Upgrade to SI Premium - Free Trial

First Hawaiian, Inc. Reports Third Quarter 2019 Financial Results and Declares Dividend

October 24, 2019 4:06 PM

HONOLULU, Oct. 24, 2019 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ: FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended September 30, 2019.

“The bank had another solid performance in the third quarter. Our earnings were driven by excellent credit quality and continued prudent expense management,” said Bob Harrison, Chairman, President and Chief Executive Officer. “During the quarter we continued to improve the quality of our balance sheet as we sold over $400 million of shared national credits and reduced public time deposits, enabling us to increase the size of our stock repurchase program.”

On October 23, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on December 6, 2019 to stockholders of record at the close of business on November 25, 2019.

Third Quarter 2019 Highlights:

Balance Sheet

Total assets were $20.6 billion as of September 30, 2019, compared to $20.5 billion as of June 30, 2019.

Gross loans and leases were $12.8 billion as of September 30, 2019, a decrease of $421 million, or 3.2%, from $13.3 billion as of June 30, 2019. The decrease was primarily due to the approximately $450 million reduction in SNC loans, which included $409 million of SNC loans sold and an additional $40 million of runoff in the SNC loan portfolio.

Total deposits were $16.9 billion as of September 30, 2019, an increase of $65 million, or 0.4%, from $16.8 billion as of June 30, 2019, primarily reflecting a $334 million reduction in public time deposits and the receipt of $400 million of temporary commercial deposits that were withdrawn early in the fourth quarter.

_______________
1 Core measurements are non-GAAP financial measures. Core excludes certain gains, expenses and one-time items. See Tables 13 and 14 at the end of this document for reconciliations of core measurements, including core net income, core noninterest income, core efficiency ratio and core earnings per diluted share to the comparable GAAP measurements.
2 Return on Average Tangible Assets (“ROATA”) and Return on Average Tangible Common Equity (“ROATCE”) are non-GAAP financial measures. A reconciliation of average tangible assets and average tangible stockholders’ equity to the comparable GAAP measurements is provided in Table 13 at the end of this document.

Net Interest Income

Net interest income for the third quarter of 2019 was $143.1 million, a decrease of $2.5 million, or 1.7%, compared to $145.6 million for the prior quarter. Net interest income in the third quarter included a negative $1.7 million premium adjustment, while the second quarter included a negative $1.8 million premium adjustment. The decrease in net interest income compared to the second quarter of 2019 was primarily due to lower yields and balances on loans and investments, partially offset by lower deposit balances.

NIM was 3.19% in the third quarter of 2019, a decrease of six basis points compared to 3.25% in the second quarter of 2019. The negative $1.7 million premium adjustment in the third quarter and the negative $1.8 million premium adjustment in the second quarter had a negative four basis point impact on the reported NIM in each quarter.

Provision Expense

No provision for credit losses was taken in the quarter ended September 30, 2019 compared to $3.9 million in the quarter ended June 30, 2019.

Noninterest Income

Noninterest income was $50.0 million in the third quarter of 2019, an increase of $1.2 million compared to noninterest income of $48.8 million in the second quarter of 2019.

Noninterest Expense

Noninterest expense was $93.5 million in the third quarter of 2019, essentially unchanged from $93.3 million in the second quarter of 2019.

The efficiency ratio was 48.4% and 48.0% for the quarters ended September 30, 2019 and June 30, 2019, respectively. Core efficiency ratio1 was 47.3% and 47.9% for the quarters ended September 30, 2019 and June 30, 2019, respectively.

Taxes

The effective tax rate was 25.5% for the quarters ended September 30, 2019 and June 30, 2019.

Asset Quality

The allowance for loan and lease losses was $133.0 million, or 1.04% of total loans and leases, as of September 30, 2019, compared to $138.5 million, or 1.04% of total loans and leases, as of June 30, 2019. Net charge-offs were $5.6 million, or 0.17% of average loans and leases on an annualized basis for the quarter ended September 30, 2019, compared to $6.9 million, or 0.21% of average loans and leases on an annualized basis for the quarter ended June 30, 2019. Total non-performing assets were $4.3 million, or 0.03% of total loans and leases and other real estate owned, at September 30, 2019, compared to non-performing assets of $3.9 million, or 0.03% of total loans and leases and other real estate owned, at June 30, 2019.

Capital

Total stockholders' equity was $2.7 billion at September 30, 2019 and June 30, 2019.

