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Company Announcements

First Hawaiian Inc

First Hawaiian, Inc. Reports Fourth Quarter 2023 Financial Results and Declares Dividend

Source: GlobeNewswire
First Hawaiian, Inc. Reports Fourth Quarter 2023 Financial Results and Declares Dividend

HONOLULU, Hawaii, Jan. 26, 2024 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended December 31, 2023.

“I’m happy to report that we finished 2023 with a strong fourth quarter. Our loan balances were stable, we grew consumer and commercial deposits, and credit quality remained excellent,” said Bob Harrison, Chairman, President, and CEO. “During the fourth quarter we also took action to strengthen our balance sheet and increase our future earnings power by selling low-yielding securities. We intend to use the proceeds to reduce high-cost deposits which will increase our net interest margin and net interest income in 2024.”

On January 24, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on March 1, 2024, to stockholders of record at the close of business on February 16, 2024.  

Additionally, the Company’s Board of Directors adopted a stock repurchase program for up to $40 million of its outstanding common stock during 2024.

Fourth Quarter 2023 Highlights:

  • Net income of $47.5 million, or $0.37 per diluted share
  • Total loans and leases increased $21.2 million versus prior quarter
  • Total deposits decreased $178.8 million versus prior quarter
  • Net interest margin decreased 5 basis points to 2.81%
  • Recorded a $5.3 million provision for credit losses
  • Sold $525.6 million of low-yielding investment securities and recognized a $40.0 million loss
  • Sold 120,104 shares of Visa Class B stock for a gain of $40.8 million
  • $16.3 million FDIC special assessment included in expenses
  • Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet

Total assets were $24.9 billion at December 31, 2023 and September 30, 2023.

Gross loans and leases were $14.4 billion as of December 31, 2023, an increase of $21.2 million, or 0.1%, from $14.3 billion as of September 30, 2023.

Total deposits were $21.3 billion as of December 31, 2023, a decrease of $178.8 million, or 0.8%, from $21.5 billion as of September 30, 2023.

Net Interest Income

Net interest income for the fourth quarter of 2023 was $151.8 million, a decrease of $5.4 million, or 3.4%, compared to $157.1 million for the prior quarter.  

The net interest margin was 2.81% in the fourth quarter of 2023, a decrease of 5 basis points compared to 2.86% in the prior quarter.

Provision Expense

During the quarter ended December 31, 2023, we recorded a $5.3 million provision for credit losses. In the quarter ended September 30, 2023, we recorded a $7.5 million provision for credit losses.

Noninterest Income

Noninterest income was $58.3 million in the fourth quarter of 2023, an increase of $12.3 million compared to noninterest income of $46.1 million in the prior quarter.

Noninterest Expense

Noninterest expense was $142.3 million in the fourth quarter of 2023, an increase of $22.9 million compared to noninterest expense of $119.4 million in the prior quarter.

The efficiency ratio was 67.3% and 58.3% for the quarters ended December 31, 2023 and September 30, 2023, respectively.

Taxes

The effective tax rate was 24.0% and 23.8% for the quarters ended December 31, 2023 and September 30, 2023, respectively.

Asset Quality

The allowance for credit losses was $156.5 million, or 1.09% of total loans and leases, as of December 31, 2023, compared to $154.8 million, or 1.08% of total loans and leases, as of September 30, 2023. The reserve for unfunded commitments was $35.6 million as of December 31, 2023 compared to $37.8 million as of September 30, 2023. Net charge-offs were $5.8 million, or 0.16% of average loans and leases on an annualized basis, for the quarter ended December 31, 2023, compared to net recoveries of $0.3 million, or 0.01% of average loans and leases on an annualized basis, for the quarter ended September 30, 2023. Total non-performing assets were $18.6 million, or 0.13% of total loans and leases and other real estate owned, on December 31, 2023, compared to total non-performing assets of $14.6 million, or 0.10% of total loans and leases and other real estate owned, on September 30, 2023.

Capital

Total stockholders' equity was $2.5 billion on December 31, 2023 an increase of $135.1 million from $2.4 billion as of September 30, 2023.

The tier 1 leverage, common equity tier 1 and total capital ratios were 8.64%, 12.39% and 13.57%, respectively, on December 31, 2023, compared with 8.45%, 12.21% and 13.38%, respectively, on September 30, 2023.

The Company did not repurchase any shares in the fourth quarter.

As to the stock repurchase program approved for 2024, repurchases of shares of the Company’s common stock may be conducted through open-market purchases, which may include purchases under a trading plan adopted pursuant to Securities and Exchange Commission Rule 10b5-1, or through privately negotiated transactions. The timing and exact amount of share repurchases, if any, will be subject to management’s discretion and various factors, including the Company’s capital position and financial performance, as well as market conditions. The repurchase program may be suspended, terminated or modified at any time for any reason.

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, 8:00 a.m. Hawaii Time.

To access the call by phone, please register via the following link: https://register.vevent.com/register/BIb0fdeb3d43a84da4acc2b0efeb9ba356, and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time.

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.

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, 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 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, 2022 and our Quarterly Report on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023.

Use of Non-GAAP Financial Measures
Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. 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. Investors should consider our performance and capital adequacy as reported under GAAP and all other relevant information when assessing our performance and capital adequacy.

Table 14 at the end of this document provides a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.

