EX-99.1 2 ex-99d1.htm EX-99.1 fnb_Ex_99_1

EXHIBIT 99.1

Picture 1

 

For Immediate Release

First Hawaiian, Inc. Reports Fourth Quarter and Full Year 2017 Financial Results and Increases Dividend by 9.1%

HONOLULU, Hawaii January 25, 2018 -- (Globe Newswire) -- First Hawaiian, Inc. (NASDAQ:FHB), (the “Company”) today reported financial results for its fourth quarter and full year ended December 31, 2017.

Highlights

·

Net income for the quarter ended December 31, 2017 and the full year 2017 was $11.7 million, or $0.08 per diluted share, and $183.7 million, or $1.32 per diluted share, respectively.

·

Core net income1 for the quarter ended December 31, 2017 and the full year 2017, which primarily excludes the impact of a one-time charge to provision for income taxes of $47.6 million due to the revaluation of certain tax-related assets at the projected lower corporate tax rate resulting from the Tax Cuts and Jobs Act, was $59.2 million, or $0.42 per diluted share, and $230.4 million, or $1.65 per diluted share, respectively.

·

The Board of Directors increased the quarterly dividend by 9.1% to $0.24 per share.

“2017 was another successful year for First Hawaiian, and we were able to cap it off with a strong fourth quarter,” said Bob Harrison, Chairman and Chief Executive Officer. “We were also pleased to see the benefits from key strategic initiatives. In residential lending, we are starting to see initial results from the shift in our mortgage lending model, and our commitment to small business lending was recognized by the Small Business Administration (“SBA”), as we were named Hawaii’s 2017 SBA Lender of the Year – Category 1 and 2017 SBA 504 Lender of the Year.”

On January 24, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.24 per share, an increase of $0.02 per share from the dividend paid in December 2017. The dividend will be payable on March 9, 2018 to shareholders of record at the close of business on February 26, 2018.

Earnings Highlights

Net income for the quarter ended December 31, 2017 was $11.7 million, or $0.08 per diluted share, compared to $58.4 million, or $0.42 per diluted share, for the quarter ended September 30, 2017, and $56.6 million, or $0.41 per diluted share, for the quarter ended December 31, 2016. Core net income for the quarter ended December 31, 2017 was $59.2 million, or $0.42 per diluted share, compared to $57.0 million, or $0.41 per diluted share, for the quarter ended September 30, 2017, and $56.0 million, or $0.40 per diluted share, for the quarter ended December 31, 2016. Net income for the full year 2017 was $183.7 million, or $1.32 per diluted share, compared to $230.2 million, or $1.65 per diluted share, for the full year 2016. Core net income for the full year 2017 was $230.4 million, or $1.65 per diluted share, compared to $217.1 million, or $1.56 per diluted share for the full year 2016.

Net interest income for the quarter ended December 31, 2017 was $134.9 million, an increase of $1.6 million compared to $133.3 million for the quarter ended September 30, 2017, and an increase of $3.6 million compared to $131.3 million for the quarter ended December 31, 2016.  The increase in net interest income compared to the third quarter of 2017 was due to higher average balances of loans and investment securities and higher yields on investment securities, partially offset by higher rates on deposits. The increase in net interest income compared to the fourth quarter of 2016 was due to higher average balances of loans and higher yields on loans, interest-bearing deposits in other banks, and investment securities, partially offset by higher rates on deposits. Net interest income for the full year 2017 was $528.8 million compared to $491.7 million for 2016.  The increase in net interest income was primarily attributable to higher average balances and yields on loans and investment securities, partially offset by higher rates on deposits.

Net interest margin (“NIM”) was 2.99%, 2.96% and 2.99%, for the quarters ended December 31, 2017, September 30, 2017 and December 31, 2016, respectively. The increase in NIM as compared to the prior quarter was due to increased overall yields on earnings assets, offset by higher deposit costs.

Results for the quarter ended December 31, 2017 included a provision for credit losses of $5.1 million compared to $4.5 million in the quarter ended September 30, 2017 and $3.9 million in the quarter ended December 31, 2016. The provision for credit losses for the full year of 2017 was $18.5 million, compared to $8.6 million in 2016.

1Core net income is a non-GAAP measure. For more information on this measure, including a reconciliation to the most directly comparable GAAP measure, see “Use of Non-GAAP Financial Measures” and Tables 13 and 14 at the end of this document.

 

Noninterest income was $54.3 million in the quarter ended December 31, 2017, an increase of $4.6 million compared to noninterest income of $49.7 million in the quarter ended September 30, 2017 and an increase of $3.3 million compared to noninterest income of $51.0 million in the quarter ended December 31, 2016. The increase in noninterest income compared to the third quarter was due to $6.2 million higher other noninterest income, primarily due to a $4.3 million gain on sale of a bank property, compared to a $2.7 million gain on sale of a bank property in the third quarter, and $3.7 million related to intercompany taxes. The increase in noninterest income compared to the fourth quarter of 2016 was primarily due to $5.1 million higher other noninterest income, primarily offset by $1.5 million lower investment securities gains. Noninterest income for full year 2017 was $205.6 million compared to $226.0 million for 2016. The $20.4 million lower noninterest income in 2017 compared to 2016 was primarily due to $27.3 lower investment securities gains, partially offset by higher other noninterest income. Investment securities gains in 2016 included a gain of $22.7 million from the sale of Visa Class B shares.

Noninterest expense was $89.9 million for the quarter ended December 31, 2017, an increase of $5.1 million from $84.8 million in the quarter ended September 30, 2017, and an increase of $5.4 million from $84.5 million in the quarter ended December 31, 2016.  The increase in noninterest expense compared to the third quarter of 2017 was primarily due to $5.6 million higher salaries and employee benefits and $0.8 million higher cards rewards program expenses, partially offset by $1.1 million lower advertising and marketing expenses and $1.1 million lower other expenses.  Salaries and benefits in the fourth quarter included a $3.7 million expense due to the $1,500 bonuses awarded to virtually all employees following the passage of the Tax Cuts and Jobs Act, higher compensation for tellers due to the previously disclosed salary adjustment and higher compensation due to the change in mortgage origination model. The increase in noninterest expense compared to the fourth quarter of 2016 was primarily due to a $6.7 million increase in salaries and benefits, offset by lower expenses in other noninterest expense categories. Noninterest expense for full year 2017 was $347.6 million compared to $337.3 million in 2016, an increase of $10.3 million, primarily due to $6.1 million higher salaries and employee benefits and higher expenses in other noninterest expense categories.

The efficiency ratio was 47.5%, 46.3% and 46.4% for the quarters ended December 31, 2017, September 30, 2017 and December 31, 2016, respectively. The efficiency ratio for full year 2017 was 47.3% compared to 47.0% in 2016.

