First Hawaiian, Inc. Reports First Quarter 2021 Financial Results and Declares Dividend

HONOLULU, April 23, 2021 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended March 31, 2021.

“We had a good first quarter as our teams continued supporting local businesses by originating $459 million of PPP loans. We also experienced strong deposit growth and maintained excellent credit quality,” said Bob Harrison, Chairman, President and CEO. “We are optimistic about the local economy, as the state’s vaccine rollout is well underway and we are seeing a steady increase in visitor arrivals, all positive signs for Hawaii’s economy.”

On April 21, 2021 the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on June 4, 2021 to stockholders of record at the close of business on May 24, 2021.  

First Quarter 2021 Highlights:

• Net income of $57.7 million, or $0.44 per diluted share
• Total loans and leases increased $21.2 million versus prior quarter
• Total deposits increased $906.0 million, or 4.7%, versus prior quarter
• Did not record a provision for credit losses
• Board of Directors declared a quarterly dividend of $0.26 per share
• Repurchased $9.5 million of stock under share repurchase program

Balance Sheet

Total assets were $23.5 billion as of March 31, 2021, compared to $22.7 billion as of December 31, 2020.

Gross loans and leases were $13.3 billion as of March 31, 2021, unchanged from $13.3 billion as of December 31, 2020.

Total deposits were $20.1 billion as of March 31, 2021, an increase of $906.0 million, or 4.7%, from $19.2 billion as of December 31, 2020.

Net Interest Income

Net interest income for the first quarter of 2021 was $129.2 million, a decrease of $6.1 million, or 4.5%, compared to $135.2 million for the prior quarter.

The NIM was 2.55% in the first quarter of 2021, a decrease of 16 basis points compared to 2.71% in the fourth quarter of 2020.

Provision Expense

During the quarter ended March 31, 2021, the Bank did not record a provision for credit losses. In the quarter ended December 31, 2020, the total provision for credit losses was $20.0 million.

Noninterest Income

Noninterest income was $43.9 million in the first quarter of 2021, a decrease of $9.7 million compared to noninterest income of $53.6 million in the fourth quarter of 2020.

Noninterest Expense

Noninterest expense was $96.3 million in the first quarter of 2021, an increase of $8.2 million compared to noninterest expense of $88.1 million in the fourth quarter of 2020.

The efficiency ratio was 55.5% and 46.6% for the quarters ended March 31, 2021 and December 31, 2020, respectively.

Taxes

The effective tax rate was 24.8% for the quarter ended March 31, 2021 and 23.5% for the quarter ended December 31, 2020.

Asset Quality

The allowance for credit losses was $200.4 million, or 1.51% of total loans and leases, as of March 31, 2021, compared to $208.5 million, or 1.57% of total loans and leases, as of December 31, 2020. The reserve for unfunded commitments was $34.1 million as of March 31, 2021 compared to $30.6 million as of December 31, 2020. Net charge-offs were $4.6 million, or 0.14% of average loans and leases on an annualized basis for the quarter ended March 31, 2021, compared to net charge-offs of $1.4 million, or 0.04% of average loans and leases on an annualized basis for the quarter ended December 31, 2020. Total non-performing assets were $9.1 million, or 0.07% of total loans and leases and other real estate owned, at both March 31, 2021 and December 31, 2020.

Capital

Total stockholders' equity was $2.7 billion at both March 31, 2021 and December 31, 2020.

The tier 1 leverage, common equity tier 1 and total capital ratios were 7.90%, 12.82% and 14.07%, respectively, at March 31, 2021, compared with 8.00%, 12.47% and 13.73%, respectively, at December 31, 2020.

The Company repurchased 0.3 million shares of common stock at a total cost of $9.5 million under the stock repurchase program in the first quarter. The average cost was $28.70 per share repurchased. Remaining buyback authority under the stock repurchase program was $65.5 million at March 31, 2021.

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, 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: 4277629. 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 4:30 p.m. (Eastern Time) on April 30, 2021. Access the replay by dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID: 4277629.

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, 2020.

Use of Non-GAAP Financial Measures

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

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

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

Tables 12 and 13 at the end of this document provide a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.

Investor Relations Contact: Kevin Haseyama, CFA (808) 525-6268 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)			2021			2020			2020
Operating Results:
Net interest income			$	129,158		$	135,227		$	138,683
Provision for credit losses				—			20,000			41,200
Noninterest income				43,868			53,598			49,228
Noninterest expense				96,306			88,127			96,466
Net income				57,693			61,739			38,865
Basic earnings per share				0.44			0.48			0.30
Diluted earnings per share				0.44			0.47			0.30
Dividends declared per share				0.26			0.26			0.26
Dividend payout ratio				59.09	%		55.32	%		86.67	%
Supplemental Income Statement Data (non-GAAP):
Core net interest income			$	129,158		$	135,227		$	138,683
Core noninterest income				43,868			58,438			49,143
Core noninterest expense				96,306			88,127			96,466
Core net income				57,693			65,288			38,803
Core basic earnings per share				0.44			0.50			0.30
Core diluted earnings per share				0.44			0.50			0.30
Performance Ratio(1):
Net interest margin				2.55	%		2.71	%		3.12	%
Core net interest margin (non-GAAP)				2.55	%		2.71	%		3.12	%
Efficiency ratio				55.53	%		46.59	%		51.33	%
Core efficiency ratio (non-GAAP)				55.53	%		45.43	%		51.35	%
Return on average total assets				1.02	%		1.09	%		0.77	%
Core return on average total assets (non-GAAP)				1.02	%		1.16	%		0.77	%
Return on average tangible assets (non-GAAP)				1.07	%		1.14	%		0.81	%
Core return on average tangible assets (non-GAAP)(2)				1.07	%		1.21	%		0.81	%
Return on average total stockholders' equity				8.58	%		8.99	%		5.87	%
Core return on average total stockholders' equity (non-GAAP)				8.58	%		9.51	%		5.87	%
Return on average tangible stockholders' equity (non-GAAP)				13.51	%		14.14	%		9.39	%
Core return on average tangible stockholders’ equity (non-GAAP)(3)				13.51	%		14.95	%		9.37	%
Average Balances:
Average loans and leases			$	13,242,270		$	13,366,980		$	13,191,426
Average earning assets				20,476,149			19,977,933			17,814,189
Average assets				22,944,699			22,468,040			20,313,304
Average deposits				19,503,067			19,020,800			16,543,305
Average stockholders' equity				2,727,701			2,732,271			2,660,811
Market Value Per Share:
Closing				27.37			23.58			16.53
High				30.80			23.90			31.25
Low				23.14			14.16			15.42

		As of			As of			As of
		March 31,			December 31,			March 31,
(dollars in thousands, except per share data)		2021			2020			2020
Balance Sheet Data:
Loans and leases		$	13,300,289		$	13,279,097		$	13,380,270
Total assets			23,497,596			22,662,831			20,755,891
Total deposits			20,133,681			19,227,723			17,020,002
Short-term borrowings			—			—			400,000
Long-term borrowings			200,010			200,010			200,019
Total stockholders' equity			2,683,630			2,744,104			2,664,685
Per Share of Common Stock:
Book value		$	20.68		$	21.12		$	20.52
Tangible book value (non-GAAP)(4)			13.01			13.46			12.86
Asset Quality Ratios:
Non-accrual loans and leases / total loans and leases			0.07	%		0.07	%		0.05	%
Allowance for credit losses for loans and leases / total loans and leases			1.51	%		1.57	%		1.24	%
Capital Ratios:
Common Equity Tier 1 Capital Ratio			12.82	%		12.47	%		11.65	%
Tier 1 Capital Ratio			12.82	%		12.47	%		11.65	%
Total Capital Ratio			14.07	%		13.73	%		12.90	%
Tier 1 Leverage Ratio			7.90	%		8.00	%		8.63	%
Total stockholders' equity to total assets			11.42	%		12.11	%		12.84	%
Tangible stockholders' equity to tangible assets (non-GAAP)			7.50	%		8.07	%		8.45	%
Non-Financial Data:
Number of branches			54			54			58
Number of ATMs			297			297			304
Number of Full-Time Equivalent Employees			2,090			2,103			2,103

(1)	Except for the efficiency ratio and the core efficiency ratio, amounts are annualized for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020.
(2)	Core return on average tangible assets is a non-GAAP financial measure. We compute our core return on average tangible assets as the ratio of core 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. For a reconciliation to the most directly comparable GAAP financial measure for core net income, see Table 12, GAAP to Non-GAAP Reconciliation.
(3)	Core return on average tangible stockholders’ equity is a non-GAAP financial measure. 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. For a reconciliation to the most directly comparable GAAP financial measure for core net income, see Table 12, GAAP to Non-GAAP Reconciliation.
(4)	Tangible book value is a non-GAAP financial measure. We compute our tangible book value as the ratio of tangible stockholders’ equity to shares outstanding. Tangible stockholders’ equity is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our total stockholders’ equity. For a reconciliation to the most directly comparable GAAP financial measure for core net income, see Table 12, GAAP to Non-GAAP Reconciliation.