Investor Relations Contact:
Kevin Haseyama, CFA
(808) 525-6268
khaseyama@fhb.com

Media Contact:
Lindsay Chambers
(808) 525-6254
lchambers@fhb.com


                 
Financial Highlights Table 1
  For the Three Months Ended For the Year Ended  
  December 31,  September 30,  December 31,  December 31,  
(dollars in thousands, except per share data)    2023    2023    2022    2023    2022 
Operating Results:                
Net interest income $ 151,793 $157,148 $171,794 $ 636,127 $613,549 
Provision for credit losses   5,330  7,500  2,956   26,630  1,392 
Noninterest income   58,347  46,097  48,151   200,815  179,525 
Noninterest expense   142,307  119,383  113,922   501,138  440,471 
Net income   47,502  58,221  79,588   234,983  265,685 
Basic earnings per share   0.37  0.46  0.62   1.84  2.08 
Diluted earnings per share   0.37  0.46  0.62   1.84  2.08 
Dividends declared per share   0.26  0.26  0.26   1.04  1.04 
Dividend payout ratio   70.27% 56.52% 41.94%  56.52% 50.00%
Performance Ratios(1):                
Net interest margin   2.81%   2.86%   3.15%    2.92%   2.78%
Efficiency ratio   67.28%   58.31%   51.47%    59.48%   55.20%
Return on average total assets   0.77%   0.93%   1.28%    0.95%   1.06%
Return on average tangible assets (non-GAAP)(2)   0.81%   0.97%   1.34%    0.99%   1.11%
Return on average total stockholders' equity   7.94%   9.76%   14.27%    10.01%   11.44%
Return on average tangible stockholders' equity (non-GAAP)(2)   13.66%   16.84%   25.93%    17.39%   20.03%
Average Balances:                
Average loans and leases $ 14,349,322 $14,349,402 $13,876,136 $ 14,266,291 $13,314,821 
Average earning assets   21,688,816  22,060,480  21,856,135   21,952,009  22,272,795 
Average assets   24,404,727  24,727,893  24,575,648   24,625,445  24,964,422 
Average deposits   20,908,221  21,212,102  21,725,177   21,160,155  22,058,497 
Average stockholders' equity   2,374,669  2,367,422  2,213,030   2,346,713  2,321,606 
Market Value Per Share:                
Closing   22.86  18.05  26.04   22.86  26.04 
High   23.22  22.59  27.16   28.28  31.16 
Low   17.18  17.41  24.06   15.08  21.21 
                 


           
  As of As of As of 
  December 31,  September 30,  December 31,  
(dollars in thousands, except per share data)    2023  2023 2022 
Balance Sheet Data:              
Loans and leases $ 14,353,497 $14,332,335 $14,092,012 
Total assets   24,926,474  24,912,524  24,577,223 
Total deposits   21,332,657  21,511,489  21,689,029 
Short-term borrowings   500,000  500,000  75,000 
Total stockholders' equity   2,486,066  2,351,009  2,269,005 
           
Per Share of Common Stock:          
Book value $ 19.48 $18.42 $17.82 
Tangible book value (non-GAAP)(2)   11.68  10.62  10.00 
           
Asset Quality Ratios:          
Non-accrual loans and leases / total loans and leases   0.13%   0.10% 0.08%  
Allowance for credit losses for loans and leases / total loans and leases   1.09%   1.08% 1.02%  
           
Capital Ratios:          
Common Equity Tier 1 Capital Ratio    12.39%    12.21% 11.82%  
Tier 1 Capital Ratio   12.39%   12.21% 11.82%  
Total Capital Ratio   13.57%   13.38% 12.92%  
Tier 1 Leverage Ratio   8.64%   8.45% 8.11%  
Total stockholders' equity to total assets   9.97%   9.44% 9.23%  
Tangible stockholders' equity to tangible assets (non-GAAP)(2)   6.23%   5.67% 5.40%  
           
Non-Financial Data:          
Number of branches   50  50  51 
Number of ATMs   275  294  294 
Number of Full-Time Equivalent Employees   2,089  2,087  2,063 
           

                                                           

(1)   Except for the efficiency ratio, amounts are annualized for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022.

(2)   Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. 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 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 tangible book value per share as the ratio of tangible stockholders’ equity to outstanding shares. Tangible stockholders’ equity is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our total stockholders’ equity. 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. For a reconciliation to the most directly comparable GAAP financial measure, see Table 14, GAAP to Non-GAAP Reconciliation.

                
Consolidated Statements of Income Table 2
  For the Three Months Ended For the Year Ended
  December 31,  September 30,  December 31,  December 31, 
(dollars in thousands, except per share amounts)    2023    2023    2022    2023    2022
Interest income               
Loans and lease financing $ 196,276 $194,098 $159,526 $ 748,053 $509,820
Available-for-sale investment securities   19,033  18,426  18,714   74,241  87,108
Held-to-maturity investment securities   17,987  18,271  19,137   73,497  55,376
Other   7,734  9,004  3,088   27,788  10,916
Total interest income   241,030  239,799  200,465   923,579  663,220
Interest expense               
Deposits   82,215  74,651  28,202   258,221  49,201
Short-term and long-term borrowings   6,232  6,838  469   26,289  470
Other   790  1,162  —   2,942  —
Total interest expense   89,237  82,651  28,671   287,452  49,671
Net interest income   151,793  157,148  171,794   636,127  613,549
Provision for credit losses   5,330  7,500  2,956   26,630  1,392
Net interest income after provision for credit losses   146,463  149,648  168,838   609,497  612,157
Noninterest income               
Service charges on deposit accounts   7,646  7,524  7,376   29,647  28,809
Credit and debit card fees   16,381  15,748  16,376   63,888  66,028
Other service charges and fees   9,535  9,546  9,185   37,299  37,036
Trust and investment services income   9,645  9,742  9,023   38,449  36,465
Bank-owned life insurance   5,063  1,872  2,865   15,326  1,248
Investment securities gains, net   792  —  —   792  —
Other   9,285  1,665  3,326   15,414  9,939
Total noninterest income   58,347  46,097  48,151   200,815  179,525
Noninterest expense               
Salaries and employee benefits   55,882  55,937  49,629   225,755  199,129
Contracted services and professional fees   16,219  16,393  17,638   66,423  70,027
Occupancy   7,561  6,711  8,175   29,608  31,034
Equipment   12,547  11,826  9,984   45,109  34,506
Regulatory assessment and fees   20,412  4,149  2,591   32,073  9,603
Advertising and marketing   1,441  2,289  2,072   7,615  7,996
Card rewards program   7,503  8,358  8,681   31,627  30,990
Other   20,742  13,720  15,152   62,928  57,186
Total noninterest expense   142,307  119,383  113,922   501,138  440,471
Income before provision for income taxes   62,503  76,362  103,067   309,174  351,211
Provision for income taxes   15,001  18,141  23,479   74,191  85,526
Net income $ 47,502 $58,221 $79,588 $ 234,983 $265,685
Basic earnings per share $ 0.37 $0.46 $0.62 $ 1.84 $2.08
Diluted earnings per share $ 0.37 $0.46 $0.62 $ 1.84 $2.08
Basic weighted-average outstanding shares   127,612,734  127,609,860  127,356,795   127,567,547  127,489,889
Diluted weighted-average outstanding shares   128,028,964  127,936,440  127,894,773   127,915,873  127,981,699
 


          
Consolidated Balance Sheets Table 3
  December 31,  September 30,  December 31, 
(dollars in thousands, except share amount)    2023     2023     2022 
Assets         
Cash and due from banks $ 185,015  $246,028  $297,502 
Interest-bearing deposits in other banks   1,554,882   967,400   229,122 
Investment securities:         
Available-for-sale, at fair value (amortized cost: $2,558,675 as of December 31, 2023, $3,172,031 as of September 30, 2023 and $3,549,599 as of December 31, 2022)   2,255,336   2,722,704   3,151,133 
Held-to-maturity, at amortized cost (fair value: $3,574,856 as of December 31, 2023, $3,433,029 as of September 30, 2023 and $3,814,822 as of December 31, 2022)   4,041,449   4,104,114   4,320,639 
Loans held for sale   190   —   — 
Loans and leases   14,353,497   14,332,335   14,092,012 
Less: allowance for credit losses   156,533   154,795   143,900 
Net loans and leases   14,196,964   14,177,540   13,948,112 
          
Premises and equipment, net   281,461   277,805   280,355 
Other real estate owned and repossessed personal property   —   —   91 
Accrued interest receivable   84,417   84,327   78,194 
Bank-owned life insurance   479,907   477,698   473,067 
Goodwill   995,492   995,492   995,492 
Mortgage servicing rights   5,699   5,855   6,562 
Other assets   845,662   853,561   796,954 
Total assets $ 24,926,474  $24,912,524  $24,577,223 
Liabilities and Stockholders' Equity         
Deposits:         
Interest-bearing $ 13,749,095  $13,612,493  $12,824,383 
Noninterest-bearing   7,583,562   7,898,996   8,864,646 
Total deposits   21,332,657   21,511,489   21,689,029 
Short-term borrowings   500,000   500,000   75,000 
Retirement benefits payable   103,285   99,685   102,577 
Other liabilities   504,466   450,341   441,612 
Total liabilities   22,440,408   22,561,515   22,308,218 
          
Stockholders' equity         
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 141,340,539 / 127,618,761 shares as of December 31, 2023, issued/outstanding: 141,330,663 / 127,609,934 shares as of September 30, 2023 and issued/outstanding: 140,963,918 / 127,363,327 shares as of December 31, 2022)   1,413   1,413   1,410 
Additional paid-in capital   2,548,250   2,545,659   2,538,336 
Retained earnings   837,859   823,895   736,544 
Accumulated other comprehensive loss, net   (530,210)  (648,731)  (639,254)
Treasury stock (13,721,778 shares as of December 31, 2023, 13,720,729 shares as of September 30, 2023 and 13,600,591 shares as of December 31, 2022)   (371,246)  (371,227)  (368,031)
Total stockholders' equity   2,486,066   2,351,009   2,269,005 
Total liabilities and stockholders' equity $ 24,926,474  $24,912,524  $24,577,223 
 