The tier 1 leverage, common equity tier 1 and total capital ratios were 8.68%, 12.15% and 13.11%, respectively, at September 30, 2019, compared with 8.75%, 11.84% and 12.81% at June 30, 2019.

During the third quarter of 2019, the Company’s Board of Directors approved a $50 million increase in the stock repurchase program to up to $150 million during 2019. The Company repurchased 2.3 million shares of common stock at a total cost of $59 million under the stock repurchase program in the third quarter. The average cost was $25.69 per share repurchased. Year-to-date through September 30, the Company has repurchased 3.8 million shares at a total cost of $99 million. Remaining buyback authority under the stock repurchase program was $51 million at September 30, 2019.

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 (844) 452-2942 (US/Canada), or (574) 990-9846 (International) ten minutes prior to the start of the call and enter the conference ID: 1875646. 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 October 31, 2019. Access the replay by dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID: 1875646.

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, 2018 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019.

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 13 and 14 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 For the Nine Months Ended
September 30, June 30, September 30, September 30,
(dollars in thousands, except per share data) 2019 2019 2018 2019 2018
Operating Results:
Net interest income $143,081 $145,613 $141,258 $433,783 $422,333
Provision for loan and lease losses — 3,870 4,460 9,550 16,430
Noninterest income 49,980 48,773 47,405 145,825 145,902
Noninterest expense 93,466 93,290 93,147 279,379 275,599
Net income 74,199 72,433 67,388 216,556 204,399
Basic earnings per share 0.56 0.54 0.50 1.62 1.48
Diluted earnings per share 0.56 0.54 0.50 1.61 1.48
Dividends declared per share 0.26 0.26 0.24 0.78 0.72
Dividend payout ratio 46.43% 48.15% 48.00% 48.45% 48.65%
Supplemental Income Statement Data (non-GAAP):
Core net interest income $143,081 $145,613 $141,258 $433,783 $422,333
Core noninterest income 49,980 48,752 47,405 148,417 145,902
Core noninterest expense 91,222 93,029 88,511 276,613 269,642
Core net income 75,871 72,612 70,818 220,535 208,797
Core basic earnings per share 0.57 0.54 0.52 1.65 1.52
Core diluted earnings per share 0.57 0.54 0.52 1.64 1.52
Performance Ratio(1):
Net interest margin 3.19% 3.25% 3.11% 3.22% 3.14%
Core net interest margin (non-GAAP) 3.19% 3.25% 3.11% 3.22% 3.14%
Efficiency ratio 48.41% 47.99% 49.36% 48.20% 48.49%
Core efficiency ratio (non-GAAP) 47.25% 47.86% 46.90% 47.51% 47.44%
Return on average total assets 1.45% 1.42% 1.31% 1.42% 1.35%
Core return on average total assets (non-GAAP) 1.48% 1.43% 1.38% 1.44% 1.37%
Return on average tangible assets (non-GAAP) 1.52% 1.50% 1.38% 1.49% 1.42%
Core return on average tangible assets (non-GAAP)(2) 1.56% 1.50% 1.45% 1.52% 1.45%
Return on average total stockholders' equity 11.12% 11.13% 11.01% 11.13% 11.09%
Core return on average total stockholders' equity (non-GAAP) 11.37% 11.16% 11.57% 11.34% 11.33%
Return on average tangible stockholders' equity (non-GAAP) 17.81% 17.99% 18.66% 18.04% 18.60%
Core return on average tangible stockholders’ equity (non-GAAP)(3) 18.21% 18.03% 19.61% 18.37% 19.00%
Average Balances:
Average loans and leases $13,032,349 $13,209,655 $12,595,668 $13,105,086 $12,482,747
Average earning assets 17,862,564 17,971,615 18,041,483 17,974,363 17,982,396
Average assets 20,332,457 20,390,273 20,391,456 20,405,261 20,306,833
Average deposits 16,573,796 16,664,837 17,158,849 16,700,366 17,286,159
Average stockholders' equity 2,648,428 2,610,565 2,427,907 2,600,259 2,464,601
Market Value Per Share:
Closing 26.70 25.87 27.16 26.70 27.16
High 27.84 28.20 30.02 28.20 32.36
Low 24.25 24.83 27.02 22.13 26.92


