First Hawaiian, Inc. Reports First Quarter 2018 Financial Results and Declares Dividend

• Net income of $68.0 million or $0.49 per diluted share and core net income¹ of $68.3 million, or $0.49 per diluted share
• 1.35% return on average total assets and 1.43% core return on average tangible assets¹
• 11.02% return on average total equity and 18.40% core return on average tangible common equity¹
• 48.1% efficiency ratio
• The Board of Directors declared a dividend of $0.24 per share.

HONOLULU, April 26, 2018 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (the “Company”) today reported financial results for its first quarter ended March 31, 2018.

“We are very pleased with our performance in the first quarter,” said Bob Harrison, Chairman and Chief Executive Officer.  “We had strong earnings driven by good loan growth, margin expansion, excellent asset quality, and an effective tax rate in line with our expectations.  We have been very focused on managing expenses, which resulted in an efficiency ratio of 48.1%.  At quarter end, the bank remained well capitalized with a tier 1 capital ratio of 12.73%, a total capital ratio of 13.77%, and a tier 1 leverage ratio of 8.71%.”

On April 25, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.24 per share.  The dividend will be payable on June 8, 2018 to shareholders of record at the close of business on May 29, 2018.

Earnings Highlights

Net income for the quarter ended March 31, 2018 was $68.0 million, or $0.49 per diluted share, compared to $11.7 million, or $0.08 per diluted share, for the quarter ended December 31, 2017, and $56.7 million, or $0.41 per diluted share, for the quarter ended March 31, 2017.  Core net income¹ for the quarter ended March 31, 2018 was $68.3 million, or $0.49 per diluted share, compared to $59.2 million, or $0.42 per diluted share, for the quarter ended December 31, 2017, and $57.0 million, or $0.41 per diluted share, for the quarter ended March 31, 2017.

Net interest income for the quarter ended March 31, 2018 was $139.7 million, an increase of $4.8 million compared to $134.9 million for the quarter ended December 31, 2017, and an increase of $10.3 million compared to $129.3 million for the quarter ended March 31, 2017.  The increase in net interest income compared to the fourth quarter of 2017 was due to higher average balances of loans and interest-bearing deposits in other banks, and higher yields on loans and investment securities, partially offset by higher rates on deposits.  The increase in net interest income compared to the first quarter of 2017 was due to higher average balances of loans and higher yields on loans, interest-bearing deposits in other banks, and investment securities, partially offset by higher rates on deposits.

¹ A non-GAAP measure. For more information on these measures, including reconciliation to the most directly comparable GAAP measure, see “Use of Non-GAAP Financial Measures” and Tables 11 and 12 at the end of this document.

Net interest margin (“NIM”) was 3.13%, 2.99% and 3.00%, for the quarters ended March 31, 2018, December 31, 2017, and March 31, 2017, respectively.  The 14 basis point increase in NIM versus the prior quarter was due to increased overall yields on earnings assets, a positive $1.9 million premium amortization adjustment, and the impact of the short quarter, partially offset by higher deposit costs.  Excluding the premium amortization adjustment and the impact of the short quarter, the annualized NIM would have been approximately 3.03% for the quarter ended March 31, 2018.

Results for the quarter ended March 31, 2018 included a provision for credit losses of $6.0 million compared to $5.1 million in the quarter ended December 31, 2017 and $4.5 million in the quarter ended March 31, 2017.    

Noninterest income was $48.7 million in the quarter ended March 31, 2018, a decrease of $5.6 million compared to noninterest income of $54.3 million in the quarter ended December 31, 2017 and a decrease of $2.4 million compared to noninterest income of $51.1 million in the quarter ended March 31, 2017.    The decrease in noninterest income compared to the fourth quarter of 2017 was primarily due to $5.9 million lower other income.  Other income in the fourth quarter of 2017 quarter included a $4.3 million gain on sale of bank property and $3.7 million related to intercompany taxes.  The decrease in noninterest income compared to the first quarter of 2017 was primarily due to $2.5 million lower bank-owned life insurance (BOLI) income, $1.4 million lower service charges on deposit accounts and $0.8 million lower credit and debit card fees, partially offset by $1.3 million higher other income and $0.9 million higher trust and investment services income.  The first quarter of 2017 also included proceeds of $1.3 million from BOLI death benefits.

Noninterest expense was $90.6 million for the quarter ended March 31, 2018, an increase of $0.7 million from $89.9 million in the quarter ended December 31, 2017, and an increase of $4.6 million from $86.0 million in the quarter ended March 31, 2017.  The increase in noninterest expense compared to the fourth quarter of 2017 was primarily due to $1.0 million higher other expenses, $0.8 million higher contracted services and professional fees, $0.4 million higher occupancy expenses, $0.3 million higher regulatory assessments and fees and $0.2 million higher equipment expenses, partially offset by $1.5 million lower salaries and employee benefits and $0.5 million lower cards rewards program expenses.  Salaries and benefits in the fourth quarter included a $3.4 million expense due to bonuses awarded to virtually all employees following the passage of the Tax Cuts and Jobs Act.  The increase in noninterest expense compared to the first quarter of 2017 was primarily due to $2.0 million higher contracted services and professional fees, a $1.8 million increase in salaries and benefits, $0.8 million higher occupancy expenses, and $0.6 million higher other expenses, partially offset by $1.1 million lower advertising and marketing expenses.

The efficiency ratio was 48.1%, 47.5% and 47.7% for the quarters ended March 31, 2018, December 31, 2017 and March 31, 2017, respectively.

The effective tax rate for the first quarter of 2018 was 26.0% compared to 87.6% in the fourth quarter of 2017 and 36.9% in the same quarter last year.  The lower effective tax rate in the first quarter of 2018 compared to the previous quarter and the same quarter last year was due to the lower corporate tax rate resulting from the Tax Cuts and Jobs Act.  The provision for taxes in the fourth quarter of 2017 included a $47.6 million charge due to the revaluation of certain tax-related assets at the projected lower corporate tax rate resulting from the Tax Cuts and Jobs Act.  Excluding the one-time charge, the effective tax rate for the fourth quarter of 2017 was 37.1%.

Balance Sheet Highlights

Total assets were $20.2 billion at March 31, 2018, compared to $20.5 billion at December 31, 2017 and $19.8 billion at March 31, 2017.

The investment securities portfolio was $5.1 billion at March 31, 2018, compared to $5.2 billion at December 31, 2017 and $5.3 billion at March 31, 2017.  The portfolio remains largely comprised of securities issued by U. S. government agencies.

Total loans and leases were $12.5 billion at March 31, 2018, up 1.5%, from $12.3 billion at December 31, 2017 and up 5.8% from $11.8 billion at March 31, 2017.

The growth in loans and leases in the first quarter of 2018 compared to the fourth quarter of 2017 was led by increases in commercial and industrial loans (C&I) of $83.9 million, commercial real estate loans of $71.0 million, residential real estate loans of $66.0 million, and consumer loans of $9.5 million.  Construction loans declined by $38.6 million, primarily due to the completion of several large commercial construction projects.  Compared to March 31, 2017, the growth in loans and leases was due to increases in residential real estate loans of $291.5 million, commercial real estate loans of $206.3 million, construction loans of $124.5 million and consumer loans of $92.9 million.  C&I loans declined by $24.3 million.

Total deposits were $17.4 billion at March 31, 2018, a decrease of $0.2 billion, or 1.4%, from $17.6 billion at December 31, 2017, and an increase of $0.4 billion, or 2.5%, compared to $16.9 billion at March 31, 2017. 

Asset Quality

The Company's asset quality remained excellent during the first quarter of 2018. Total non-performing assets were $12.1 million, or 0.10% of total loans and leases and other real estate owned, at March 31, 2018, compared to non-performing assets of $10.2 million, or 0.08% of total loans and leases and other real estate owned, at December 31, 2017 and non­-performing assets of $7.7 million, or 0.07% of total loans and leases and other real estate owned, at March 31, 2017.

Net charge offs for the quarter ended March 31, 2018 were $4.6 million, or 0.15% of average loans and leases on an annualized basis, compared to $5.2 million, or 0.17% of average loans and leases on an annualized basis for the quarter ended December 31, 2017 and $4.1 million, or 0.15% of average loans and leases on an annualized basis for the quarter ended March 31, 2017.

The ratio of the allowance for loan and lease losses to total loans and leases was 1.11% at March 31, 2018 compared to 1.12% at December 31, 2017 and 1.15% at March 31, 2017. 

Capital

Total stockholders' equity was $2.5 billion at March 31, 2018, December 31, 2017 and March 31, 2017.   

The tier 1 leverage, common equity tier 1, and total capital ratios were 8.71%, 12.73% and 13.77%, respectively, at March 31, 2018, compared with 8.52%, 12.45% and 13.50% at December 31, 2017 and 8.52%, 12.78% and 13.87% at March 31, 2017. 

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 5:00 p.m. Eastern Time, 11:00 a.m. Hawaii Time.  To access the call, participants should dial [phone] (US/Canada), or [phone] (International) ten minutes prior to the start of the call and enter the conference ID:  8467599.  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 8:30 p.m. (Eastern Time) on May 6, 2018.  Access the replay by dialing [phone] or [phone] and entering the conference ID:  8467599.

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. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. For a discussion of some of the 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, 2017.

Use of Non-GAAP Financial Measures

We present net interest income, noninterest income, noninterest expense, net income, earnings per share 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 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 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 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 11 and 12 at the end of this document provide a reconciliation of these non-GAAP financial measures with their most closely related GAAP measures.

Investor Relations Contact: Kevin Haseyama, CFA [phone] [e-mail]

Media Contact: Susan Kam [phone] [e-mail]

Financial Highlights									Table 1
			For the Three Months Ended
			March 31,			December 31,			March 31,
(dollars in thousands, except per share data)			2018			2017			2017
Operating Results:
Net interest income			$	139,672		$	134,886		$	129,345
Provision for loan and lease losses				5,950			5,100			4,500
Noninterest income(1)				48,700			54,324			51,059
Noninterest expense(1)				90,587			89,850			85,991
Net income				67,958			11,684			56,740
Basic earnings per share				0.49			0.08			0.41
Diluted earnings per share				0.49			0.08			0.41
Dividends declared per share				0.24			0.22			0.22
Dividend payout ratio				48.98	%		275.00	%		53.66	%
Supplemental Income Statement Data (non-GAAP):
Core net interest income			$	139,672		$	134,886		$	129,345
Core noninterest income(1)				48,700			50,069			51,059
Core noninterest expense(1)				90,180			85,777			85,607
Core net income				68,259			59,163			56,982
Core basic earnings per share				0.49			0.42			0.41
Core diluted earnings per share				0.49			0.42			0.41
Performance Ratio:
Net interest margin				3.13	%		2.99	%		3.00	%
Core net interest margin (non-GAAP)				3.13	%		2.99	%		3.00	%
Efficiency ratio(1)				48.08	%		47.47	%		47.66	%
Core efficiency ratio (non-GAAP)(1)				47.86	%		46.36	%		47.45	%
Return on average total assets				1.35	%		0.23	%		1.16	%
Core return on average total assets (non-GAAP)				1.36	%		1.16	%		1.17	%
Return on average tangible assets				1.42	%		0.24	%		1.23	%
Core return on average tangible assets (non-GAAP)				1.43	%		1.22	%		1.23	%
Return on average total stockholders' equity				11.02	%		1.80	%		9.25	%
Core return on average total stockholders' equity (non-GAAP)				11.07	%		9.13	%		9.29	%
Return on average tangible stockholders' equity (non-GAAP)				18.32	%		2.94	%		15.41	%
Core return on average tangible stockholders’ equity (non-GAAP)				18.40	%		14.90	%		15.48	%
Average Balances:
Average loans and leases			$	12,296,678		$	12,169,167		$	11,582,645
Average earning assets				18,088,280			17,904,956			17,470,726
Average assets				20,407,718			20,193,919			19,769,508
Average deposits				17,504,054			17,211,872			16,900,354
Average shareholders' equity				2,500,299			2,570,704			2,488,519
Market Value Per Share:
Closing				27.83			29.18			29.92
High				32.36			30.85			35.32
Low				26.92			27.34			28.66

 

			As of			As of			As of
			March 31,			December 31,			March 31,
			2018			2017			2017
Balance Sheet Data:
Loans and leases			$	12,464,165		$	12,277,369		$	11,781,496
Total assets				20,242,942			20,549,461			19,792,785
Total deposits				17,362,422			17,612,122			16,938,178
Total stockholders' equity				2,520,862			2,532,551			2,505,994
Per Share of Common Stock:
Book value			$	18.06		$	18.14		$	17.96
Tangible book value (non-GAAP)				10.93			11.01			10.82
Asset Quality Ratios:
Non-accrual loans and leases / total loans and leases				0.10	%		0.08	%		0.06	%
Allowance for loan and lease losses / total loans and leases				1.11	%		1.12	%		1.15	%
Capital Ratios:
Common Equity Tier 1 Capital Ratio				12.73	%		12.45	%		12.78	%
Tier 1 Capital Ratio				12.73	%		12.45	%		12.78	%
Total Capital Ratio				13.77	%		13.50	%		13.87	%
Tier 1 Leverage Ratio				8.71	%		8.52	%		8.52	%
Total stockholders' equity to total assets				12.45	%		12.32	%		12.66	%
Tangible stockholders' equity to tangible assets (non-GAAP)				7.93	%		7.86	%		8.04	%
Non-Financial Data:
Number of branches				61			62			62
Number of ATMs				310			310			311
Number of Full-Time Equivalent Employees				2,213			2,220			2,195

 

Consolidated Statements of Income		Table 2
		Three Months Ended
		March 31,			December 31,			March 31,
(dollars in thousands, except per share amounts)		2018			2017			2017
Interest income
Loans and lease financing		$	123,551		$	120,244		$	109,266
Available-for-sale securities			28,993			26,589			26,429
Other			2,392			1,725			1,226
Total interest income			154,936			148,558			136,921
Interest expense
Deposits			15,264			13,665			7,570
Short-term borrowings and long-term debt			—			7			6
Total interest expense			15,264			13,672			7,576
Net interest income			139,672			134,886			129,345
Provision for loan and lease losses			5,950			5,100			4,500
Net interest income after provision for loan and lease losses			133,722			129,786			124,845
Noninterest income
Service charges on deposit accounts			7,955			8,259			9,381
Credit and debit card fees			15,497			15,599			16,305
Other service charges and fees			9,342			8,346			9,097
Trust and investment services income			8,231			7,949			7,338
Bank-owned life insurance			2,044			2,659			4,578
Other			5,631			11,512			4,360
Total noninterest income			48,700			54,324			51,059
Noninterest expense
Salaries and employee benefits			42,160			43,627			40,408
Contracted services and professional fees			12,287			11,481			10,308
Occupancy			6,484			6,103			5,709
Equipment			4,588			4,349			4,197
Regulatory assessment and fees			3,973			3,715			3,774
Advertising and marketing			951			936			2,028
Card rewards program			5,718			6,256			5,775
Other			14,426			13,383			13,792
Total noninterest expense			90,587			89,850			85,991
Income before provision for income taxes			91,835			94,260			89,913
Provision for income taxes			23,877			82,576			33,173
Net income		$	67,958		$	11,684		$	56,740
Basic earnings per share		$	0.49		$	0.08		$	0.41
Diluted earnings per share		$	0.49		$	0.08		$	0.41
Dividends declared per share		$	0.24		$	0.22		$	0.22
Basic weighted-average outstanding shares			139,600,712			139,588,782			139,545,728
Diluted weighted-average outstanding shares			139,732,100			139,698,674			139,637,410

 

Consolidated Balance Sheets		Table 3
		March 31,				December 31,				March 31,
(dollars in thousands)		2018				2017				2017
Assets
Cash and due from banks		$	283,135			$	367,084			$	249,953
Interest-bearing deposits in other banks			409,357				667,560				527,659
Investment securities			5,076,766				5,234,658				5,260,262
Loans held for sale			397				556				—
Loans and leases			12,464,165				12,277,369				11,781,496
Less: allowance for loan and lease losses			138,574				137,253				135,847
Net loans and leases			12,325,591				12,140,116				11,645,649
Premises and equipment, net			288,565				289,215				295,608
Other real estate owned and repossessed personal property			—				329				329
Accrued interest receivable			47,499				47,987				39,386
Bank-owned life insurance			440,054				438,010				429,800
Goodwill			995,492				995,492				995,492
Mortgage servicing rights			18,659				13,196				15,800
Other assets			357,427				355,258				332,847
Total assets		$	20,242,942			$	20,549,461			$	19,792,785
Liabilities and Stockholders' Equity
Deposits:
Interest-bearing		$	11,312,288			$	11,485,269			$	10,917,631
Noninterest-bearing			6,050,134				6,126,853				6,020,547
Total deposits			17,362,422				17,612,122				16,938,178
Long-term debt			34				34				41
Retirement benefits payable			134,684				134,218				133,819
Other liabilities			224,940				270,536				214,753
Total liabilities			17,722,080				18,016,910				17,286,791
Stockholders' equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 139,611,795 / 139,601,123 shares as of March 31, 2018, issued/outstanding: 139,599,454 / 139,588,782 shares as of December 31, 2017 and issued and outstanding: 139,546,615 shares as of March 31, 2017)			1,396				1,396				1,395
Additional paid-in capital			2,490,910				2,488,643				2,486,596
Retained earnings			193,522				139,177				104,695
Accumulated other comprehensive loss, net			(164,684	)			(96,383	)			(86,692	)
Treasury stock (10,672 shares as of both March 31, 2018 and December 31, 2017 and nil as of March 31, 2017)			(282	)			(282	)			—
Total stockholders' equity			2,520,862				2,532,551				2,505,994
Total liabilities and stockholders' equity		$	20,242,942			$	20,549,461			$	19,792,785

 

Average Balances and Interest Rates																							Table 4
		Three Months Ended								Three Months Ended								Three Months Ended
		March 31, 2018								December 31, 2017								March 31, 2017
		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		$	616.8		$	2.3		1.53	%	$	479.4		$	1.6		1.31	%	$	640.2		$	1.2		0.78	%
Available-for-Sale Investment Securities			5,160.3			29.0		2.28			5,236.8			26.6		2.01			5,236.6			26.4		2.05
Loans Held for Sale			0.1			—		2.99			0.1			—		3.57			—			—		—
Loans and Leases (1)
Commercial and industrial			3,104.4			27.7		3.62			3,130.3			26.3		3.34			3,233.6			24.3		3.04
Real estate - commercial			2,799.9			26.5		3.83			2,755.1			25.6		3.68			2,481.2			22.2		3.63
Real estate - construction			621.2			5.7		3.74			605.5			5.5		3.57			460.3			3.7		3.25
Real estate - residential			4,009.8			41.1		4.15			3,933.9			40.3		4.07			3,723.7			37.6		4.10
Consumer			1,599.6			21.3		5.41			1,575.1			21.3		5.36			1,513.4			20.3		5.43
Lease financing			161.8			1.2		3.10			169.3			1.3		2.94			170.5			1.2		2.77
Total Loans and Leases			12,296.7			123.5		4.07			12,169.2			120.3		3.92			11,582.7			109.3		3.83
Other Earning Assets			14.4			0.1		1.68			19.5			0.1		2.98			11.2			—		0.77
Total Earning Assets (2)			18,088.3			154.9		3.47			17,905.0			148.6		3.29			17,470.7			136.9		3.18
Cash and Due from Banks			318.9								317.5								324.7
Other Assets			2,000.5								1,971.4								1,974.1
Total Assets		$	20,407.7							$	20,193.9							$	19,769.5
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings		$	4,543.1		$	1.7		0.15	%	$	4,401.0		$	1.3		0.12	%	$	4,506.4		$	0.7		0.06	%
Money Market			2,710.9			1.7		0.26			2,582.1			1.1		0.17			2,494.3			0.6		0.09
Time			4,252.3			11.8		1.13			4,299.7			11.3		1.04			3,985.8			6.3		0.65
Total Interest-Bearing Deposits			11,506.3			15.2		0.54			11,282.8			13.7		0.48			10,986.5			7.6		0.28
Short-Term Borrowings			—			—		—			2.3			—		1.11			3.9			—		0.54
Total Interest-Bearing Liabilities			11,506.3			15.2		0.54			11,285.1			13.7		0.48			10,990.4			7.6		0.28
Net Interest Income					$	139.7							$	134.9							$	129.3
Interest Rate Spread								2.93	%							2.81	%							2.90	%
Net Interest Margin								3.13	%							2.99	%							3.00	%
Noninterest-Bearing Demand Deposits			5,997.8								5,929.1								5,913.9
Other Liabilities			403.3								409.0								376.7
Stockholders' Equity			2,500.3								2,570.7								2,488.5
Total Liabilities and Stockholders' Equity		$	20,407.7							$	20,193.9							$	19,769.5

 

Analysis of Change in Net Interest Income											Table 5
		Three Months Ended March 31, 2018
		Compared to December 31, 2017
(dollars in millions)		Volume				Rate				Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks		$	0.5			$	0.3			$	0.8
Available-for-Sale Investment Securities			(0.4	)			2.8				2.4
Loans and Leases
Commercial and industrial			(0.2	)			1.6				1.4
Real estate - commercial			0.4				0.5				0.9
Real estate - construction			0.2				0.1				0.3
Real estate - residential			0.8				(0.1	)			0.7
Consumer			0.3				(0.3	)			—
Lease financing			—				(0.1	)			(0.1	)
Total Loans and Leases			1.5				1.7				3.2
Total Change in Interest Income			1.6				4.8				6.4
Change in Interest Expense:
Interest-Bearing Deposits
Savings			—				0.4				0.4
Money Market			0.1				0.5				0.6
Time			(0.1	)			0.7				0.6
Total Interest-Bearing Deposits			—				1.6				1.6
Total Change in Interest Expense			—				1.6				1.6
Change in Net Interest Income		$	1.6			$	3.2			$	4.8

 

Analysis of Change in Net Interest Income											Table 6
		Three Months Ended March 31, 2018
		Compared to March 31, 2017
(dollars in millions)		Volume				Rate				Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks		$	—			$	1.1			$	1.1
Available-for-Sale Investment Securities			(0.4	)			3.0				2.6
Loans and Leases
Commercial and industrial			(1.0	)			4.5				3.5
Real estate - commercial			3.0				1.2				4.2
Real estate - construction			1.4				0.7				2.1
Real estate - residential			2.9				0.5				3.4
Consumer			1.1				(0.1	)			1.0
Lease financing			—				0.1				0.1
Total Loans and Leases			7.4				6.9				14.3
Total Change in Interest Income			7.0				11.0				18.0
Change in Interest Expense:
Interest-Bearing Deposits
Savings			—				1.0				1.0
Money Market			0.1				1.1				1.2
Time			0.5				5.0				5.5
Total Interest-Bearing Deposits			0.6				7.1				7.7
Total Change in Interest Expense			0.6				7.1				7.7
Change in Net Interest Income		$	6.4			$	3.9			$	10.3

 

Loans and Leases										Table 7
			March 31,			December 31,			March 31,
(dollars in thousands)			2018			2017			2017
Commercial and industrial			$	3,219,210		$	3,135,266		$	3,243,508
Real estate:
Commercial				2,738,557			2,667,597			2,532,253
Construction				594,266			632,911			469,741
Residential				4,156,003			4,090,053			3,864,509
Total real estate				7,488,826			7,390,561			6,866,503
Consumer				1,595,989			1,586,476			1,503,129
Lease financing				160,140			165,066			168,356
Total loans and leases			$	12,464,165		$	12,277,369		$	11,781,496

 

Deposits										Table 8
			March 31,			December 31,			March 31,
(dollars in thousands)			2018			2017			2017
Demand			$	6,050,134		$	6,126,853		$	6,020,547
Savings				4,614,668			4,509,419			4,503,663
Money Market				2,631,894			2,801,968			2,496,642
Time				4,065,726			4,173,882			3,917,326
Total Deposits			$	17,362,422		$	17,612,122		$	16,938,178

 

Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More										Table 9
			March 31,			December 31,			March 31,
(dollars in thousands)			2018			2017			2017
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial Loans:
Commercial and industrial			$	1,888		$	2,932		$	2,154
Real estate - commercial				2,885			1,786			—
Real estate - construction				2,001			—			—
Lease financing				—			—			153
Total Commercial Loans				6,774			4,718			2,307
Residential				5,349			5,107			5,023
Total Non-Accrual Loans and Leases				12,123			9,825			7,330
Other Real Estate Owned				—			329			329
Total Non-Performing Assets			$	12,123		$	10,154		$	7,659
Accruing Loans and Leases Past Due 90 Days or More
Commercial Loans:
Commercial and industrial			$	83		$	220		$	309
Real estate - commercial				—			1,400			—
Real estate - construction				343			—			—
Lease financing				—			—			84
Total Commercial Loans				426			1,620			393
Residential				1,469			1,360			1,437
Consumer				1,744			1,394			1,718
Total Accruing Loans and Leases Past Due 90 Days or More			$	3,639		$	4,374		$	3,548
Restructured Loans on Accrual Status and Not Past Due 90 Days or More				33,429			34,130			50,758
Total Loans and Leases			$	12,464,165		$	12,277,369		$	11,781,496

 

Allowance for Loan and Lease Losses											Table 10
		For the Three Months Ended
		March 31,				December 31,				March 31,
(dollars in thousands)		2018				2017				2017
Balance at Beginning of Period		$	137,253			$	137,327			$	135,494
Loans and Leases Charged-Off
Commercial Loans:
Commercial and industrial			(475	)			(181	)			(855	)
Total Commercial Loans			(475	)			(181	)			(855	)
Residential			—				(93	)			(22	)
Consumer			(6,625	)			(6,765	)			(5,572	)
Total Loans and Leases Charged-Off			(7,100	)			(7,039	)			(6,449	)
Recoveries on Loans and Leases Previously Charged-Off
Commercial Loans:
Commercial and industrial			64				19				114
Real estate - commercial			122				128				77
Total Commercial Loans			186				147				191
Residential			182				77				321
Consumer			2,103				1,641				1,790
Total Recoveries on Loans and Leases Previously Charged-Off			2,471				1,865				2,302
Net Loans and Leases Charged-Off			(4,629	)			(5,174	)			(4,147	)
Provision for Loan and Lease Losses			5,950				5,100				4,500
Balance at End of Period		$	138,574			$	137,253			$	135,847
Average Loans and Leases Outstanding		$	12,296,678			$	12,169,167			$	11,582,645
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding			0.15	%			0.17	%			0.15	%
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding			1.11	%			1.12	%			1.15	%