                          
Average Balances and Interest Rates                       Table 4
  Three Months Ended  Three Months Ended  Three Months Ended  
  December 31, 2023 September 30, 2023 December 31, 2022 
  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 $ 568.0 $ 7.8  5.39%  $608.6 $8.2 5.36%  $321.3 $2.9 3.64%
Available-for-Sale Investment Securities                         
Taxable   2,598.4   19.0  2.92  2,834.6  18.4 2.59  3,180.8  18.3 2.30 
Non-Taxable   1.9   —  5.12  2.3  — 5.48  37.9  0.5 5.42 
Held-to-Maturity Investment Securities                         
Taxable   3,472.1   14.8  1.70  3,544.1  15.0 1.70  3,754.9  15.8 1.69 
Non-Taxable   603.9   3.9  2.58  604.3  4.1 2.66  613.4  4.2 2.69 
Total Investment Securities   6,676.3   37.7  2.25  6,985.3  37.5 2.14  7,587.0  38.8 2.04 
Loans Held for Sale   0.7   —  7.41  0.4  — 6.63  0.1  — 6.50 
Loans and Leases(1)                         
Commercial and industrial   2,148.1   36.7  6.78  2,123.5  35.7 6.66  2,126.3  28.1 5.24 
Commercial real estate   4,356.3   71.4  6.51  4,381.8  71.4 6.47  4,116.8  53.9 5.19 
Construction   888.7   16.7  7.45  873.7  15.5 7.05  804.4  11.8 5.83 
Residential:                         
Residential mortgage   4,294.8   38.8  3.61  4,316.3  40.1 3.72  4,280.6  38.1 3.56 
Home equity line   1,174.8   11.3  3.83  1,154.0  10.1 3.45  1,029.7  8.1 3.10 
Consumer   1,132.4   18.4  6.43  1,172.8  18.3 6.19  1,220.9  17.1 5.55 
Lease financing   354.2   3.6  4.03  327.3  3.7 4.48  297.4  2.9 3.92 
Total Loans and Leases   14,349.3   196.9  5.45  14,349.4  194.8 5.39  13,876.1  160.0 4.58 
Other Earning Assets   94.5   —  0.06  116.8  0.8 2.64  71.6  0.2 0.80 
Total Earning Assets(2)   21,688.8   242.4  4.44  22,060.5  241.3 4.35  21,856.1  201.9 3.67 
Cash and Due from Banks   240.8       276.0       286.4      
Other Assets   2,475.1       2,391.4       2,433.1      
Total Assets $ 24,404.7      $24,727.9      $24,575.6      
                          
Interest-Bearing Liabilities                         
Interest-Bearing Deposits                         
Savings $ 6,067.2 $ 22.4  1.46%  $5,982.5 $19.2 1.27%   6,455.5 $10.3 0.63%
Money Market   3,905.0   27.5  2.79  3,907.2  24.7 2.51  4,012.9  9.8 0.97 
Time   3,390.7   32.3  3.78  3,362.7  30.8 3.63  2,163.2  8.1 1.48 
Total Interest-Bearing Deposits   13,362.9   82.2  2.44  13,252.4  74.7 2.23  12,631.6  28.2 0.89 
Federal Funds Purchased   —   —  —  —  — —  45.5  0.5 4.09 
Other Short-Term Borrowings   515.2   6.2  4.80  113.1  1.5 5.17  —  — — 
Long-Term Borrowings   —   —  —  440.2  5.3 4.83  —  — — 
Other Interest-Bearing Liabilities   42.1   0.8  7.44  89.1  1.2 5.17  —  — — 
Total Interest-Bearing Liabilities   13,920.2   89.2  2.54  13,894.8  82.7 2.36  12,677.1  28.7 0.90 
Net Interest Income    $ 153.2      $158.6      $173.2   
Interest Rate Spread        1.90%        1.99%        2.77%
Net Interest Margin        2.81%        2.86%        3.15%
Noninterest-Bearing Demand Deposits   7,545.3       7,959.7       9,093.6      
Other Liabilities   564.5       506.0       591.9      
Stockholders' Equity   2,374.7       2,367.4       2,213.0      
Total Liabilities and Stockholders' Equity $ 24,404.7      $24,727.9      $24,575.6      

                                                                     

(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 $1.4 million, $1.5 million and $1.4 million for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively.

                  
                  
Average Balances and Interest Rates               Table 5
  Year Ended  Year Ended  
  December 31, 2023 December 31, 2022 
  Average Income/ Yield/ Average Income/ Yield/ 
(dollars in millions)    Balance Expense Rate Balance Expense Rate 
Earning Assets                                    
Interest-Bearing Deposits in Other Banks $ 512.3 $ 26.5  5.18%  $867.6 $10.3 1.19%
Available-for-Sale Investment Securities                 
Taxable   2,871.8   73.8  2.57  4,650.1  83.2 1.79 
Non-Taxable   10.2   0.6  5.55  180.0  4.9 2.74 
Held-to-Maturity Investment Securities                 
Taxable   3,579.0   60.7  1.70  2,728.2  45.5 1.67 
Non-Taxable   607.7   15.9  2.61  460.6  12.5 2.71 
Total Investment Securities   7,068.7   151.0  2.14  8,018.9  146.1 1.82 
Loans Held for Sale   0.4   —  6.63  0.6  — 3.14 
Loans and Leases(1)                 
Commercial and industrial   2,182.3   141.0  6.46  2,019.5  78.4 3.88 
Commercial real estate   4,257.9   266.0  6.25  3,895.3  153.2 3.93 
Construction   877.7   62.1  7.08  755.0  32.5 4.30 
Residential:                 
Residential mortgage   4,308.0   156.4  3.63  4,200.2  145.5 3.46 
Home equity line   1,131.1   39.3  3.47  965.0  26.5 2.75 
Consumer   1,178.6   71.5  6.07  1,218.9  65.3 5.35 
Lease financing   330.7   14.1  4.26  260.9  9.7 3.69 
Total Loans and Leases   14,266.3   750.4  5.26  13,314.8  511.1 3.84 
Other Earning Assets   104.3   1.3  1.20  70.9  0.6 0.89 
Total Earning Assets(2)   21,952.0   929.2  4.23  22,272.8  668.1 3.00 
Cash and Due from Banks   265.1       289.0      
Other Assets   2,408.3       2,402.6      
Total Assets $ 24,625.4      $24,964.4      
                  