As of As of As of As of
September 30, June 30, December 31, September 30,
2019 2019 2018 2018
Balance Sheet Data:
Loans and leases $ 12,843,396 $ 13,264,609 $ 13,076,191 $ 12,600,464
Total assets 20,598,220 20,526,367 20,695,678 19,983,838
Total deposits 16,857,246 16,792,078 17,150,068 16,689,273
Short-term borrowings 400,000 200,000 — 30,000
Long-term borrowings 200,018 400,028 600,026 400,026
Total stockholders' equity 2,654,558 2,659,441 2,524,839 2,423,462
Per Share of Common Stock:
Book value $ 20.22 $ 19.92 $ 18.72 $ 17.97
Tangible book value (non-GAAP)(4) 12.64 12.46 11.34 10.59
Asset Quality Ratios:
Non-accrual loans and leases / total loans and leases 0.03 % 0.03% 0.05% 0.09%
Allowance for loan and lease losses / total loans and leases 1.04 % 1.04% 1.08% 1.12%
Capital Ratios:
Common Equity Tier 1 Capital Ratio 12.15 % 11.84% 11.97% 12.09%
Tier 1 Capital Ratio 12.15 % 11.84% 11.97% 12.09%
Total Capital Ratio 13.11 % 12.81% 12.99% 13.14%
Tier 1 Leverage Ratio 8.68 % 8.75% 8.72% 8.42%
Total stockholders' equity to total assets 12.89 % 12.96% 12.20% 12.13%
Tangible stockholders' equity to tangible assets (non-GAAP) 8.46 % 8.52% 7.76% 7.52%
Non-Financial Data:
Number of branches 58 59 60 60
Number of ATMs 293 292 295 296
Number of Full-Time Equivalent Employees 2,099 2,123 2,155 2,166


Consolidated Statements of Income Table 2
Three Months Ended For the Nine Months Ended
September 30, June 30, September 30, September 30,
(dollars in thousands, except per share amounts) 2019 2019 2018 2019 2018
Interest income
Loans and lease financing $ 144,691 $ 146,883 $ 135,394 $ 435,980 $ 389,228
Available-for-sale securities 22,256 24,784 25,196 71,526 81,586
Other 3,234 2,151 3,462 9,054 7,193
Total interest income 170,181 173,818 164,052 516,560 478,007
Interest expense
Deposits 22,753 23,693 20,205 69,643 52,824
Short-term and long-term borrowings 4,347 4,512 2,589 13,134 2,850
Total interest expense 27,100 28,205 22,794 82,777 55,674
Net interest income 143,081 145,613 141,258 433,783 422,333
Provision for loan and lease losses — 3,870 4,460 9,550 16,430
Net interest income after provision for loan and lease losses 143,081 141,743 136,798 424,233 405,903
Noninterest income
Service charges on deposit accounts 8,554 8,123 7,933 24,737 23,609
Credit and debit card fees 16,839 16,629 16,535 50,123 48,961
Other service charges and fees 8,903 9,403 9,578 27,435 28,553
Trust and investment services income 8,698 8,931 7,487 26,247 23,429
Bank-owned life insurance 5,743 3,390 3,692 12,946 8,131
Investment securities gains (losses), net — 21 — (2,592) —
Other 1,243 2,276 2,180 6,929 13,219
Total noninterest income 49,980 48,773 47,405 145,825 145,902
Noninterest expense
Salaries and employee benefits 44,955 42,185 41,959 132,000 125,755
Contracted services and professional fees 14,649 14,303 11,478 42,597 36,770
Occupancy 7,250 7,286 6,757 21,522 20,149
Equipment 4,024 4,544 4,181 12,852 13,104
Regulatory assessment and fees 1,992 2,149 3,966 5,588 12,164
Advertising and marketing 1,647 1,980 1,060 5,593 3,126
Card rewards program 6,930 7,664 5,805 21,326 17,882
Other 12,019 13,179 17,941 37,901 46,649
Total noninterest expense 93,466 93,290 93,147 279,379 275,599
Income before provision for income taxes 99,595 97,226 91,056 290,679 276,206
Provision for income taxes 25,396 24,793 23,668 74,123 71,807
Net income $ 74,199 $ 72,433 $ 67,388 $ 216,556 $ 204,399
Basic earnings per share $ 0.56 $ 0.54 $ 0.50 $ 1.62 $ 1.48
Diluted earnings per share $ 0.56 $ 0.54 $ 0.50 $ 1.61 $ 1.48
Basic weighted-average outstanding shares 132,583,902 134,420,380 135,466,669 133,957,192 137,643,005
Diluted weighted-average outstanding shares 132,877,769 134,652,008 135,675,498 134,231,762 137,809,573


Consolidated Balance Sheets Table 3
September 30, June 30, December 31, September 30,
(dollars in thousands) 2019 2019 2018 2018
Assets
Cash and due from banks $358,863 $423,802 $396,836 $350,967
Interest-bearing deposits in other banks 985,154 259,713 606,801 348,526
Investment securities 4,157,082 4,395,476 4,498,342 4,595,301
Loans held for sale 1,594 215 432 —
Loans and leases 12,843,396 13,264,609 13,076,191 12,600,464
Less: allowance for loan and lease losses 132,964 138,535 141,718 141,250
Net loans and leases 12,710,432 13,126,074 12,934,473 12,459,214
Premises and equipment, net 315,309 313,200 304,996 286,374
Other real estate owned and repossessed personal property 82 — 751 362
Accrued interest receivable 44,671 49,205 48,920 49,407
Bank-owned life insurance 453,410 450,722 446,076 444,987
Goodwill 995,492 995,492 995,492 995,492
Mortgage servicing rights 13,630 14,573 16,155 16,937
Other assets 562,501 497,895 446,404 436,271
Total assets $20,598,220 $20,526,367 $20,695,678 $19,983,838
Liabilities and Stockholders' Equity
Deposits:
Interest-bearing $11,136,424 $11,028,921 $11,142,127 $10,881,918
Noninterest-bearing 5,720,822 5,763,157 6,007,941 5,807,355
Total deposits 16,857,246 16,792,078 17,150,068 16,689,273
Short-term borrowings 400,000 200,000 — 30,000
Long-term borrowings 200,018 400,028 600,026 400,026
Retirement benefits payable 128,442 128,610 127,909 135,523
Other liabilities 357,956 346,210 292,836 305,554
Total liabilities 17,943,662 17,866,926 18,170,839 17,560,376
Stockholders' equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 139,908,699 / 131,260,900 shares as of September 30, 2019, issued/outstanding: 139,857,673 / 133,508,212 shares as of June 30, 2019, issued/outstanding: 139,656,674 / 134,874,302 shares as of December 31, 2018 and issued/outstanding: 139,655,841 / 134,873,728 shares as of September 30, 2018) 1,399 1,399 1,397 1,397
Additional paid-in capital 2,501,324 2,499,946 2,495,853 2,494,436
Retained earnings 403,317 363,748 291,919 264,463
Accumulated other comprehensive loss, net (18,774) (31,984) (132,195) (204,699)
Treasury stock (8,647,799 shares as of September 30, 2019, 6,349,461 shares as of June 30, 2019, 4,782,372 shares as of December 31, 2018 and 4,782,113 shares as of September 30, 2018) (232,708) (173,668) (132,135) (132,135)
Total stockholders' equity 2,654,558 2,659,441 2,524,839 2,423,462
Total liabilities and stockholders' equity $20,598,220 $20,526,367 $20,695,678 $19,983,838


Average Balances and Interest Rates Table 4
Three Months Ended Three Months Ended Three Months Ended
September 30, 2019 June 30, 2019 September 30, 2018
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 $ 447.8 $ 2.3 2.02 % $ 247.2 $ 1.4 2.35% $ 656.7 $ 3.3 1.99%
Available-for-Sale Investment Securities 4,296.3 22.3 2.07 4,438.1 24.8 2.23 4,737.3 25.2 2.11
Loans Held for Sale 1.4 — 2.36 0.7 — 2.76 1.8 — 3.83
Loans and Leases(1)
Commercial and industrial 2,885.9 30.0 4.12 3,235.0 34.3 4.26 3,019.9 31.0 4.08
Commercial real estate 3,294.7 37.3 4.49 3,094.4 36.0 4.67 2,975.3 31.0 4.13
Construction 477.2 5.6 4.67 583.6 6.9 4.73 629.5 6.7 4.20
Residential:
Residential mortgages 3,644.9 38.6 4.23 3,581.2 37.2 4.16 3,288.4 34.9 4.21
Home equity lines 912.8 8.6 3.74 908.5 8.6 3.79 870.6 8.2 3.72
Consumer 1,651.4 23.3 5.61 1,657.7 22.7 5.48 1,649.7 22.4 5.39
Lease financing 165.4 1.3 3.14 149.3 1.2 3.31 162.3 1.2 3.00
Total Loans and Leases 13,032.3 144.7 4.41 13,209.7 146.9 4.46 12,595.7 135.4 4.26
Other Earning Assets 84.8 0.9 4.47 76.0 0.7 3.71 50.0 0.2 1.29
Total Earning Assets(2) 17,862.6 170.2 3.79 17,971.7 173.8 3.88 18,041.5 164.1 3.61
Cash and Due from Banks 341.7 342.6 336.5
Other Assets 2,128.2 2,076.0 2,013.5
Total Assets $ 20,332.5 $ 20,390.3 $ 20,391.5
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings $ 4,891.5 $ 4.6 0.37 % $ 4,712.2 $ 4.0 0.34% 4,727.2 $ 3.3 0.28%
Money Market 3,067.4 7.1 0.92 3,126.7 7.4 0.95 2,871.0 4.6 0.63
Time 2,872.6 11.1 1.54 3,084.6 12.3 1.60 3,705.7 12.3 1.32
Total Interest-Bearing Deposits 10,831.5 22.8 0.83 10,923.5 23.7 0.87 11,303.9 20.2 0.71
Short-Term Borrowings 370.0 2.6 2.84 50.4 0.3 2.25 3.3 — 1.30
Long-Term Borrowings 239.1 1.7 2.82 593.5 4.2 2.86 358.7 2.6 2.85
Total Interest-Bearing Liabilities 11,440.6 27.1 0.94 11,567.4 28.2 0.98 11,665.9 22.8 0.78
Net Interest Income $ 143.1 $ 145.6 $ 141.3
Interest Rate Spread 2.85 % 2.90% 2.83%
Net Interest Margin 3.19 % 3.25% 3.11%
Noninterest-Bearing Demand Deposits 5,742.3 5,741.3 5,854.9
Other Liabilities 501.2 471.0 442.8
Stockholders' Equity 2,648.4 2,610.6 2,427.9
Total Liabilities and Stockholders' Equity $ 20,332.5 $ 20,390.3 $ 20,391.5