 

GAAP to Non-GAAP Reconciliation							Table 11
		For the Three Months Ended
		March 31,			December 31,			March 31,
(dollars in thousands, except per share amounts)		2018			2017			2017
Income Statement Data:
Net income		$	67,958		$	11,684		$	56,740
Average total stockholders' equity		$	2,500,299		$	2,570,704		$	2,488,519
Less: average goodwill			995,492			995,492			995,492
Average tangible stockholders' equity		$	1,504,807		$	1,575,212		$	1,493,027
Average total assets		$	20,407,718		$	20,193,919		$	19,769,508
Less: average goodwill			995,492			995,492			995,492
Average tangible assets		$	19,412,226		$	19,198,427		$	18,774,016
Return on average total stockholders' equity(1)			11.02	%		1.80	%		9.25	%
Return on average tangible stockholders' equity (non-GAAP)(1)			18.32	%		2.94	%		15.41	%
Return on average total assets(1)			1.35	%		0.23	%		1.16	%
Return on average tangible assets (non-GAAP)(1)			1.42	%		0.24	%		1.23	%
Average stockholders' equity to average assets			12.25	%		12.73	%		12.59	%
Tangible average stockholders' equity to tangible average assets (non-GAAP)			7.75	%		8.20	%		7.95	%
		As of			As of			As of
		March 31,			December 31,			March 31,
		2018			2017			2017
Balance Sheet Data:
Total stockholders' equity		$	2,520,862		$	2,532,551		$	2,505,994
Less: goodwill			995,492			995,492			995,492
Tangible stockholders' equity		$	1,525,370		$	1,537,059		$	1,510,502
Total assets		$	20,242,942		$	20,549,461		$	19,792,785
Less: goodwill			995,492			995,492			995,492
Tangible assets		$	19,247,450		$	19,553,969		$	18,797,293
Shares outstanding			139,601,123			139,588,782			139,546,615
Total stockholders' equity to total assets			12.45	%		12.32	%		12.66	%
Tangible stockholders' equity to tangible assets (non-GAAP)			7.93	%		7.86	%		8.04	%
Book value per share		$	18.06		$	18.14		$	17.96
Tangible book value per share (non-GAAP)		$	10.93		$	11.01		$	10.82

 

GAAP to Non-GAAP Reconciliation											Table 12
		For the Three Months Ended
		March 31,				December 31,				March 31,
(dollars in thousands, except per share amounts)		2018				2017				2017
Net interest income		$	139,672			$	134,886			$	129,345
Core net interest income (non-GAAP)		$	139,672			$	134,886			$	129,345
Noninterest income		$	48,700			$	54,324			$	51,059
Gains on sale of real estate			—				(4,255	)			—
Core noninterest income (non-GAAP)		$	48,700			$	50,069			$	51,059
Noninterest expense		$	90,587			$	89,850			$	85,991
One-time items(1)			(407	)			(4,073	)			(384	)
Core noninterest expense (non-GAAP)		$	90,180			$	85,777			$	85,607
Net income		$	67,958			$	11,684			$	56,740
Gains on sale of real estate			—				(4,255	)			—
One-time items(1)			407				4,073				384
Tax reform bill			—				47,598				—
Tax adjustments(2)			(106	)			63				(142	)
Total core adjustments			301				47,479				242
Core net income (non-GAAP)		$	68,259			$	59,163			$	56,982
Core basic earnings per share (non-GAAP)		$	0.49			$	0.42			$	0.41
Core diluted earnings per share (non-GAAP)		$	0.49			$	0.42			$	0.41