The provision for taxes in the fourth quarter of 2017 included a $47.6 million charge due to the revaluation of certain tax-related assets at the projected lower corporate tax rate resulting from the Tax Cuts and Jobs Act. Excluding the one-time charge, the effective tax rate for the fourth quarter of 2017 was 37.1% compared with 37.7% in the previous quarter and 39.8% percent in the same quarter last year. Excluding the one-time charge in the fourth quarter of 2017, the effective tax rate for the full year 2017 was 37.2% compared with 38.1% in 2016.

Subsequent to the issuance of the Company’s interim condensed consolidated financial statements as of September 30, 2017, the Company’s management determined that certain expenses were misclassified in prior periods. As a result, certain noninterest income and noninterest expense amounts have been revised from the amounts previously reported to correct the misclassifications. There was no change to net income or earnings per share as previously reported as a result of correcting these misclassifications. A full explanation of the adjustments can be found in the footnote to Table 1.

Balance Sheet Highlights

Total assets were $20.5 billion at December 31, 2017, compared to $20.6 billion at September 30, 2017 and $19.7 billion at December 31, 2016.

The investment securities portfolio was $5.2 billion at December 31, 2017, compared to $5.3 billion at September 30, 2017 and $5.1 billion at December 31, 2016. The portfolio remains largely comprised of securities issued by U. S. government agencies.

Total loans and leases were $12.3 billion at December 31, 2017, up 1.1% from $12.1 billion at September 30, 2017 and up 6.6% from $11.5 billion at December 31, 2016.

The growth in loans and leases in the most recent quarter was due to increases in residential real estate loans of $88.6 million, commercial real estate loans of $41.9 million, construction loans of $34.1 million and consumer loans of $24.3 million. Commercial and industrial loans declined by $55.0 million. The decline in commercial and industrial loans was due to pay downs in the shared national credit portfolio.  Compared to December 31, 2016, the growth in loans and leases was due to increases in commercial real estate loans of $324.1 million, residential real estate loans of $293.6 million, construction loans of $182.9 million and consumer loans of $75.7 million. Commercial and industrial loans declined by $104.3 million.

Total deposits were $17.6 billion at December 31, 2017, unchanged from $17.6 billion at September 30, 2017, and an increase of $0.8 billion, or 4.9%, compared to $16.8 billion at December 31, 2016.

Asset Quality

The Company’s  asset quality remained excellent during the fourth quarter of 2017. Total non-performing assets were $10.2 million, or 0.08% of total loans and leases and other real estate owned, at December 31, 2017, compared to non-performing assets of $8.4 million, or 0.07% of total loans and leases and other real estate owned, at September 30, 2017 and non-performing assets of $9.8 million, or 0.08% of total loans and leases and other real estate owned, at December 31, 2016.

 

Net charge offs for the quarter ended December 31, 2017 were $5.2 million, or 0.17% of average loans and leases on an annualized basis, compared to $4.1 million, or 0.13% of average loans and leases on an annualized basis for the quarter ended September 30, 2017 and $3.4 million, or 0.12% of average loans and leases on an annualized basis for the quarter ended December 31, 2016. Net charge-offs for the full year 2017 were $16.7 million, or 0.14% of average loans and leases, compared to net charge-offs of $8.6 million, or 0.08% of average loans and leases, in 2016.

The ratio of the allowance for loan and lease losses to total loans and leases was 1.12% at December 31, 2017 compared to 1.13% at September 30, 2017 and 1.18% at December 31, 2016.

Capital

Total stockholders’ equity was $2.5 billion at December 31, 2017, compared to $2.6 billion at September 30, 2017 and $2.5 billion at December 31, 2016.

The tier 1 leverage, common equity tier 1 and total capital ratios were 8.52%, 12.45% and 13.50%, respectively, at December 31, 2017, compared with 8.66%, 12.71% and 13.77% at September 30, 2017 and 8.36%, 12.75% and 13.85% at December 31, 2016.

First Hawaiian, Inc.

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

Conference Call Information

First Hawaiian will host a conference call to discuss the Company’s results today at 5:00 p.m. Eastern Time, 12:00 p.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: 6158609. A live webcast of the conference call, including a slide presentation, will be available at the following link: www.fhb.com/earnings. The archive of the webcast will be available at the same location. A telephonic replay of the conference call will be available two hours after the conclusion of the call until 8:30 p.m. (Eastern Time) on February 4, 2018. Access the replay by dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID: 6158609.  

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized” and “outlook”, or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. For a discussion of some of the risks and important factors that could affect our future results and financial condition, see our U.S. Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our annual report on Form 10-K for the year ended December 31, 2016.

Use of Non-GAAP Financial Measures

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

 

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

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

Tables 13 and 14 at the end of this document provide a reconciliation of these non-GAAP financial measures with their most closely related GAAP measures.

 

 

Investor Relations Contact:

Media Contact:

Kevin Haseyama, CFA

Susan Kam

(808) 525‑6268

(808) 525‑6254

khaseyama@fhb.com

skam@fhb.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

Table 1

 

 

 

For the Three Months Ended

 

For the Year Ended

 

 

 

December 31, 

 

September 30,

 

December 31, 

 

December 31, 

 

(dollars in thousands, except per share data)

    

2017

    

2017

    

2016

    

2017

    

2016

 

Operating Results:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

134,886

 

$

133,319

 

$

131,250

 

$

528,804

 

$

491,672

 

Provision for loan and lease losses

 

 

5,100

 

 

4,500

 

 

3,900

 

 

18,500

 

 

8,600

 

Noninterest income(1)

 

 

54,324

 

 

49,664

 

 

50,984

 

 

205,605

 

 

226,037

 

Noninterest expense(1)

 

 

89,850

 

 

84,784

 

 

84,466

 

 

347,554

 

 

337,280

 

Net income

 

 

11,684

 

 

58,363

 

 

56,552

 

 

183,682

 

 

230,178

 

Basic earnings per share

 

 

0.08

 

 

0.42

 

 

0.41

 

 

1.32

 

 

1.65

 

Diluted earnings per share

 

 

0.08

 

 

0.42

 

 

0.41

 

 

1.32

 

 

1.65

 

Dividends declared per share

 

 

0.22

 

 

0.22

 

 

0.20

 

 

0.88

 

 

0.62

 

Dividend payout ratio

 

 

275.00

%

 

52.38

%

 

49.35

%

 

66.67

%

 

37.27

%

Supplemental Income Statement Data (non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core net interest income

 

$

134,886

 

$

133,319

 

$

131,250

 

$

528,804

 

$

491,672

 

Core noninterest income(1)

 

 

50,069

 

 

46,997

 

 

49,468

 

 

198,683

 

 

198,793

 

Core noninterest expense(1)

 

 

85,777

 

 

84,241

 

 

83,883

 

 

342,097

 

 

331,060

 

Core net income

 

 

59,163

 

 

57,040

 

 

56,001

 

 

230,366

 

 

217,111

 

Core basic earnings per share

 

 

0.42

 

 

0.41

 

 

0.40

 

 

1.65

 

 

1.56

 

Core diluted earnings per share

 

 

0.42

 

 

0.41

 

 

0.40

 

 

1.65

 

 

1.56

 

