

2.2

2.2

Home equity line

(0.1

)

(0.1

)

(0.2

)

Consumer

(0.6

)

0.2

(0.4

)

Lease financing

0.1

0.1

Total Loans and Leases

(2.5

)

1.3

(1.2

)

Other Earning Assets

0.1

0.1

Total Change in Interest Income

0.9

0.6

1.5

Change in Interest Expense: