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First Hawaiian, Inc. Reports Second Quarter 2022 Financial Results and Declares Dividend
Source: Nasdaq GlobeNewswire / 29 Jul 2022 08:00:02 America/New_York
HONOLULU, July 29, 2022 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended June 30, 2022.
“I’m pleased to report that we had a very strong second quarter as the bank continued to perform well,” said Bob Harrison, Chairman, President and CEO. “We had good loan and deposit growth, credit quality remained excellent, and we successfully converted to our new core operating system.”
On July 27, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on September 2, 2022, to stockholders of record at the close of business on August 22, 2022.
Second Quarter 2022 Highlights:
- Net income of $59.4 million, or $0.46 per diluted share
- Total loans and leases increased $371.0 million versus prior quarter.
- Total deposits increased $331.0 million versus prior quarter
- Net interest margin increased 18 basis points to 2.60%
- Recorded a $1.0 million provision for credit losses
- Board of Directors declared a quarterly dividend of $0.26 per share
Balance Sheet
Total assets were $25.4 billion as of June 30, 2022, compared to $25.0 billion as of March 31, 2022.
Gross loans and leases were $13.3 billion as of June 30, 2022, an increase of $371.0 million, or 2.9%, from $12.9 billion as of March 31, 2022.
Total deposits were $22.6 billion as of June 30, 2022, an increase of $331.0 million, or 1.5%, from $22.3 billion as of March 31, 2022.
Net Interest Income
Net interest income for the second quarter of 2022 was $145.1 million, an increase of $11.3 million, or 8.4%, compared to $133.9 million for the prior quarter.
The net interest margin was 2.60% in the second quarter of 2022, an increase of 18 basis points compared to 2.42% in the prior quarter.
Provision Expense
During the quarter ended June 30, 2022, we recorded a $1.0 million provision for credit losses. In the quarter ended March 31, 2022, we recorded a $5.7 million negative provision for credit losses.
Noninterest Income
Noninterest income was $44.1 million in the second quarter of 2022, an increase of $2.7 million compared to noninterest income of $41.4 million in the prior quarter.
Noninterest Expense
Noninterest expense was $109.2 million in the second quarter of 2022, an increase of $5.1 million compared to noninterest expense of $104.0 million in the prior quarter.
The efficiency ratio was 57.3% and 59.0% for the quarters ended June 30, 2022 and March 31, 2022, respectively.
Taxes
The effective tax rate was 25.0% for the quarters ended June 30, 2022 and March 31, 2022.
Asset Quality
The allowance for credit losses was $148.9 million, or 1.12% of total loans and leases, as of June 30, 2022, compared to $150.3 million, or 1.17% of total loans and leases, as of March 31, 2022. The reserve for unfunded commitments was $29.0 million as of June 30, 2022 and March 31, 2022. Net charge-offs were $2.3 million, or 0.07% of average loans and leases on an annualized basis, for the quarter ended June 30, 2022, compared to net charge-offs of $2.6 million, or 0.08% of average loans and leases on an annualized basis, for the quarter ended March 31, 2022. Total non-performing assets were $7.9 million, or 0.06% of total loans and leases and other real estate owned, on June 30, 2022, compared to total non-performing assets of $8.6 million, or 0.07% of total loans and leases and other real estate owned, on March 31, 2022.
Capital
Total stockholders' equity was $2.3 billion on June 30, 2022 and March 31, 2022.
The tier 1 leverage, common equity tier 1 and total capital ratios were 7.54%, 11.98%, and 13.14%, respectively, on June 30, 2022, compared with 7.50%, 12.27% and 13.48%, respectively, on March 31, 2022.
The Company repurchased 0.3 million shares of common stock at a total cost of $7.0 million under the stock repurchase program in the second quarter. The average cost was $24.09 per share repurchased. Remaining buyback authority under the stock repurchase program was $68.0 million on June 30, 2022.
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.
Please note that the process for accessing the conference call has changed. Participants will need to click on the registration link provided below, register for the conference call, and then you will receive the dial-in number and a personalized PIN code.
To access the call by phone, please register via the following link: https://register.vevent.com/register/BI2ebfe69a17064bc89a14e15354a8e329, 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. Further, statements about the potential effects of the COVID-19 pandemic on our businesses and financial results and conditions may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, there can be no assurance that actual results will not prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements, including (without limitation) the risks and uncertainties associated with the ongoing impacts of COVID-19, the domestic and global economic environment and capital market conditions and other risk factors. For a discussion of some of these risks and important factors that could affect our future results and financial condition, see our U.S. Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.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.comMedia Contact:
Lindsay Chambers
(808) 525-6254
lchambers@fhb.comFinancial Highlights Table 1 For the Three Months Ended For the Six Months Ended June 30, March 31, June 30, June 30, (dollars in thousands, except per share data) 2022 2022 2021 2022 2021 Operating Results: Net interest income $ 145,147 $ 133,872 $ 131,481 $ 279,019 $ 260,639 Provision for credit losses 1,000 (5,747 ) (35,000 ) (4,747 ) (35,000 ) Noninterest income 44,137 41,380 49,371 85,517 93,239 Noninterest expense 109,175 104,042 99,388 213,217 195,694 Net income 59,360 57,719 86,741 117,079 144,434 Basic earnings per share 0.46 0.45 0.67 0.92 1.11 Diluted earnings per share 0.46 0.45 0.67 0.91 1.11 Dividends declared per share 0.26 0.26 0.26 0.52 0.52 Dividend payout ratio 56.52 % 57.78 % 38.81 % 57.14 % 46.85 % Performance Ratios(1): Net interest margin 2.60 % 2.42 % 2.46 % 2.51 % 2.50 % Efficiency ratio 57.33 % 59.04 % 54.74 % 58.15 % 55.12 % Return on average total assets 0.94 % 0.93 % 1.45 % 0.94 % 1.24 % Return on average tangible assets (non-GAAP)(2) 0.98 % 0.97 % 1.51 % 0.98 % 1.30 % Return on average total stockholders' equity 10.52 % 9.19 % 12.92 % 9.82 % 10.75 % Return on average tangible stockholders' equity (non-GAAP)(2) 18.79 % 15.08 % 20.51 % 16.76 % 16.99 % Average Balances: Average loans and leases $ 13,058,558 $ 12,819,612 $ 13,205,086 $ 12,939,745 $ 13,223,575 Average earning assets 22,520,605 22,463,209 21,539,264 22,492,066 21,010,643 Average assets 25,250,176 25,080,453 24,015,065 25,165,783 23,482,839 Average deposits 22,401,558 21,960,819 20,638,015 22,182,406 20,073,676 Average stockholders' equity 2,262,654 2,547,865 2,691,966 2,404,471 2,709,735 Market Value Per Share: Closing 22.80 27.89 28.34 22.80 28.34 High 28.44 31.16 29.85 31.16 30.80 Low 21.49 26.93 24.75 21.49 23.14 As of As of As of As of June 30, March 31, December 31, June 30, (dollars in thousands, except per share data) 2022 2022 2021 2021 Balance Sheet Data: Loans and leases $ 13,262,781 $ 12,891,743 $ 12,961,999 $ 13,103,785 Total assets 25,377,533 25,042,720 24,992,410 24,246,328 Total deposits 22,601,454 22,270,430 21,816,146 20,835,115 Long-term borrowings — — — 200,000 Total stockholders' equity 2,252,611 2,285,149 2,656,912 2,731,341 Per Share of Common Stock: Book value $ 17.67 $ 17.90 $ 20.84 $ 21.17 Tangible book value (non-GAAP)(2) 9.86 10.10 13.03 13.45 Asset Quality Ratios: Non-accrual loans and leases / total loans and leases 0.06 % 0.07 % 0.05 % 0.07 % Allowance for credit losses for loans and leases / total loans and leases 1.12 % 1.17 % 1.21 % 1.29 % Capital Ratios: Common Equity Tier 1 Capital Ratio 11.98 % 12.27 % 12.24 % 12.76 % Tier 1 Capital Ratio 11.98 % 12.27 % 12.24 % 12.76 % Total Capital Ratio 13.14 % 13.48 % 13.49 % 14.01 % Tier 1 Leverage Ratio 7.54 % 7.50 % 7.24 % 7.68 % Total stockholders' equity to total assets 8.88 % 9.13 % 10.63 % 11.26 % Tangible stockholders' equity to tangible assets (non-GAAP)(2) 5.16 % 5.36 % 6.92 % 7.47 % Non-Financial Data: Number of branches 51 51 54 54 Number of ATMs 297 298 299 294 Number of Full-Time Equivalent Employees 2,021 2,022 2,036 2,087
(1) Except for the efficiency ratio, amounts are annualized for the three and six months ended June 30, 2022 and 2021 and the three months ended March 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 Six Months Ended June 30, March 31, June 30, June 30, (dollars in thousands, except per share amounts) 2022 2022 2021 2022 2021 Interest income Loans and lease financing $ 111,916 $ 103,732 $ 110,919 $ 215,648 $ 221,858 Available-for-sale investment securities 16,643 32,107 24,637 48,750 47,783 Held-to-maturity investment securities 18,289 — — 18,289 — Other 2,896 782 666 3,678 1,157 Total interest income 149,744 136,621 136,222 286,365 270,798 Interest expense Deposits 4,597 2,749 3,363 7,346 7,419 Short-term and long-term borrowings — — 1,378 — 2,740 Total interest expense 4,597 2,749 4,741 7,346 10,159 Net interest income 145,147 133,872 131,481 279,019 260,639 Provision for credit losses 1,000 (5,747 ) (35,000 ) (4,747 ) (35,000 ) Net interest income after provision for credit losses 144,147 139,619 166,481 283,766 295,639 Noninterest income Service charges on deposit accounts 6,843 7,501 6,632 14,344 13,350 Credit and debit card fees 17,056 14,850 16,746 31,906 31,297 Other service charges and fees 9,018 9,654 10,303 18,672 19,149 Trust and investment services income 8,759 8,883 8,707 17,642 17,199 Bank-owned life insurance (859 ) (417 ) 3,104 (1,276 ) 5,493 Investment securities (losses) gains, net — — 102 — 102 Other 3,320 909 3,777 4,229 6,649 Total noninterest income 44,137 41,380 49,371 85,517 93,239 Noninterest expense Salaries and employee benefits 49,902 48,226 45,982 98,128 89,918 Contracted services and professional fees 18,617 17,147 16,516 35,764 33,704 Occupancy 7,334 7,410 7,314 14,744 14,484 Equipment 7,754 5,977 6,362 13,731 11,853 Regulatory assessment and fees 2,301 2,224 1,826 4,525 3,860 Advertising and marketing 1,994 2,028 1,469 4,022 3,060 Card rewards program 7,285 6,883 6,262 14,168 11,097 Other 13,988 14,147 13,657 28,135 27,718 Total noninterest expense 109,175 104,042 99,388 213,217 195,694 Income before provision for income taxes 79,109 76,957 116,464 156,066 193,184 Provision for income taxes 19,749 19,238 29,723 38,987 48,750 Net income $ 59,360 $ 57,719 $ 86,741 $ 117,079 $ 144,434 Basic earnings per share $ 0.46 $ 0.45 $ 0.67 $ 0.92 $ 1.11 Diluted earnings per share $ 0.46 $ 0.45 $ 0.67 $ 0.91 $ 1.11 Basic weighted-average outstanding shares 127,672,244 127,556,242 129,392,339 127,614,564 129,661,228 Diluted weighted-average outstanding shares 128,014,777 128,121,126 129,828,847 128,108,630 130,164,762 Consolidated Balance Sheets Table 3 June 30, March 31, December 31, June 30, (dollars in thousands) 2022 2022 2021 2021 Assets Cash and due from banks $ 279,629 $ 274,022 $ 246,716 $ 347,861 Interest-bearing deposits in other banks 1,254,047 1,352,138 1,011,753 1,558,437 Investment securities: Available-for-sale, at fair value (amortized cost: $4,267,809 as of June 30, 2022, $8,733,170 as of March 31, 2022, $8,560,733 as of December 31, 2021 and $6,951,153 as of June 30, 2021) 3,967,746 8,062,384 8,428,032 6,953,930 Held-to-maturity, at amortized cost (fair value: $3,910,780 as of June 30, 2022 and nil as of March 31, 2022, December 31, 2021 and June 30, 2021) 4,093,215 — — — Loans held for sale 180 — 538 1,241 Loans and leases 13,262,781 12,891,743 12,961,999 13,103,785 Less: allowance for credit losses 148,942 150,280 157,262 169,148 Net loans and leases 13,113,839 12,741,463 12,804,737 12,934,637 Premises and equipment, net 310,047 315,766 318,448 319,452 Other real estate owned and repossessed personal property — — 175 — Accrued interest receivable 63,240 61,561 63,158 66,734 Bank-owned life insurance 470,542 471,401 471,819 466,402 Goodwill 995,492 995,492 995,492 995,492 Mortgage servicing rights 7,152 7,650 8,302 10,007 Other assets 822,404 760,843 643,240 592,135 Total assets $ 25,377,533 $ 25,042,720 $ 24,992,410 $ 24,246,328 Liabilities and Stockholders' Equity Deposits: Interest-bearing $ 12,990,571 $ 12,504,821 $ 12,422,283 $ 12,245,193 Noninterest-bearing 9,610,883 9,765,609 9,393,863 8,589,922 Total deposits 22,601,454 22,270,430 21,816,146 20,835,115 Long-term borrowings — — — 200,000 Retirement benefits payable 134,151 134,323 134,491 144,101 Other liabilities 389,317 352,818 384,861 335,771 Total liabilities 23,124,922 22,757,571 22,335,498 21,514,987 Stockholders' equity Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 140,943,908 / 127,451,087 shares as of June 30, 2022, issued/outstanding: 140,875,595 / 127,686,307 shares as of March 31, 2022, issued/outstanding: 140,581,715 / 127,502,472 shares as of December 31, 2021 and issued/outstanding: 140,542,398 / 129,019,871 shares as of June 30, 2021) 1,409 1,409 1,406 1,405 Additional paid-in capital 2,533,407 2,530,795 2,527,663 2,520,790 Retained earnings 654,777 628,642 604,534 550,511 Accumulated other comprehensive loss, net (571,457 ) (517,502 ) (121,693 ) (29,702 ) Treasury stock (13,492,821 shares as of June 30, 2022, 13,189,288 shares as of March 31, 2022, 13,079,243 shares as of December 31, 2021 and 11,522,527 shares as of June 30, 2021) (365,525 ) (358,195 ) (354,998 ) (311,663 ) Total stockholders' equity 2,252,611 2,285,149 2,656,912 2,731,341 Total liabilities and stockholders' equity $ 25,377,533 $ 25,042,720 $ 24,992,410 $ 24,246,328 Average Balances and Interest Rates Table 4 Three Months Ended Three Months Ended Three Months Ended June 30, 2022 March 31, 2022 June 30, 2021 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 $ 1,297.3 $ 2.8 0.85 % $ 1,138.3 $ 0.6 0.20 % $ 1,503.0 $ 0.4 0.10 % Available-for-Sale Investment Securities Taxable 3,946.4 16.6 1.68 7,800.3 29.2 1.50 6,298.3 22.5 1.43 Non-Taxable 8.4 0.1 5.26 636.7 3.6 2.32 468.4 2.7 2.30 Held-to-Maturity Investment Securities Taxable 3,533.6 15.0 1.70 — — — — — — Non-Taxable 607.0 4.1 2.71 — — — — — — Total Investment Securities 8,095.4 35.8 1.77 8,437.0 32.8 1.56 6,766.7 25.2 1.49 Loans Held for Sale 0.3 — 5.06 1.2 — 2.02 2.0 — 1.44 Loans and Leases(1) Commercial and industrial 1,951.3 15.0 3.09 1,973.1 14.6 3.01 2,882.1 21.1 2.94 Commercial real estate 3,808.9 30.7 3.23 3,632.2 25.8 2.88 3,419.7 25.3 2.97 Construction 711.3 6.3 3.57 766.9 5.7 3.03 800.9 6.3 3.15 Residential: Residential mortgage 4,183.0 36.7 3.51 4,111.0 34.8 3.38 3,765.4 34.0 3.62 Home equity line 945.7 5.9 2.49 891.6 5.5 2.48 812.6 5.5 2.72 Consumer 1,218.0 15.5 5.09 1,218.6 15.6 5.19 1,277.9 16.9 5.32 Lease financing 240.4 2.1 3.53 226.2 1.9 3.42 246.5 1.9 3.06 Total Loans and Leases 13,058.6 112.2 3.44 12,819.6 103.9 3.27 13,205.1 111.0 3.37 Other Earning Assets 69.0 0.1 0.79 67.1 0.2 1.31 62.5 0.3 1.91 Total Earning Assets(2) 22,520.6 150.9 2.68 22,463.2 137.5 2.47 21,539.3 136.9 2.55 Cash and Due from Banks 300.8 292.1 290.7 Other Assets 2,428.8 2,325.2 2,185.1 Total Assets $ 25,250.2 $ 25,080.5 $ 24,015.1 Interest-Bearing Liabilities Interest-Bearing Deposits Savings $ 6,971.3 $ 1.7 0.10 % $ 6,668.4 $ 0.5 0.03 % 6,361.8 $ 0.5 0.03 % Money Market 4,127.4 1.4 0.14 4,048.9 0.5 0.05 3,783.1 0.5 0.06 Time 1,671.4 1.5 0.36 1,748.5 1.7 0.39 2,034.5 2.3 0.45 Total Interest-Bearing Deposits 12,770.1 4.6 0.14 12,465.8 2.7 0.09 12,179.4 3.3 0.11 Long-Term Borrowings — — — — — — 200.0 1.4 2.76 Total Interest-Bearing Liabilities 12,770.1 4.6 0.14 12,465.8 2.7 0.09 12,379.4 4.7 0.15 Net Interest Income $ 146.3 $ 134.8 $ 132.2 Interest Rate Spread 2.54 % 2.38 % 2.40 % Net Interest Margin 2.60 % 2.42 % 2.46 % Noninterest-Bearing Demand Deposits 9,631.4 9,495.0 8,458.6 Other Liabilities 586.0 571.8 485.1 Stockholders' Equity 2,262.7 2,547.9 2,692.0 Total Liabilities and Stockholders' Equity $ 25,250.2 $ 25,080.5 $ 24,015.1
(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 $1.2 million, $1.0 million and $0.7 million for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively. Average Balances and Interest Rates Table 5 Six Months Ended Six Months Ended June 30, 2022 June 30, 2021 Average Income/ Yield/ Average Income/ Yield/ (dollars in millions) Balance Expense Rate Balance Expense Rate Earning Assets Interest-Bearing Deposits in Other Banks $ 1,218.3 $ 3.3 0.55 % $ 1,222.4 $ 0.6 0.10 % Available-for-Sale Investment Securities Taxable 5,862.7 45.7 1.56 6,125.1 44.6 1.46 Non-Taxable 320.8 3.9 2.41 373.7 4.0 2.11 Held-to-Maturity Investment Securities Taxable 1,776.6 15.0 1.69 — — — Non-Taxable 305.2 4.1 2.71 — — — Total Investment Securities 8,265.3 68.7 1.66 6,498.8 48.6 1.49 Loans Held for Sale 0.8 — 2.60 5.6 0.1 2.28 Loans and Leases(1) Commercial and industrial 1,962.1 29.7 3.05 2,954.0 41.5 2.84 Commercial real estate 3,721.0 56.4 3.06 3,402.6 50.2 2.98 Construction 738.9 12.1 3.30 774.0 12.1 3.16 Residential: Residential mortgage 4,147.2 71.5 3.45 3,730.9 68.7 3.68 Home equity line 918.8 11.3 2.48 817.3 11.2 2.76 Consumer 1,218.3 31.1 5.14 1,300.7 34.7 5.37 Lease financing 233.4 4.0 3.48 244.1 3.7 3.04 Total Loans and Leases 12,939.7 216.1 3.36 13,223.6 222.1 3.38 Other Earning Assets 68.0 0.4 1.05 60.2 0.5 1.85 Total Earning Assets(2) 22,492.1 288.5 2.58 21,010.6 271.9 2.60 Cash and Due from Banks 296.5 292.3 Other Assets 2,377.2 2,179.9 Total Assets $ 25,165.8 $ 23,482.8 Interest-Bearing Liabilities Interest-Bearing Deposits Savings $ 6,820.7 $ 2.2 0.07 % $ 6,169.5 $ 1.1 0.04 % Money Market 4,088.3 2.0 0.09 3,657.3 1.0 0.05 Time 1,709.8 3.2 0.38 2,160.8 5.3 0.49 Total Interest-Bearing Deposits 12,618.8 7.4 0.12 11,987.6 7.4 0.12 Long-Term Borrowings — — — 200.0 2.7 2.76 Total Interest-Bearing Liabilities 12,618.8 7.4 0.12 12,187.6 10.1 0.17 Net Interest Income $ 281.1 $ 261.8 Interest Rate Spread 2.46 % 2.43 % Net Interest Margin 2.51 % 2.50 % Noninterest-Bearing Demand Deposits 9,563.6 8,086.1 Other Liabilities 578.9 499.4 Stockholders' Equity 2,404.5 2,709.7 Total Liabilities and Stockholders' Equity $ 25,165.8 $ 23,482.8
(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 $2.1 million and $1.1 million for the six months ended June 30, 2022 and 2021, respectively. Analysis of Change in Net Interest Income Table 6 Three Months Ended June 30, 2022 Compared to March 31, 2022 (dollars in millions) Volume Rate Total Change in Interest Income: Interest-Bearing Deposits in Other Banks $ 0.1 $ 2.1 $ 2.2 Available-for-Sale Investment Securities Taxable (15.8 ) 3.2 (12.6 ) Non-Taxable (5.6 ) 2.1 (3.5 ) Held-to-Maturity Investment Securities Taxable 15.0 — 15.0 Non-Taxable 4.1 — 4.1 Total Investment Securities (2.3 ) 5.3 3.0 Loans and Leases Commercial and industrial (0.1 ) 0.5 0.4 Commercial real estate 1.4 3.5 4.9 Construction (0.4 ) 1.0 0.6 Residential: Residential mortgage 0.6 1.3 1.9 Home equity line 0.4 — 0.4 Consumer — (0.1 ) (0.1 ) Lease financing 0.1 0.1 0.2 Total Loans and Leases 2.0 6.3 8.3 Other Earning Assets — (0.1 ) (0.1 ) Total Change in Interest Income (0.2 ) 13.6 13.4 Change in Interest Expense: Interest-Bearing Deposits Savings 0.1 1.1 1.2 Money Market — 0.9 0.9 Time (0.1 ) (0.1 ) (0.2 ) Total Interest-Bearing Deposits — 1.9 1.9 Total Change in Interest Expense — 1.9 1.9 Change in Net Interest Income $ (0.2 ) $ 11.7 $ 11.5 Analysis of Change in Net Interest Income Table 7 Three Months Ended June 30, 2022 Compared to June 30, 2021 (dollars in millions) Volume Rate Total Change in Interest Income: Interest-Bearing Deposits in Other Banks $ — $ 2.4 $ 2.4 Available-for-Sale Investment Securities Taxable (9.4 ) 3.5 (5.9 ) Non-Taxable (4.1 ) 1.5 (2.6 ) Held-to-Maturity Investment Securities Taxable 15.0 — 15.0 Non-Taxable 4.1 — 4.1 Total Investment Securities 5.6 5.0 10.6 Loans and Leases Commercial and industrial (7.1 ) 1.0 (6.1 ) Commercial real estate 3.0 2.4 5.4 Construction (0.8 ) 0.8 — Residential: Residential mortgage 3.7 (1.0 ) 2.7 Home equity line 0.9 (0.5 ) 0.4 Consumer (0.7 ) (0.7 ) (1.4 ) Lease financing (0.1 ) 0.3 0.2 Total Loans and Leases (1.1 ) 2.3 1.2 Other Earning Assets — (0.2 ) (0.2 ) Total Change in Interest Income 