Performance Ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

2.99

%  

 

2.96

%  

 

2.99

%  

 

2.99

%  

 

2.88

%

Core net interest margin (non-GAAP)

 

 

2.99

%  

 

2.96

%  

 

2.99

%  

 

2.99

%  

 

2.88

%

Efficiency ratio(1)

 

 

47.47

%  

 

46.33

%  

 

46.35

%  

 

47.32

%  

 

46.99

%

Core efficiency ratio (non-GAAP)(1)

 

 

46.36

%  

 

46.72

%  

 

46.41

%  

 

47.02

%  

 

47.94

%

Return on average total assets

 

 

0.23

%  

 

1.15

%  

 

1.14

%  

 

0.92

%  

 

1.19

%

Core return on average total assets (non-GAAP)

 

 

1.16

%  

 

1.13

%  

 

1.13

%  

 

1.16

%  

 

1.12

%

Return on average tangible assets

 

 

0.24

%  

 

1.21

%  

 

1.20

%  

 

0.97

%  

 

1.26

%

Core return on average tangible assets (non-GAAP)

 

 

1.22

%  

 

1.18

%  

 

1.19

%  

 

1.22

%  

 

1.18

%

Return on average total stockholders' equity

 

 

1.80

%  

 

9.03

%  

 

8.97

%  

 

7.24

%  

 

8.96

%

Core return on average total stockholders' equity (non-GAAP)

 

 

9.13

%  

 

8.82

%  

 

8.88

%  

 

9.08

%  

 

8.45

%

Return on average tangible stockholders' equity (non-GAAP)

 

 

2.94

%  

 

14.76

%  

 

14.88

%  

 

11.91

%  

 

14.64

%

Core return on average tangible stockholders’ equity (non-GAAP)

 

 

14.90

%  

 

14.42

%  

 

14.73

%  

 

14.93

%  

 

13.80

%

Average Balances:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average loans and leases

 

$

12,169,167

 

$

12,115,001

 

$

11,531,684

 

$

11,944,596

 

$

11,175,213

 

Average earning assets

 

 

17,904,956

 

 

17,867,021

 

 

17,482,648

 

 

17,680,885

 

 

17,093,114

 

Average assets

 

 

20,193,919

 

 

20,109,090

 

 

19,778,918

 

 

19,942,807

 

 

19,334,653

 

Average deposits

 

 

17,211,872

 

 

17,165,355

 

 

16,861,525

 

 

17,016,382

 

 

16,275,811

 

Average shareholders' equity

 

 

2,570,704

 

 

2,564,563

 

 

2,507,514

 

 

2,538,341

 

 

2,568,219

 

Market Value Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Closing

 

 

29.18

 

 

30.29

 

 

34.82

 

 

29.18

 

 

34.82

 

    High

 

 

30.85

 

 

31.48

 

 

35.47

 

 

35.32

 

 

35.47

 

    Low

 

 

27.34

 

 

26.30

 

 

25.80

 

 

26.30

 

 

24.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

As of

 

As of

 

 

 

 

December 31, 

 

September 30,

 

December 31, 

 

 

 

    

2017

 

2017

 

2016

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

Loans and leases

 

 

$

12,277,369

 

$

12,149,711

 

$

11,520,378

 

Total assets

 

 

 

20,549,461

 

 

20,565,627

 

 

19,661,829

 

Total deposits

 

 

 

17,612,122

 

 

17,595,483

 

 

16,794,532

 

Total stockholders' equity

 

 

 

2,532,551

 

 

2,581,858

 

 

2,476,485

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share of Common Stock:

 

 

 

 

 

 

 

 

 

 

 

Book value

 

 

$

18.14

 

$

18.50

 

$

17.75

 

Tangible book value (non-GAAP)

 

 

 

11.01

 

 

11.36

 

 

10.61

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans and leases / total loans and leases

 

 

 

0.08

%  

 

0.06

%

 

0.08

%  

Allowance for loan and lease losses / total loans and leases

 

 

 

1.12

%  

 

1.13

%

 

1.18

%  

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital Ratio

 

 

 

  

12.45

%  

  

12.71

%

  

12.75

%  

Tier 1 Capital Ratio

 

 

 

12.45

%  

 

12.71

%

 

12.75

%  

Total Capital Ratio

 

 

 

13.50

%  

 

13.77

%

 

13.85

%  

Tier 1 Leverage Ratio

 

 

 

8.52

%  

 

8.66

%

 

8.36

%  

Total stockholders' equity to total assets

 

 

 

12.32

%  

 

12.55

%

 

12.60

%  

Tangible stockholders' equity to tangible assets (non-GAAP)

 

 

 

7.86

%  

 

8.11

%

 

7.93

%  

 

 

 

 

 

 

 

 

 

 

 

 

Non-Financial Data:

 

 

 

 

 

 

 

 

 

 

 

Number of branches

 

 

 

62

 

 

62

 

 

62

 

Number of ATMs

 

 

 

310

 

 

312

 

 

311

 

Number of Full-Time Equivalent Employees

 

 

 

2,220

 

 

2,184

 

 

2,179

 

(1)

Subsequent to the issuance of the Company’s interim condensed consolidated financial statements as of September 30, 2017, the Company’s management determined that certain expenses related to the card rewards program were incorrectly offset against credit and debit card fee income and credit card interchange assessment fees were incorrectly classified in card rewards program expenses versus credit and debit card fee income in the interim condensed consolidated statements of income for the three months ended September 30, 2017 and December 31, 2016, and consolidated statement of income for the year ended December 31, 2016. As a result, certain noninterest income and noninterest expense amounts have been revised from the amounts previously reported to correct the classification errors. There was no change to net income or earnings per share as previously reported as a result of these errors. Management has evaluated the materiality of these errors on its prior period financial statements from a quantitative and qualitative perspective, and has concluded that these errors were not material to any prior annual or interim period.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Income

 

Table 2

 

 

Three Months Ended

 

For the Year Ended

 

 

December 31, 

 

September 30,

 

December 31, 

 

December 31, 

(dollars in thousands, except per share amounts)

    

2017

    

2017

    

2016

    

2017

    

2016

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and lease financing

 

$

120,244

 

$

118,986

 

$

111,461

 

$

462,675

 

$

428,419

Available-for-sale securities

 

 

26,589

 

 

24,195

 

 

25,884

 

 

102,272

 

 

83,019

Other

 

 

1,725

 

 

2,089

 

 

968

 

 

5,821

 

 

7,082

Total interest income

 

 

148,558

 

 

145,270

 

 

138,313

 

 

570,768

 

 

518,520

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

13,665

 

 

11,949

 

 

7,048

 

 

41,944

 

 

26,650

Short-term borrowings and long-term debt

 

 

 7

 

 

 2

 

 

15

 

 

20

 

 

198

Total interest expense

 

 

13,672

 

 

11,951

 

 

7,063

 

 

41,964

 

 

26,848

Net interest income

 

 

134,886

 

 

133,319

 

 

131,250

 

