First Hawaiian, Inc. Reports Third Quarter 2024 Financial Results and Declares Dividend

First Hawaiian, Inc.

Fri, Oct 25, 2024, 5:00 AM 18 min read

“I’m happy to report that we had a very good third quarter,” said Bob Harrison, Chairman, President, and CEO. “Net interest income and noninterest income increased over the prior quarter, expenses were well controlled and credit quality remained excellent. I’m also pleased to report that during the third quarter, Moody’s reviewed and reaffirmed all of First Hawaiian Bank’s long-term credit and deposit ratings.”

On October 23, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on November 29, 2024, to stockholders of record at the close of business on November 18, 2024.

Third Quarter 2024 Highlights:

Net income of $61.5 million, or $0.48 per diluted share
Total loans and leases decreased $118.5 million versus the prior quarter
Total deposits decreased $91.1 million versus the prior quarter
Net interest margin increased 3 basis points to 2.95%
Recorded a $7.4 million provision for credit losses
Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet

Total assets were $23.8 billion as of September 30, 2024, a decrease of $211.5 million, or 0.9%, from $24.0 billion as of June 30, 2024.

Gross loans and leases were $14.2 billion as of September 30, 2024, a decrease of $118.5 million, or 0.8%, from $14.4 billion as of June 30, 2024.

Total deposits were $20.2 billion as of September 30, 2024, a decrease of $91.1 million, or 0.4%, from $20.3 billion as of June 30, 2024.

Net Interest Income

Net interest income for the third quarter of 2024 was $156.7 million, an increase of $3.9 million, or 2.5%, compared to $152.9 million for the prior quarter.

The net interest margin was 2.95% in the third quarter of 2024, an increase of 3 basis points compared to 2.92% in the prior quarter.

Provision Expense

During the quarter ended September 30, 2024, we recorded a $7.4 million provision for credit losses. In the quarter ended June 30, 2024, we recorded a $1.8 million provision for credit losses.

Noninterest Income

Noninterest income was $53.3 million in the third quarter of 2024, an increase of $1.5 million compared to noninterest income of $51.8 million in the prior quarter.

Noninterest Expense

Noninterest expense was $126.1 million in the third quarter of 2024, an increase of $4.1 million compared to noninterest expense of $122.1 million in the prior quarter.

The efficiency ratio was 59.8% and 59.2% for the quarters ended September 30, 2024 and June 30, 2024, respectively.

Taxes

The effective tax rate was 19.6% and 23.3% for the quarters ended September 30, 2024 and June 30, 2024, respectively.

Asset Quality

The allowance for credit losses was $163.7 million, or 1.15% of total loans and leases, as of September 30, 2024, compared to $160.5 million, or 1.12% of total loans and leases, as of June 30, 2024. The reserve for unfunded commitments was $33.7 million as of September 30, 2024 compared to $33.4 million as of June 30, 2024. Net charge-offs were $3.9 million, or 0.11% of average loans and leases on an annualized basis, for the quarter ended September 30, 2024, compared to net charge-offs of $2.5 million, or 0.07% of average loans and leases on an annualized basis, for the quarter ended June 30, 2024. Total non-performing assets were $17.8 million, or 0.13% of total loans and leases and other real estate owned, as of September 30, 2024, compared to $18.0 million, or 0.13% of total loans and leases and other real estate owned, as of June 30, 2024.

Capital

Total stockholders' equity increased $97.7 million in the third quarter, and stood at $2.6 billion on September 30, 2024 and June 30, 2024.

The tier 1 leverage, common equity tier 1 and total capital ratios were 9.14%, 13.03% and 14.25%, respectively, on September 30, 2024, compared with 9.03%, 12.73% and 13.92%, respectively, on June 30, 2024.

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

First Hawaiian, Inc.

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

Conference Call Information

First Hawaiian will host a conference call to discuss the Company’s results today at 1:00 p.m. Eastern Time, 7:00 a.m. Hawaii Time.

To access the call by phone, participants will need to click on the following registration link: https://register.vevent.com/register/BIec8273f35cc340bcb13d27eae17d127b, register for the conference call, and then you will receive the dial-in number and a personalized PIN code. 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, 2023 and our Quarterly Report on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024.

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
[email protected]

Media Contact:
Lindsay Chambers
(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)	2024			2024			2023			2024			2023
Operating Results:
Net interest income	$	156,707		$	152,851		$	157,148		$	463,985		$	484,334
Provision for credit losses		7,400			1,800			7,500			15,500			21,300
Noninterest income		53,288			51,768			46,097			156,427			142,468
Noninterest expense		126,147			122,086			119,383			377,046			358,831
Net income		61,492			61,921			58,221			177,633			187,481
Basic earnings per share		0.48			0.48			0.46			1.39			1.47
Diluted earnings per share		0.48			0.48			0.46			1.38			1.47
Dividends declared per share		0.26			0.26			0.26			0.78			0.78
Dividend payout ratio		54.17	%		54.17	%		56.52	%		56.52	%		53.06	%
Performance Ratios⁽¹⁾:
Net interest margin		2.95	%		2.92	%		2.86	%		2.93	%		2.96	%
Efficiency ratio		59.77	%		59.22	%		58.31	%		60.38	%		56.86	%
Return on average total assets		1.02	%		1.04	%		0.93	%		0.99	%		1.01	%
Return on average tangible assets (non-GAAP)⁽²⁾		1.06	%		1.08	%		0.97	%		1.03	%		1.06	%
Return on average total stockholders' equity		9.45	%		9.91	%		9.76	%		9.37	%		10.72	%
Return on average tangible stockholders' equity (non-GAAP)⁽²⁾		15.35	%		16.42	%		16.84	%		15.43	%		18.68	%
Average Balances:
Average loans and leases	$	14,304,806		$	14,358,049		$	14,349,402		$	14,325,065		$	14,238,309
Average earning assets		21,328,882			21,247,707			22,060,480			21,352,739			22,040,704
Average assets		24,046,696			23,958,913			24,727,893			24,064,208			24,699,826
Average deposits		20,367,805			20,308,028			21,212,102			20,415,746			21,245,055
Average stockholders' equity		2,588,806			2,512,471			2,367,422			2,532,911			2,337,292
Market Value Per Share:
Closing		23.15			20.76			18.05			23.15			18.05
High		26.18			22.68			22.59			26.18			28.28
Low		20.28			19.48			17.41			19.48			15.08


	As of			As of			As of			As of
	September 30,			June 30,			December 31,			September 30,
(dollars in thousands, except per share data)	2024			2024			2023			2023
Balance Sheet Data:
Loans and leases	$	14,241,370		$	14,359,899		$	14,353,497		$	14,332,335
Total assets		23,780,285			23,991,791			24,926,474			24,912,524
Total deposits		20,227,702			20,318,832			21,332,657			21,511,489
Short-term borrowings		250,000			500,000			500,000			500,000
Total stockholders' equity		2,648,034			2,550,312			2,486,066			2,351,009

Per Share of Common Stock:
Book value	$	20.71		$	19.94		$	19.48		$	18.42
Tangible book value (non-GAAP)⁽²⁾		12.92			12.16			11.68			10.62

Asset Quality Ratios:
Non-accrual loans and leases / total loans and leases		0.13	%		0.13	%		0.13	%		0.10	%
Allowance for credit losses for loans and leases / total loans and leases		1.15	%		1.12	%		1.09	%		1.08	%

Capital Ratios:
Common Equity Tier 1 Capital Ratio		13.03	%		12.73	%		12.39	%		12.21	%
Tier 1 Capital Ratio		13.03	%		12.73	%		12.39	%		12.21	%
Total Capital Ratio		14.25	%		13.92	%		13.57	%		13.38	%
Tier 1 Leverage Ratio		9.14	%		9.03	%		8.64	%		8.45	%
Total stockholders' equity to total assets		11.14	%		10.63	%		9.97	%		9.44	%
Tangible stockholders' equity to tangible assets (non-GAAP)⁽²⁾		7.25	%		6.76	%		6.23	%		5.67	%

Non-Financial Data:
Number of branches		48			48			50			50
Number of ATMs		273			272			275			294
Number of Full-Time Equivalent Employees		2,022			2,032			2,089			2,087

⁽¹⁾Except for the efficiency ratio, amounts are annualized for the three and nine months ended September 30, 2024 and 2023 and three months ended June 30, 2024.

⁽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 Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
(dollars in thousands, except per share amounts)	2024		2024		2023		2024		2023
Interest income
Loans and lease financing	$	205,682	$	202,068	$	194,098	$	607,594	$	551,777
Available-for-sale investment securities		12,850		14,143		18,426		41,539		55,208
Held-to-maturity investment securities		16,937		17,575		18,271		52,305		55,510
Other		14,527		11,148		9,004		38,444		20,054
Total interest income		249,996		244,934		239,799		739,882		682,549
Interest expense
Deposits		87,500		85,609		74,651		257,252		176,006
Short-term and long-term borrowings		5,397		5,953		6,838		17,303		20,057
Other		392		521		1,162		1,342		2,152
Total interest expense		93,289		92,083		82,651		275,897		198,215
Net interest income		156,707		152,851		157,148		463,985		484,334
Provision for credit losses		7,400		1,800		7,500		15,500		21,300
Net interest income after provision for credit losses		149,307		151,051		149,648		448,485		463,034
Noninterest income
Service charges on deposit accounts		7,783		7,793		7,524		23,122		22,001
Credit and debit card fees		17,533		15,861		15,748		49,567		47,507
Other service charges and fees		11,790		11,036		9,546		32,730		27,764
Trust and investment services income		9,077		9,426		9,742		28,857		28,804
Bank-owned life insurance		4,502		3,360		1,872		12,148		10,263
Other		2,603		4,292		1,665		10,003		6,129
Total noninterest income		53,288		51,768		46,097		156,427		142,468
Noninterest expense
Salaries and employee benefits		59,563		57,737		55,937		176,562		169,873
Contracted services and professional fees		14,634		16,067		16,393		46,440		50,204
Occupancy		6,945		7,377		6,711		21,263		22,047
Equipment		13,078		13,196		11,826		39,687		32,562
Regulatory assessment and fees		3,412		3,814		4,149		15,346		11,661
Advertising and marketing		1,813		1,765		2,289		6,190		6,174
Card rewards program		8,678		8,719		8,358		25,905		24,124
Other		18,024		13,411		13,720		45,653		42,186
Total noninterest expense		126,147		122,086		119,383		377,046		358,831
Income before provision for income taxes		76,448		80,733		76,362		227,866		246,671
Provision for income taxes		14,956		18,812		18,141		50,233		59,190
Net income	$	61,492	$	61,921	$	58,221	$	177,633	$	187,481
Basic earnings per share	$	0.48	$	0.48	$	0.46	$	1.39	$	1.47
Diluted earnings per share	$	0.48	$	0.48	$	0.46	$	1.38	$	1.47
Basic weighted-average outstanding shares		127,886,167		127,867,853		127,609,860		127,820,737		127,552,255
Diluted weighted-average outstanding shares		128,504,035		128,262,594		127,936,440		128,362,433		127,897,829