         

Consolidated Statements of Income			Table 2
			For the Three Months Ended
			March 31,			December 31,				March 31,
(dollars in thousands, except per share amounts)			2021			2020				2020
Interest income
Loans and lease financing			$	110,939		$	118,314			$	134,971
Available-for-sale securities				23,146			22,752				21,210
Other				491			615				2,351
Total interest income				134,576			141,681				158,532
Interest expense
Deposits				4,056			5,061				15,600
Short-term and long-term borrowings				1,362			1,393				4,249
Total interest expense				5,418			6,454				19,849
Net interest income				129,158			135,227				138,683
Provision for credit losses				—			20,000				41,200
Net interest income after provision for credit losses				129,158			115,227				97,483
Noninterest income
Service charges on deposit accounts				6,718			6,769				8,950
Credit and debit card fees				14,551			15,583				14,949
Other service charges and fees				8,846			8,404				8,539
Trust and investment services income				8,492			8,733				9,591
Bank-owned life insurance				2,389			4,159				2,260
Investment securities (losses) gains, net				—			(12	)			85
Other				2,872			9,962				4,854
Total noninterest income				43,868			53,598				49,228
Noninterest expense
Salaries and employee benefits				43,936			42,687				44,829
Contracted services and professional fees				17,188			13,940				16,055
Occupancy				7,170			7,355				7,243
Equipment				5,491			5,225				4,708
Regulatory assessment and fees				2,034			2,168				1,946
Advertising and marketing				1,591			1,096				1,823
Card rewards program				4,835			4,890				7,015
Other				14,061			10,766				12,847
Total noninterest expense				96,306			88,127				96,466
Income before provision for income taxes				76,720			80,698				50,245
Provision for income taxes				19,027			18,959				11,380
Net income			$	57,693		$	61,739			$	38,865
Basic earnings per share			$	0.44		$	0.48			$	0.30
Diluted earnings per share			$	0.44		$	0.47			$	0.30
Basic weighted-average outstanding shares				129,933,104			129,912,104				129,895,706
Diluted weighted-average outstanding shares				130,589,878			130,314,381				130,351,585

Consolidated Balance Sheets			Table 3
			March 31,				December 31,				March 31,
(dollars in thousands)			2021				2020				2020
Assets
Cash and due from banks			$	278,994			$	303,373			$	353,908
Interest-bearing deposits in other banks				983,816				737,571				698,924
Investment securities, at fair value (amortized cost: $6,708,431 as of March 31, 2021, $5,985,031 as of December 31, 2020 and $4,014,397 as of March 31, 2020)				6,692,479				6,071,415				4,058,457
Loans held for sale				9,390				11,579				8,180
Loans and leases				13,300,289				13,279,097				13,380,270
Less: allowance for credit losses				200,366				208,454				166,013
Net loans and leases				13,099,923				13,070,643				13,214,257
Premises and equipment, net				319,949				322,401				321,254
Other real estate owned and repossessed personal property				—				—				238
Accrued interest receivable				69,879				69,626				43,552
Bank-owned life insurance				468,927				466,537				455,226
Goodwill				995,492				995,492				995,492
Mortgage servicing rights				10,869				10,731				11,979
Other assets				567,878				603,463				594,424
Total assets			$	23,497,596			$	22,662,831			$	20,755,891
Liabilities and Stockholders' Equity
Deposits:
Interest-bearing			$	11,958,606			$	11,705,609			$	11,274,463
Noninterest-bearing				8,175,075				7,522,114				5,745,539
Total deposits				20,133,681				19,227,723				17,020,002
Short-term borrowings				—				—				400,000
Long-term borrowings				200,010				200,010				200,019
Retirement benefits payable				143,736				143,373				138,396
Other liabilities				336,539				347,621				332,789
Total liabilities				20,813,966				19,918,727				18,091,206
Stockholders' equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 140,455,180 / 129,749,890 shares as of March 31, 2021, issued/outstanding: 140,191,133 / 129,912,272 shares as of December 31, 2020 and issued/outstanding: 140,092,172 / 129,827,968 shares as of March 31, 2020)				1,405				1,402				1,401
Additional paid-in capital				2,517,048				2,514,014				2,506,477
Retained earnings				497,418				473,974				429,323
Accumulated other comprehensive (loss) income, net				(43,435	)			31,604				4,129
Treasury stock (10,705,290 shares as of March 31, 2021, 10,278,861 shares as of December 31, 2020 and 10,264,204 shares as of March 31, 2020)				(288,806	)			(276,890	)			(276,645	)
Total stockholders' equity				2,683,630				2,744,104				2,664,685
Total liabilities and stockholders' equity			$	23,497,596			$	22,662,831			$	20,755,891

Average Balances and Interest Rates																							Table 4
		Three Months Ended								Three Months Ended								Three Months Ended
		March 31, 2021								December 31, 2020								March 31, 2020
		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		$	938.7		$	0.2		0.10	%	$	688.1		$	0.2		0.10	%	$	516.8		$	1.6		1.25	%
Available-for-Sale Investment Securities
Taxable			5,949.9			22.1		1.49			5,632.9			22.0		1.56			4,033.2			21.2		2.10
Non-Taxable			278.0			1.3		1.80			220.0			0.9		1.74			—			—		—
Total Available-for-Sale Investment Securities			6,227.9			23.4		1.50			5,852.9			22.9		1.57			4,033.2			21.2		2.10
Loans Held for Sale			9.2			0.1		2.46			16.2			0.1		2.00			15.8			0.1		1.70
Loans and Leases(1)
Commercial and industrial			3,026.7			20.4		2.74			3,077.6			22.6		2.93			2,776.2			24.6		3.56
Commercial real estate			3,385.2			24.9		2.98			3,407.2			26.2		3.06			3,433.2			34.6		4.05
Construction			746.8			5.8		3.16			703.1			5.6		3.14			538.5			5.7		4.27
Residential:
Residential mortgage			3,696.1			34.7		3.76			3,679.6			37.1		4.03			3,721.2			37.7		4.05
Home equity line			822.0			5.7		2.80			856.8			6.1		2.81			887.4			7.7		3.50
Consumer			1,323.7			17.7		5.43			1,394.5			19.0		5.43			1,611.7			23.0		5.75
Lease financing			241.8			1.8		3.02			248.2			1.8		2.89			223.2			1.6		2.85
Total Loans and Leases			13,242.3			111.0		3.39			13,367.0			118.4		3.53			13,191.4			134.9		4.11
Other Earning Assets			58.0			0.3		1.79			53.7			0.4		3.26			57.0			0.7		5.30
Total Earning Assets(2)			20,476.1			135.0		2.66			19,977.9			142.0		2.83			17,814.2			158.5		3.57
Cash and Due from Banks			294.0								289.2								327.4
Other Assets			2,174.6								2,200.9								2,171.7
Total Assets		$	22,944.7							$	22,468.0							$	20,313.3
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings		$	5,975.1		$	0.6		0.04	%	$	5,786.4		$	0.5		0.03	%		5,090.4		$	3.3		0.26	%
Money Market			3,530.0			0.4		0.05			3,440.9			0.4		0.05			3,064.8			4.6		0.61
Time			2,288.5			3.0		0.53			2,461.3			4.2		0.67			2,534.7			7.7		1.23
Total Interest-Bearing Deposits			11,793.6			4.0		0.14			11,688.6			5.1		0.17			10,689.9			15.6		0.59
Short-Term Borrowings			—			—		—			—			—		—			401.7			2.8		2.88
Long-Term Borrowings			200.0			1.4		2.76			200.0			1.4		2.77			200.0			1.4		2.77
Total Interest-Bearing Liabilities			11,993.6			5.4		0.18			11,888.6			6.5		0.22			11,291.6			19.8		0.71
Net Interest Income					$	129.6							$	135.5							$	138.7
Interest Rate Spread								2.48	%							2.61	%							2.86	%
Net Interest Margin								2.55	%							2.71	%							3.12	%
Noninterest-Bearing Demand Deposits			7,709.5								7,332.2								5,853.4
Other Liabilities			513.9								514.9								507.5
Stockholders' Equity			2,727.7								2,732.3								2,660.8
Total Liabilities and Stockholders' Equity		$	22,944.7							$	22,468.0							$	20,313.3

 

(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 $0.4 million, $0.3 million and nil for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020, respectively.