 

528,804

 

 

491,672

Provision for loan and lease losses

 

 

5,100

 

 

4,500

 

 

3,900

 

 

18,500

 

 

8,600

Net interest income after provision for loan and lease losses

 

 

129,786

 

 

128,819

 

 

127,350

 

 

510,304

 

 

483,072

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

8,259

 

 

8,929

 

 

9,208

 

 

35,807

 

 

37,392

Credit and debit card fees

 

 

15,599

 

 

16,126

 

 

16,482

 

 

64,049

 

 

65,262

Other service charges and fees

 

 

8,346

 

 

8,510

 

 

8,446

 

 

34,063

 

 

35,355

Trust and investment services income

 

 

7,949

 

 

7,672

 

 

7,204

 

 

30,485

 

 

29,440

Bank-owned life insurance

 

 

2,659

 

 

3,119

 

 

1,758

 

 

13,283

 

 

15,021

Investment securities gains, net

 

 

 —

 

 

 —

 

 

1,516

 

 

 —

 

 

27,277

Other

 

 

11,512

 

 

5,308

 

 

6,370

 

 

27,918

 

 

16,290

Total noninterest income

 

 

54,324

 

 

49,664

 

 

50,984

 

 

205,605

 

 

226,037

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

47,215

 

 

41,579

 

 

40,471

 

 

175,351

 

 

169,233

Contracted services and professional fees

 

 

11,481

 

 

10,834

 

 

12,221

 

 

45,011

 

 

45,345

Occupancy

 

 

6,103

 

 

6,238

 

 

5,501

 

 

23,485

 

 

21,606

Equipment

 

 

4,349

 

 

4,174

 

 

4,777

 

 

17,247

 

 

16,912

Regulatory assessment and fees

 

 

3,715

 

 

3,668

 

 

4,103

 

 

14,907

 

 

12,972

Advertising and marketing

 

 

936

 

 

2,005

 

 

1,309

 

 

6,191

 

 

6,127

Card rewards program

 

 

6,256

 

 

5,438

 

 

6,357

 

 

23,363

 

 

22,459

Other

 

 

9,795

 

 

10,848

 

 

9,727

 

 

41,999

 

 

42,626

Total noninterest expense

 

 

89,850

 

 

84,784

 

 

84,466

 

 

347,554

 

 

337,280

Income before provision for income taxes

 

 

94,260

 

 

93,699

 

 

93,868

 

 

368,355

 

 

371,829

Provision for income taxes

 

 

82,576

 

 

35,336

 

 

37,316

 

 

184,673

 

 

141,651

Net income

 

$

11,684

 

$

58,363

 

$

56,552

 

$

183,682

 

$

230,178

Basic earnings per share

 

$

0.08

 

$

0.42

 

$

0.41

 

$

1.32

 

$

1.65

Diluted earnings per share

 

$

0.08

 

$

0.42

 

$

0.41

 

$

1.32

 

$

1.65

Dividends declared per share

 

$

0.22

 

$

0.22

 

$

0.20

 

$

0.88

 

$

0.62

Basic weighted-average outstanding shares

 

 

139,588,782

 

 

139,556,532

 

 

139,530,654

 

 

139,560,305

 

 

139,487,762

Diluted weighted-average outstanding shares

 

 

139,698,674

 

 

139,696,330

 

 

139,546,875

 

 

139,656,993

 

 

139,492,608

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets

 

Table 3

 

 

December 31, 

 

September 30,

 

December 31, 

(dollars in thousands)

    

2017

    

2017

    

2016

Assets

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

367,084

 

$

321,319

 

$

253,827

Interest-bearing deposits in other banks

 

 

667,560

 

 

793,046

 

 

798,231

Investment securities

 

 

5,234,658

 

 

5,314,973

 

 

5,077,514

Loans held for sale

 

 

556

 

 

 —

 

 

 —

Loans and leases

 

 

12,277,369

 

 

12,149,711

 

 

11,520,378

Less: allowance for loan and lease losses

 

 

137,253

 

 

137,327

 

 

135,494

Net loans and leases

 

 

12,140,116

 

 

12,012,384

 

 

11,384,884

 

 

 

 

 

 

 

 

 

 

Premises and equipment, net

 

 

289,215

 

 

289,689

 

 

300,788

Other real estate owned and repossessed personal property

 

 

329

 

 

564

 

 

329

Accrued interest receivable

 

 

47,987

 

 

44,728

 

 

41,971

Bank-owned life insurance

 

 

438,010

 

 

435,607

 

 

429,209

Goodwill

 

 

995,492

 

 

995,492

 

 

995,492

Other intangible assets

 

 

13,196

 

 

13,980

 

 

16,809

Other assets

 

 

355,258

 

 

343,845

 

 

362,775

Total assets

 

$

20,549,461

 

$

20,565,627

 

$

19,661,829

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Interest-bearing

 

$

11,485,269

 

$

11,687,849

 

$

10,801,915

Noninterest-bearing

 

 

6,126,853

 

 

5,907,634

 

 

5,992,617

Total deposits

 

 

17,612,122

 

 

17,595,483

 

 

16,794,532

Short-term borrowings

 

 

 —

 

 

 —

 

 

9,151

Long-term debt

 

 

34

 

 

34

 

 

41

Retirement benefits payable

 

 

134,218

 

 

135,092

 

 

132,904

Other liabilities

 

 

270,536

 

 

253,160

 

 

248,716

Total liabilities

 

 

18,016,910

 

 

17,983,769

 

 

17,185,344

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

 

Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 139,599,454 / 139,588,782 shares as of December 31, 2017, issued and outstanding: 139,586,282 shares as of September 30, 2017 and issued and outstanding: 139,530,654 shares as of December 31, 2016)

 

 

1,396

 

 

1,396

 

 

1,395

Additional paid-in capital

 

 

2,488,643

 

 

2,489,273

 

 

2,484,251

Retained earnings

 

 

139,177

 

 

158,303

 

 

78,850

Accumulated other comprehensive loss, net

 

 

(96,383)

 

 

(67,114)

 

 

(88,011)

Treasury stock (10,672 shares as of December 31, 2017 and nil as of both September 30, 2017 and December 31, 2016)

 

 

(282)

 

 

 —

 

 

 —

Total stockholders' equity

 

 

2,532,551

 

 

2,581,858

 

 

2,476,485

Total liabilities and stockholders' equity

 

$

20,549,461

 

$

20,565,627

 

$

19,661,829

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balances and Interest Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 4

 

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

 

 

December 31, 2017

 

September 30, 2017

 

December 31, 2016

 

 

 

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

 

$

479.4

 

$

1.6

 

1.31

%  

$

597.5

 

$

2.0

 

1.30

%  

$

673.7

 

$

0.9

 

0.57

%

Available-for-Sale Investment Securities

 

 

5,236.8

 

 

26.6

 

2.01

 

 

5,124.9

 

 

24.2

 

1.88

 

 

5,277.2

 

 

25.9

 

1.95

 