Interest-Bearing Liabilities                 
Interest-Bearing Deposits                 
Savings $ 6,124.7 $ 71.5  1.17%  $6,741.5 $19.2 0.29%
Money Market   3,869.1   86.1  2.22  4,068.8  16.6 0.41 
Time   3,040.0   100.6  3.31  1,826.7  13.4 0.73 
Total Interest-Bearing Deposits   13,033.8   258.2  1.98  12,637.0  49.2 0.39 
Federal Funds Purchased   17.2   0.8  4.45  11.5  0.5 4.08 
Other Short-Term Borrowings   261.9   13.0  4.98  —  — — 
Long-Term Borrowings   261.6   12.5  4.78  —  — — 
Other Interest-Bearing Liabilities   57.1   3.0  5.15  —  — — 
Total Interest-Bearing Liabilities   13,631.6   287.5  2.11  12,648.5  49.7 0.39 
Net Interest Income    $ 641.7      $618.4   
Interest Rate Spread        2.12%        2.61%
Net Interest Margin        2.92%        2.78%
Noninterest-Bearing Demand Deposits   8,126.4       9,421.5      
Other Liabilities   520.7       572.8      
Stockholders' Equity   2,346.7       2,321.6      
Total Liabilities and Stockholders' Equity $ 24,625.4      $24,964.4      

                                                                            

(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 $5.6 million and $4.9 million for the years ended December 31, 2023 and 2022, respectively.

          
Analysis of Change in Net Interest Income        Table 6
  Three Months Ended December 31, 2023
  Compared to September 30, 2023
(dollars in millions) Volume Rate Total
Change in Interest Income:                  
Interest-Bearing Deposits in Other Banks $ (0.5) $ 0.1  $ (0.4)
Available-for-Sale Investment Securities         
Taxable   (1.6)   2.2    0.6 
Held-to-Maturity Investment Securities         
Taxable   (0.2)   —    (0.2)
Non-Taxable   —    (0.2)   (0.2)
Total Investment Securities   (1.8)   2.0    0.2 
Loans and Leases         
Commercial and industrial   0.4    0.6    1.0 
Commercial real estate   (0.4)   0.4    — 
Construction   0.3    0.9    1.2 
Residential:         
Residential mortgage   (0.2)   (1.1)   (1.3)
Home equity line   0.1    1.1    1.2 
Consumer   (0.6)   0.7    0.1 
Lease financing   0.3    (0.4)   (0.1)
Total Loans and Leases   (0.1)   2.2    2.1 
Other Earning Assets   (0.2)   (0.6)   (0.8)
Total Change in Interest Income   (2.6)   3.7    1.1 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   0.3    2.9    3.2 
Money Market   —    2.8    2.8 
Time   0.2    1.3    1.5 
Total Interest-Bearing Deposits   0.5    7.0    7.5 
Other Short-Term Borrowings   4.9    (0.2)   4.7 
Long-Term Borrowings   (2.6)   (2.7)   (5.3)
Other Interest-Bearing Liabilities   (0.8)   0.4    (0.4)
Total Change in Interest Expense   2.0    4.5    6.5 
Change in Net Interest Income $ (4.6) $ (0.8) $ (5.4)
 


          
Analysis of Change in Net Interest Income        Table 7
  Three Months Ended December 31, 2023
  Compared to December 31, 2022
(dollars in millions) Volume Rate Total
Change in Interest Income:                  
Interest-Bearing Deposits in Other Banks $ 3.0  $ 1.9  $ 4.9 
Available-for-Sale Investment Securities         
Taxable   (3.7)   4.4    0.7 
Non-Taxable   (0.5)   —    (0.5)
Held-to-Maturity Investment Securities         
Taxable   (1.1)   0.1    (1.0)
Non-Taxable   (0.1)   (0.2)   (0.3)
Total Investment Securities   (5.4)   4.3    (1.1)
Loans and Leases         
Commercial and industrial   0.3    8.3    8.6 
Commercial real estate   3.3    14.2    17.5 
Construction   1.3    3.6    4.9 
Residential:         
Residential mortgage   0.1    0.6    0.7 
Home equity line   1.2    2.0    3.2 
Consumer   (1.3)   2.6    1.3 
Lease financing   0.6    0.1    0.7 
Total Loans and Leases   5.5    31.4    36.9 
Other Earning Assets   —    (0.2)   (0.2)
Total Change in Interest Income   3.1    37.4    40.5 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   (0.6)   12.7    12.1 
Money Market   (0.2)   17.9    17.7 
Time   6.4    17.8    24.2 
Total Interest-Bearing Deposits   5.6    48.4    54.0 
Federal Funds Purchased   (0.3)   (0.2)   (0.5)
Other Short-Term Borrowings   6.2    —    6.2 
Other Interest-Bearing Liabilities   0.8    —    0.8 
Total Change in Interest Expense   12.3    48.2    60.5 
Change in Net Interest Income $ (9.2) $ (10.8) $ (20.0)
 