Consolidated Balance Sheets	Table 3
	September 30,			June 30,			December 31,			September 30,
(dollars in thousands, except share amount)	2024			2024			2023			2023
Assets
Cash and due from banks	$	252,209		$	290,501		$	185,015		$	246,028
Interest-bearing deposits in other banks		820,603			824,258			1,554,882			967,400
Investment securities:
Available-for-sale, at fair value (amortized cost: $2,290,781 as of September 30, 2024, $2,379,004 as of June 30, 2024, $2,558,675 as of December 31, 2023 and $3,172,031 as of September 30, 2023)		2,055,959			2,067,956			2,255,336			2,722,704
Held-to-maturity, at amortized cost (fair value: $3,475,143 as of September 30, 2024, $3,401,006 as of June 30, 2024, $3,574,856 as of December 31, 2023 and $3,433,029 as of September 30, 2023)		3,853,697			3,917,175			4,041,449			4,104,114
Loans held for sale		—			2,820			190			—
Loans and leases		14,241,370			14,359,899			14,353,497			14,332,335
Less: allowance for credit losses		163,700			160,517			156,533			154,795
Net loans and leases		14,077,670			14,199,382			14,196,964			14,177,540

Premises and equipment, net		287,036			283,762			281,461			277,805
Accrued interest receivable		81,875			82,512			84,417			84,327
Bank-owned life insurance		490,135			486,261			479,907			477,698
Goodwill		995,492			995,492			995,492			995,492
Mortgage servicing rights		5,236			5,395			5,699			5,855
Other assets		860,373			836,277			845,662			853,561
Total assets	$	23,780,285		$	23,991,791		$	24,926,474		$	24,912,524
Liabilities and Stockholders' Equity
Deposits:
Interest-bearing	$	13,427,674		$	13,461,365		$	13,749,095		$	13,612,493
Noninterest-bearing		6,800,028			6,857,467			7,583,562			7,898,996
Total deposits		20,227,702			20,318,832			21,332,657			21,511,489
Short-term borrowings		250,000			500,000			500,000			500,000
Retirement benefits payable		100,448			101,304			103,285			99,685
Other liabilities		554,101			521,343			504,466			450,341
Total liabilities		21,132,251			21,441,479			22,440,408			22,561,515

Stockholders' equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 141,735,601 / 127,886,167 shares as of September 30, 2024, issued/outstanding: 141,728,446 / 127,879,012 shares as of June 30, 2024, issued/outstanding: 141,340,539 / 127,618,761 shares as of December 31, 2023 and issued/outstanding: 141,330,663 / 127,609,934 shares as of September 30, 2023)		1,417			1,417			1,413			1,413
Additional paid-in capital		2,558,158			2,554,795			2,548,250			2,545,659
Retained earnings		915,062			887,176			837,859			823,895
Accumulated other comprehensive loss, net		(452,658	)		(519,132	)		(530,210	)		(648,731	)
Treasury stock (13,849,434 shares as of September 30, 2024, 13,849,434 shares as of June 30, 2024, 13,721,778 shares as of December 31, 2023 and 13,720,729 shares as of September 30, 2023)		(373,945	)		(373,944	)		(371,246	)		(371,227	)
Total stockholders' equity		2,648,034			2,550,312			2,486,066			2,351,009
Total liabilities and stockholders' equity	$	23,780,285		$	23,991,791		$	24,926,474		$	24,912,524


Average Balances and Interest Rates																	Table 4
	Three Months Ended						Three Months Ended						Three Months Ended
	September 30, 2024						June 30, 2024						September 30, 2023
	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	$	1,020.4	$	13.9	5.40	%	$	773.4	$	10.5	5.45	%	$	608.6	$	8.2	5.36	%
Available-for-Sale Investment Securities
Taxable		2,062.6		12.8	2.48			2,100.7		14.1	2.69			2,834.6		18.4	2.59
Non-Taxable		1.5		—	5.06			1.5		—	5.76			2.3		—	5.48
Held-to-Maturity Investment Securities
Taxable		3,288.2		13.8	1.67			3,358.2		14.4	1.71			3,544.1		15.0	1.70
Non-Taxable		602.3		3.7	2.46			602.9		4.0	2.64			604.3		4.1	2.66
Total Investment Securities		5,954.6		30.3	2.03			6,063.3		32.5	2.15			6,985.3		37.5	2.14
Loans Held for Sale		2.2		—	5.64			1.0		—	6.58			0.4		—	6.63
Loans and Leases⁽¹⁾
Commercial and industrial		2,165.3		38.0	6.98			2,201.6		38.1	6.96			2,123.5		35.7	6.66
Commercial real estate		4,278.3		71.6	6.67			4,305.6		71.5	6.68			4,381.8		71.4	6.47
Construction		1,040.7		20.3	7.74			984.8		18.5	7.57			873.7		15.5	7.05
Residential:
Residential mortgage		4,204.5		40.4	3.84			4,229.4		40.1	3.80			4,316.3		40.1	3.72
Home equity line		1,158.5		13.2	4.52			1,164.2		12.6	4.35			1,154.0		10.1	3.45
Consumer		1,035.3		18.7	7.19			1,054.1		17.7	6.74			1,172.8		18.3	6.19
Lease financing		422.2		4.0	3.72			418.3		4.3	4.09			327.3		3.7	4.48
Total Loans and Leases		14,304.8		206.2	5.74			14,358.0		202.8	5.67			14,349.4		194.8	5.39
Other Earning Assets		46.9		0.7	5.83			52.0		0.7	5.25			116.8		0.8	2.64
Total Earning Assets⁽²⁾		21,328.9		251.1	4.69			21,247.7		246.5	4.66			22,060.5		241.3	4.35
Cash and Due from Banks		242.3						240.4						276.0
Other Assets		2,475.5						2,470.8						2,391.4
Total Assets	$	24,046.7					$	23,958.9					$	24,727.9

Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings	$	5,963.1	$	23.6	1.57	%	$	6,000.4	$	23.4	1.57	%	$	5,982.5	$	19.2	1.27	%
Money Market		4,179.5		31.9	3.04			4,076.7		30.6	3.02			3,907.2		24.7	2.51
Time		3,327.3		32.0	3.83			3,284.3		31.6	3.87			3,362.7		30.8	3.63
Total Interest-Bearing Deposits		13,469.9		87.5	2.58			13,361.4		85.6	2.58			13,252.4		74.7	2.23
Other Short-Term Borrowings		451.1		5.4	4.76			500.0		6.0	4.79			113.1		1.5	5.17
Long-Term Borrowings		—		—	—			—		—	—			440.2		5.3	4.83
Other Interest-Bearing Liabilities		22.4		0.4	6.97			38.2		0.5	5.48			89.1		1.2	5.17
Total Interest-Bearing Liabilities		13,943.4		93.3	2.66			13,899.6		92.1	2.66			13,894.8		82.7	2.36
Net Interest Income			$	157.8					$	154.4					$	158.6
Interest Rate Spread⁽³⁾					2.03	%					2.00	%					1.99	%
Net Interest Margin⁽⁴⁾					2.95	%					2.92	%					2.86	%
Noninterest-Bearing Demand Deposits		6,897.9						6,946.6						7,959.7
Other Liabilities		616.6						600.2						506.0
Stockholders' Equity		2,588.8						2,512.5						2,367.4
Total Liabilities and Stockholders' Equity	$	24,046.7					$	23,958.9					$	24,727.9

⁽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 $1.1 million, $1.5 million and $1.5 million for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively.

⁽³⁾Interest rate spread is the difference between the average yield on earning assets and the average rate paid on interest-bearing liabilities, on a fully taxable-equivalent basis.

⁽⁴⁾Net interest margin is net interest income annualized for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, on a fully taxable-equivalent basis, divided by average total earning assets.


Average Balances and Interest Rates											Table 5
	Nine Months Ended						Nine Months Ended
	September 30, 2024						September 30, 2023
	Average		Income/		Yield/		Average		Income/		Yield/
(dollars in millions)	Balance		Expense		Rate		Balance		Expense		Rate
Earning Assets
Interest-Bearing Deposits in Other Banks	$	884.6	$	35.9	5.43	%	$	493.6	$	18.8	5.10	%
Available-for-Sale Investment Securities
Taxable		2,124.4		41.5	2.61			2,964.0		54.8	2.47
Non-Taxable		1.6		0.1	5.49			13.0		0.5	5.57
Held-to-Maturity Investment Securities
Taxable		3,354.0		42.7	1.70			3,615.0		46.0	1.70
Non-Taxable		602.9		11.7	2.58			608.9		11.9	2.62
Total Investment Securities		6,082.9		96.0	2.10			7,200.9		113.2	2.10
Loans Held for Sale		1.3		0.1	6.11			0.3		—	6.11
Loans and Leases⁽¹⁾
Commercial and industrial		2,177.2		113.3	6.95			2,193.8		104.3	6.35
Commercial real estate		4,302.4		213.4	6.62			4,224.7		194.6	6.16
Construction		983.6		56.2	7.63			874.0		45.4	6.95
Residential:
Residential mortgage		4,232.6		122.5	3.86			4,312.4		117.6	3.64
Home equity line		1,164.9		37.8	4.34			1,116.4		27.9	3.35
Consumer		1,057.6		54.4	6.87			1,194.1		53.2	5.95
Lease financing		406.8		11.9	3.90			322.9		10.5	4.34
Total Loans and Leases		14,325.1		609.5	5.68			14,238.3		553.5	5.19
Other Earning Assets		58.8		2.5	5.69			107.6		1.3	1.53
Total Earning Assets⁽²⁾		21,352.7		744.0	4.65			22,040.7		686.8	4.16
Cash and Due from Banks		242.4						273.3
Other Assets		2,469.1						2,385.8
Total Assets	$	24,064.2					$	24,699.8

Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings	$	6,007.6	$	70.5	1.57	%	$	6,144.1	$	49.1	1.07	%
Money Market		4,067.5		91.3	3.00			3,857.0		58.6	2.03
Time		3,312.3		95.5	3.85			2,921.8		68.3	3.12
Total Interest-Bearing Deposits		13,387.4		257.3	2.57			12,922.9		176.0	1.82
Federal Funds Purchased		—		—	—			23.0		0.8	4.45
Other Short-Term Borrowings		483.6		17.3	4.78			176.5		6.8	5.15
Long-Term Borrowings		—		—	—			349.8		12.5	4.78
Other Interest-Bearing Liabilities		31.1		1.3	5.75			62.1		2.1	4.63
Total Interest-Bearing Liabilities		13,902.1		275.9	2.65			13,534.3		198.2	1.96
Net Interest Income			$	468.1					$	488.6
Interest Rate Spread⁽³⁾					2.00	%					2.20	%
Net Interest Margin⁽⁴⁾					2.93	%					2.96	%
Noninterest-Bearing Demand Deposits		7,028.4						8,322.2
Other Liabilities		600.8						506.0
Stockholders' Equity		2,532.9						2,337.3
Total Liabilities and Stockholders' Equity	$	24,064.2					$	24,699.8

⁽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 $4.1 million and $4.2 million for the nine months ended September 30, 2024 and 2023, respectively.

⁽³⁾Interest rate spread is the difference between the average yield on earning assets and the average rate paid on interest-bearing liabilities, on a fully taxable-equivalent basis.

⁽⁴⁾Net interest margin is net interest income annualized for the nine months ended September 30, 2024 and 2023, on a fully taxable-equivalent basis, divided by average total earning assets.

Analysis of Change in Net Interest Income

Table 6

Three Months Ended September 30, 2024

Compared to June 30, 2024

(dollars in millions)

Volume

Rate

Total⁽¹⁾

Change in Interest Income:

Interest-Bearing Deposits in Other Banks

3.5

(0.1

)

3.4

Available-for-Sale Investment Securities

Taxable

(0.2

)

(1.1

)

(1.3

)

Held-to-Maturity Investment Securities

Taxable

(0.3

)

(0.3

)

(0.6

)

Non-Taxable

—

(0.3

)

(0.3

)

Total Investment Securities

(0.5

)

(1.7

)

(2.2

)

Loans and Leases

Commercial and industrial

(0.3

)

0.2

(0.1

)

Commercial real estate

—

0.1

Construction

1.3

0.5

1.8

Residential:

Residential mortgage

(0.2

)

0.5

0.3

Home equity line

—

0.6

Consumer

(0.3

)

1.3

1.0

Lease financing

—

(0.3

)

(0.3

)

Total Loans and Leases

0.5

2.9

3.4

Other Earning Assets

(0.1

)

0.1

—

Total Change in Interest Income

3.4

1.2

4.6

Change in Interest Expense:

Interest-Bearing Deposits

Savings

—

0.2

Money Market

1.0

0.3

1.3

Time

0.6

(0.2

)

0.4

Total Interest-Bearing Deposits

1.6

0.3

1.9

Other Short-Term Borrowings

(0.5

)

(0.1

)

(0.6

)

Other Interest-Bearing Liabilities

(0.2

)

0.1

(0.1

)

Total Change in Interest Expense

0.9

0.3

1.2

Change in Net Interest Income

2.5

0.9

3.4

⁽¹⁾The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

Analysis of Change in Net Interest Income

Table 7

Three Months Ended September 30, 2024

Compared to September 30, 2023

(dollars in millions)

Volume

Rate

Total ⁽¹⁾

Change in Interest Income:

Interest-Bearing Deposits in Other Banks

5.6

0.1

5.7

Available-for-Sale Investment Securities

Taxable

(4.8

)

(0.8

)

(5.6

)

Held-to-Maturity Investment Securities

Taxable

(1.0

)

(0.2

)

(1.2

)

Non-Taxable

—

(0.4

)

(0.4

)

Total Investment Securities

(5.8

)

(1.4

)

(7.2

)

Loans and Leases

Commercial and industrial

0.7

1.6

2.3

Commercial real estate

(1.8

)

2.0

0.2

Construction

3.2

1.6

4.8

Residential:

Residential mortgage

(1.0

)

1.3

0.3

Home equity line

—

3.1

Consumer

(2.3

)

2.7

0.4

Lease financing

0.9

(0.6

)

0.3

Total Loans and Leases

(0.3

)

11.7

11.4

Other Earning Assets

(0.7

)

0.6

(0.1

)

Total Change in Interest Income

(1.2

)

11.0

9.8

Change in Interest Expense:

Interest-Bearing Deposits

Savings

(0.1

)

4.5

4.4

Money Market

1.8

5.4

7.2

Time

(0.3

)

1.5

1.2

Total Interest-Bearing Deposits

1.4

11.4

12.8

Other Short-Term Borrowings

4.0

(0.1

)

3.9

Long-Term Borrowings

(2.6

)

(2.7

)

(5.3

)

Other Interest-Bearing Liabilities

(1.1

)

0.3

(0.8

)

