First Hawaiian, Inc. Reports First Quarter 2021 Financial Results and Declares Dividend

HONOLULU, April 23, 2021 (GLOBE NEWSWIRE) — First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended March 31, 2021.

“We had a good first quarter as our teams continued supporting local businesses by originating $459 million of PPP loans. We also experienced strong deposit growth and maintained excellent credit quality,” said Bob Harrison, Chairman, President and CEO. “We are optimistic about the local economy, as the state’s vaccine rollout is well underway and we are seeing a steady increase in visitor arrivals, all positive signs for Hawaii’s economy.”

On April 21, 2021 the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on June 4, 2021 to stockholders of record at the close of business on May 24, 2021.  

First Quarter 2021 Highlights:

  • Net income of $57.7 million, or $0.44 per diluted share
  • Total loans and leases increased $21.2 million versus prior quarter
  • Total deposits increased $906.0 million, or 4.7%, versus prior quarter
  • Did not record a provision for credit losses
  • Board of Directors declared a quarterly dividend of $0.26 per share
  • Repurchased $9.5 million of stock under share repurchase program

Balance Sheet

Total assets were $23.5 billion as of March 31, 2021, compared to $22.7 billion as of December 31, 2020.

Gross loans and leases were $13.3 billion as of March 31, 2021, unchanged from $13.3 billion as of December 31, 2020.

Total deposits were $20.1 billion as of March 31, 2021, an increase of $906.0 million, or 4.7%, from $19.2 billion as of December 31, 2020.

Net Interest Income

Net interest income for the first quarter of 2021 was $129.2 million, a decrease of $6.1 million, or 4.5%, compared to $135.2 million for the prior quarter.

The NIM was 2.55% in the first quarter of 2021, a decrease of 16 basis points compared to 2.71% in the fourth quarter of 2020.

Provision Expense

During the quarter ended March 31, 2021, the Bank did not record a provision for credit losses. In the quarter ended December 31, 2020, the total provision for credit losses was $20.0 million.

Noninterest Income

Noninterest income was $43.9 million in the first quarter of 2021, a decrease of $9.7 million compared to noninterest income of $53.6 million in the fourth quarter of 2020.

Noninterest Expense

Noninterest expense was $96.3 million in the first quarter of 2021, an increase of $8.2 million compared to noninterest expense of $88.1 million in the fourth quarter of 2020.

The efficiency ratio was 55.5% and 46.6% for the quarters ended March 31, 2021 and December 31, 2020, respectively.

Taxes

The effective tax rate was 24.8% for the quarter ended March 31, 2021 and 23.5% for the quarter ended December 31, 2020.

Asset Quality

The allowance for credit losses was $200.4 million, or 1.51% of total loans and leases, as of March 31, 2021, compared to $208.5 million, or 1.57% of total loans and leases, as of December 31, 2020. The reserve for unfunded commitments was $34.1 million as of March 31, 2021 compared to $30.6 million as of December 31, 2020. Net charge-offs were $4.6 million, or 0.14% of average loans and leases on an annualized basis for the quarter ended March 31, 2021, compared to net charge-offs of $1.4 million, or 0.04% of average loans and leases on an annualized basis for the quarter ended December 31, 2020. Total non-performing assets were $9.1 million, or 0.07% of total loans and leases and other real estate owned, at both March 31, 2021 and December 31, 2020.

Capital

Total stockholders’ equity was $2.7 billion at both March 31, 2021 and December 31, 2020.

The tier 1 leverage, common equity tier 1 and total capital ratios were 7.90%, 12.82% and 14.07%, respectively, at March 31, 2021, compared with 8.00%, 12.47% and 13.73%, respectively, at December 31, 2020.

The Company repurchased 0.3 million shares of common stock at a total cost of $9.5 million under the stock repurchase program in the first quarter. The average cost was $28.70 per share repurchased. Remaining buyback authority under the stock repurchase program was $65.5 million at March 31, 2021.

First Hawaiian, Inc.

First Hawaiian, Inc. (NASDAQ:FHB) is a bank holding company headquartered in Honolulu, Hawaii. Its principal subsidiary, First Hawaiian Bank, founded in 1858 under the name Bishop & Company, is Hawaii’s oldest and largest financial institution with branch locations throughout Hawaii, Guam and Saipan. The company offers a comprehensive suite of banking services to consumer and commercial customers including deposit products, loans, wealth management, insurance, trust, retirement planning, credit card and merchant processing services. Customers may also access their accounts through ATMs, online and mobile banking channels. For more information about First Hawaiian, Inc., visit the Company’s website, www.fhb.com.

Conference Call Information

First Hawaiian will host a conference call to discuss the Company’s results today at 1:00 p.m. Eastern Time, 7:00 a.m. Hawaii Time. To access the call, 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: 4277629. 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 April 30, 2021. Access the replay by dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID: 4277629.

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, 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 12 and 13 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
[email protected]
Media Contact:
Susan Kam
(808) 525-6254
[email protected]
                       
Financial Highlights                   Table 1  
      For the Three Months Ended  
      March 31,    December 31,    March 31,   
(dollars in thousands, except per share data)        2021      2020      2020     
Operating Results:                      
Net interest income     $ 129,158   $ 135,227   $ 138,683  
Provision for credit losses           20,000     41,200  
Noninterest income       43,868     53,598     49,228  
Noninterest expense       96,306     88,127     96,466  
Net income       57,693     61,739     38,865  
Basic earnings per share       0.44     0.48     0.30  
Diluted earnings per share       0.44     0.47     0.30  
Dividends declared per share       0.26     0.26     0.26  
Dividend payout ratio       59.09 %   55.32 %   86.67 %
Supplemental Income Statement Data (non-GAAP):                      
Core net interest income     $ 129,158   $ 135,227   $ 138,683  
Core noninterest income       43,868     58,438     49,143  
Core noninterest expense       96,306     88,127     96,466  
Core net income       57,693     65,288     38,803  
Core basic earnings per share       0.44     0.50     0.30  
Core diluted earnings per share       0.44     0.50     0.30  
Performance Ratio(1):                      
Net interest margin       2.55 %     2.71 %     3.12 %  
Core net interest margin (non-GAAP)       2.55 %     2.71 %     3.12 %  
Efficiency ratio       55.53 %     46.59 %     51.33 %  
Core efficiency ratio (non-GAAP)       55.53 %     45.43 %     51.35 %  
Return on average total assets       1.02 %     1.09 %     0.77 %  
Core return on average total assets (non-GAAP)       1.02 %     1.16 %     0.77 %  
Return on average tangible assets (non-GAAP)       1.07 %     1.14 %     0.81 %  
Core return on average tangible assets (non-GAAP)(2)       1.07 %     1.21 %     0.81 %  
Return on average total stockholders’ equity       8.58 %     8.99 %     5.87 %  
Core return on average total stockholders’ equity (non-GAAP)       8.58 %     9.51 %     5.87 %  
Return on average tangible stockholders’ equity (non-GAAP)       13.51 %     14.14 %     9.39 %  
Core return on average tangible stockholders’ equity (non-GAAP)(3)       13.51 %     14.95 %     9.37 %  
Average Balances:                      
Average loans and leases     $ 13,242,270   $ 13,366,980   $ 13,191,426  
Average earning assets       20,476,149     19,977,933     17,814,189  
Average assets       22,944,699     22,468,040     20,313,304  
Average deposits       19,503,067     19,020,800     16,543,305  
Average stockholders’ equity       2,727,701     2,732,271     2,660,811  
Market Value Per Share:                      
Closing       27.37     23.58     16.53  
High       30.80     23.90     31.25  
Low       23.14     14.16     15.42  
                     
    As of   As of   As of  
    March 31,    December 31,    March 31,   
(dollars in thousands, except per share data)      2021      2020   2020  
Balance Sheet Data:                        
Loans and leases   $ 13,300,289   $ 13,279,097   $ 13,380,270  
Total assets     23,497,596     22,662,831     20,755,891  
Total deposits     20,133,681     19,227,723     17,020,002  
Short-term borrowings             400,000  
Long-term borrowings     200,010     200,010     200,019  
Total stockholders’ equity     2,683,630     2,744,104     2,664,685  
                     
Per Share of Common Stock:                    
Book value   $ 20.68   $ 21.12   $ 20.52  
Tangible book value (non-GAAP)(4)     13.01     13.46     12.86  
                     
Asset Quality Ratios:                    
Non-accrual loans and leases / total loans and leases     0.07 %     0.07 %   0.05 %  
Allowance for credit losses for loans and leases / total loans and leases     1.51 %     1.57 %   1.24 %  
                     
Capital Ratios:                    
Common Equity Tier 1 Capital Ratio      12.82 %      12.47 %   11.65 %  
Tier 1 Capital Ratio     12.82 %     12.47 %   11.65 %  
Total Capital Ratio     14.07 %     13.73 %   12.90 %  
Tier 1 Leverage Ratio     7.90 %     8.00 %   8.63 %  
Total stockholders’ equity to total assets     11.42 %     12.11 %   12.84 %  
Tangible stockholders’ equity to tangible assets (non-GAAP)     7.50 %     8.07 %   8.45 %  
                     
Non-Financial Data:                    
Number of branches     54     54     58  
Number of ATMs     297     297     304  
Number of Full-Time Equivalent Employees     2,090     2,103     2,103  
(1) Except for the efficiency ratio and the core efficiency ratio, amounts are annualized for the three months ended March 31, 2021, December 31, 2020 and March 31, 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 12, 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 12, 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 12, GAAP to Non-GAAP Reconciliation.

         

                     
Consolidated Statements of Income     Table 2
      For the Three Months Ended
      March 31,    December 31,    March 31, 
(dollars in thousands, except per share amounts)        2021      2020       2020
Interest income                    
Loans and lease financing     $ 110,939   $ 118,314     $ 134,971
Available-for-sale securities       23,146     22,752       21,210
Other       491     615       2,351
Total interest income       134,576     141,681       158,532
Interest expense                    
Deposits       4,056     5,061       15,600
Short-term and long-term borrowings       1,362     1,393       4,249
Total interest expense       5,418     6,454       19,849
Net interest income       129,158     135,227       138,683
Provision for credit losses           20,000       41,200
Net interest income after provision for credit losses       129,158     115,227       97,483
Noninterest income                    
Service charges on deposit accounts       6,718     6,769       8,950
Credit and debit card fees       14,551     15,583       14,949
Other service charges and fees       8,846     8,404       8,539
Trust and investment services income       8,492     8,733       9,591
Bank-owned life insurance       2,389     4,159       2,260
Investment securities (losses) gains, net           (12 )     85
Other       2,872     9,962       4,854
Total noninterest income       43,868     53,598       49,228
Noninterest expense                    
Salaries and employee benefits       43,936     42,687       44,829
Contracted services and professional fees       17,188     13,940       16,055
Occupancy       7,170     7,355       7,243
Equipment       5,491     5,225       4,708
Regulatory assessment and fees       2,034     2,168       1,946
Advertising and marketing       1,591     1,096       1,823
Card rewards program       4,835     4,890       7,015
Other       14,061     10,766       12,847
Total noninterest expense       96,306     88,127       96,466
Income before provision for income taxes       76,720     80,698       50,245
Provision for income taxes       19,027     18,959       11,380
Net income     $ 57,693   $ 61,739     $ 38,865
Basic earnings per share     $ 0.44   $ 0.48     $ 0.30
Diluted earnings per share     $ 0.44   $ 0.47     $ 0.30
Basic weighted-average outstanding shares       129,933,104     129,912,104       129,895,706
Diluted weighted-average outstanding shares       130,589,878     130,314,381       130,351,585
                     
Consolidated Balance Sheets     Table 3
      March 31,    December 31,    March 31, 
(dollars in thousands)        2021      2020      2020
Assets                    
Cash and due from banks     $ 278,994     $ 303,373     $ 353,908  
Interest-bearing deposits in other banks       983,816       737,571       698,924  
Investment securities, at fair value (amortized cost: $6,708,431 as of
March 31, 2021, $5,985,031 as of December 31, 2020 and $4,014,397 as of
March 31, 2020)
      6,692,479       6,071,415       4,058,457  
Loans held for sale       9,390       11,579       8,180  
Loans and leases       13,300,289       13,279,097       13,380,270  
Less: allowance for credit losses       200,366       208,454       166,013  
Net loans and leases       13,099,923       13,070,643       13,214,257  
                     
Premises and equipment, net       319,949       322,401       321,254  
Other real estate owned and repossessed personal property                   238  
Accrued interest receivable       69,879       69,626       43,552  
Bank-owned life insurance       468,927       466,537       455,226  
Goodwill       995,492       995,492       995,492  
Mortgage servicing rights       10,869       10,731       11,979  
Other assets       567,878       603,463       594,424  
Total assets     $ 23,497,596     $ 22,662,831     $ 20,755,891  
Liabilities and Stockholders’ Equity                    
Deposits:                    
Interest-bearing     $ 11,958,606     $ 11,705,609     $ 11,274,463  
Noninterest-bearing       8,175,075       7,522,114       5,745,539  
Total deposits       20,133,681       19,227,723       17,020,002  
Short-term borrowings                   400,000  
Long-term borrowings       200,010       200,010       200,019  
Retirement benefits payable       143,736       143,373       138,396  
Other liabilities       336,539       347,621       332,789  
Total liabilities       20,813,966       19,918,727       18,091,206  
                     