Loans Held for Sale

 

 

0.1

 

 

 —

 

3.57

 

 

0.1

 

 

 —

 

3.62

 

 

 —

 

 

 —

 

 —

 

Loans and Leases (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

3,130.3

 

 

26.3

 

3.34

 

 

3,276.4

 

 

27.3

 

3.31

 

 

3,314.3

 

 

25.7

 

3.09

 

Real estate - commercial

 

 

2,755.1

 

 

25.6

 

3.68

 

 

2,696.4

 

 

25.1

 

3.69

 

 

2,431.4

 

 

23.1

 

3.78

 

Real estate - construction

 

 

605.5

 

 

5.5

 

3.57

 

 

570.6

 

 

5.1

 

3.54

 

 

470.7

 

 

3.8

 

3.21

 

Real estate - residential

 

 

3,933.9

 

 

40.3

 

4.07

 

 

3,846.8

 

 

39.2

 

4.04

 

 

3,636.9

 

 

37.0

 

4.04

 

Consumer

 

 

1,575.1

 

 

21.3

 

5.36

 

 

1,546.9

 

 

21.0

 

5.39

 

 

1,493.9

 

 

20.6

 

5.49

 

Lease financing

 

 

169.3

 

 

1.3

 

2.94

 

 

177.9

 

 

1.3

 

2.91

 

 

184.5

 

 

1.3

 

2.75

 

Total Loans and Leases

 

 

12,169.2

 

 

120.3

 

3.92

 

 

12,115.0

 

 

119.0

 

3.90

 

 

11,531.7

 

 

111.5

 

3.85

 

Other Earning Assets

 

 

19.5

 

 

0.1

 

2.98

 

 

29.5

 

 

0.1

 

1.22

 

 

 —

 

 

 —

 

 —

 

Total Earning Assets (2)

 

 

17,905.0

 

 

148.6

 

3.29

 

 

17,867.0

 

 

145.3

 

3.23

 

 

17,482.6

 

 

138.3

 

3.15

 

Cash and Due from Banks

 

 

317.5

 

 

 

 

 

 

 

324.0

 

 

 

 

 

 

 

312.5

 

 

 

 

 

 

Other Assets

 

 

1,971.4

 

 

 

 

 

 

 

1,918.1

 

 

 

 

 

 

 

1,983.8

 

 

 

 

 

 

Total Assets

 

$

20,193.9

 

 

 

 

 

 

$

20,109.1

 

 

 

 

 

 

$

19,778.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

$

4,401.0

 

$

1.3

 

0.12

%  

$

4,505.1

 

$

1.1

 

0.10

%  

$

4,446.1

 

$

0.6

 

0.06

%

Money Market

 

 

2,582.1

 

 

1.1

 

0.17

 

 

2,607.7

 

 

0.9

 

0.13

 

 

2,680.4

 

 

0.7

 

0.10

 

Time

 

 

4,299.7

 

 

11.3

 

1.04

 

 

4,208.0

 

 

10.0

 

0.94

 

 

3,923.1

 

 

5.7

 

0.58

 

Total Interest-Bearing Deposits

 

 

11,282.8

 

 

13.7

 

0.48

 

 

11,320.8

 

 

12.0

 

0.42

 

 

11,049.6

 

 

7.0

 

0.25

 

Short-Term Borrowings

 

 

2.3

 

 

 —

 

1.11

 

 

0.8

 

 

 —

 

0.91

 

 

11.1

 

 

 —

 

0.49

 

Total Interest-Bearing Liabilities

 

 

11,285.1

 

 

13.7

 

0.48

 

 

11,321.6

 

 

12.0

 

0.42

 

 

11,060.7

 

 

7.0

 

0.25

 

Net Interest Income

 

 

 

 

$

134.9

 

 

 

 

 

 

$

133.3

 

 

 

 

 

 

$

131.3

 

 

 

Interest Rate Spread

 

 

 

 

 

 

 

2.81

%  

 

 

 

 

 

 

2.81

%  

 

 

 

 

 

 

2.90

%

Net Interest Margin

 

 

 

 

 

 

 

2.99

%  

 

 

 

 

 

 

2.96

%  

 

 

 

 

 

 

2.99

%

Noninterest-Bearing Demand Deposits

 

 

5,929.1

 

 

 

 

 

 

 

5,844.6

 

 

 

 

 

 

 

5,811.9

 

 

 

 

 

 

Other Liabilities

 

 

409.0

 

 

 

 

 

 

 

378.3

 

 

 

 

 

 

 

398.8

 

 

 

 

 

 

Stockholders' Equity

 

 

2,570.7

 

 

 

 

 

 

 

2,564.6

 

 

 

 

 

 

 

2,507.5

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

20,193.9

 

 

 

 

 

 

$

20,109.1

 

 

 

 

 

 

$

19,778.9

 

 

 

 

 

 

(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)

For the periods disclosed above, the taxable-equivalent basis adjustments made to the table above were not material.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balances and Interest Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 5

 

 

 

Year Ended

 

Year Ended

 

 

 

December 31, 2017

 

December 31, 2016

 

 

 

Average

 

Income/

 

 

Yield/

 

Average

 

Income/

 

Yield/

 

(dollars in millions)

    

Balance

 

Expense

 

 

Rate

 

Balance

 

Expense

 

Rate

 

Earning Assets

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

  

Interest-Bearing Deposits in Other Banks

 

$

507.3

 

$

5.5

 

 

1.09

%  

$

1,368.9

 

$

7.1

 

0.52

%

Available-for-Sale Investment Securities

 

 

5,201.5

 

 

102.3

 

 

1.97

 

 

4,549.0

 

 

83.0

 

1.82

 

Loans and Leases (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

3,230.2

 

 

103.6

 

 

3.21

 

 

3,229.5

 

 

96.0

 

2.97

 

Real estate - commercial

 

 

2,643.6

 

 

96.7

 

 

3.66

 

 

2,313.0

 

 

86.0

 

3.72

 

Real estate - construction

 

 

537.8

 

 

18.6

 

 

3.45

 

 

436.4

 

 

14.2

 

3.26

 

Real estate - residential

 

 

3,821.5

 

 

155.8

 

 

4.08

 

 

3,553.6

 

 

145.9

 

4.10

 

Consumer

 

 

1,540.0

 

 

83.1

 

 

5.40

 

 

1,454.4

 

 

80.9

 

5.56

 

Lease financing

 

 

171.5

 

 

4.9

 

 

2.87

 

 

188.3

 

 

5.4

 

2.86

 

Total Loans and Leases

 

 

11,944.6

 

 

462.7

 

 

3.87

 

 

11,175.2

 

 

428.4

 

3.83

 

Other Earning Assets

 

 

27.5

 

 

0.3

 

 

1.04

 

 

 —

 

 

 —

 

 —

 

Total Earning Assets (2)

 

 

17,680.9

 

 

570.8

 

 

3.23

 

 

17,093.1

 

 

518.5

 

3.03

 

Cash and Due from Banks

 

 

