First Hawaiian, Inc. Reports Third Quarter 2017 Financial Results and Declares Dividend

HONOLULU, Oct. 26, 2017 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (the “Company”) today reported financial results for the quarter ended September 30, 2017.

Highlights

• Net income for the quarter ended September 30, 2017 was $58.4 million, or $0.42 per diluted share, and core net income¹ was $57.0 million, or $0.41 per diluted share
  
  
• Board of Directors declared a dividend of $0.22 per share

“I’m pleased that we were able to celebrate the one year anniversary of our initial public offering with a solid third quarter,” said Bob Harrison, Chairman and Chief Executive Officer.  “Our overall financial performance was strong, asset quality remained excellent, and the local economy continues to do well.”

On October 20, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.22 per share.  The dividend will be payable on December 8, 2017 to stockholders of record at the close of business on November 27, 2017.

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1}   Core net income is a non-GAAP measure. For more information on this measure, including a reconciliation to the most directly comparable GAAP measure, see “Use of Non-GAAP Financial Measures” and Tables 13 and 14 at the end of this document.

Earnings Highlights

Net income for the quarter ended September 30, 2017 was $58.4 million, or $0.42 per diluted share, compared to $56.9 million, or $0.41 per diluted share, for the quarter ended June 30, 2017 and $53.2 million, or $0.38 per diluted share, for the quarter ended September 30, 2016.  Core net income for the quarter ended September 30, 2017 was $57.0 million, or $0.41 per diluted share, compared to $57.2 million, or $0.41 per diluted share, for the quarter ended June 30, 2017, and $55.2 million, or $0.40 per diluted share, for the quarter ended September 30, 2016.

Net interest income for the quarter ended September 30, 2017 was $133.3 million, an increase of $2.0 million compared to $131.3 million for the quarter ended June 30, 2017 and an increase of $10.6 million compared to $122.7 million for the quarter ended September 30, 2016.  The increase in net interest income compared to the second quarter of 2017 was primarily due to higher average balances and yields on loans and interest bearing deposits in other banks, partially offset by higher average balances and rates on deposits as well as lower average balances and yields on investment securities.  The increase compared to the third quarter of 2016 was due to higher average balances and yields on loans and investment securities, partially offset by higher average deposit balances and rates.

Net interest margin was 2.96%, 3.02% and 2.87% for the quarters ended September 30, 2017, June 30, 2017, and September 30, 2016, respectively.  Net interest margin decreased during the third quarter of 2017 by six basis points, primarily due to higher costs related to public time deposits and lower yields on investment securities, partially offset by higher yields on loans and interest-bearing deposits in other banks.  The nine basis point increase compared to the third quarter of 2016 was due to higher yields on earnings assets, partially offset by higher deposit costs.   

Results for the quarter ended September 30, 2017 included a provision for credit losses of $4.5 million compared to $4.4 million in the quarter ended June 30, 2017 and $2.1 million in the quarter ended September 30, 2016.  

Noninterest income was $48.5 million in the quarter ended September 30, 2017, a decrease of $0.4 million compared to noninterest income of $48.9 million in the quarter ended June 30, 2017 and a decrease of $0.2 million compared to noninterest income of $48.7 million in the quarter ended September 30, 2016.  The decrease in noninterest income compared to the second quarter of 2017 was primarily due to $1.4 million lower other income and $0.3 million lower service charges on deposit accounts, largely offset by increases across the remaining noninterest income items.  Other income in the third quarter of 2017 included $0.4 million lower swap fee income compared to the prior quarter and a $2.7 million gain from the sale of a bank property.  Other income in the second quarter of 2017 included $2.4 million from partner credit card incentives and recoveries.      

Noninterest expense was $83.7 million for the quarter ended September 30, 2017, a decrease of $1.5 million from $85.2 million in the quarter ended June 30, 2017, and an increase of $0.9 million from $82.8 million in the quarter ended September 30, 2016.  The decrease in noninterest expense compared to the second quarter of 2017 was primarily due to $1.7 million lower salaries and employee benefits and $1.6 million lower contracted services and professional fees, partially offset by $0.8 million higher occupancy expense and $0.8 million higher advertising and marketing expense.  The decrease in salaries and benefits was primarily due to equity compensation forfeitures due to retirements and a change in the estimate of our compensation liabilities.  Contracted services and professional fees in the second quarter of 2017 were elevated due to system upgrades and product enhancements.  The increase in noninterest expense compared to the third quarter of 2016 was primarily due to a $1.0 million increase in occupancy costs, a $0.4 million increase in contracted services and professional fees, a $0.2 million increase in advertising and marketing expenses and a $0.2 million increase in cards rewards expenses, partially offset by $0.5 million lower salaries and employee benefits expenses and $0.5 million lower of other expenses.    

The efficiency ratio was 46.0%, 47.3% and 48.3% for the quarters ended September 30, 2017, June 30, 2017 and September 30, 2016, respectively. 

The effective tax rate for the third quarter of 2017 was 37.7% compared with 37.1% in the previous quarter and 38.4% percent in the same quarter last year.  The increase in the effective tax rate in the third quarter of 2017 compared to the prior quarter was primarily due to a $0.75 million release of tax reserves during the prior quarter.  The higher effective tax rate in the third quarter of 2016 was due to non-deductible offering expenses incurred during the quarter.

Balance Sheet Highlights

Total assets were $20.6 billion at September 30, 2017, compared to $20.4 billion at June 30, 2017 and $19.9 billion at September 30, 2016.

The investment securities portfolio was $5.3 billion at September 30, 2017, compared to $5.1 billion at June 30, 2017 and $5.4 billion at September 30, 2016.  The portfolio remains largely comprised of securities issued by U.S. government agencies.

Total loans and leases were $12.1 billion at September 30, 2017, an increase of $87.3 million, or 0.7%, from $12.1 billion at June 30, 2017 and up $753.2 million, or 6.6%, from $11.4 billion at September 30, 2016.  The growth in loans and leases compared to June 30, 2017 and September 30, 2016 was due to growth in commercial real estate, residential real estate, construction and consumer loans, partially offset by declines in commercial loans and leases. 

Total deposits were $17.6 billion at September 30, 2017, an increase of $143.2 million, or 0.8%, compared with $17.5 billion at June 30, 2017, and an increase of $630.0 million, or 3.7%, compared to $17.0 billion at September 30, 2016. 

Asset Quality

The Company's asset quality remained solid during the third quarter of 2017. Total non-performing assets were $8.4 million, or 0.07% of total loans and leases and other real estate owned, at September 30, 2017, an increase of $0.3 million from non-performing assets of $8.1 million, or 0.07% of total loans and leases and other real estate owned, at June 30, 2017 and a decrease of $1.8 million from non­-performing assets of $10.2 million, or 0.09% of total loans and leases and other real estate owned at September 30, 2016.

Net charge offs for the quarter ended September 30, 2017 were $4.1 million, or 0.13% of average loans and leases on an annualized basis, compared to $3.4 million, or 0.11% of average loans and leases on an annualized basis for the quarter ended June 30, 2017 and $3.4 million, or 0.12% of average loans and leases on an annualized basis for the quarter ended September 30, 2016. 

The ratio of allowance for loan and lease losses to total loans and leases was 1.13% at both September 30, 2017 and June 30, 2017 and 1.18% at September 30, 2016. 

Capital

Total stockholders' equity was $2.6 billion at both September 30, 2017 and June 30, 2017 and $2.5 billion at September 30, 2016.   

The tier 1 leverage, common equity tier 1, and total capital ratios were 8.66%, 12.71% and 13.77%, respectively, at September 30, 2017, compared with 8.70%, 12.73% and 13.81% at June 30, 2017 and 8.41%, 12.48%, and 13.59% at September 30, 2016.

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:  96616877.  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 approximately two hours after the conclusion of the call until 7:30 p.m. (Eastern Time) on November 5, 2017.  Access the replay by dialing [phone] or [phone] and entering the conference ID:  96616877.

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 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, 2016. 

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 13 and 14 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									For the Nine Months Ended
				September 30,			June 30,			September 30,			September 30,
(dollars in thousands, except per share data)				2017			2017			2016			2017			2016
Operating Results:
Net interest income				$	133,319		$	131,254		$	122,683		$	393,918		$	360,422
Provision for loan and lease losses					4,500			4,400			2,100			13,400			4,700
Noninterest income					48,535			48,870			48,690			146,812			168,580
Noninterest expense					83,655			85,241			82,804			253,235			246,341
Net income					58,363			56,895			53,235			171,998			173,626
Basic earnings per share					0.42			0.41			0.38			1.23			1.24
Diluted earnings per share					0.42			0.41			0.38			1.23			1.24
Dividends declared per share					0.22			0.22			0.20			0.66			0.42
Dividend payout ratio					52.38	%		53.66	%		52.39	%		53.66	%		33.34	%
Supplemental Income Statement Data (non-GAAP):
Core net interest income				$	133,319		$	131,254		$	122,683		$	393,918		$	360,422
Core noninterest income					45,868			48,870			48,690			144,145			142,852
Core noninterest expense					83,112			84,784			79,714			251,851			240,704
Core net income					57,040			57,181			55,177			171,203			161,110
Core basic earnings per share					0.41			0.41			0.40			1.23			1.16
Core diluted earnings per share					0.41			0.41			0.40			1.23			1.16
Performance Ratio:
Net interest margin					2.96	%		3.02	%		2.87	%		2.99	%		2.84	%
Core net interest margin (non-GAAP)					2.96	%		3.02	%		2.87	%		2.99	%		2.84	%
Efficiency ratio					46.00	%		47.32	%		48.31	%		46.83	%		46.56	%
Core efficiency ratio (non-GAAP)					46.38	%		47.07	%		46.51	%		46.80	%		47.82	%
Return on average total assets					1.15	%		1.16	%		1.10	%		1.16	%		1.21	%
Core return on average total assets (non-GAAP)					1.13	%		1.16	%		1.14	%		1.15	%		1.12	%
Return on average tangible assets					1.21	%		1.22	%		1.16	%		1.22	%		1.28	%
Core return on average tangible assets (non-GAAP)					1.18	%		1.23	%		1.20	%		1.21	%		1.18	%
Return on average total stockholders' equity					9.03	%		9.03	%		8.45	%		9.10	%		8.96	%
Core return on average total stockholders' equity (non-GAAP)					8.82	%		9.07	%		8.76	%		9.06	%		8.31	%
Return on average tangible stockholders' equity (non-GAAP)					14.76	%		14.89	%		14.02	%		15.01	%		14.56	%
Core return on average tangible stockholders’ equity (non-GAAP)					14.42	%		14.96	%		14.53	%		14.94	%		13.51	%
Average Balances:
Average loans and leases				$	12,115,001		$	11,903,255		$	11,261,710		$	11,868,917		$	11,055,522
Average earning assets					17,867,021			17,453,655			17,028,930			17,605,376			16,962,355
Average assets					20,109,090			19,692,222			19,314,668			19,858,184			19,185,484
Average deposits					17,165,355			16,782,887			16,392,125			16,950,503			16,079,148
Average shareholders' equity					2,564,563			2,528,388			2,506,099			2,527,435			2,588,602
Market Value Per Share:
Closing					30.29			30.62			26.86			30.29			26.86
High					31.48			31.34			27.97			35.32			27.97
Low					26.30			26.96			24.25			26.30			24.25

 

		As of			As of			As of			As of
		September 30,			June 30,			December 31,			September 30,
		2017			2017			2016			2016
Balance Sheet Data:
Loans and leases		$	12,149,711		$	12,062,392		$	11,520,378		$	11,396,555
Total assets			20,565,627			20,373,974			19,661,829			19,892,693
Total deposits			17,595,483			17,452,262			16,794,532			16,965,527
Total stockholders' equity			2,581,858			2,552,602			2,476,485			2,523,963
Per Share of Common Stock:
Book value		$	18.50		$	18.29		$	17.75		$	18.09
Tangible book value			11.36			11.16			10.61			10.95
Asset Quality Ratios:
Non-accrual loans and leases / total loans and leases			0.06	%		0.06	%		0.08	%		0.08	%
Allowance for loan and lease losses / total loans and leases			1.13	%		1.13	%		1.18	%		1.18	%
Capital Ratios:
Common Equity Tier 1 Capital Ratio			12.71	%		12.73	%		12.75	%		12.48	%
Tier 1 Capital Ratio			12.71	%		12.73	%		12.75	%		12.48	%
Total Capital Ratio			13.77	%		13.81	%		13.85	%		13.59	%
Tier 1 Leverage Ratio			8.66	%		8.70	%		8.36	%		8.41	%
Total stockholders' equity to total assets			12.55	%		12.53	%		12.60	%		12.69	%
Tangible stockholders' equity to tangible assets (non-GAAP)			8.11	%		8.04	%		7.93	%		8.09	%
Non-Financial Data:
Number of branches			62			62			62			62
Number of ATMs			312			312			311			312
Number of Full-Time Equivalent Employees			2,184			2,191			2,179			2,197

 

Consolidated Statements of Income		Table 2
		Three Months Ended									Nine Months Ended
		September 30,			June 30,			September 30,			September 30,
(dollars in thousands, except per share amounts)		2017			2017			2016			2017			2016
Interest income
Loans and lease financing		$	118,986		$	114,179		$	106,900		$	342,431		$	316,958
Available-for-sale securities			24,195			25,059			21,123			75,683			57,135
Other			2,089			781			1,311			4,096			6,114
Total interest income			145,270			140,019			129,334			422,210			380,207
Interest expense
Deposits			11,949			8,760			6,632			28,279			19,602
Short-term borrowings and long-term debt			2			5			19			13			183
Total interest expense			11,951			8,765			6,651			28,292			19,785
Net interest income			133,319			131,254			122,683			393,918			360,422
Provision for loan and lease losses			4,500			4,400			2,100			13,400			4,700
Net interest income after provision for loan and lease losses			128,819			126,854			120,583			380,518			355,722
Noninterest income
Service charges on deposit accounts			9,095			9,412			9,575			28,062			28,759
Credit and debit card fees			14,831			14,157			14,103			43,467			41,732
Other service charges and fees			8,510			8,110			8,768			25,717			26,909
Trust and investment services income			7,672			7,526			7,508			22,536			22,236
Bank-owned life insurance			3,119			2,927			7,115			10,624			13,263
Investment securities gains, net			—			—			30			—			25,761
Other			5,308			6,738			1,591			16,406			9,920
Total noninterest income			48,535			48,870			48,690			146,812			168,580
Noninterest expense
Salaries and employee benefits			41,579			43,257			42,106			128,136			128,762
Contracted services and professional fees			10,834			12,388			10,430			33,530			33,124
Occupancy			5,844			5,023			4,870			16,188			14,991
Equipment			4,174			4,527			4,192			12,898			12,135
Regulatory assessment and fees			3,668			3,750			3,546			11,192			8,869
Advertising and marketing			2,005			1,222			1,769			5,255			4,818
Card rewards program			4,703			4,618			4,512			13,832			10,743
Other			10,848			10,456			11,379			32,204			32,899
Total noninterest expense			83,655			85,241			82,804			253,235			246,341
Income before provision for income taxes			93,699			90,483			86,469			274,095			277,961
Provision for income taxes			35,336			33,588			33,234			102,097			104,335
Net income		$	58,363		$	56,895		$	53,235		$	171,998		$	173,626
Basic earnings per share		$	0.42		$	0.41		$	0.38		$	1.23		$	1.24
Diluted earnings per share		$	0.42		$	0.41		$	0.38		$	1.23		$	1.24
Dividends declared per share		$	0.22		$	0.22		$	0.20		$	0.66		$	0.42
Basic weighted-average outstanding shares			139,556,532			139,546,615			139,500,542			139,549,665			139,473,360
Diluted weighted-average outstanding shares			139,696,330			139,646,117			139,503,558			139,670,487			139,474,373

 

Consolidated Balance Sheets		Table 3
		September 30,				June 30,				December 31,				September 30,
(dollars in thousands)		2017				2017				2016				2016
Assets
Cash and due from banks		$	321,319			$	355,752			$	253,827			$	371,622
Interest-bearing deposits in other banks			793,046				872,013				798,231				804,198
Investment securities			5,314,973				5,126,869				5,077,514				5,363,696
Loans and leases			12,149,711				12,062,392				11,520,378				11,396,555
Less: allowance for loan and lease losses			137,327				136,883				135,494				135,025
Net loans and leases			12,012,384				11,925,509				11,384,884				11,261,530
Premises and equipment, net			289,689				292,959				300,788				302,059
Other real estate owned and repossessed personal property			564				329				329				854
Accrued interest receivable			44,728				39,739				41,971				37,107
Bank-owned life insurance			435,607				432,726				429,209				432,031
Goodwill			995,492				995,492				995,492				995,492
Other intangible assets			13,980				14,877				16,809				17,554
Other assets			343,845				317,709				362,775				306,550
Total assets		$	20,565,627			$	20,373,974			$	19,661,829			$	19,892,693
Liabilities and Stockholders' Equity
Deposits:
Interest-bearing		$	11,687,849			$	11,580,664			$	10,801,915			$	11,164,989
Noninterest-bearing			5,907,634				5,871,598				5,992,617				5,800,538
Total deposits			17,595,483				17,452,262				16,794,532				16,965,527
Short-term borrowings			—				—				9,151				9,151
Long-term debt			34				41				41				41
Retirement benefits payable			135,092				134,400				132,904				139,567
Other liabilities			253,160				234,669				248,716				254,444
Total liabilities			17,983,769				17,821,372				17,185,344				17,368,730
Stockholders' equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued and outstanding 139,586,282 shares as of September 30, 2017, 139,546,615 shares as of June 30, 2017 and 139,530,654 shares as of both December 31, 2016 and September 30, 2016)			1,396				1,395				1,395				1,395
Additional paid-in capital			2,489,273				2,488,091				2,484,251				2,482,679
Retained earnings			158,303				130,767				78,850				50,204
Accumulated other comprehensive loss, net			(67,114	)			(67,651	)			(88,011	)			(10,315	)
Total stockholders' equity			2,581,858				2,552,602				2,476,485				2,523,963
Total liabilities and stockholders' equity		$	20,565,627			$	20,373,974			$	19,661,829			$	19,892,693

 

Average Balances and Interest Rates																							Table 4
		Three Months Ended								Three Months Ended								Three Months Ended
		September 30, 2017								June 30, 2017								September 30, 2016
		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		$	597.5		$	2.0		1.30	%	$	312.8		$	0.8		1.00	%	$	1,023.6		$	1.3		0.51	%
Available-for-Sale Investment Securities			5,124.9			24.2		1.88			5,208.8			25.0		1.93			4,743.7			21.1		1.77
Loans Held for Sale			0.1			—		3.62			—			—		—			—			—		—
Loans and Leases (1)
Commercial and industrial			3,276.4			27.3		3.31			3,279.2			25.7		3.15			3,248.1			23.7		2.90
Real estate - commercial			2,696.4			25.1		3.69			2,638.3			23.8		3.62			2,338.2			21.3		3.63
Real estate - construction			570.6			5.1		3.54			509.7			4.3		3.41			448.9			3.7		3.29
Real estate - residential			3,846.8			39.2		4.04			3,782.1			38.6		4.09			3,571.3			36.4		4.06
Consumer			1,546.9			21.0		5.39			1,525.8			20.6		5.40			1,467.0			20.5		5.55
Lease financing			177.9			1.3		2.91			168.1			1.2		2.84			188.2			1.3		2.84
Total Loans and Leases			12,115.0			119.0		3.90			11,903.2			114.2		3.85			11,261.7			106.9		3.78
Other Earning Assets			29.5			0.1		1.22			10.8			—		0.99			—			—		—
Total Earning Assets (2)			17,867.0			145.3		3.23			17,435.6			140.0		3.22			17,029.0			129.3		3.02
Cash and Due from Banks			324.0								319.4								357.1
Other Assets			1,918.1								1,937.2								1,928.6
Total Assets		$	20,109.1							$	19,692.2							$	19,314.7
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings		$	4,505.1		$	1.1		0.10	%	$	4,488.8		$	0.7		0.07	%	$	4,416.4		$	0.6		0.06	%
Money Market			2,607.7			0.9		0.13			2,618.6			0.8		0.12			2,549.3			0.6		0.10
Time			4,208.0			10.0		0.94			3,887.5			7.2		0.75			3,776.6			5.4		0.57
Total Interest-Bearing Deposits			11,320.8			12.0		0.42			10,994.9			8.7		0.32			10,742.3			6.6		0.25
Short-Term Borrowings			0.8			—		0.91			1.7			—		0.89			18.5			—		0.42
Total Interest-Bearing Liabilities			11,321.6			12.0		0.42			10,996.6			8.7		0.32			10,760.8			6.6		0.25
Net Interest Income					$	133.3							$	131.3							$	122.7
Interest Rate Spread								2.81	%							2.90	%							2.77	%
Net Interest Margin								2.96	%							3.02	%							2.87	%
Noninterest-Bearing Demand Deposits			5,844.6								5,788.0								5,649.8
Other Liabilities			378.3								379.2								398.0
Stockholders' Equity			2,564.6								2,528.4								2,506.1
Total Liabilities and Stockholders' Equity		$	20,109.1							$	19,692.2							$	19,314.7

 

Average Balances and Interest Rates																	Table 5
		Nine Months Ended									Nine Months Ended
		September 30, 2017									September 30, 2016
		Average			Income/				Yield/		Average			Income/			Yield/
(dollars in millions)		Balance			Expense				Rate		Balance			Expense			Rate
Earning Assets
Interest-Bearing Deposits in Other Banks		$	516.8		$	4.0			1.02	%	$	1,602.3		$	6.1		0.51	%
Available-for-Sale Investment Securities			5,189.7			75.7			1.95			4,304.5			57.1		1.77
Loans and Leases (1)
Commercial and industrial			3,263.3			77.3			3.17			3,200.6			70.3		2.93
Real estate - commercial			2,606.1			71.1			3.65			2,273.3			62.9		3.70
Real estate - construction			514.1			13.1			3.41			425.0			10.4		3.27
Real estate - residential			3,784.5			115.5			4.08			3,525.5			108.9		4.13
Consumer			1,528.8			61.8			5.41			1,441.6			60.4		5.59
Lease financing			172.1			3.6			2.84			189.5			4.1		2.90
Total Loans and Leases			11,868.9			342.4			3.86			11,055.5			317.0		3.83
Other Earning Assets			30.0			0.1			0.62			—			—		—
Total Earning Assets (2)			17,605.4			422.2			3.21			16,962.3			380.2		2.99
Cash and Due from Banks			322.7									320.1
Other Assets			1,930.1									1,903.1
Total Assets		$	19,858.2								$	19,185.5
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings		$	4,500.1		$	2.5			0.08	%	$	4,371.6		$	1.9		0.06	%
Money Market			2,574.0			2.2			0.11			2,410.6			1.7		0.09
Time			4,027.9			23.6			0.78			3,782.2			16.0		0.57
Total Interest-Bearing Deposits			11,102.0			28.3			0.34			10,564.4			19.6		0.25
Short-Term Borrowings			2.1			—			0.68			148.0			0.2		0.16
Total Interest-Bearing Liabilities			11,104.1			28.3			0.34			10,712.4			19.8		0.25
Net Interest Income					$	393.9								$	360.4
Interest Rate Spread									2.87	%							2.74	%
Net Interest Margin									2.99	%							2.84	%
Noninterest-Bearing Demand Deposits			5,848.5									5,514.8
Other Liabilities			378.2									369.7
Stockholders' Equity			2,527.4									2,588.6
Total Liabilities and Stockholders' Equity		$	19,858.2								$	19,185.5

 

Analysis of Change in Net Interest Income											Table 6
		Three Months Ended September 30, 2017
		Compared to June 30, 2017
(dollars in millions)		Volume				Rate				Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks		$	0.9			$	0.3			$	1.2
Available-for-Sale Investment Securities			(0.4	)			(0.4	)			(0.8	)
Loans and Leases
Commercial and industrial			—				1.6				1.6
Real estate - commercial			0.5				0.8				1.3
Real estate - construction			0.5				0.3				0.8
Real estate - residential			0.7				(0.1	)			0.6
Consumer			0.2				0.2				0.4
Lease financing			0.1				—				0.1
Total Loans and Leases			2.0				2.8				4.8
Other Earning Assets			0.1				—				0.1
Total Change in Interest Income			2.6				2.7				5.3
Change in Interest Expense:
Interest-Bearing Deposits
Savings			—				0.4				0.4
Money Market			—				0.1				0.1
Time			0.6				2.1				2.7
Total Interest-Bearing Deposits			0.6				2.6				3.2
Total Change in Interest Expense			0.6				2.6				3.2
Change in Net Interest Income		$	2.0			$	0.1			$	2.1

 

Analysis of Change in Net Interest Income											Table 7
		Three Months Ended September 30, 2017
		Compared to September 30, 2016
(dollars in millions)		Volume				Rate				Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks		$	(0.7	)		$	1.4			$	0.7
Available-for-Sale Investment Securities			1.7				1.4				3.1
Loans and Leases
Commercial and industrial			0.2				3.4				3.6
Real estate - commercial			3.3				0.4				3.7
Real estate - construction			1.1				0.3				1.4
Real estate - residential			2.8				—				2.8
Consumer			1.0				(0.5	)			0.5
Total Loans and Leases			8.4				3.6				12.0
Other Earning Assets			0.1				—				0.1
Total Change in Interest Income			9.5				6.4				15.9
Change in Interest Expense:
Interest-Bearing Deposits
Savings			—				0.5				0.5
Money Market			—				0.2				0.2
Time			0.7				3.9				4.6
Total Interest-Bearing Deposits			0.7				4.6				5.3
Total Change in Interest Expense			0.7				4.6				5.3
Change in Net Interest Income		$	8.8			$	1.8			$	10.6

Analysis of Change in Net Interest Income											Table 8
		Nine Months Ended September 30, 2017
		Compared to September 30, 2016
(dollars in millions)		Volume				Rate				Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks		$	(5.8	)		$	3.7			$	(2.1	)
Available-for-Sale Investment Securities			12.4				6.1				18.5
Loans and Leases
Commercial and industrial			1.4				5.6				7.0
Real estate - commercial			9.1				(0.9	)			8.2
Real estate - construction			2.2				0.5				2.7
Real estate - residential			7.9				(1.3	)			6.6
Consumer			3.6				(2.1	)			1.5
Lease financing			(0.4	)			(0.1	)			(0.5	)
Total Loans and Leases			23.8				1.7				25.5
Other Earning Assets			0.1				—				0.1
Total Change in Interest Income			30.5				11.5				42.0
Change in Interest Expense:
Interest-Bearing Deposits
Savings			0.1				0.5				0.6
Money Market			0.1				0.4				0.5
Time			1.1				6.5				7.6
Total Interest-Bearing Deposits			1.3				7.4				8.7
Short-Term Borrowings			(0.3	)			0.1				(0.2	)
Total Change in Interest Expense			1.0				7.5				8.5
Change in Net Interest Income		$	29.5			$	4.0			$	33.5

 

Loans and Leases												Table 9
		September 30,			June 30,			December 31,			September 30,
(dollars in thousands)		2017			2017			2016			2016
Commercial and industrial		$	3,190,237		$	3,331,092		$	3,239,600		$	3,265,291
Real estate:
Commercial			2,625,688			2,545,479			2,343,495			2,311,874
Construction			598,763			555,794			450,012			475,333
Residential			4,001,478			3,921,881			3,796,459			3,687,660
Total real estate			7,225,929			7,023,154			6,589,966			6,474,867
Consumer			1,562,172			1,527,470			1,510,772			1,469,220
Lease financing			171,373			180,676			180,040			187,177
Total loans and leases		$	12,149,711		$	12,062,392		$	11,520,378		$	11,396,555

 

Deposits												Table 10
		September 30,			June 30,			December 31,			September 30,
(dollars in thousands)		2017			2017			2016			2016
Demand		$	5,907,634		$	5,871,598		$	5,992,617		$	5,800,538
Savings			4,411,411			4,568,600			4,609,306			4,341,714
Money Market			2,631,311			2,944,005			2,454,013			2,818,132
Time			4,645,127			4,068,059			3,738,596			4,005,143
Total Deposits		$	17,595,483		$	17,452,262		$	16,794,532		$	16,965,527

 

Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More												Table 11
		September 30,			June 30,			December 31,			September 30,
(dollars in thousands)		2017			2017			2016			2016
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial Loans:
Commercial and industrial		$	2,312		$	2,155		$	2,730		$	2,933
Lease financing			—			—			153			163
Total Commercial Loans			2,312			2,155			2,883			3,096
Residential			5,562			5,569			6,547			6,274
Total Non-Accrual Loans and Leases			7,874			7,724			9,430			9,370
Other Real Estate Owned			564			329			329			854
Total Non-Performing Assets		$	8,438		$	8,053		$	9,759		$	10,224
Accruing Loans and Leases Past Due 90 Days or More
Commercial Loans:
Commercial and industrial		$	1,751		$	1,275		$	449		$	177
Real estate - commercial			3,247			—			—			—
Real estate - construction			—			350			—			—
Lease financing			—			—			83			—
Total Commercial Loans			4,998			1,625			532			177
Residential			1,055			1,543			866			1,638
Consumer			1,894			1,873			1,870			2,036
Total Accruing Loans and Leases Past Due 90 Days or More		$	7,947		$	5,041		$	3,268		$	3,851
Restructured Loans on Accrual Status and Not Past Due 90 Days or More			36,728			38,886			44,496			46,453
Total Loans and Leases		$	12,149,711		$	12,062,392		$	11,520,378		$	11,396,555

 

Allowance for Loan and Lease Losses																			Table 12
		For the Three Months Ended												For the Nine Months Ended
		September 30,				June 30,				September 30,				September 30,				September 30,
(dollars in thousands)		2017				2017				2016				2017				2016
Balance at Beginning of Period		$	136,883			$	135,847			$	136,360			$	135,494			$	135,484
Loans and Leases Charged-Off
Commercial Loans:
Commercial and industrial			(408	)			(75	)			(210	)			(1,338	)			(348	)
Lease financing			(1	)			(146	)			—				(147	)			—
Total Commercial Loans			(409	)			(221	)			(210	)			(1,485	)			(348	)
Residential			(293	)			—				(268	)			(315	)			(796	)
Consumer			(6,263	)			(5,251	)			(4,878	)			(17,086	)			(13,379	)
Total Loans and Leases Charged-Off			(6,965	)			(5,472	)			(5,356	)			(18,886	)			(14,523	)
Recoveries on Loans and Leases Previously Charged-Off
Commercial Loans:
Commercial and industrial			582				129				6				825				228
Real estate - commercial			336				55				42				468				3,288
Lease financing			—				—				—				—				1
Total Commercial Loans			918				184				48				1,293				3,517
Residential			139				150				350				610				1,116
Consumer			1,852				1,774				1,523				5,416				4,731
Total Recoveries on Loans and Leases Previously Charged-Off			2,909				2,108				1,921				7,319				9,364
Net Loans and Leases Charged-Off			(4,056	)			(3,364	)			(3,435	)			(11,567	)			(5,159	)
Provision for Credit Losses			4,500				4,400				2,100				13,400				4,700
Balance at End of Period		$	137,327			$	136,883			$	135,025			$	137,327			$	135,025
Average Loans and Leases Outstanding		$	12,115,001			$	11,903,255			$	11,261,710			$	11,868,917			$	11,055,522
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding			0.13	%			0.11	%			0.12	%			0.13	%			0.06	%
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding			1.13	%			1.13	%			1.18	%			1.13	%			1.18	%

 