          
Analysis of Change in Net Interest Income        Table 8
  Year Ended December 31, 2023
  Compared to December 31, 2022
(dollars in millions)    Volume    Rate    Total
Change in Interest Income:         
Interest-Bearing Deposits in Other Banks $ (5.8) $ 22.0  $ 16.2 
Available-for-Sale Investment Securities         
Taxable   (38.3)   28.9    (9.4)
Non-Taxable   (6.9)   2.6    (4.3)
Held-to-Maturity Investment Securities         
Taxable   14.4    0.8    15.2 
Non-Taxable   3.9    (0.5)   3.4 
Total Investment Securities   (26.9)   31.8    4.9 
Loans and Leases         
Commercial and industrial   6.8    55.8    62.6 
Commercial real estate   15.4    97.4    112.8 
Construction   5.9    23.7    29.6 
Residential:         
Residential mortgage   3.7    7.2    10.9 
Home equity line   5.1    7.7    12.8 
Consumer   (2.3)   8.5    6.2 
Lease financing   2.8    1.6    4.4 
Total Loans and Leases   37.4    201.9    239.3 
Other Earning Assets   0.4    0.3    0.7 
Total Change in Interest Income   5.1    256.0    261.1 
          
Change in Interest Expense:         
Interest-Bearing Deposits         
Savings   (1.9)   54.2    52.3 
Money Market   (0.9)   70.4    69.5 
Time   13.8    73.4    87.2 
Total Interest-Bearing Deposits   11.0    198.0    209.0 
Federal Funds Purchased   0.2    0.1    0.3 
Other Short-Term Borrowings   13.0    —    13.0 
Long-Term Borrowings   12.5    —    12.5 
Other Interest-Bearing Liabilities   3.0    —    3.0 
Total Change in Interest Expense   39.7    198.1    237.8 
Change in Net Interest Income $ (34.6) $ 57.9  $ 23.3 
 


          
Loans and Leases        Table 9
  December 31,  September 30,  December 31, 
(dollars in thousands)    2023    2023    2022
Commercial and industrial:         
Commercial and industrial excluding Paycheck Protection Program loans $ 2,156,872 $2,091,379 $2,217,604
Paycheck Protection Program loans   8,477  10,063  18,293
Total commercial and industrial   2,165,349  2,101,442  2,235,897
Commercial real estate   4,340,243  4,387,751  4,132,309
Construction   900,292  885,112  844,643
Residential:         
Residential mortgage   4,283,315  4,303,924  4,302,788
Home equity line   1,174,588  1,167,388  1,055,351
Total residential   5,457,903  5,471,312  5,358,139
Consumer   1,109,901  1,154,203  1,222,934
Lease financing   379,809  332,515  298,090
Total loans and leases $ 14,353,497 $14,332,335 $14,092,012
 


          
Deposits        Table 10
  December 31,  September 30,  December 31, 
(dollars in thousands)    2023    2023    2022
Demand $ 7,583,562 $7,898,996 $8,864,646
Savings   6,445,084  6,028,308  6,382,910
Money Market   3,847,853  3,923,054  3,965,423
Time   3,456,158  3,661,131  2,476,050
Total Deposits $ 21,332,657 $21,511,489 $21,689,029
 


          
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More        Table 11
  December 31,  September 30,  December 31, 
(dollars in thousands)    2023    2023    2022
Non-Performing Assets         
Non-Accrual Loans and Leases         
Commercial Loans:         
Commercial and industrial $ 970 $988 $1,215
Commercial real estate   2,953  —  727
Total Commercial Loans   3,923  988  1,942
Residential Loans:         
Residential mortgage   7,620  7,435  6,166
Home equity line   7,052  6,200  3,797
Total Residential Loans   14,672  13,635  9,963
Total Non-Accrual Loans and Leases   18,595  14,623  11,905
Other Real Estate Owned   —  —  91
Total Non-Performing Assets $ 18,595 $14,623 $11,996
          
Accruing Loans and Leases Past Due 90 Days or More         
Commercial Loans:         
Commercial and industrial $ 494 $289 $291
Commercial real estate   300  170  —
Total Commercial Loans   794  459  291
Residential mortgage   —  1,430  58
Consumer   2,702  1,681  2,885
Total Accruing Loans and Leases Past Due 90 Days or More $ 3,496 $3,570 $3,234
          