321.4

 

 

 

 

 

 

 

 

289.9

 

 

 

 

 

 

Other Assets

 

 

1,940.5

 

 

 

 

 

 

 

 

1,951.7

 

 

 

 

 

 

Total Assets

 

$

19,942.8

 

 

 

 

 

 

 

$

19,334.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

$

4,475.2

 

$

3.9

 

 

0.09

%  

$

4,390.3

 

$

2.6

 

0.06

%

Money Market

 

 

2,576.0

 

 

3.3

 

 

0.13

 

 

2,478.4

 

 

2.3

 

0.09

 

Time

 

 

4,096.4

 

 

34.8

 

 

0.85

 

 

3,817.6

 

 

21.7

 

0.57

 

Total Interest-Bearing Deposits

 

 

11,147.6

 

 

42.0

 

 

0.38

 

 

10,686.3

 

 

26.6

 

0.25

 

Short-Term Borrowings

 

 

2.2

 

 

 —

 

 

0.80

 

 

113.6

 

 

0.2

 

0.17

 

Total Interest-Bearing Liabilities

 

 

11,149.8

 

 

42.0

 

 

0.38

 

 

10,799.9

 

 

26.8

 

0.25

 

Net Interest Income

 

 

 

 

$

528.8

 

 

 

 

 

 

 

$

491.7

 

 

 

Interest Rate Spread

 

 

 

 

 

 

 

 

2.85

%  

 

 

 

 

 

 

2.78

%

Net Interest Margin

 

 

 

 

 

 

 

 

2.99

%  

 

 

 

 

 

 

2.88

%

Noninterest-Bearing Demand Deposits

 

 

5,868.8

 

 

 

 

 

 

 

 

5,589.5

 

 

 

 

 

 

Other Liabilities

 

 

385.9

 

 

 

 

 

 

 

 

377.1

 

 

 

 

 

 

Stockholders' Equity

 

 

2,538.3

 

 

 

 

 

 

 

 

2,568.2

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

19,942.8

 

 

 

 

 

 

 

$

19,334.7

 

 

 

 

 

 

(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)

For the periods disclosed above, the taxable-equivalent basis adjustments made to the table above were not material.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analysis of Change in Net Interest Income

 

 

 

 

 

 

 

 

Table 6

 

 

Three Months Ended December 31, 2017

 

 

Compared to September 30, 2017

(dollars in millions)

 

Volume

 

Rate

 

Total

Change in Interest Income:

    

 

 

    

 

 

    

 

 

Interest-Bearing Deposits in Other Banks

 

$

(0.4)

 

$

 —

 

$

(0.4)

Available-for-Sale Investment Securities

 

 

0.6

 

 

1.8

 

 

2.4

Loans and Leases

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

(1.2)

 

 

0.2

 

 

(1.0)

Real estate - commercial

 

 

0.5

 

 

 —

 

 

0.5

Real estate - construction

 

 

0.4

 

 

 —

 

 

0.4

Real estate - residential

 

 

0.9

 

 

0.2

 

 

1.1

Consumer

 

 

0.4

 

 

(0.1)

 

 

0.3

Total Loans and Leases

 

 

1.0

 

 

0.3

 

 

1.3

Other Earning Assets

 

 

(0.1)

 

 

0.1

 

 

 —

Total Change in Interest Income

 

 

1.1

 

 

2.2

 

 

3.3

 

 

 

 

 

 

 

 

 

 

Change in Interest Expense:

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

 

 

 

Savings

 

 

 —

 

 

0.2

 

 

0.2

Money Market

 

 

 —

 

 

0.2

 

 

0.2

Time

 

 

0.2

 

 

1.1

 

 

1.3

Total Interest-Bearing Deposits

 

 

0.2

 

 

1.5

 

 

1.7

Total Change in Interest Expense

 

 

0.2

 

 

1.5

 

 

1.7

Change in Net Interest Income

 

$

0.9

 

$

0.7

 

$

1.6

 

 

 

 

 

 

 

 

 

 

 

 

Analysis of Change in Net Interest Income

 

 

 

 

 

 

 

 

Table 7

 

 

Three Months Ended December 31, 2017

 

 

Compared to December 31, 2016

(dollars in millions)

 

Volume

 

Rate

 

Total

Change in Interest Income:

    

 

 

    

 

 

    

 

 

Interest-Bearing Deposits in Other Banks

 

$

(0.4)

 

$

1.0

 

$

0.6

Available-for-Sale Investment Securities

 

 

(0.2)

 

 

0.9

 

 

0.7

Loans and Leases

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

(1.5)

 

 

2.1

 

 

0.6

Real estate - commercial

 

 

3.0

 

 

(0.6)

 

 

2.4

Real estate - construction

 

 

1.2

 

 

0.5

 

 

1.7

Real estate - residential

 

 

3.0

 

 

0.4

 

 

3.4

Consumer

 

 

1.1

 

 

(0.4)

 

 

0.7

Lease financing

 

 

(0.1)

 

 

0.1

 

 

 —

Total Loans and Leases

 

 

6.7

 

 

2.1

 

 

8.8

Other Earning Assets

 

 

0.1

 

 

 —

 

 

0.1

Total Change in Interest Income

 

 

6.2

 

 

4.0

 

 

10.2

 

 

 

 

 

 

 

 

 

 

Change in Interest Expense:

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

 

 

 

Savings

 

 

 —

 

 

0.6

 

 

0.6

Money Market

 

 

 —

 

 

0.4

 

 

0.4

Time

 

 

0.6

 

 

5.0

 

 

5.6

Total Interest-Bearing Deposits

 

 

0.6

 

 

6.0

 

 

6.6

Total Change in Interest Expense

 

 

0.6

 

 

6.0

 

 

6.6

Change in Net Interest Income

 

$

5.6

 

$

(2.0)

 

$

3.6

 

 

 

 

 

 

 

 

 

 

 

Analysis of Change in Net Interest Income

 

 

 

 

 

 

 

 

Table 8

 

 

Year Ended December 31, 2017

 

 

Compared to December 31, 2016

(dollars in millions)

    

Volume

    

Rate

    

Total

Change in Interest Income:

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits in Other Banks

 

$

(6.3)

 

$

4.7

 

$

(1.6)

Available-for-Sale Investment Securities

 

 

12.5

 

 

6.8

 

 

19.3

Loans and Leases

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

 —

 

 

7.6

 

 

7.6

Real estate - commercial

 

 

12.1

 

 

(1.5)

 

 

10.6

Real estate - construction

 

 

3.5

 

 

0.9

 

 

4.4

Real estate - residential

 

 

10.9

 

 

(1.0)

 

 

9.9

Consumer

 

 

4.7

 

 

(2.5)

 

 

2.2

Lease financing

 

 

(0.5)

 

 

 —

 

 

(0.5)

Total Loans and Leases

 

 

30.7

 

 

3.5

 

 

34.2

Other Earning Assets

 

 

0.3

 

 

 —

 

 

0.3

Total Change in Interest Income

 

