Market Overview

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

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

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

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

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

Earnings Highlights

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

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

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

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

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

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

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

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

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

Balance Sheet Highlights

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

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

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

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

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

Asset Quality

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

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

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

Capital

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

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

First Hawaiian, Inc. 

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

Conference Call Information

First Hawaiian will host a conference call to discuss the Company's results today at 5:00 p.m. Eastern Time, 11:00 a.m. Hawaii Time.  To access the call, participants should dial (844) 452-2942 (US/Canada), or (574) 990-9846 (International) ten minutes prior to the start of the call and enter the conference ID:  8467599.  A live webcast of the conference call, including a slide presentation, will be available at the following link:  www.fhb.com/earnings.  The archive of the webcast will be available at the same location.  A telephonic replay of the conference call will be available two hours after the conclusion of the call until 8:30 p.m. (Eastern Time) on May 6, 2018.  Access the replay by dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID:  8467599.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may", "might", "should", "could", "predict", "potential", "believe", "expect", "continue", "will", "anticipate", "seek", "estimate", "intend", "plan", "projection", "would", "annualized" and "outlook", or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. For a discussion of some of the risks and important factors that could affect our future results and financial condition, see our U.S. Securities and Exchange Commission ("SEC") filings, including, but not limited to, our annual report on Form 10-K for the year ended December 31, 2017.

Use of Non-GAAP Financial Measures

We present net interest income, noninterest income, noninterest expense, net income, earnings per share and the related ratios described below, on an adjusted, or ‘‘core,'' basis, each a non-GAAP financial measure. These core measures exclude from the corresponding GAAP measure the impact of certain items that we do not believe are representative of our financial results. We believe that the presentation of these non-GAAP financial measures helps identify underlying trends in our business from period to period that could otherwise be distorted by the effect of certain expenses, gains and other items included in our operating results. We believe that these core measures provide useful information about our operating results and enhance the overall understanding of our past performance and future performance.  Investors should consider our performance and financial condition as reported under GAAP and all other relevant information when assessing our performance or financial condition. 

Core net interest margin, core return on average total assets and core return on average total stockholders' equity are non-GAAP financial measures. We compute our core net interest margin as the ratio of core net interest income to average earning assets.  We compute our core return on average total assets as the ratio of core net income to average total assets.  We compute our core return on average total stockholders' equity as the ratio of core net income to average stockholders' equity. 

Return on average tangible stockholders' equity, core return on average tangible stockholders' equity, return on average tangible assets, core return on average tangible assets and tangible stockholders' equity to tangible assets are non-GAAP financial measures. We compute our return on average tangible stockholders' equity as the ratio of net income to average tangible stockholders' equity, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total stockholders' equity. We compute our core return on average tangible stockholders' equity as the ratio of core net income to average tangible stockholders' equity, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total stockholders' equity. We compute our return on average tangible assets as the ratio of net income to average tangible assets, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total assets. We compute our core return on average tangible assets as the ratio of core net income to average tangible assets. We compute our tangible stockholders' equity to tangible assets as the ratio of tangible stockholders' equity to tangible assets, each of which we calculate by subtracting (and thereby effectively excluding) the value of our goodwill. We believe that these measurements are useful for investors, regulators, management and others to evaluate financial performance and capital adequacy relative to other financial institutions. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results or financial condition as reported under GAAP.

Tables 11 and 12 at the end of this document provide a reconciliation of these non-GAAP financial measures with their most closely related GAAP measures.

Investor Relations Contact:
Kevin Haseyama, CFA
(808) 525-6268
khaseyama@fhb.com
Media Contact:
Susan Kam
(808) 525-6254
skam@fhb.com


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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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