Average Balances and Interest Rates Table 5
Nine Months Ended Nine Months Ended
September 30, 2019 September 30, 2018
Average Income/ Yield/ Average Income/ Yield/
(dollars in millions) Balance Expense Rate Balance Expense Rate
Earning Assets
Interest-Bearing Deposits in Other Banks $ 400.6 $ 6.9 2.31 % $ 518.4 $ 6.9 1.77%
Available-for-Sale Investment Securities 4,383.6 71.5 2.18 4,951.4 81.6 2.20
Loans Held for Sale 0.8 — 2.52 1.3 — 3.60
Loans and Leases(1)
Commercial and industrial 3,094.8 97.5 4.21 3,100.1 89.2 3.85
Commercial real estate 3,129.8 108.1 4.62 2,886.7 86.3 4.00
Construction 565.2 20.0 4.73 623.9 18.6 4.00
Residential:
Residential mortgages 3,590.2 112.4 4.17 3,221.7 102.4 4.25
Home equity lines 912.4 25.9 3.79 864.0 23.6 3.65
Consumer 1,658.7 68.5 5.52 1,625.0 65.5 5.38
Lease financing 154.0 3.6 3.15 161.3 3.6 2.98
Total Loans and Leases 13,105.1 436.0 4.44 12,482.7 389.2 4.17
Other Earning Assets 84.3 2.2 3.37 28.6 0.3 1.58
Total Earning Assets(2) 17,974.4 516.6 3.84 17,982.4 478.0 3.55
Cash and Due from Banks 348.1 324.4
Other Assets 2,082.8 2,000.0
Total Assets $ 20,405.3 $ 20,306.8
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings $ 4,806.0 $ 12.8 0.35 % $ 4,615.1 $ 7.4 0.21%
Money Market 3,125.5 22.1 0.95 2,769.9 9.1 0.44
Time 2,999.0 34.8 1.55 3,985.2 36.3 1.22
Total Interest-Bearing Deposits 10,930.5 69.7 0.85 11,370.2 52.8 0.62
Short-Term Borrowings 145.7 3.0 2.76 15.3 0.2 1.81
Long-Term Borrowings 476.2 10.1 2.84 123.1 2.7 2.87
Total Interest-Bearing Liabilities 11,552.4 82.8 0.96 11,508.6 55.7 0.65
Net Interest Income $ 433.8 $ 422.3
Interest Rate Spread 2.88 % 2.90%
Net Interest Margin 3.22 % 3.14%
Noninterest-Bearing Demand Deposits 5,769.9 5,916.0
Other Liabilities 482.7 417.6
Stockholders' Equity 2,600.3 2,464.6
Total Liabilities and Stockholders' Equity $ 20,405.3 $ 20,306.8