4.5 9.5 14.0 Change in Interest Expense: Interest-Bearing Deposits Savings 0.1 1.1 1.2 Money Market 0.1 0.8 0.9 Time (0.4 ) (0.4 ) (0.8 ) Total Interest-Bearing Deposits (0.2 ) 1.5 1.3 Long-Term Borrowings (0.7 ) (0.7 ) (1.4 ) Total Change in Interest Expense (0.9 ) 0.8 (0.1 ) Change in Net Interest Income $ 5.4 $ 8.7 $ 14.1 Analysis of Change in Net Interest Income Table 8 Six Months Ended June 30, 2022 Compared to June 30, 2021 (dollars in millions) Volume Rate Total Change in Interest Income: Interest-Bearing Deposits in Other Banks $ — $ 2.7 $ 2.7 Available-for-Sale Investment Securities Taxable (1.9 ) 3.0 1.1 Non-Taxable (0.6 ) 0.5 (0.1 ) Held-to-Maturity Investment Securities Taxable 15.0 — 15.0 Non-Taxable 4.1 — 4.1 Total Investment Securities 16.6 3.5 20.1 Loans Held for Sale (0.1 ) — (0.1 ) Loans and Leases Commercial and industrial (14.7 ) 2.9 (11.8 ) Commercial real estate 4.8 1.4 6.2 Construction (0.5 ) 0.5 — Residential: Residential mortgage 7.2 (4.4 ) 2.8 Home equity line 1.3 (1.2 ) 0.1 Consumer (2.1 ) (1.5 ) (3.6 ) Lease financing (0.2 ) 0.5 0.3 Total Loans and Leases (4.2 ) (1.8 ) (6.0 ) Other Earning Assets 0.1 (0.2 ) (0.1 ) Total Change in Interest Income 12.4 4.2 16.6 Change in Interest Expense: Interest-Bearing Deposits Savings 0.1 1.0 1.1 Money Market 0.2 0.8 1.0 Time (1.0 ) (1.1 ) (2.1 ) Total Interest-Bearing Deposits (0.7 ) 0.7 — Long-Term Borrowings (1.4 ) (1.3 ) (2.7 ) Total Change in Interest Expense (2.1 ) (0.6 ) (2.7 ) Change in Net Interest Income $ 14.5 $ 4.8 $ 19.3 Loans and Leases Table 9 June 30, March 31, December 31, June 30, (dollars in thousands) 2022 2022 2021 2021 Commercial and industrial: Commercial and industrial excluding Paycheck Protection Program loans $ 1,898,899 $ 1,817,346 $ 1,870,657 $ 1,753,444 Paycheck Protection Program loans 43,233 106,188 216,442 811,103 Total commercial and industrial 1,942,132 1,923,534 2,087,099 2,564,547 Commercial real estate 3,956,828 3,759,980 3,639,623 3,528,068 Construction 727,771 708,300 813,969 853,865 Residential: Residential mortgage 4,212,768 4,153,824 4,083,367 3,821,407 Home equity line 971,569 918,101 876,608 825,368 Total residential 5,184,337 5,071,925 4,959,975 4,646,775 Consumer 1,207,051 1,204,834 1,229,939 1,267,559 Lease financing 244,662 223,170 231,394 242,971 Total loans and leases $ 13,262,781 $ 12,891,743 $ 12,961,999 $ 13,103,785 Deposits Table 10 June 30, March 31, December 31, June 30, (dollars in thousands) 2022 2022 2021 2021 Demand $ 9,610,883 $ 9,765,609 $ 9,393,863 $ 8,589,922 Savings 7,243,185 6,812,758 6,612,775 6,421,053 Money Market 4,079,706 3,990,225 4,033,070 3,920,477 Time 1,667,680 1,701,838 1,776,438 1,903,663 Total Deposits $ 22,601,454 $ 22,270,430 $ 21,816,146 $ 20,835,115 Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More Table 11 June 30, March 31, December 31, June 30, (dollars in thousands) 2022 2022 2021 2021 Non-Performing Assets Non-Accrual Loans and Leases Commercial Loans: Commercial and industrial $ 682 $ 707 $ 718 $ 828 Commercial real estate 727 727 727 937 Lease financing — 75 — — Total Commercial Loans 1,409 1,509 1,445 1,765 Residential Loans: Residential mortgage 6,450 7,092 5,637 7,140 Total Residential Loans 6,450 7,092 5,637 7,140 Total Non-Accrual Loans and Leases 7,859 8,601 7,082 8,905 Other Real Estate Owned — — 175 — Total Non-Performing Assets $ 7,859 $ 8,601 $ 7,257 $ 8,905 Accruing Loans and Leases Past Due 90 Days or More Commercial Loans: Commercial and industrial $ 2,230 $ 591 $ 740 $ 494 Commercial real estate 176 — — — Construction 352 — — 60 Total Commercial Loans 2,758 591 740 554 Residential Loans: Residential mortgage 750 13 987 — Home equity line 1,039 2,252 3,681 4,680 Total Residential Loans 1,789 2,265 4,668 4,680 Consumer 1,218 1,588 1,800 1,134 Total Accruing Loans and Leases Past Due 90 Days or More $ 5,765 $ 4,444 $ 7,208 $ 6,368 Restructured Loans on Accrual Status and Not Past Due 90 Days or More $ 29,440 $ 32,590 $ 34,893 $ 36,668 Total Loans and Leases $ 13,262,781 $ 12,891,743 $ 12,961,999 $ 13,103,785 Allowance for Credit Losses and Reserve for Unfunded Commitments Table 12 For the Three Months Ended For the Six Months Ended June 30, March 31, June 30, June 30, June 30, (dollars in thousands) 2022 2022 2021 2022 2021 Balance at Beginning of Period $ 179,238 $ 187,584 $ 234,469 187,584 239,057 Loans and Leases Charged-Off Commercial Loans: Commercial and industrial (243 ) (706 ) (330 ) (949 ) (1,293 ) Commercial real estate — — — — (66 ) Total Commercial Loans (243 ) (706 ) (330 ) (949 ) (1,359 ) Residential Loans: Residential mortgage — — — — (98 ) Home equity line (1,120 ) (43 ) — (1,163 ) — Total Residential Loans (1,120 ) (43 ) — (1,163 ) (98 ) Consumer (3,659 ) (4,109 ) (3,917 ) (7,768 ) (10,458 ) Total Loans and Leases Charged-Off (5,022 ) (4,858 ) (4,247 ) (9,880 ) (11,915 ) Recoveries on Loans and Leases Previously Charged-Off Commercial Loans: Commercial and industrial 301 53 287 354 502 Commercial real estate — 14 12 14 15 Construction — — — — 166 Lease financing 60 — — 60 — Total Commercial Loans 361 67 299 428 683 Residential Loans: Residential mortgage 192 16 14 208 31 Home equity line 191 28 38 219 62 Total Residential Loans 383 44 52 427 93 Consumer 1,940 2,148 2,797 4,088 5,452 Total Recoveries on Loans and Leases Previously Charged-Off 2,684 2,259 3,148 4,943 6,228 Net Loans and Leases Charged-Off (2,338 ) (2,599 ) (1,099 ) (4,937 ) (5,687 ) Provision for Credit Losses 1,000 (5,747 ) (35,000 ) (4,747 ) (35,000 ) Balance at End of Period $ 177,900 $ 179,238 $ 198,370 $ 177,900 $ 198,370 Components: Allowance for Credit Losses $ 148,942 $ 150,280 $ 169,148 $ 148,942 $ 169,148 Reserve for Unfunded Commitments 28,958 28,958 29,222 28,958 29,222 Total Allowance for Credit Losses and Reserve for Unfunded Commitments $ 177,900 $ 179,238 $ 198,370 $ 177,900 $ 198,370 Average Loans and Leases Outstanding $ 13,058,558 $ 12,819,612 $ 13,205,086 $ 12,939,745 $ 13,223,575 Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1) 0.07 % 0.08 % 0.03 % 0.08 % 0.09 % Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding 1.12 % 1.17 % 1.29 % 1.12 % 1.29 % Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases 18.95x 17.47x 18.99x 18.95x 18.99x
(1) Annualized for the three and six months ended June 30, 2022 and 2021, and three months ended March 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) 2022 2021 2020 2019 2018 Prior Cost Basis Cost Basis Total Commercial Lending Commercial and Industrial Risk rating: Pass $ 216,303 $ 421,981 $ 66,601 $ 182,175 $ 60,586 $ 156,647 $ 697,256 $ 19,128 $ 1,820,677 Special Mention 2,816 316 1,628 2,822 748 5,295 1,073 841 15,539 Substandard — 320 1,103 1,605 1,019 879 16,214 114 21,254 Other (1) 12,807 9,613 11,531 5,366 3,075 1,576 40,694 — 84,662 Total Commercial and Industrial 231,926 432,230 80,863 191,968 65,428 164,397 755,237 20,083 1,942,132 Commercial Real Estate Risk rating: Pass 516,062 695,446 338,391 516,210 459,372 1,270,438 84,174 — 3,880,093 Special Mention — — 562 47,781 — 11,140 695 — 60,178 Substandard — — 180 — 1,742 14,476 3 — 16,401 Other (1) — — — — — 156 — — 156 Total Commercial Real Estate 516,062 695,446 339,133 563,991 461,114 1,296,210 84,872 — 3,956,828 Construction Risk rating: Pass 39,575 193,588 127,677 85,471 115,881 88,509 14,965 — 665,666 Special Mention — — — 236 — 350 — — 586 Substandard — — — — 351 498 — — 849 Other (1) 13,228 29,529 6,049 2,849 3,913 4,151 951 — 60,670 Total Construction 52,803 223,117 133,726 88,556 120,145 93,508 15,916 — 727,771 Lease Financing Risk rating: Pass 41,656 26,813 49,889 43,989 7,801 68,457 — — 238,605 Special Mention — 457 2,642 1,358 11 17 — — 4,485 Substandard — — 195 16 14 1,347 — — 1,572 Total Lease Financing 41,656 27,270 52,726 45,363 7,826 69,821 — — 244,662 Total Commercial Lending $ 842,447 $ 1,378,063 $ 606,448 $ 889,878 $ 654,513 $ 1,623,936 $ 856,025 $ 20,083 $ 6,871,393 Revolving Loans Converted Term Loans Revolving to Term Amortized Cost Basis by