Analysis of Change in Net Interest Income											Table 5
		Three Months Ended March 31, 2021
		Compared to December 31, 2020
(dollars in millions)		Volume				Rate				Total
Change in Interest Income:
Available-for-Sale Investment Securities
Taxable		$	1.2			$	(1.1	)		$	0.1
Non-Taxable			0.3				0.1				0.4
Total Available-for-Sale Investment Securities			1.5				(1.0	)			0.5
Loans and Leases
Commercial and industrial			(0.5	)			(1.7	)			(2.2	)
Commercial real estate			(0.2	)			(1.1	)			(1.3	)
Construction			0.2				—				0.2
Residential:
Residential mortgage			0.2				(2.6	)			(2.4	)
Home equity line			(0.4	)			—				(0.4	)
Consumer			(1.3	)			—				(1.3	)
Lease financing			(0.1	)			0.1				—
Total Loans and Leases			(2.1	)			(5.3	)			(7.4	)
Other Earning Assets			0.1				(0.2	)			(0.1	)
Total Change in Interest Income			(0.5	)			(6.5	)			(7.0	)
Change in Interest Expense:
Interest-Bearing Deposits
Savings			—				0.1				0.1
Time			(0.3	)			(0.9	)			(1.2	)
Total Interest-Bearing Deposits			(0.3	)			(0.8	)			(1.1	)
Total Change in Interest Expense			(0.3	)			(0.8	)			(1.1	)
Change in Net Interest Income		$	(0.2	)		$	(5.7	)		$	(5.9	)

Analysis of Change in Net Interest Income											Table 6
		Three Months Ended March 31, 2021
		Compared to March 31, 2020
(dollars in millions)		Volume				Rate				Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks		$	0.7			$	(2.1	)		$	(1.4	)
Available-for-Sale Investment Securities
Taxable			8.2				(7.3	)			0.9
Non-Taxable			1.3				—				1.3
Total Available-for-Sale Investment Securities			9.5				(7.3	)			2.2
Loans and Leases
Commercial and industrial			2.0				(6.2	)			(4.2	)
Commercial real estate			(0.5	)			(9.2	)			(9.7	)
Construction			1.8				(1.7	)			0.1
Residential:
Residential mortgage			(0.3	)			(2.7	)			(3.0	)
Home equity line			(0.5	)			(1.5	)			(2.0	)
Consumer			(4.0	)			(1.3	)			(5.3	)
Lease financing			0.1				0.1				0.2
Total Loans and Leases			(1.4	)			(22.5	)			(23.9	)
Other Earning Assets			0.1				(0.5	)			(0.4	)
Total Change in Interest Income			8.9				(32.4	)			(23.5	)
Change in Interest Expense:
Interest-Bearing Deposits
Savings			0.5				(3.2	)			(2.7	)
Money Market			0.6				(4.8	)			(4.2	)
Time			(0.7	)			(4.0	)			(4.7	)
Total Interest-Bearing Deposits			0.4				(12.0	)			(11.6	)
Short-Term Borrowings			(1.4	)			(1.4	)			(2.8	)
Total Change in Interest Expense			(1.0	)			(13.4	)			(14.4	)
Change in Net Interest Income		$	9.9			$	(19.0	)		$	(9.1	)

Loans and Leases									Table 7
		March 31,			December 31,			March 31,
(dollars in thousands)		2021			2020			2020
Commercial and industrial:
Commercial and industrial excluding Paycheck Protection Program loans		$	1,962,672		$	2,218,266		$	3,025,345
Paycheck Protection Program loans			1,158,764			801,241			—
Total commercial and industrial			3,121,436			3,019,507			3,025,345
Commercial real estate			3,396,233			3,392,676			3,413,014
Construction			739,271			735,819			572,062
Residential:
Residential mortgage			3,715,676			3,690,218			3,673,455
Home equity line			805,746			841,624			891,698
Total residential			4,521,422			4,531,842			4,565,153
Consumer			1,283,779			1,353,842			1,568,073
Lease financing			238,148			245,411			236,623
Total loans and leases		$	13,300,289		$	13,279,097		$	13,380,270

Deposits										Table 8
			March 31,			December 31,			March 31,
(dollars in thousands)			2021			2020			2020
Demand			$	8,175,075		$	7,522,114		$	5,745,539
Savings				6,141,161			6,020,075			5,213,471
Money Market				3,642,604			3,337,236			3,148,694
Time				2,174,841			2,348,298			2,912,298
Total Deposits			$	20,133,681		$	19,227,723		$	17,020,002