Total Loans and Leases $ 14,353,497 $14,332,335 $14,092,012
 


                 
Allowance for Credit Losses and Reserve for Unfunded Commitments Table 12
  For the Three Months Ended  For the Year Ended  
  December 31,  September 30,  December 31,  December 31,  December 31,  
(dollars in thousands)    2023     2023     2022     2023  2022   
Balance at Beginning of Period $ 192,570  $184,780  $178,304    177,735   187,584  
Loans and Leases Charged-Off                
Commercial Loans:                
Commercial and industrial   (910)  (784)  (735)   (3,482)  (2,012) 
Commercial real estate   (2,500)  —   —    (2,500)  (750) 
Total Commercial Loans   (3,410)  (784)  (735)   (5,982)  (2,762) 
Residential Loans:                
Residential mortgage   —   —   (102)   (122)  (103) 
Home equity line   (20)  —   (12)   (292)  (1,175) 
Total Residential Loans   (20)  —   (114)   (414)  (1,278) 
Consumer   (4,147)  (3,665)  (5,094)   (17,110)  (16,848) 
Total Loans and Leases Charged-Off   (7,577)  (4,449)  (5,943)   (23,506)  (20,888) 
Recoveries on Loans and Leases Previously Charged-Off                
Commercial Loans:                
Commercial and industrial   171   2,637   303    3,346   897  
Commercial real estate   —   —   —    —   14  
Lease financing   —   —   —    —   60  
Total Commercial Loans   171   2,637   303    3,346   971  
Residential Loans:                
Residential mortgage   31   53   173    141   418  
Home equity line   163   303   138    702   713  
Total Residential Loans   194   356   311    843   1,131  
Consumer   1,450   1,746   1,804    7,090   7,545  
Total Recoveries on Loans and Leases Previously Charged-Off   1,815   4,739   2,418    11,279   9,647  
Net Loans and Leases (Charged-Off) Recovered   (5,762)  290   (3,525)   (12,227)  (11,241) 
Provision for Credit Losses   5,330   7,500   2,956    26,630   1,392  
Balance at End of Period $ 192,138  $192,570  $177,735  $ 192,138  $177,735  
Components:                
Allowance for Credit Losses $ 156,533  $154,795  $143,900  $ 156,533  $143,900  
Reserve for Unfunded Commitments   35,605   37,775   33,835    35,605   33,835  
Total Allowance for Credit Losses and Reserve for Unfunded Commitments $ 192,138  $192,570  $177,735  $ 192,138  $177,735  
Average Loans and Leases Outstanding $ 14,349,322  $14,349,402  $13,876,136  $ 14,266,291  $13,314,821  
Ratio of Net Loans and Leases Charged-Off (Recovered) to Average Loans and Leases Outstanding(1)   0.16 %   (0.01)%   0.10 %    0.09 %   0.08 %
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding   1.09 %   1.08 %   1.02 %    1.09 %   1.02 %
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases  8.42x  10.59x  12.09x  8.42x  12.09x 
                 

                                                                   

(1)   Annualized for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022.

                            
Loans and Leases by Year of Origination and Credit Quality Indicator  Table 13
                       Revolving   
                       Loans   
                       Converted   
  Term Loans Revolving to Term   
  Amortized Cost Basis by Origination Year Loans Loans   
                    Amortized Amortized   
(dollars in thousands) 2023 2022 2021 2020 2019 Prior Cost Basis Cost Basis Total
Commercial Lending                           
Commercial and Industrial                           
Risk rating:                           
Pass $ 85,839 $ 273,663 $ 346,024 $ 32,753 $ 146,893 $ 141,681 $ 971,065 $ 1,823 $ 1,999,741
Special Mention   1   44,069   80   653   1,032   1,290   22,807   14   69,946
Substandard   —   342   230   677   1,686   829   8,330   —   12,094
Other (1)   15,978   11,598   4,814   2,370   1,702   1,125   45,981   —   83,568
Total Commercial and Industrial   101,818   329,672   351,148   36,453   151,313   144,925   1,048,183   1,837   2,165,349
Current period gross charge-offs   130   70   75   87   168   2,952   —   —   3,482
                            
Commercial Real Estate                           
Risk rating:                           
Pass   346,369   872,783   676,362   337,529   523,446   1,414,613   74,238   1,350   4,246,690
Special Mention   2,307   7,618   41,320   1,359   13,550   11,998   819   —   78,971
Substandard   205   5,079   2,003   —   2,953   2,545   1,655   —   14,440
Other (1)   —   —   —   —   —   142   —   —   142
Total Commercial Real Estate   348,881   885,480   719,685   338,888   539,949   1,429,298   76,712   1,350   4,340,243
Current period gross charge-offs   —   —   —   —   2,500   —   —   —   2,500
                            
Construction                           
Risk rating:                           
Pass   156,432   269,623   265,674   60,057   63,018   27,847   6,070   —   848,721
Special Mention   —   —   —   —   189   665   —   —   854
Other (1)   12,728   21,036   8,250   2,143   2,031   3,820   709   —   50,717
Total Construction   169,160   290,659   273,924   62,200   65,238   32,332   6,779   —   900,292
Current period gross charge-offs   —   —   —   —   —   —   —   —   —
                            
Lease Financing                           
Risk rating:                           
Pass   145,914   82,833   18,680   31,791   30,299   68,520   —   —   378,037
Special Mention   56   137   414   35   —   —   —   —   642
Substandard   712   416   —   —   2   —   —   —   1,130
Total Lease Financing   146,682   83,386   19,094   31,826   30,301   68,520   —   —   379,809
Current period gross charge-offs   —   —   —   —   —   —   —   —   —
                            
Total Commercial Lending $ 766,541 $ 1,589,197 $ 1,363,851 $ 469,367 $ 786,801 $ 1,675,075 $ 1,131,674 $ 3,187 $ 7,785,693
Current period gross charge-offs $ 130 $ 70 $ 75 $ 87 $ 2,668 $ 2,952 $ — $ — $ 5,982
                            


                            
                       Revolving   
                       Loans   
                       Converted   
  Term Loans Revolving to Term   
  Amortized Cost Basis by Origination Year Loans Loans   
(continued)                   Amortized Amortized   
(dollars in thousands) 2023 2022 2021 2020 2019 Prior Cost Basis Cost Basis Total
Residential Lending                           
Residential Mortgage                           
FICO:                           
740 and greater $ 211,598 $ 529,296 $ 999,522 $ 529,881 $ 227,058 $ 987,251 $ — $ — $ 3,484,606
680 - 739   36,975   67,205   117,337   68,122   33,148   130,387   —   —   453,174
620 - 679   3,544   16,395   19,184   12,811   4,096   38,987   —   —   95,017
550 - 619   1,305   6,521   1,917   2,492   398   11,679   —   —   24,312
Less than 550   —   —   2,909   2,017   582   6,439   —   —   11,947
No Score (3)   9,137   19,311   11,492   6,043   9,679   51,109   —   —   106,771
Other (2)   15,802   17,528   17,432   12,534   8,599   25,513   10,080   —   107,488
Total Residential Mortgage   278,361   656,256   1,169,793   633,900   283,560   1,251,365   10,080   —   4,283,315
Current period gross charge-offs   —   —   —   —   —   122   —   —   122
                            