 

37.2

 

 

15.0

 

 

52.2

 

 

 

 

 

 

 

 

 

 

Change in Interest Expense:

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

 

 

 

Savings

 

 

 —

 

 

1.2

 

 

1.2

Money Market

 

 

0.1

 

 

0.9

 

 

1.0

Time

 

 

1.7

 

 

11.4

 

 

13.1

Total Interest-Bearing Deposits

 

 

1.8

 

 

13.5

 

 

15.3

Short-Term Borrowings

 

 

(0.4)

 

 

0.2

 

 

(0.2)

Total Change in Interest Expense

 

 

1.4

 

 

13.7

 

 

15.1

Change in Net Interest Income

 

$

35.8

 

$

1.3

 

$

37.1

 

 

 

 

 

 

 

 

 

 

 

 

Loans and Leases

 

 

 

 

 

 

 

 

 

Table 9

 

 

 

December 31, 

 

September 30,

 

December 31, 

(dollars in thousands)

 

    

2017

    

2017

    

2016

Commercial and industrial

 

  

$

3,135,266

  

$

3,190,237

  

$

3,239,600

Real estate:

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

2,667,597

 

 

2,625,688

 

 

2,343,495

Construction

 

 

 

632,911

 

 

598,763

 

 

450,012

Residential

 

 

 

4,090,053

 

 

4,001,478

 

 

3,796,459

Total real estate

 

 

 

7,390,561

 

 

7,225,929

 

 

6,589,966

Consumer

 

 

 

1,586,476

 

 

1,562,172

 

 

1,510,772

Lease financing

 

 

 

165,066

 

 

171,373

 

 

180,040

Total loans and leases

 

 

$

12,277,369

 

$

12,149,711

 

$

11,520,378

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Table 10

 

 

 

December 31, 

 

September 30,

 

December 31, 

(dollars in thousands)

 

    

2017

    

2017

    

2016

Demand

 

 

$

6,126,853

 

$

5,907,634

 

$

5,992,617

Savings

 

 

 

4,509,419

 

 

4,411,411

 

 

4,609,306

Money Market

 

 

 

2,801,968

 

 

2,631,311

 

 

2,454,013

Time

 

 

 

4,173,882

 

 

4,645,127

 

 

3,738,596

    Total Deposits

 

 

$

17,612,122

 

$

17,595,483

 

$

16,794,532

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More

 

 

 

 

 

 

 

 

 

Table 11

 

 

 

December 31, 

 

September 30,

 

December 31, 

(dollars in thousands)

 

    

2017

    

2017

    

2016

Non-Performing Assets

 

 

 

 

 

 

 

 

 

 

Non-Accrual Loans and Leases

 

 

 

 

 

 

 

 

 

 

Commercial Loans:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

$

2,932

 

$

2,312

 

$

2,730

Lease financing

 

 

 

 —

 

 

 —

 

 

153

Total Commercial Loans

 

 

 

4,718

 

 

2,312

 

 

2,883

Residential

 

 

 

5,107

 

 

5,562

 

 

6,547

Total Non-Accrual Loans and Leases

 

 

 

9,825

 

 

7,874

 

 

9,430

Other Real Estate Owned

 

 

 

329

 

 

564

 

 

329

Total Non-Performing Assets

 

 

$

10,154

 

$

8,438

 

$

9,759

 

 

 

 

 

 

 

 

 

 

 

Accruing Loans and Leases Past Due 90 Days or More

 

 

 

 

 

 

 

 

 

 

Commercial Loans:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

$

220

 

$

1,751

 

$

449

Real estate - commercial

 

 

 

1,400

 

 

3,247

 

 

 —

Lease financing

 

 

 

 —

 

 

 —

 

 

83

Total Commercial Loans

 

 

 

1,620

 

 

4,998

 

 

532

Residential

 

 

 

1,360

 

 

1,055

 

 

866

Consumer

 

 

 

1,394

 

 

1,894

 

 

1,870

Total Accruing Loans and Leases Past Due 90 Days or More

 

 

$

4,374

 

$

7,947

 

$

3,268

 

 

 

 

 

 

 

 

 

 

 

Restructured Loans on Accrual Status and Not Past Due 90 Days or More

 

 

 

34,130

 

 

36,728

 

 

44,496

Total Loans and Leases

 

 

$

12,277,369

 

$

12,149,711

 

$

11,520,378

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan and Lease Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 12

 

 

 

For the Three Months Ended

 

For the Year Ended

 

 

 

December 31, 

 

September 30,

 

December 31, 

 

December 31, 

 

December 31, 

 

(dollars in thousands)

    

2017

    

2017

    

2016

    

2017

    

2016

   

Balance at Beginning of Period

 

$

137,327

 

$

136,883

 

$

135,025

 

$

135,494

 

$

135,484

 

Loans and Leases Charged-Off

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

(181)

 

 

(408)

 

 

 —

 

 

(1,519)

 

 

(348)

 

Lease financing

 

 

 —

 

 

(1)

 

 

 —

 

 

(147)

 

 

 —

 

Total Commercial Loans

 

 

(181)

 

 

(409)

 

 

 —

 

 

(1,666)

 

 

(348)

 

Residential

 

 

(93)

 

 

(293)

 

 

(3)

 

 

(408)

 

 

(799)

 

Consumer

 

 

(6,765)

 

 

(6,263)

 

 

(5,412)

 

 

(23,851)

 

 

(18,791)

 

Total Loans and Leases Charged-Off

 

 

(7,039)

 

 

(6,965)

 

 

(5,415)

 

 

(25,925)

 

 

(19,938)

 

Recoveries on Loans and Leases Previously Charged-Off

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

19

 

 

582

 

 

23

 

 

844

 

 

251

 

Real estate - commercial

 

 

128

 

 

336

 

 

41

 

 

596

 

 

3,329

 

Lease financing

 

 

 —

 

 

 —

 

 

 1

 

 

 —

 

 

 2

 

Total Commercial Loans

 

 

147

 

 

918

 

 

65

 

 

1,440

 

 

3,582

 

Residential

 

 

77

 

 

139

 

 

242

 

 

687

 

 

1,358

 

Consumer

 

 

1,641

 

 

1,852

 

 

1,677

 

 

7,057

 

 

6,408

 

Total Recoveries on Loans and Leases Previously Charged-Off

 

 

1,865

 

 

2,909

 

 

1,984

 

 

9,184

 

 

11,348

 

Net Loans and Leases Charged-Off

 

 

(5,174)

 

 

(4,056)

 

 

(3,431)

 

 

(16,741)

 

 

(8,590)

 

Provision for Credit Losses

 

 

5,100

 

 

4,500

 

 

3,900

 

 

18,500

 

 

8,600

 

Balance at End of Period

 

$

137,253

 

$

137,327

 

$

135,494

 

$

137,253

 

$

135,494

 

Average Loans and Leases Outstanding

 

$

12,169,167

 

$

12,115,001

 

$

11,531,684

 

$

11,944,596

 