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)			2021			2020			2020
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial Loans:
Commercial and industrial			$	593		$	518		$	32
Commercial real estate				937			80			—
Construction				579			2,043			2,422
Total Commercial Loans				2,109			2,641			2,454
Residential Loans:
Residential mortgage				6,999			6,441			4,472
Total Residential Loans				6,999			6,441			4,472
Total Non-Accrual Loans and Leases				9,108			9,082			6,926
Other Real Estate Owned				—			—			238
Total Non-Performing Assets			$	9,108		$	9,082		$	7,164
Accruing Loans and Leases Past Due 90 Days or More
Commercial Loans:
Commercial and industrial			$	1,365		$	2,108		$	4,007
Commercial real estate				1,054			882			757
Construction				89			93			148
Total Commercial Loans				2,508			3,083			4,912
Residential Loans:
Residential mortgage				—			—			82
Home equity line				4,975			4,818			2,566
Total Residential Loans				4,975			4,818			2,648
Consumer				2,024			3,266			3,353
Total Accruing Loans and Leases Past Due 90 Days or More			$	9,507		$	11,167		$	10,913
Restructured Loans on Accrual Status and Not Past Due 90 Days or More			$	39,831		$	16,684		$	17,823
Total Loans and Leases			$	13,300,289		$	13,279,097		$	13,380,270

Allowance for Credit Losses												Table 10
			For the Three Months Ended
			March 31,				December 31,				March 31,
(dollars in thousands)			2021				2020				2020
Balance at Beginning of Period			$	208,454			$	195,876			$	130,530
Adjustment to Adopt ASC Topic 326				—				—				770
After Adoption of ASC Topic 326				208,454				195,876				131,300
Loans and Leases Charged-Off
Commercial Loans:
Commercial and industrial				(963	)			(799	)			(201	)
Commercial real estate				(66	)			(30	)			—
Total Commercial Loans				(1,029	)			(829	)			(201	)
Residential Loans:
Residential mortgage				(98	)			—				—
Home equity line				—				(46	)			(8	)
Total Residential Loans				(98	)			(46	)			(8	)
Consumer				(6,541	)			(7,049	)			(8,597	)
Total Loans and Leases Charged-Off				(7,668	)			(7,924	)			(8,806	)
Recoveries on Loans and Leases Previously Charged-Off
Commercial Loans:
Commercial and industrial				215				2,986				220
Commercial real estate				3				615				—
Construction				166				30				110
Total Commercial Loans				384				3,631				330
Residential Loans:
Residential mortgage				17				37				135
Home equity line				24				21				122
Total Residential Loans				41				58				257
Consumer				2,655				2,812				2,083
Total Recoveries on Loans and Leases Previously Charged-Off				3,080				6,501				2,670
Net Loans and Leases Charged-Off				(4,588	)			(1,423	)			(6,136	)
Provision for Credit Losses - Loans and Leases				(3,500	)			14,001				40,849
Balance at End of Period			$	200,366			$	208,454			$	166,013
Average Loans and Leases Outstanding			$	13,242,270			$	13,366,980			$	13,191,426
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)				0.14		%		0.04		%		0.19		%
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding				1.51		%		1.57		%		1.24		%

(1)	Annualized for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020.