Analysis of Change in Net Interest Income Table 6
Three Months Ended September 30, 2019
Compared to June 30, 2019
(dollars in millions) Volume Rate Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks $ 1.1 $ (0.2) $ 0.9
Available-for-Sale Investment Securities (0.8) (1.7) (2.5)
Loans and Leases
Commercial and industrial (3.3) (1.0) (4.3)
Commercial real estate 2.6 (1.3) 1.3
Construction (1.2) (0.1) (1.3)
Residential:
Residential mortgage 0.7 0.7 1.4
Home equity line 0.1 (0.1) —
Consumer (0.1) 0.7 0.6
Lease financing 0.1 — 0.1
Total Loans and Leases (1.1) (1.1) (2.2)
Other Earning Assets 0.1 0.1 0.2
Total Change in Interest Income (0.7) (2.9) (3.6)
Change in Interest Expense:
Interest-Bearing Deposits
Savings 0.2 0.4 0.6
Money Market (0.1) (0.2) (0.3)
Time (0.8) (0.4) (1.2)
Total Interest-Bearing Deposits (0.7) (0.2) (0.9)
Short-Term Borrowings 2.3 — 2.3
Long-Term Borrowings (2.5) — (2.5)
Total Change in Interest Expense (0.9) (0.2) (1.1)
Change in Net Interest Income $ 0.2 $ (2.7) $ (2.5)


Analysis of Change in Net Interest Income Table 7
Three Months Ended September 30, 2019
Compared to September 30, 2018
(dollars in millions) Volume Rate Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks $ (1.0) $ — $ (1.0)
Available-for-Sale Investment Securities (2.4) (0.5) (2.9)
Loans and Leases
Commercial and industrial (1.4) 0.4 (1.0)
Commercial real estate 3.5 2.8 6.3
Construction (1.7) 0.6 (1.1)
Residential:
Residential mortgage 3.5 0.2 3.7
Home equity line 0.4 — 0.4
Consumer — 0.9 0.9
Lease financing — 0.1 0.1
Total Loans and Leases 4.3 5.0 9.3
Other Earning Assets 0.1 0.6 0.7
Total Change in Interest Income 1.0 5.1 6.1
Change in Interest Expense:
Interest-Bearing Deposits
Savings 0.1 1.2 1.3
Money Market 0.3 2.2 2.5
Time (3.0) 1.8 (1.2)
Total Interest-Bearing Deposits (2.6) 5.2 2.6
Short-Term Borrowings 2.6 — 2.6
Long-Term Borrowings (0.9) — (0.9)
Total Change in Interest Expense (0.9) 5.2 4.3
Change in Net Interest Income $ 1.9 $ (0.1) $ 1.8


Analysis of Change in Net Interest Income Table 8
Nine Months Ended September 30, 2019
Compared to September 30, 2018
(dollars in millions) Volume Rate Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks $ (1.8) $ 1.8 $ —
Available-for-Sale Investment Securities (9.2) (0.9) (10.1)
Loans and Leases
Commercial and industrial (0.2) 8.5 8.3
Commercial real estate 7.7 14.1 21.8
Construction (1.8) 3.2 1.4
Residential:
Residential mortgage 11.9 (1.9) 10.0
Home equity line 1.4 0.9 2.3
Consumer 1.3 1.7 3.0
Lease financing (0.2) 0.2 —
Total Loans and Leases 20.1 26.7 46.8
Other Earning Assets 1.2 0.7 1.9
Total Change in Interest Income 10.3 28.3 38.6
Change in Interest Expense:
Interest-Bearing Deposits
Savings 0.3 5.1 5.4
Money Market 1.3 11.7 13.0
Time (10.1) 8.6 (1.5)
Total Interest-Bearing Deposits (8.5) 25.4 16.9
Short-Term Borrowings 2.6 0.2 2.8
Long-Term Borrowings 7.5 (0.1) 7.4
Total Change in Interest Expense 1.6 25.5 27.1
Change in Net Interest Income $ 8.7 $ 2.8 $ 11.5


Loans and Leases Table 9
September 30, June 30, December 31, September 30,
(dollars in thousands) 2019 2019 2018 2018
Commercial and industrial $ 2,654,077 $ 3,177,844 $ 3,208,760 $ 2,969,237
Commercial real estate 3,309,389 3,194,219 2,990,783 2,891,753
Construction 486,977 549,578 626,757 612,794
Residential:
Residential mortgage 3,671,424 3,618,433 3,527,101 3,423,115
Home equity line 916,106 908,452 912,517 890,374
Total residential 4,587,530 4,526,885 4,439,618 4,313,489
Consumer 1,637,549 1,650,713 1,662,504 1,651,877
Lease financing 167,874 165,370 147,769 161,314
Total loans and leases $ 12,843,396 $ 13,264,609 $ 13,076,191 $ 12,600,464