Home Equity Line                           
FICO:                           
740 and greater   —   —   —   —   —   —   964,932   1,511   966,443
680 - 739   —   —   —   —   —   —   151,716   1,920   153,636
620 - 679   —   —   —   —   —   —   36,541   1,189   37,730
550 - 619   —   —   —   —   —   —   9,896   1,012   10,908
Less than 550   —   —   —   —   —   —   4,488   100   4,588
No Score (3)   —   —   —   —   —   —   1,283   —   1,283
Total Home Equity Line   —   —   —   —   —   —   1,168,856   5,732   1,174,588
Current period gross charge-offs   —   —   —   —   —   —   273   19   292
                            
Total Residential Lending $ 278,361 $ 656,256 $ 1,169,793 $ 633,900 $ 283,560 $ 1,251,365 $ 1,178,936 $ 5,732 $ 5,457,903
Current period gross charge-offs $ — $ — $ — $ — $ — $ 122 $ 273 $ 19 $ 414
                            
Consumer Lending                           
FICO:                           
740 and greater   92,117   128,358   76,148   33,507   21,819   8,970   123,592   155   484,666
680 - 739   68,865   71,031   37,925   17,116   13,270   5,690   76,645   401   290,943
620 - 679   28,533   29,229   16,919   7,843   7,972   4,624   35,210   781   131,111
550 - 619   4,996   10,859   7,760   4,917   4,651   2,986   13,223   925   50,317
Less than 550   1,790   6,370   4,842   2,796   2,905   2,040   5,222   455   26,420
No Score (3)   1,545   229   —   —   1   10   42,933   136   44,854
Other (2)   361   368   982   335   1,059   1   78,484   —   81,590
Total Consumer Lending $ 198,207 $ 246,444 $ 144,576 $ 66,514 $ 51,677 $ 24,321 $ 375,309 $ 2,853 $ 1,109,901
Current period gross charge-offs $ 639 $ 2,400 $ 2,135 $ 1,142 $ 1,816 $ 2,622 $ 5,790 $ 566 $ 17,110
                            
Total Loans and Leases $ 1,243,109 $ 2,491,897 $ 2,678,220 $ 1,169,781 $ 1,122,038 $ 2,950,761 $ 2,685,919 $ 11,772 $ 14,353,497
Current period gross charge-offs $ 769 $ 2,470 $ 2,210 $ 1,229 $ 4,484 $ 5,696 $ 6,063 $ 585 $ 23,506

                                                                   

(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 14
  For the Three Months Ended  For the Year Ended  
  December 31,  September 30,  December 31,  December 31,  
(dollars in thousands)    2023     2023    2022    2023     2022 
Income Statement Data:                
Net income $ 47,502 $58,221 $79,588 $ 234,983 $265,685 
                 
Average total stockholders' equity $ 2,374,669 $2,367,422 $2,213,030 $ 2,346,713 $2,321,606 
Less: average goodwill   995,492  995,492  995,492   995,492  995,492 
Average tangible stockholders' equity $ 1,379,177 $1,371,930 $1,217,538 $ 1,351,221 $1,326,114 
                 
Average total assets $ 24,404,727 $24,727,893 $24,575,648 $ 24,625,445 $24,964,422 
Less: average goodwill   995,492  995,492  995,492   995,492  995,492 
Average tangible assets $ 23,409,235 $23,732,401 $23,580,156 $ 23,629,953 $23,968,930 
                 
Return on average total stockholders' equity(1)   7.94%   9.76%   14.27%    10.01%   11.44%  
Return on average tangible stockholders' equity (non-GAAP)(1)   13.66%   16.84%   25.93%    17.39%   20.03%  
                 
Return on average total assets(1)   0.77%   0.93%   1.28%    0.95%   1.06%  
Return on average tangible assets (non-GAAP)(1)   0.81%   0.97%   1.34%    0.99%   1.11%  
                 


         
  As of As of As of 
  December 31,  September 30,  December 31,  
(dollars in thousands, except per share amounts)    2023    2023    2022    
Balance Sheet Data:          
Total stockholders' equity $ 2,486,066 $2,351,009 $2,269,005 
Less: goodwill   995,492  995,492  995,492 
Tangible stockholders' equity $ 1,490,574 $1,355,517 $1,273,513 
           
Total assets $ 24,926,474 $24,912,524 $24,577,223 
Less: goodwill   995,492  995,492  995,492 
Tangible assets $ 23,930,982 $23,917,032 $23,581,731 
           
Shares outstanding   127,618,761  127,609,934  127,363,327 
           
Total stockholders' equity to total assets   9.97%   9.44%   9.23%  
Tangible stockholders' equity to tangible assets (non-GAAP)   6.23%   5.67%   5.40%  
           
Book value per share $ 19.48 $18.42 $17.82 
Tangible book value per share (non-GAAP) $ 11.68 $10.62 $10.00 

                                                                     

(1)   Annualized for the three months ended December 31, 2023, September 30, 2023 and December 31, 2022.