Stockholders’ equity                    
Common stock ($0.01 par value; authorized 300,000,000 shares;
issued/outstanding: 140,455,180 / 129,749,890 shares as of
March 31, 2021, issued/outstanding: 140,191,133 / 129,912,272
shares as of December 31, 2020 and issued/outstanding:
140,092,172 / 129,827,968 shares as of March 31, 2020)
      1,405       1,402       1,401  
Additional paid-in capital       2,517,048       2,514,014       2,506,477  
Retained earnings       497,418       473,974       429,323  
Accumulated other comprehensive (loss) income, net       (43,435 )     31,604       4,129  
Treasury stock (10,705,290 shares as of March 31, 2021,
10,278,861 shares as of December 31, 2020 and 10,264,204 shares
as of March 31, 2020)
      (288,806 )     (276,890 )     (276,645 )
Total stockholders’ equity       2,683,630       2,744,104       2,664,685  
Total liabilities and stockholders’ equity     $ 23,497,596     $ 22,662,831     $ 20,755,891  
                                                   
Average Balances and Interest Rates                                             Table 4  
    Three Months Ended   Three Months Ended   Three Months Ended  
    March 31, 2021   December 31, 2020   March 31, 2020  
    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   $ 938.7   $ 0.2   0.10 %   $ 688.1   $ 0.2   0.10 %   $ 516.8   $ 1.6   1.25 %
Available-for-Sale Investment Securities                                                  
Taxable     5,949.9     22.1   1.49     5,632.9     22.0   1.56     4,033.2     21.2   2.10  
Non-Taxable     278.0     1.3   1.80     220.0     0.9   1.74            
Total Available-for-Sale Investment Securities     6,227.9     23.4   1.50     5,852.9     22.9   1.57     4,033.2     21.2   2.10  
Loans Held for Sale     9.2     0.1   2.46     16.2     0.1   2.00     15.8     0.1   1.70  
Loans and Leases(1)                                                  
Commercial and industrial     3,026.7     20.4   2.74     3,077.6     22.6   2.93     2,776.2     24.6   3.56  
Commercial real estate     3,385.2     24.9   2.98     3,407.2     26.2   3.06     3,433.2     34.6   4.05  
Construction     746.8     5.8   3.16     703.1     5.6   3.14     538.5     5.7   4.27  
Residential:                                                  
Residential mortgage     3,696.1     34.7   3.76     3,679.6     37.1   4.03     3,721.2     37.7   4.05  
Home equity line     822.0     5.7   2.80     856.8     6.1   2.81     887.4     7.7   3.50  
Consumer     1,323.7     17.7   5.43     1,394.5     19.0   5.43     1,611.7     23.0   5.75  
Lease financing     241.8     1.8   3.02     248.2     1.8   2.89     223.2     1.6   2.85  
Total Loans and Leases     13,242.3     111.0   3.39     13,367.0     118.4   3.53     13,191.4     134.9   4.11  
Other Earning Assets     58.0     0.3   1.79     53.7     0.4   3.26     57.0     0.7   5.30  
Total Earning Assets(2)     20,476.1     135.0   2.66     19,977.9     142.0   2.83     17,814.2     158.5   3.57  
Cash and Due from Banks     294.0               289.2               327.4            
Other Assets     2,174.6               2,200.9               2,171.7            
Total Assets   $ 22,944.7             $ 22,468.0             $ 20,313.3            
                                                   
Interest-Bearing Liabilities                                                  
Interest-Bearing Deposits                                                  
Savings   $ 5,975.1   $ 0.6   0.04 %   $ 5,786.4   $ 0.5   0.03 %     5,090.4   $ 3.3   0.26 %
Money Market     3,530.0     0.4   0.05     3,440.9     0.4   0.05     3,064.8     4.6   0.61  
Time     2,288.5     3.0   0.53     2,461.3     4.2   0.67     2,534.7     7.7   1.23  
Total Interest-Bearing Deposits     11,793.6     4.0   0.14     11,688.6     5.1   0.17     10,689.9     15.6   0.59  
Short-Term Borrowings                         401.7     2.8   2.88  
Long-Term Borrowings     200.0     1.4   2.76     200.0     1.4   2.77     200.0     1.4   2.77  
Total Interest-Bearing Liabilities     11,993.6     5.4   0.18     11,888.6     6.5   0.22     11,291.6     19.8   0.71  
Net Interest Income         $ 129.6             $ 135.5             $ 138.7      
Interest Rate Spread               2.48 %               2.61 %               2.86 %
Net Interest Margin               2.55 %               2.71 %               3.12 %
Noninterest-Bearing Demand Deposits     7,709.5               7,332.2               5,853.4            
Other Liabilities     513.9               514.9               507.5            
Stockholders’ Equity     2,727.7               2,732.3               2,660.8            
Total Liabilities and Stockholders’ Equity   $ 22,944.7             $ 22,468.0             $ 20,313.3            

 

(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, $0.3 million and nil for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020, respectively.
                   
Analysis of Change in Net Interest Income                 Table 5
    Three Months Ended March 31, 2021
    Compared to December 31, 2020
(dollars in millions)   Volume   Rate   Total
Change in Interest Income:                           
Available-for-Sale Investment Securities                  
Taxable   $ 1.2     $ (1.1 )   $ 0.1  
Non-Taxable     0.3       0.1       0.4  
Total Available-for-Sale Investment Securities     1.5       (1.0 )     0.5  
Loans and Leases                  
Commercial and industrial     (0.5 )     (1.7 )     (2.2 )
Commercial real estate     (0.2 )     (1.1 )     (1.3 )
Construction     0.2             0.2  
Residential:                  
Residential mortgage     0.2       (2.6 )     (2.4 )
Home equity line     (0.4 )           (0.4 )
Consumer     (1.3 )           (1.3 )
Lease financing     (0.1 )     0.1        
Total Loans and Leases     (2.1 )     (5.3 )     (7.4 )
Other Earning Assets     0.1       (0.2 )     (0.1 )
Total Change in Interest Income     (0.5 )     (6.5 )     (7.0 )
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings           0.1       0.1  
Time     (0.3 )     (0.9 )     (1.2 )
Total Interest-Bearing Deposits     (0.3 )     (0.8 )     (1.1 )
Total Change in Interest Expense     (0.3 )     (0.8 )     (1.1 )
Change in Net Interest Income   $ (0.2 )   $ (5.7 )   $ (5.9 )
                   
Analysis of Change in Net Interest Income                 Table 6
    Three Months Ended March 31, 2021
    Compared to March 31, 2020
(dollars in millions)   Volume   Rate   Total
Change in Interest Income:                           
Interest-Bearing Deposits in Other Banks   $ 0.7     $ (2.1 )   $ (1.4 )
Available-for-Sale Investment Securities                  
Taxable     8.2       (7.3 )     0.9  
Non-Taxable     1.3             1.3  
Total Available-for-Sale Investment Securities     9.5       (7.3 )     2.2  
Loans and Leases                  
Commercial and industrial     2.0       (6.2 )     (4.2 )
Commercial real estate     (0.5 )     (9.2 )     (9.7 )
Construction     1.8       (1.7 )     0.1  
Residential:                  
Residential mortgage     (0.3 )     (2.7 )     (3.0 )
Home equity line     (0.5 )     (1.5 )     (2.0 )
Consumer     (4.0 )     (1.3 )     (5.3 )
Lease financing     0.1       0.1       0.2  
Total Loans and Leases     (1.4 )     (22.5 )     (23.9 )
Other Earning Assets     0.1       (0.5 )     (0.4 )
Total Change in Interest Income     8.9       (32.4 )     (23.5 )
                   
Change in Interest Expense:                  
Interest-Bearing Deposits                  
Savings     0.5       (3.2 )     (2.7 )
Money Market     0.6       (4.8 )     (4.2 )
Time     (0.7 )     (4.0 )     (4.7 )
Total Interest-Bearing Deposits     0.4       (12.0 )     (11.6 )
Short-Term Borrowings     (1.4 )     (1.4 )     (2.8 )
Total Change in Interest Expense     (1.0 )     (13.4 )     (14.4 )
Change in Net Interest Income   $ 9.9     $ (19.0 )   $ (9.1 )
                   
Loans and Leases                 Table 7
    March 31,    December 31,    March 31, 
(dollars in thousands)      2021      2020      2020
Commercial and industrial:                  
Commercial and industrial excluding Paycheck Protection Program loans   $ 1,962,672   $ 2,218,266   $ 3,025,345
Paycheck Protection Program loans     1,158,764     801,241    
Total commercial and industrial     3,121,436     3,019,507     3,025,345
Commercial real estate     3,396,233     3,392,676     3,413,014
Construction     739,271     735,819     572,062
Residential:                  
Residential mortgage     3,715,676     3,690,218     3,673,455
Home equity line     805,746     841,624     891,698
Total residential     4,521,422     4,531,842     4,565,153
Consumer     1,283,779     1,353,842     1,568,073
Lease financing     238,148     245,411     236,623
Total loans and leases   $ 13,300,289   $ 13,279,097   $ 13,380,270
                     
Deposits                   Table 8
      March 31,    December 31,    March 31, 
(dollars in thousands)        2021      2020      2020
Demand     $ 8,175,075   $ 7,522,114   $ 5,745,539
Savings       6,141,161     6,020,075     5,213,471
Money Market       3,642,604     3,337,236     3,148,694
Time       2,174,841     2,348,298     2,912,298
Total Deposits     $ 20,133,681   $ 19,227,723   $ 17,020,002
                     
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)        2021      2020      2020
Non-Performing Assets                    
Non-Accrual Loans and Leases                    
Commercial Loans:                    
Commercial and industrial     $ 593   $ 518   $ 32
Commercial real estate       937     80    
Construction       579     2,043     2,422
Total Commercial Loans       2,109     2,641     2,454
Residential Loans:                    
Residential mortgage       6,999     6,441     4,472
Total Residential Loans       6,999     6,441     4,472
Total Non-Accrual Loans and Leases       9,108     9,082     6,926
Other Real Estate Owned               238
Total Non-Performing Assets     $ 9,108   $ 9,082   $ 7,164
                     
Accruing Loans and Leases Past Due 90 Days or More                    
Commercial Loans:                    
Commercial and industrial     $ 1,365   $ 2,108   $ 4,007
Commercial real estate       1,054     882     757
Construction       89     93     148
Total Commercial Loans       2,508     3,083     4,912
Residential Loans:                    
Residential mortgage               82
Home equity line       4,975     4,818     2,566
Total Residential Loans       4,975     4,818     2,648
Consumer       2,024     3,266     3,353
Total Accruing Loans and Leases Past Due 90 Days or More     $ 9,507   $ 11,167   $ 10,913
                     
Restructured Loans on Accrual Status and Not Past Due 90 Days or More     $ 39,831   $ 16,684   $ 17,823
Total Loans and Leases     $ 13,300,289   $ 13,279,097   $ 13,380,270
                       
Allowance for Credit Losses                   Table 10  
      For the Three Months Ended  
      March 31,    December 31,    March 31,   
(dollars in thousands)        2021      2020      2020     
Balance at Beginning of Period     $ 208,454     $ 195,876     $ 130,530    
Adjustment to Adopt ASC Topic 326                   770    
After Adoption of ASC Topic 326       208,454       195,876       131,300    
Loans and Leases Charged-Off                      
Commercial Loans:                      
Commercial and industrial       (963 )     (799 )     (201 )  
Commercial real estate       (66 )     (30 )        
Total Commercial Loans       (1,029 )     (829 )     (201 )  
Residential Loans:                      
Residential mortgage       (98 )              
Home equity line             (46 )     (8 )  
Total Residential Loans       (98 )     (46 )     (8 )  
Consumer       (6,541 )     (7,049 )     (8,597 )  
Total Loans and Leases Charged-Off       (7,668 )     (7,924 )     (8,806 )  
Recoveries on Loans and Leases Previously Charged-Off                      
Commercial Loans:                      
Commercial and industrial       215       2,986       220    
Commercial real estate       3       615          
Construction       166       30       110    
Total Commercial Loans       384       3,631       330    
Residential Loans:                      
Residential mortgage       17       37       135    
Home equity line       24       21       122    
Total Residential Loans       41       58       257    
Consumer       2,655       2,812       2,083    
Total Recoveries on Loans and Leases Previously Charged-Off       3,080       6,501       2,670    
Net Loans and Leases Charged-Off       (4,588 )     (1,423 )     (6,136 )  
Provision for Credit Losses – Loans and Leases       (3,500 )     14,001       40,849    
Balance at End of Period     $ 200,366     $ 208,454     $ 166,013    
Average Loans and Leases Outstanding     $ 13,242,270     $ 13,366,980     $ 13,191,426    
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)       0.14   %     0.04   %     0.19   %  
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding       1.51   %     1.57   %     1.24   %  
(1) Annualized for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020.
                                                       
Loans and Leases by Year of Origination and Credit Quality Indicator     Table 11
                                              Revolving      
                                              Loans      
                                              Converted      
    Term Loans   Revolving   to Term      
    Amortized Cost Basis by Origination Year   Loans   Loans      
                                        Amortized   Amortized      
(dollars in thousands)   2021   2020   2019   2018   2017   Prior   Cost Basis   Cost Basis   Total
Commercial Lending                                                      
Commercial and Industrial                                                      
Risk rating:                                                      
Pass   $ 495,898   $ 781,914   $ 315,190   $ 152,290   $ 51,136   $ 218,781   $ 785,046   $ 27,922   $ 2,828,177
Special Mention         17,608     10,957     19,751     1,930     5,373     66,867     607     123,093
Substandard         23,098     2,808     16,913     584     12,048     28,361     1,367     85,179
Other (1)     3,252     9,848     11,793     7,889     4,362     1,496     46,347         84,987
Total Commercial and Industrial     499,150     832,468     340,748     196,843     58,012     237,698     926,621     29,896     3,121,436
                                                       
Commercial Real Estate                                                      
Risk rating:                                                      
Pass     41,958     346,445     613,930     556,954     454,433     1,104,669     51,280     8     3,169,677
Special Mention         1,491     58,763     14,518     33,401     64,971             173,144
Substandard         346         14,751     3,740     26,082     8,004         52,923
Other (1)                         489             489
Total Commercial Real Estate     41,958     348,282     672,693     586,223     491,574     1,196,211     59,284     8     3,396,233
                                                       
Construction                                                      
Risk rating:                                                      
Pass     32,201     73,512     260,522     162,052     58,537     63,624     24,043         674,491
Special Mention             507     706     4,429     9,172             14,814
Substandard                 536         1,478             2,014
Other (1)     5,410     16,755     9,924     7,588     3,655     4,040     580         47,952
Total Construction     37,611     90,267     270,953     170,882     66,621     78,314     24,623         739,271
                                                       
Lease Financing                                                      
Risk rating:                                                      
Pass     6,487     73,461     58,375     12,521     16,410     60,734             227,988
Special Mention     566     334     843     286     1,223     599             3,851
Substandard         2,714     1,673     293     1,107     522             6,309
Total Lease Financing     7,053     76,509     60,891     13,100     18,740     61,855             238,148
                                                       
Total Commercial Lending   $ 585,772   $ 1,347,526   $ 1,345,285   $ 967,048   $ 634,947   $ 1,574,078   $ 1,010,528   $ 29,904   $ 7,495,088
                                                       
                                              Revolving      
                                              Loans      
                                              Converted      
    Term Loans   Revolving   to Term      
    Amortized Cost Basis by Origination Year   Loans   Loans      
(continued)                                       Amortized   Amortized      
(dollars in thousands)   2021   2020   2019   2018   2017   Prior   Cost Basis   Cost Basis   Total
Residential Lending                                                      
Residential Mortgage                                                      
FICO:                                                      
740 and greater   $ 269,847   $ 698,143   $ 355,459   $ 261,304   $ 320,423   $ 1,031,922   $   $   $ 2,937,098
680 – 739     32,425     83,210     51,384     41,764     48,039     168,279             425,101
620 – 679     4,220     15,727     7,626     11,214     9,310     49,018             97,115
550 – 619             1,945     2,810     2,906     14,044             21,705
Less than 550             854     602     2,914     2,673             7,043
No Score (3)     4,599     12,498     17,761     21,197     19,972     55,404             131,431
Other (2)     5,767     20,213     13,584     13,754     20,607     21,516     580     162     96,183
Total Residential Mortgage     316,858     829,791     448,613     352,645     424,171     1,342,856     580     162     3,715,676
                                                       
Home Equity Line                                                      
FICO:                                                      
740 and greater                             589,662     2,108     591,770
680 – 739                             149,384     3,537     152,921
620 – 679                             37,325     1,432     38,757
550 – 619                             12,870     1,419     14,289
Less than 550                             3,641     359     4,000
No Score (3)                             4,009         4,009
Total Home Equity Line                             796,891     8,855     805,746
Total Residential Lending     316,858     829,791     448,613     352,645     424,171     1,342,856     797,471     9,017     4,521,422
                                                       
Consumer Lending                                                      
FICO:                                                      
740 and greater     37,038     105,809     109,925     86,146     44,909     22,098     107,725     266     513,916
680 – 739     19,163     79,376     82,058     58,077     31,081     16,370     72,053     774     358,952
620 – 679     6,167     38,079     44,459     30,055     21,453     11,715     33,935     1,213     187,076
550 – 619     337     8,215     18,414     15,800     13,267     8,437     11,582     1,364     77,416
Less than 550     88     2,644     8,907     7,785     5,711     3,445     4,181     719     33,480
No Score (3)     955     354     99     57     99     7     32,161     411     34,143
Other (2)         376     1,774     66     2,183     6,748     67,649         78,796
Total Consumer Lending     63,748     234,853     265,636     197,986     118,703     68,820     329,286     4,747     1,283,779
                                                       
Total Loans and Leases   $ 966,378   $ 2,412,170   $ 2,059,534   $ 1,517,679   $ 1,177,821   $ 2,985,754   $ 2,137,285   $ 43,668   $ 13,300,289
(1) Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score.
   
(2) Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating.
   
(3) No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.
                       
GAAP to Non-GAAP Reconciliation                   Table 12  
      For the Three Months Ended  
      March 31,    December 31,    March 31,   
(dollars in thousands, except per share amounts)        2021      2020      2020     
Income Statement Data:                      
Net income     $ 57,693   $ 61,739   $ 38,865  
Core net income     $ 57,693   $ 65,288   $ 38,803  
                       
Average total stockholders’ equity     $ 2,727,701   $ 2,732,271   $ 2,660,811  
Less: average goodwill       995,492     995,492     995,492  
Average tangible stockholders’ equity     $ 1,732,209   $ 1,736,779   $ 1,665,319  
                       
Average total assets     $ 22,944,699   $ 22,468,040   $ 20,313,304  
Less: average goodwill       995,492     995,492     995,492  
Average tangible assets     $ 21,949,207   $ 21,472,548   $ 19,317,812  
                       
Return on average total stockholders’ equity(1)       8.58 %     8.99 %     5.87 %  
Core return on average total stockholders’ equity (non-GAAP)(1)       8.58 %     9.51 %     5.87 %  
Return on average tangible stockholders’ equity (non-GAAP)(1)       13.51 %     14.14 %     9.39 %  
Core return on average tangible stockholders’ equity (non-GAAP)(1)       13.51 %     14.95 %     9.37 %  
                       
Return on average total assets(1)       1.02 %     1.09 %     0.77 %  
Core return on average total assets (non-GAAP)(1)       1.02 %     1.16 %     0.77 %  
Return on average tangible assets (non-GAAP)(1)       1.07 %     1.14 %     0.81 %  
Core return on average tangible assets (non-GAAP)(1)       1.07 %     1.21 %     0.81 %  
      As of   As of   As of  
      March 31,    December 31,    March 31,   
         2021      2020      2020  
Balance Sheet Data:                      
Total stockholders’ equity     $ 2,683,630   $ 2,744,104   $ 2,664,685  
Less: goodwill       995,492     995,492     995,492  
Tangible stockholders’ equity     $ 1,688,138   $ 1,748,612   $ 1,669,193  
                       
Total assets     $ 23,497,596   $ 22,662,831   $ 20,755,891  
Less: goodwill       995,492     995,492     995,492  
Tangible assets     $ 22,502,104   $ 21,667,339   $ 19,760,399  
                       
Shares outstanding       129,749,890     129,912,272     129,827,968  
                       
Total stockholders’ equity to total assets       11.42 %     12.11 %     12.84 %
Tangible stockholders’ equity to tangible assets (non-GAAP)     7.50 %     8.07 %     8.45 %
                       
Book value per share     $ 20.68   $ 21.12   $ 20.52  
Tangible book value per share (non-GAAP)     $ 13.01   $ 13.46   $ 12.86  

 

(1) Annualized for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020.
                       
GAAP to Non-GAAP Reconciliation                   Table 13  
      For the Three Months Ended  
      March 31,    December 31,    March 31,   
(dollars in thousands, except per share amounts)        2021      2020      2020     
Net interest income     $ 129,158   $ 135,227     $ 138,683    
Core net interest income (non-GAAP)     $ 129,158   $ 135,227     $ 138,683    
                       
Noninterest income     $ 43,868   $ 53,598     $ 49,228    
Losses (gains) on sale of securities           12       (85 )  
Costs associated with the sale of stock(1)           4,828          
Core noninterest income (non-GAAP)     $ 43,868   $ 58,438     $ 49,143    
                       
Noninterest expense     $ 96,306   $ 88,127     $ 96,466    
Core noninterest expense (non-GAAP)     $ 96,306   $ 88,127     $ 96,466    
                       
Net income     $ 57,693   $ 61,739     $ 38,865    
Losses (gains) on sale of securities           12       (85 )  
Costs associated with the sale of stock(1)           4,828          
Tax adjustments(2)           (1,291 )     23    
Total core adjustments           3,549       (62 )  
Core net income (non-GAAP)     $ 57,693   $ 65,288     $ 38,803    
                       
Basic earnings per share     $ 0.44   $ 0.48     $ 0.30    
Diluted earnings per share     $ 0.44   $ 0.47     $ 0.30    
Efficiency ratio       55.53 %   46.59  %     51.33  %  
                       
Core basic earnings per share (non-GAAP)     $ 0.44   $ 0.50     $ 0.30    
Core diluted earnings per share (non-GAAP)     $ 0.44   $ 0.50     $ 0.30    
Core efficiency ratio (non-GAAP)       55.53 %   45.43  %     51.35  %  
(1) Costs associated with the sale of stock for the three months ended December 31, 2020 related to changes in the valuation of the funding swap entered into with the buyer of our Visa Class B restricted shares sold in 2016.
   
(2) Represents the adjustments to net income, tax effected at the Company’s effective tax rate for the respective period.

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