Deposits Table 10
September 30, June 30, December 31, September 30,
(dollars in thousands) 2019 2019 2018 2018
Demand $ 5,720,822 $5,763,157 $6,007,941 $5,807,355
Savings 4,899,468 4,908,000 4,853,285 4,685,460
Money Market 3,529,363 3,050,843 3,196,678 2,905,959
Time 2,707,593 3,070,078 3,092,164 3,290,499
Total Deposits $ 16,857,246 $16,792,078 $17,150,068 $16,689,273


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) 2019 2019 2018 2018
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial Loans:
Commercial and industrial $ 12 $ 119 $ 274 $ 481
Commercial real estate 33 — 1,658 2,786
Construction — — — 2,001
Total Commercial Loans 45 119 1,932 5,268
Residential Loans:
Residential mortgage 3,959 3,771 4,611 5,678
Total Residential Loans 3,959 3,771 4,611 5,678
Consumer 200 — — —
Total Non-Accrual Loans and Leases 4,204 3,890 6,543 10,946
Other Real Estate Owned 82 — 751 362
Total Non-Performing Assets $ 4,286 $ 3,890 $ 7,294 $ 11,308
Accruing Loans and Leases Past Due 90 Days or More
Commercial Loans:
Commercial and industrial $ 750 $ 807 $ 141 $ 141
Construction — — — 172
Total Commercial Loans 750 807 141 313
Residential Loans:
Residential mortgage 139 — 32 168
Home equity line 3,192 1,635 2,842 2,620
Total Residential Loans 3,331 1,635 2,874 2,788
Consumer 3,076 3,295 3,373 2,813
Total Accruing Loans and Leases Past Due 90 Days or More $ 7,157 $ 5,737 $ 6,388 $ 5,914
Restructured Loans on Accrual Status and Not Past Due 90 Days or More 22,350 23,466 24,033 28,608
Total Loans and Leases $ 12,843,396 $ 13,264,609 $ 13,076,191 $ 12,600,464


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) 2019 2019 2018 2019 2018
Balance at Beginning of Period $ 138,535 $141,546 $140,601 $ 141,718 $137,253
Loans and Leases Charged-Off
Commercial Loans:
Commercial and industrial (514) (2,000) (303) (2,514) (778)
Lease financing — — — (24) —
Total Commercial Loans (514) (2,000) (303) (2,538) (778)
Residential (7) — (125) (7) (159)
Consumer (8,015) (7,505) (5,700) (24,118) (18,615)
Total Loans and Leases Charged-Off (8,536) (9,505) (6,128) (26,663) (19,552)
Recoveries on Loans and Leases Previously Charged-Off
Commercial Loans:
Commercial and industrial 241 25 51 303 154
Commercial real estate 30 32 21 93 175
Total Commercial Loans 271 57 72 396 329
Residential 425 185 442 860 684
Consumer 2,269 2,382 1,803 7,103 6,106
Total Recoveries on Loans and Leases Previously Charged-Off 2,965 2,624 2,317 8,359 7,119
Net Loans and Leases Charged-Off (5,571) (6,881) (3,811) (18,304) (12,433)
Provision for Loan and Lease Losses — 3,870 4,460 9,550 16,430
Balance at End of Period $ 132,964 $138,535 $141,250 $ 132,964 $141,250
Average Loans and Leases Outstanding $ 13,032,349 $13,209,655 $12,595,668 $ 13,105,086 $12,482,747
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding 0.17 % 0.21% 0.12% 0.19 % 0.13%
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding 1.04 % 1.04% 1.12% 1.04 % 1.12%