Total Change in Interest Expense

1.7

8.9

10.6

Change in Net Interest Income

(2.9

)

2.1

(0.8

)

⁽¹⁾The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

Analysis of Change in Net Interest Income

Table 8

Nine Months Ended September 30, 2024

Compared to September 30, 2023

(dollars in millions)

Volume

Rate

Total ⁽¹⁾

Change in Interest Income:

Interest-Bearing Deposits in Other Banks

15.8

1.3

17.1

Available-for-Sale Investment Securities

Taxable

(16.3

)

3.0

(13.3

)

Non-Taxable

(0.4

)

—

(0.4

)

Held-to-Maturity Investment Securities

Taxable

(3.3

)

—

(3.3

)

Non-Taxable

(0.1

)

(0.1

)

(0.2

)

Total Investment Securities

(20.1

)

2.9

(17.2

)

Loans Held for Sale

0.1

—

0.1

Loans and Leases

Commercial and industrial

(0.8

)

9.8

9.0

Commercial real estate

3.7

15.1

18.8

Construction

6.1

4.7

10.8

Residential:

Residential mortgage

(2.2

)

7.1

4.9

Home equity line

1.3

8.6

9.9

Consumer

(6.5

)

7.7

1.2

Lease financing

2.5

(1.1

)

1.4

Total Loans and Leases

4.1

51.9

56.0

Other Earning Assets

(0.8

)

2.0

1.2

Total Change in Interest Income

(0.9

)

58.1

57.2

Change in Interest Expense:

Interest-Bearing Deposits

Savings

(1.1

)

22.5

21.4

Money Market

3.4

29.3

32.7

Time

9.9

17.3

27.2

Total Interest-Bearing Deposits

12.2

69.1

81.3

Federal Funds Purchased

(0.4

)

(0.4

)

(0.8

)

Other Short-Term Borrowings

11.0

(0.5

)

10.5

Long-Term Borrowings

(6.3

)

(6.2

)

(12.5

)

Other Interest-Bearing Liabilities

(1.2

)

0.4

(0.8

)

Total Change in Interest Expense

15.3

62.4

77.7

Change in Net Interest Income

(16.2

)

(4.3

)

(20.5

)

⁽¹⁾The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.


Loans and Leases								Table 9
	September 30,		June 30,		December 31,		September 30,
(dollars in thousands)	2024		2024		2023		2023
Commercial and industrial	$	2,110,077	$	2,208,690	$	2,165,349	$	2,101,442
Commercial real estate		4,265,289		4,305,017		4,340,243		4,387,751
Construction		1,056,249		1,017,649		900,292		885,112
Residential:
Residential mortgage		4,187,060		4,216,416		4,283,315		4,303,924
Home equity line		1,159,823		1,159,833		1,174,588		1,167,388
Total residential		5,346,883		5,376,249		5,457,903		5,471,312
Consumer		1,030,044		1,027,104		1,109,901		1,154,203
Lease financing		432,828		425,190		379,809		332,515
Total loans and leases	$	14,241,370	$	14,359,899	$	14,353,497	$	14,332,335


Deposits								Table 10
	September 30,		June 30,		December 31,		September 30,
(dollars in thousands)	2024		2024		2023		2023
Demand	$	6,800,028	$	6,857,467	$	7,583,562	$	7,898,996
Savings		5,896,029		6,055,051		6,445,084		6,028,308
Money Market		4,129,381		4,111,609		3,847,853		3,923,054
Time		3,402,264		3,294,705		3,456,158		3,661,131
Total Deposits	$	20,227,702	$	20,318,832	$	21,332,657	$	21,511,489


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)	2024		2024		2023		2023
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial Loans:
Commercial and industrial	$	934	$	1,084	$	970	$	988
Commercial real estate		152		3,085		2,953		—
Construction		—		447		—		—
Total Commercial Loans		1,086		4,616		3,923		988
Residential Loans:
Residential mortgage		9,103		7,273		7,620		7,435
Home equity line		7,645		6,124		7,052		6,200
Total Residential Loans		16,748		13,397		14,672		13,635
Total Non-Accrual Loans and Leases		17,834		18,013		18,595		14,623
Total Non-Performing Assets	$	17,834	$	18,013	$	18,595	$	14,623

Accruing Loans and Leases Past Due 90 Days or More
Commercial Loans:
Commercial and industrial	$	529	$	110	$	494	$	289
Commercial real estate		568		—		300		170
Total Commercial Loans		1,097		110		794		459
Residential mortgage		931		1,820		—		1,430
Consumer		2,515		1,835		2,702		1,681
Total Accruing Loans and Leases Past Due 90 Days or More	$	4,543	$	3,765	$	3,496	$	3,570