Origination Year Loans Loans (continued) Amortized Amortized (dollars in thousands) 2022 2021 2020 2019 2018 Prior Cost Basis Cost Basis Total Residential Lending Residential Mortgage FICO: 740 and greater $ 352,342 $ 1,069,214 $ 587,478 $ 252,428 $ 178,752 $ 974,057 $ — $ — $ 3,414,271 680 - 739 46,224 124,306 79,422 45,117 21,882 144,226 — — 461,177 620 - 679 5,305 19,143 14,291 5,405 3,892 38,470 — — 86,506 550 - 619 169 1,943 294 226 2,073 8,017 — — 12,722 Less than 550 2,085 1,242 60 — 340 4,656 — — 8,383 No Score (3) 10,652 14,868 7,544 13,471 16,488 54,373 — — 117,396 Other (2) 20,365 19,445 15,580 9,552 9,757 31,304 4,999 1,311 112,313 Total Residential Mortgage 437,142 1,250,161 704,669 326,199 233,184 1,255,103 4,999 1,311 4,212,768 Home Equity Line FICO: 740 and greater — — — — — — 748,148 2,227 750,375 680 - 739 — — — — — — 157,042 3,106 160,148 620 - 679 — — — — — — 40,070 2,454 42,524 550 - 619 — — — — — — 9,202 1,601 10,803 Less than 550 — — — — — — 1,159 491 1,650 No Score (3) — — — — — — 6,069 — 6,069 Total Home Equity Line — — — — — — 961,690 9,879 971,569 Total Residential Lending 437,142 1,250,161 704,669 326,199 233,184 1,255,103 966,689 11,190 5,184,337 Consumer Lending FICO: 740 and greater 115,911 132,565 66,828 59,155 38,001 17,426 117,266 203 547,355 680 - 739 53,590 80,240 45,783 41,393 23,562 13,947 67,636 566 326,717 620 - 679 11,760 35,430 17,746 22,180 13,928 11,374 30,079 1,018 143,515 550 - 619 1,000 6,548 6,576 10,400 7,652 6,801 10,044 1,026 50,047 Less than 550 379 1,758 2,973 5,022 2,547 2,525 3,047 483 18,734 No Score (3) 1,087 402 9 52 31 45 37,536 303 39,465 Other (2) 1,675 4,218 358 1,674 — 2,152 71,141 — 81,218 Total Consumer Lending 185,402 261,161 140,273 139,876 85,721 54,270 336,749 3,599 1,207,051 Total Loans and Leases $ 1,464,991 $ 2,889,385 $ 1,451,390 $ 1,355,953 $ 973,418 $ 2,933,309 $ 2,159,463 $ 34,872 $ 13,262,781
(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 Six Months Ended June 30, March 31, June 30, June 30, (dollars in thousands, except per share amounts) 2022 2022 2021 2022 2021 Income Statement Data: Net income $ 59,360 $ 57,719 $ 86,741 $ 117,079 $ 144,434 Average total stockholders' equity $ 2,262,654 $ 2,547,865 $ 2,691,966 $ 2,404,471 $ 2,709,735 Less: average goodwill 995,492 995,492 995,492 995,492 995,492 Average tangible stockholders' equity $ 1,267,162 $ 1,552,373 $ 1,696,474 $ 1,408,979 $ 1,714,243 Average total assets $ 25,250,176 $ 25,080,453 $ 24,015,065 $ 25,165,783 $ 23,482,839 Less: average goodwill 995,492 995,492 995,492 995,492 995,492 Average tangible assets $ 24,254,684 $ 24,084,961 $ 23,019,573 $ 24,170,291 $ 22,487,347 Return on average total stockholders' equity(1) 10.52 % 9.19 % 12.92 % 9.82 % 10.75 % Return on average tangible stockholders' equity (non-GAAP)(1) 18.79 % 15.08 % 20.51 % 16.76 % 16.99 % Return on average total assets(1) 0.94 % 0.93 % 1.45 % 0.94 % 1.24 % Return on average tangible assets (non-GAAP)(1) 0.98 % 0.97 % 1.51 % 0.98 % 1.30 % As of As of As of As of June 30, March 31, December 31, June 30, (dollars in thousands, except per share amounts) 2022 2022 2021 2021 Balance Sheet Data: Total stockholders' equity $ 2,252,611 $ 2,285,149 $ 2,656,912 $ 2,731,341 Less: goodwill 995,492 995,492 995,492 995,492 Tangible stockholders' equity $ 1,257,119 $ 1,289,657 $ 1,661,420 $ 1,735,849 Total assets $ 25,377,533 $ 25,042,720 $ 24,992,410 $ 24,246,328 Less: goodwill 995,492 995,492 995,492 995,492 Tangible assets $ 24,382,041 $ 24,047,228 $ 23,996,918 $ 23,250,836 Shares outstanding 127,451,087 127,686,307 127,502,472 129,019,871 Total stockholders' equity to total assets 8.88 % 9.13 % 10.63 % 11.26 % Tangible stockholders' equity to tangible assets (non-GAAP) 5.16 % 5.36 % 6.92 % 7.47 % Book value per share $ 17.67 $ 17.90 $ 20.84 $ 21.17 Tangible book value per share (non-GAAP) $ 9.86 $ 10.10 $ 13.03 $ 13.45
(1) Annualized for the three and six months ended June 30, 2022 and 2021, and three months ended March 31, 2022. 