Loans and Leases by Year of Origination and Credit Quality Indicator																											Table 11
																							Revolving
																							Loans
																							Converted
		Term Loans																		Revolving			to Term
		Amortized Cost Basis by Origination Year																		Loans			Loans
																				Amortized			Amortized
(dollars in thousands)		2021			2020			2019			2018			2017			Prior			Cost Basis			Cost Basis			Total
Commercial Lending
Commercial and Industrial
Risk rating:
Pass		$	495,898		$	781,914		$	315,190		$	152,290		$	51,136		$	218,781		$	785,046		$	27,922		$	2,828,177
Special Mention			—			17,608			10,957			19,751			1,930			5,373			66,867			607			123,093
Substandard			—			23,098			2,808			16,913			584			12,048			28,361			1,367			85,179
Other (1)			3,252			9,848			11,793			7,889			4,362			1,496			46,347			—			84,987
Total Commercial and Industrial			499,150			832,468			340,748			196,843			58,012			237,698			926,621			29,896			3,121,436
Commercial Real Estate
Risk rating:
Pass			41,958			346,445			613,930			556,954			454,433			1,104,669			51,280			8			3,169,677
Special Mention			—			1,491			58,763			14,518			33,401			64,971			—			—			173,144
Substandard			—			346			—			14,751			3,740			26,082			8,004			—			52,923
Other (1)			—			—			—			—			—			489			—			—			489
Total Commercial Real Estate			41,958			348,282			672,693			586,223			491,574			1,196,211			59,284			8			3,396,233
Construction
Risk rating:
Pass			32,201			73,512			260,522			162,052			58,537			63,624			24,043			—			674,491
Special Mention			—			—			507			706			4,429			9,172			—			—			14,814
Substandard			—			—			—			536			—			1,478			—			—			2,014
Other (1)			5,410			16,755			9,924			7,588			3,655			4,040			580			—			47,952
Total Construction			37,611			90,267			270,953			170,882			66,621			78,314			24,623			—			739,271
Lease Financing
Risk rating:
Pass			6,487			73,461			58,375			12,521			16,410			60,734			—			—			227,988
Special Mention			566			334			843			286			1,223			599			—			—			3,851
Substandard			—			2,714			1,673			293			1,107			522			—			—			6,309
Total Lease Financing			7,053			76,509			60,891			13,100			18,740			61,855			—			—			238,148
Total Commercial Lending		$	585,772		$	1,347,526		$	1,345,285		$	967,048		$	634,947		$	1,574,078		$	1,010,528		$	29,904		$	7,495,088

																							Revolving
																							Loans
																							Converted
		Term Loans																		Revolving			to Term
		Amortized Cost Basis by Origination Year																		Loans			Loans
(continued)																				Amortized			Amortized
(dollars in thousands)		2021			2020			2019			2018			2017			Prior			Cost Basis			Cost Basis			Total
Residential Lending
Residential Mortgage
FICO:
740 and greater		$	269,847		$	698,143		$	355,459		$	261,304		$	320,423		$	1,031,922		$	—		$	—		$	2,937,098
680 - 739			32,425			83,210			51,384			41,764			48,039			168,279			—			—			425,101
620 - 679			4,220			15,727			7,626			11,214			9,310			49,018			—			—			97,115
550 - 619			—			—			1,945			2,810			2,906			14,044			—			—			21,705
Less than 550			—			—			854			602			2,914			2,673			—			—			7,043
No Score (3)			4,599			12,498			17,761			21,197			19,972			55,404			—			—			131,431
Other (2)			5,767			20,213			13,584			13,754			20,607			21,516			580			162			96,183
Total Residential Mortgage			316,858			829,791			448,613			352,645			424,171			1,342,856			580			162			3,715,676
Home Equity Line
FICO:
740 and greater			—			—			—			—			—			—			589,662			2,108			591,770
680 - 739			—			—			—			—			—			—			149,384			3,537			152,921
620 - 679			—			—			—			—			—			—			37,325			1,432			38,757
550 - 619			—			—			—			—			—			—			12,870			1,419			14,289
Less than 550			—			—			—			—			—			—			3,641			359			4,000
No Score (3)			—			—			—			—			—			—			4,009			—			4,009
Total Home Equity Line			—			—			—			—			—			—			796,891			8,855			805,746
Total Residential Lending			316,858			829,791			448,613			352,645			424,171			1,342,856			797,471			9,017			4,521,422
Consumer Lending
FICO:
740 and greater			37,038			105,809			109,925			86,146			44,909			22,098			107,725			266			513,916
680 - 739			19,163			79,376			82,058			58,077			31,081			16,370			72,053			774			358,952
620 - 679			6,167			38,079			44,459			30,055			21,453			11,715			33,935			1,213			187,076
550 - 619			337			8,215			18,414			15,800			13,267			8,437			11,582			1,364			77,416
Less than 550			88			2,644			8,907			7,785			5,711			3,445			4,181			719			33,480
No Score (3)			955			354			99			57			99			7			32,161			411			34,143
Other (2)			—			376			1,774			66			2,183			6,748			67,649			—			78,796
Total Consumer Lending			63,748			234,853			265,636			197,986			118,703			68,820			329,286			4,747			1,283,779
Total Loans and Leases		$	966,378		$	2,412,170		$	2,059,534		$	1,517,679		$	1,177,821		$	2,985,754		$	2,137,285		$	43,668		$	13,300,289