GAAP to Non-GAAP Reconciliation													Table 13
		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)		2017			2017			2016			2017			2016
Income Statement Data:
Net income		$	58,363		$	56,895		$	53,235		$	171,998		$	173,626
Average total stockholders' equity		$	2,564,563		$	2,528,388		$	2,506,099		$	2,527,435		$	2,588,602
Less: average goodwill			995,492			995,492			995,492			995,492			995,492
Average tangible stockholders' equity		$	1,569,071		$	1,532,896		$	1,510,607		$	1,531,943		$	1,593,110
Average total assets		$	20,109,090		$	19,692,222		$	19,314,668		$	19,858,184		$	19,185,484
Less: average goodwill			995,492			995,492			995,492			995,492			995,492
Average tangible assets		$	19,113,598		$	18,696,730		$	18,319,176		$	18,862,692		$	18,189,992
Return on average total stockholders' equity(a)			9.03	%		9.03	%		8.45	%		9.10	%		8.96	%
Return on average tangible stockholders' equity (non-GAAP)(a)			14.76	%		14.89	%		14.02	%		15.01	%		14.56	%
Return on average total assets(a)			1.15	%		1.16	%		1.10	%		1.16	%		1.21	%
Return on average tangible assets (non-GAAP)(a)			1.21	%		1.22	%		1.16	%		1.22	%		1.28	%
Average stockholders' equity to average assets			12.75	%		12.84	%		12.98	%		12.73	%		13.49	%
Tangible average stockholders' equity to tangible average assets (non-GAAP)			8.21	%		8.20	%		8.25	%		8.12	%		8.76	%

 

		As of			As of			As of			As of
		September 30,			June 30,			December 31,			September 30,
		2017			2017			2016			2016
Balance Sheet Data:
Total stockholders' equity		$	2,581,858		$	2,552,602		$	2,476,485		$	2,523,963
Less: goodwill			995,492			995,492			995,492			995,492
Tangible stockholders' equity		$	1,586,366		$	1,557,110		$	1,480,993		$	1,528,471
Total assets		$	20,565,627		$	20,373,974		$	19,661,829		$	19,892,693
Less: goodwill			995,492			995,492			995,492			995,492
Tangible assets		$	19,570,135		$	19,378,482		$	18,666,337		$	18,897,201
Shares outstanding			139,586,282			139,546,615			139,530,654			139,530,654
Total stockholders' equity to total assets			12.55	%		12.53	%		12.60	%		12.69	%
Tangible stockholders' equity to tangible assets (non-GAAP)			8.11	%		8.04	%		7.93	%		8.09	%
Book value per share		$	18.50		$	18.29		$	17.75		$	18.09
Tangible book value per share (non-GAAP)		$	11.36		$	11.16		$	10.61		$	10.95

 

GAAP to Non-GAAP Reconciliation		Table 14
		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)		2017				2017				2016				2017				2016
Net interest income		$	133,319			$	131,254			$	122,683			$	393,918			$	360,422
Core net interest income (non-GAAP)		$	133,319			$	131,254			$	122,683			$	393,918			$	360,422
Noninterest income		$	48,535			$	48,870			$	48,690			$	146,812			$	168,580
Gains on sale of bank properties			(2,667	)			—				—				(2,667	)			—
Gains on sale of securities			—				—				—				—				(3,050	)
Gains on sale of stock (Visa/MasterCard)			—				—				—				—				(22,678	)
Core noninterest income (non-GAAP)		$	45,868			$	48,870			$	48,690			$	144,145			$	142,852
Noninterest expense		$	83,655			$	85,241			$	82,804			$	253,235			$	246,341
One-time items(a)			(543	)			(457	)			(3,090	)			(1,384	)			(5,637	)
Core noninterest expense (non-GAAP)		$	83,112			$	84,784			$	79,714			$	251,851			$	240,704
Net income		$	58,363			$	56,895			$	53,235			$	171,998			$	173,626
Gains on sale of bank properties			(2,667	)			—				—				(2,667	)			—
Gains on sale of securities			—				—				—				—				(3,050	)
Gains on sale of stock (Visa/MasterCard)			—				—				—				—				(22,678	)
One-time items(a)			543				457				3,090				1,384				5,637
Tax adjustments(b)			801				(171	)			(1,148	)			488				7,575
Total core adjustments			(1,323	)			286				1,942				(795	)			(12,516	)
Core net income (non-GAAP)		$	57,040			$	57,181			$	55,177			$	171,203			$	161,110
Core basic earnings per share (non-GAAP)		$	0.41			$	0.41			$	0.40			$	1.23			$	1.16
Core diluted earnings per share (non-GAAP)		$	0.41			$	0.41			$	0.40			$	1.23			$	1.16