$

11,175,213

 

Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding

 

 

0.17

%  

 

0.13

%  

 

0.12

%  

 

0.14

%  

 

0.08

%

Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding

 

 

1.12

%  

 

1.13

%  

 

1.18

%  

 

1.12

%  

 

1.18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP to Non-GAAP Reconciliation

 

 

 

 

 

 

 

 

 

 

Table 13

 

 

 

For the Three Months Ended

 

For the Year Ended

 

 

 

December 31, 

 

September 30,

 

December 31, 

 

December 31, 

 

(dollars in thousands, except per share amounts)

    

2017

    

2017

    

2016

    

2017

    

2016

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

11,684

 

$

58,363

 

$

56,552

 

$

183,682

 

$

230,178

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total stockholders' equity

 

$

2,570,704

 

$

2,564,563

 

$

2,507,514

 

$

2,538,341

 

$

2,568,219

 

Less: average goodwill

 

 

995,492

 

 

995,492

 

 

995,492

 

 

995,492

 

 

995,492

 

Average tangible stockholders' equity

 

$

1,575,212

 

$

1,569,071

 

$

1,512,022

 

$

1,542,849

 

$

1,572,727

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total assets

 

$

20,193,919

 

$

20,109,090

 

$

19,778,918

 

$

19,942,807

 

$

19,334,653

 

Less: average goodwill

 

 

995,492

 

 

995,492

 

 

995,492

 

 

995,492

 

 

995,492

 

Average tangible assets

 

$

19,198,427

 

$

19,113,598

 

$

18,783,426

 

$

18,947,315

 

$

18,339,161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average total stockholders' equity(1)

 

 

1.80

%  

 

9.03

%  

 

8.97

%  

 

7.24

%  

 

8.96

%

Return on average tangible stockholders' equity (non-GAAP)(1)

 

 

2.94

%  

 

14.76

%  

 

14.88

%  

 

11.91

%  

 

14.64

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average total assets(1)

 

 

0.23

%  

 

1.15

%  

 

1.14

%  

 

0.92

%  

 

1.19

%  

Return on average tangible assets (non-GAAP)(1)

 

 

0.24

%  

 

1.21

%  

 

1.20

%  

 

0.97

%  

 

1.26

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average stockholders' equity to average assets

 

 

12.73

%  

 

12.75

%  

 

12.68

%  

 

12.73

%  

 

13.28

%  

Tangible average stockholders' equity to tangible average assets (non-GAAP)

 

 

8.20

%  

 

8.21

%  

 

8.05

%  

 

8.14

%  

 

8.58

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

As of

 

As of

 

 

 

 

December 31, 

 

September 30,

 

December 31, 

 

 

 

    

2017

    

2017

    

2016

    

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

2,532,551

 

$

2,581,858

 

$

2,476,485

 

Less: goodwill

 

 

 

995,492

 

 

995,492

 

 

995,492

 

Tangible stockholders' equity

 

 

$

1,537,059

 

$

1,586,366

 

$

1,480,993

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

$

20,549,461

 

$

20,565,627

 

$

19,661,829

 

Less: goodwill

 

 

 

995,492

 

 

995,492

 

 

995,492

 

Tangible assets

 

 

$

19,553,969

 

$

19,570,135

 

$

18,666,337

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding

 

 

 

139,588,782

 

 

139,586,282

 

 

139,530,654

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity to total assets

 

 

 

12.32

%  

 

12.55

%  

 

12.60

%  

Tangible stockholders' equity to tangible assets (non-GAAP)

 

 

7.86

%  

 

8.11

%  

 

7.93

%  

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

 

$

18.14

 

$

18.50

 

$

17.75

 

Tangible book value per share (non-GAAP)

 

 

$

11.01

 

$

11.36

 

$

10.61

 

(1)

Annualized for the three months ended December 31, 2017, September 30, 2017 and December 31, 2016.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP to Non-GAAP Reconciliation

 

Table 14

 

 

 

For the Three Months Ended

 

For the Year Ended

 

 

 

December 31, 

 

September 30,

 

December 31, 

 

December 31, 

 

(dollars in thousands, except per share amounts)

    

2017

    

2017

    

2016

    

2017

    

2016

   

Net interest income

 

$

134,886

 

$

133,319

 

$

131,250

 

$

528,804

 

$

491,672

 

Core net interest income (non-GAAP)

 

$

134,886

 

$

133,319

 

$

131,250

 

$

528,804

 

$

491,672

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

$

54,324

 

$

49,664

 

$

50,984

 

$

205,605

 

$

226,037

 

Gains on sale of real estate

 

 

(4,255)

 

 

(2,667)

 

 

 —

 

 

(6,922)

 

 

 —

 

Gains on sale of securities

 

 

 —

 

 

 —

 

 

(1,516)

 

 

 —

 

 

(4,566)

 

Gains on sale of stock (Visa/MasterCard)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(22,678)

 

Core noninterest income (non-GAAP)

 

$

50,069

 

$

46,997

 

$

49,468

 

$

198,683

 

$

198,793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

89,850

 

$

84,784

 

$

84,466

 

$

347,554

 

$

337,280

 

One-time items(1)

 

 

(4,073)

 

 

(543)

 

 

(583)

 

 

(5,457)

 

 

(6,220)

 

Core noninterest expense (non-GAAP)

 

$

85,777

 

$

84,241

 

$

83,883

 

$

342,097

 

$

331,060

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

11,684

 

$

58,363

 

$

56,552

 

$

183,682

 

$

230,178

 

Gains on sale of real estate

 

 

(4,255)

 

 

(2,667)

 

 

 —

 

 

(6,922)

 

 

 —

 

Gains on sale of securities

 

 

 —

 

 

 —

 

 

(1,516)

 

 

 —

 

 

(4,566)

 

Gains on sale of stock (Visa/MasterCard)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(22,678)

 

One-time items(1)

 

 

4,073

 

 

543

 

 

583

 

 

5,457

 

 

6,220

 

Tax reform bill

 

 

47,598

 

 

 —

 

 

 —

 

 

47,598

 

 

 —

 

Tax adjustments(2)

 

 

63

 

 

801

 

 

382

 

 

551

 

 

7,957

 

Total core adjustments

 

 

47,479

 

 

(1,323)

 

 

(551)

 

 

46,684

 

 

(13,067)

 

Core net income (non-GAAP)

 

$

59,163

 

$

57,040

 

$

56,001

 

$

230,366

 

$

217,111

 

Core basic earnings per share (non-GAAP)

 

$

0.42

 

$

0.41

 

$

0.40

 

$

1.65

 

$

1.56

 

Core diluted earnings per share (non-GAAP)

 

$

0.42

 

$

0.41

 

$

0.40

 

$

1.65

 

$

1.56

 

(1)

One-time items include salaries and benefits stemming from the 2017 tax reform bill and initial public offering related costs.

(2)

Represents the adjustments to net income, tax effected at the Company’s effective tax rate for the respective period, exclusive of one-time tax reform bill expense.