Total Loans and Leases	$	14,241,370	$	14,359,899	$	14,353,497	$	14,332,335


Allowance for Credit Losses and Reserve for Unfunded Commitments																		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)	2024				2024				2023				2024				2023
Balance at Beginning of Period	$	193,930			$	194,649			$	184,780			$	192,138			$	177,735
Loans and Leases Charged-Off
Commercial Loans:
Commercial and industrial		(1,178	)			(677	)			(784	)			(2,764	)			(2,572	)
Commercial real estate		(400	)			—				—				(400	)			—
Total Commercial Loans		(1,578	)			(677	)			(784	)			(3,164	)			(2,572	)
Residential Loans:
Residential mortgage		—				—				—				—				(122	)
Home equity line		—				—				—				—				(272	)
Total Residential Loans		—				—				—				—				(394	)
Consumer		(4,192	)			(4,182	)			(3,665	)			(13,228	)			(12,963	)
Total Loans and Leases Charged-Off		(5,770	)			(4,859	)			(4,449	)			(16,392	)			(15,929	)
Recoveries on Loans and Leases Previously Charged-Off
Commercial and industrial		160				250				2,637				621				3,175
Residential Loans:
Residential mortgage		31				28				53				89				110
Home equity line		86				112				303				242				539
Total Residential Loans		117				140				356				331				649
Consumer		1,560				1,950				1,746				5,199				5,640
Total Recoveries on Loans and Leases Previously Charged-Off		1,837				2,340				4,739				6,151				9,464
Net Loans and Leases (Charged-Off) Recovered		(3,933	)			(2,519	)			290				(10,241	)			(6,465	)
Provision for Credit Losses		7,400				1,800				7,500				15,500				21,300
Balance at End of Period	$	197,397			$	193,930			$	192,570			$	197,397			$	192,570
Components:
Allowance for Credit Losses	$	163,700			$	160,517			$	154,795			$	163,700			$	154,795
Reserve for Unfunded Commitments		33,697				33,413				37,775				33,697				37,775
Total Allowance for Credit Losses and Reserve for Unfunded Commitments	$	197,397			$	193,930			$	192,570			$	197,397			$	192,570
Average Loans and Leases Outstanding	$	14,304,806			$	14,358,049			$	14,349,402			$	14,325,065			$	14,238,309
Ratio of Net Loans and Leases Charged-Off (Recovered) to Average Loans and Leases Outstanding⁽¹⁾		0.11		%		0.07		%		(0.01	)	%		0.10		%		0.06		%
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding		1.15		%		1.12		%		1.08		%		1.15		%		1.08		%
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases		9.18x				8.91x				10.59x				9.18x				10.59x

⁽¹⁾Annualized for the three and nine months ended September 30, 2024 and 2023 and three months ended June 30, 2024.

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

Amortized

(dollars in thousands)

2024

2023

2022

2021

2020

Prior

Cost Basis

Total

Commercial Lending

Commercial and Industrial

Risk rating:

Pass

100,174

82,175

191,861

256,997

20,866

266,720

1,026,457

13,396

1,958,646

Special Mention

303

7,327

398

1,371

18,239

—

27,687

Substandard

—

8,251

219

358

2,033

32,296

—

43,157

Other ⁽¹⁾

10,797

10,542

7,779

3,074

1,052

1,723

45,620

—

80,587

Total Commercial and Industrial

111,274

92,718

215,218

260,338

22,674

271,847

1,122,612

13,396

2,110,077

Current period gross charge-offs

—

578

333

221

1,543

—

2,764

Commercial Real Estate

Risk rating:

Pass

118,884

347,480

810,746

649,133

325,887

1,774,529

87,188

7,760

4,121,607

Special Mention

3,587

2,261

7,537

41,384

3,306

11,973

7,815

—

77,863

Substandard

—

54,984

1,003

—

9,548

149

—

65,684

Other ⁽¹⁾

—

135

—

135

Total Commercial Real Estate

122,471

349,741

873,267

691,520

329,193

1,796,185

95,152

7,760

4,265,289

Current period gross charge-offs

—

400

—

400

Construction

Risk rating:

Pass

61,677

246,176

361,974

241,212

58,820

46,344

4,484

—

1,020,687

Special Mention

—

164

—

164

Other ⁽¹⁾

4,970

9,468

12,022

3,575

1,199

3,463

701

—

35,398

Total Construction

66,647

255,644

373,996

244,787

60,019

49,971

5,185

—

1,056,249

Current period gross charge-offs

—

Lease Financing

Risk rating:

Pass

126,380

105,523

66,764

15,483

23,133

89,254

—

426,537

Special Mention

—

100

300

—

447

Substandard

4,899

602

343

—

5,844

Total Lease Financing

131,279

106,167

67,207

15,783

23,138

89,254

—

432,828

Current period gross charge-offs

—

Total Commercial Lending

431,671

804,270

1,529,688

1,212,428

435,024

2,207,257

1,222,949

21,156

7,864,443

Current period gross charge-offs

—

578

333

221

1,943

—

3,164


															Revolving
															Loans
															Converted
	Term Loans												Revolving		to Term
	Amortized Cost Basis by Origination Year												Loans		Loans
(continued)													Amortized		Amortized
(dollars in thousands)	2024		2023		2022		2021		2020		Prior		Cost Basis		Cost Basis		Total
Residential Lending
Residential Mortgage
FICO:
740 and greater	$	113,307	$	206,224	$	504,141	$	956,983	$	503,160	$	1,129,857	$	—	$	—	$	3,413,672
680 - 739		11,614		28,638		65,128		109,018		66,719		157,263		—		—		438,380
620 - 679		1,519		1,792		22,921		19,854		11,651		37,979		—		—		95,716
550 - 619		—		896		3,703		6,707		2,269		15,751		—		—		29,326
Less than 550		—		286		2,380		3,818		2,959		5,569		—		—		15,012
No Score ⁽³⁾		543		7,117		16,923		10,512		5,553		52,526		—		—		93,174
Other ⁽²⁾		8,148		12,786		16,721		14,776		11,222		30,022		8,105		—		101,780
Total Residential Mortgage		135,131		257,739		631,917		1,121,668		603,533		1,428,967		8,105		—		4,187,060
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Home Equity Line
FICO:
740 and greater		—		—		—		—		—		—		930,909		1,730		932,639
680 - 739		—		—		—		—		—		—		167,097		1,137		168,234
620 - 679		—		—		—		—		—		—		36,540		985		37,525
550 - 619		—		—		—		—		—		—		14,514		581		15,095
Less than 550		—		—		—		—		—		—		4,477		571		5,048
No Score ⁽³⁾		—		—		—		—		—		—		1,282		—		1,282
Total Home Equity Line		—		—		—		—		—		—		1,154,819		5,004		1,159,823
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Total Residential Lending	$	135,131	$	257,739	$	631,917	$	1,121,668	$	603,533	$	1,428,967	$	1,162,924	$	5,004	$	5,346,883
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer Lending
FICO:
740 and greater		71,777		71,423		94,710		51,952		18,512		10,435		121,278		128		440,215
680 - 739		51,651		51,667		49,864		23,959		9,995		7,497		77,278		525		272,436
620 - 679		21,223		20,604		21,700		12,515		5,155		5,577		35,665		851		123,290
550 - 619		4,116		7,348		9,802		5,983		2,862		3,862		12,674		825		47,472
Less than 550		1,071		3,266		6,247		3,999		1,783		2,492		4,836		525		24,219
No Score ⁽³⁾		2,291		117		47		—		7		8		42,658		205		45,333
Other ⁽²⁾		—		—		296		911		101		981		74,790		—		77,079
Total Consumer Lending	$	152,129	$	154,425	$	182,666	$	99,319	$	38,415	$	30,852	$	369,179	$	3,059	$	1,030,044
Current period gross charge-offs	$	385	$	1,403	$	2,107	$	1,085	$	518	$	2,234	$	4,952	$	544	$	13,228

Total Loans and Leases	$	718,931	$	1,216,434	$	2,344,271	$	2,433,415	$	1,076,972	$	3,667,076	$	2,755,052	$	29,219	$	14,241,370
Current period gross charge-offs	$	385	$	1,981	$	2,440	$	1,174	$	739	$	4,177	$	4,952	$	544	$	16,392

⁽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. As of September 30, 2024, the majority of the loans in this population were current.

⁽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. As of September 30, 2024, the majority of the loans in this population were current.

⁽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 Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
(dollars in thousands)	2024			2024			2023			2024			2023
Income Statement Data:
Net income	$	61,492		$	61,921		$	58,221		$	177,633		$	187,481

Average total stockholders' equity	$	2,588,806		$	2,512,471		$	2,367,422		$	2,532,911		$	2,337,292
Less: average goodwill		995,492			995,492			995,492			995,492			995,492
Average tangible stockholders' equity	$	1,593,314		$	1,516,979		$	1,371,930		$	1,537,419		$	1,341,800

Average total assets	$	24,046,696		$	23,958,913		$	24,727,893		$	24,064,208		$	24,699,826
Less: average goodwill		995,492			995,492			995,492			995,492			995,492
Average tangible assets	$	23,051,204		$	22,963,421		$	23,732,401		$	23,068,716		$	23,704,334

Return on average total stockholders' equity⁽¹⁾		9.45	%		9.91	%		9.76	%		9.37	%		10.72	%
Return on average tangible stockholders' equity (non-GAAP)⁽¹⁾		15.35	%		16.42	%		16.84	%		15.43	%		18.68	%

Return on average total assets⁽¹⁾		1.02	%		1.04	%		0.93	%		0.99	%		1.01	%
Return on average tangible assets (non-GAAP)⁽¹⁾		1.06	%		1.08	%		0.97	%		1.03	%		1.06	%



	As of			As of			As of			As of
	September 30,			June 30,			December 31,			September 30,
(dollars in thousands, except per share amounts)	2024			2024			2023			2023
Balance Sheet Data:
Total stockholders' equity	$	2,648,034		$	2,550,312		$	2,486,066		$	2,351,009
Less: goodwill		995,492			995,492			995,492			995,492
Tangible stockholders' equity	$	1,652,542		$	1,554,820		$	1,490,574		$	1,355,517

Total assets	$	23,780,285		$	23,991,791		$	24,926,474		$	24,912,524
Less: goodwill		995,492			995,492			995,492			995,492
Tangible assets	$	22,784,793		$	22,996,299		$	23,930,982		$	23,917,032

Shares outstanding		127,886,167			127,879,012			127,618,761			127,609,934

Total stockholders' equity to total assets		11.14	%		10.63	%		9.97	%		9.44	%
Tangible stockholders' equity to tangible assets (non-GAAP)		7.25	%		6.76	%		6.23	%		5.67	%

Book value per share	$	20.71		$	19.94		$	19.48		$	18.42
Tangible book value per share (non-GAAP)	$	12.92		$	12.16		$	11.68		$	10.62

⁽¹⁾Annualized for the three and nine months ended September 30, 2024 and 2023 and three months ended June 30, 2024.

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