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) 2019 2019 2018 2019 2018
Income Statement Data:
Net income $ 74,199 $ 72,433 $ 67,388 $ 216,556 $ 204,399
Core net income $ 75,871 $ 72,612 $ 70,818 $ 220,535 $ 208,797
Average total stockholders' equity $ 2,648,428 $ 2,610,565 $ 2,427,907 $ 2,600,259 $ 2,464,601
Less: average goodwill 995,492 995,492 995,492 995,492 995,492
Average tangible stockholders' equity $ 1,652,936 $ 1,615,073 $ 1,432,415 $ 1,604,767 $ 1,469,109
Average total assets $ 20,332,457 $ 20,390,273 $ 20,391,456 $ 20,405,261 $ 20,306,833
Less: average goodwill 995,492 995,492 995,492 995,492 995,492
Average tangible assets $ 19,336,965 $ 19,394,781 $ 19,395,964 $ 19,409,769 $ 19,311,341
Return on average total stockholders' equity(1) 11.12 % 11.13% 11.01% 11.13 % 11.09%
Core return on average total stockholders' equity (non-GAAP)(1) 11.37 % 11.16% 11.57% 11.34 % 11.33%
Return on average tangible stockholders' equity (non-GAAP)(1) 17.81 % 17.99% 18.66% 18.04 % 18.60%
Core return on average tangible stockholders' equity (non-GAAP)(1) 18.21 % 18.03% 19.61% 18.37 % 19.00%
Return on average total assets(1) 1.45 % 1.42% 1.31% 1.42 % 1.35%
Core return on average total assets (non-GAAP)(1) 1.48 % 1.43% 1.38% 1.44 % 1.37%
Return on average tangible assets (non-GAAP)(1) 1.52 % 1.50% 1.38% 1.49 % 1.42%
Core return on average tangible assets (non-GAAP)(1) 1.56 % 1.50% 1.45% 1.52 % 1.45%
As of As of As of As of
September 30, June 30, December 31, September 30,
2019 2019 2018 2018
Balance Sheet Data:
Total stockholders' equity $ 2,654,558 $ 2,659,441 $ 2,524,839 $ 2,423,462
Less: goodwill 995,492 995,492 995,492 995,492
Tangible stockholders' equity $ 1,659,066 $ 1,663,949 $ 1,529,347 $ 1,427,970
Total assets $ 20,598,220 $ 20,526,367 $ 20,695,678 $ 19,983,838
Less: goodwill 995,492 995,492 995,492 995,492
Tangible assets $ 19,602,728 $ 19,530,875 $ 19,700,186 $ 18,988,346
Shares outstanding 131,260,900 133,508,212 134,874,302 134,873,728
Total stockholders' equity to total assets 12.89 % 12.96% 12.20% 12.13%
Tangible stockholders' equity to tangible assets (non-GAAP) 8.46 % 8.52% 7.76% 7.52%
Book value per share $ 20.22 $ 19.92 $ 18.72 $ 17.97
Tangible book value per share (non-GAAP) $ 12.64 $ 12.46 $ 11.34 $ 10.59


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) 2019 2019 2018 2019 2018
Net interest income $ 143,081 $ 145,613 $ 141,258 $ 433,783 $ 422,333
Core net interest income (non-GAAP) $ 143,081 $ 145,613 $ 141,258 $ 433,783 $ 422,333
Noninterest income $ 49,980 $ 48,773 $ 47,405 $ 145,825 $ 145,902
(Gain) loss on sale of securities — (21) — 2,592 —
Core noninterest income (non-GAAP) $ 49,980 $ 48,752 $ 47,405 $ 148,417 $ 145,902
Noninterest expense $ 93,466 $ 93,290 $ 93,147 $ 279,379 $ 275,599
Loss on litigation settlement(1) — — (4,125) — (4,125)
One-time items(2) (2,244) (261) (511) (2,766) (1,832)
Core noninterest expense (non-GAAP) $ 91,222 $ 93,029 $ 88,511 $ 276,613 $ 269,642
Net income $ 74,199 $ 72,433 $ 67,388 $ 216,556 $ 204,399
(Gain) loss on sale of securities — (21) — 2,592 —
Loss on litigation settlement(1) — — 4,125 — 4,125
One-time noninterest expense items(2) 2,244 261 511 2,766 1,832
Tax adjustments(3) (572) (61) (1,206) (1,379) (1,559)
Total core adjustments 1,672 179 3,430 3,979 4,398
Core net income (non-GAAP) $ 75,871 $ 72,612 $ 70,818 $ 220,535 $ 208,797
Basic earnings per share $ 0.56 $ 0.54 $ 0.50 $ 1.62 $ 1.48
Diluted earnings per share $ 0.56 $ 0.54 $ 0.50 $ 1.61 $ 1.48
Efficiency ratio 48.41 % 47.99% 49.36% 48.20 % 48.49%
Core basic earnings per share (non-GAAP) $ 0.57 $ 0.54 $ 0.52 $ 1.65 $ 1.52
Core diluted earnings per share (non-GAAP) $ 0.57 $ 0.54 $ 0.52 $ 1.64 $ 1.52
Core efficiency ratio (non-GAAP) 47.25 % 47.86% 46.90% 47.51 % 47.44%

Categories

Globe Newswire Press Releases

Next Articles