(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 12
			For the Three Months Ended
			March 31,			December 31,			March 31,
(dollars in thousands, except per share amounts)			2021			2020			2020
Income Statement Data:
Net income			$	57,693		$	61,739		$	38,865
Core net income			$	57,693		$	65,288		$	38,803
Average total stockholders' equity			$	2,727,701		$	2,732,271		$	2,660,811
Less: average goodwill				995,492			995,492			995,492
Average tangible stockholders' equity			$	1,732,209		$	1,736,779		$	1,665,319
Average total assets			$	22,944,699		$	22,468,040		$	20,313,304
Less: average goodwill				995,492			995,492			995,492
Average tangible assets			$	21,949,207		$	21,472,548		$	19,317,812
Return on average total stockholders' equity(1)				8.58	%		8.99	%		5.87	%
Core return on average total stockholders' equity (non-GAAP)(1)				8.58	%		9.51	%		5.87	%
Return on average tangible stockholders' equity (non-GAAP)(1)				13.51	%		14.14	%		9.39	%
Core return on average tangible stockholders' equity (non-GAAP)(1)				13.51	%		14.95	%		9.37	%
Return on average total assets(1)				1.02	%		1.09	%		0.77	%
Core return on average total assets (non-GAAP)(1)				1.02	%		1.16	%		0.77	%
Return on average tangible assets (non-GAAP)(1)				1.07	%		1.14	%		0.81	%
Core return on average tangible assets (non-GAAP)(1)				1.07	%		1.21	%		0.81	%

			As of			As of			As of
			March 31,			December 31,			March 31,
			2021			2020			2020
Balance Sheet Data:
Total stockholders' equity			$	2,683,630		$	2,744,104		$	2,664,685
Less: goodwill				995,492			995,492			995,492
Tangible stockholders' equity			$	1,688,138		$	1,748,612		$	1,669,193
Total assets			$	23,497,596		$	22,662,831		$	20,755,891
Less: goodwill				995,492			995,492			995,492
Tangible assets			$	22,502,104		$	21,667,339		$	19,760,399
Shares outstanding				129,749,890			129,912,272			129,827,968
Total stockholders' equity to total assets				11.42	%		12.11	%		12.84	%
Tangible stockholders' equity to tangible assets (non-GAAP)				7.50	%		8.07	%		8.45	%
Book value per share			$	20.68		$	21.12		$	20.52
Tangible book value per share (non-GAAP)			$	13.01		$	13.46		$	12.86

 

(1)	Annualized for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020.

GAAP to Non-GAAP Reconciliation											Table 13
			For the Three Months Ended
			March 31,			December 31,				March 31,
(dollars in thousands, except per share amounts)			2021			2020				2020
Net interest income			$	129,158		$	135,227			$	138,683
Core net interest income (non-GAAP)			$	129,158		$	135,227			$	138,683
Noninterest income			$	43,868		$	53,598			$	49,228
Losses (gains) on sale of securities				—			12				(85	)
Costs associated with the sale of stock(1)				—			4,828				—
Core noninterest income (non-GAAP)			$	43,868		$	58,438			$	49,143
Noninterest expense			$	96,306		$	88,127			$	96,466
Core noninterest expense (non-GAAP)			$	96,306		$	88,127			$	96,466
Net income			$	57,693		$	61,739			$	38,865
Losses (gains) on sale of securities				—			12				(85	)
Costs associated with the sale of stock(1)				—			4,828				—
Tax adjustments(2)				—			(1,291	)			23
Total core adjustments				—			3,549				(62	)
Core net income (non-GAAP)			$	57,693		$	65,288			$	38,803
Basic earnings per share			$	0.44		$	0.48			$	0.30
Diluted earnings per share			$	0.44		$	0.47			$	0.30
Efficiency ratio				55.53	%		46.59	%			51.33	%
Core basic earnings per share (non-GAAP)			$	0.44		$	0.50			$	0.30
Core diluted earnings per share (non-GAAP)			$	0.44		$	0.50			$	0.30
Core efficiency ratio (non-GAAP)				55.53	%		45.43	%			51.35	%

(1)	Costs associated with the sale of stock for the three months ended December 31, 2020 related to changes in the valuation of the funding swap entered into with the buyer of our Visa Class B restricted shares sold in 2016.
(2)	Represents the adjustments to net income, tax effected at the Company’s effective tax rate for the respective period.