EX-99.1 2 ex-99d1.htm EX-99.1 fhb_Ex_99.1A

 

EXHIBIT 99.1

 

Picture 2

For Immediate Release

CORRECTION - First Hawaiian, Inc. Reports Fourth Quarter 2019 Financial Results and Declares Dividend

·

Net income of $67.8 million, or $0.52 per diluted share, core net income1 of $71.3 million or $0.54 per diluted share1

·

Board of Directors declared a quarterly dividend of $0.26 per share

HONOLULU, Jan.  29, 2020 (GLOBE NEWSWIRE) -- In a release issued under the same headline yesterday by First Hawaiian, Inc. (NASDAQ:FHB), please note that in the third paragraph of the release, the record date for its next quarterly dividend should be February 24, 2020, not February 28, 2020 as previously stated. The corrected release follows:

First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended December 31, 2019.

“I’m pleased to report that we ended 2019 with a strong fourth quarter. We generated great loan growth, significantly reduced deposit costs, and maintained excellent credit quality,” said Bob Harrison, Chairman, President and Chief Executive Officer. “This was a good finish to an exciting year, and we are well positioned going into 2020.”

On January 22, 2020 the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on March 6, 2020 to stockholders of record at the close of business on February 24, 2020.

Fourth Quarter 2019 Highlights:

·

Profitability measures were excellent with Return on Assets of 1.34%, core Return on Average Tangible Assets1,2  of 1.48%, Return on Equity of 10.21%, and core Return on Average Tangible Common Equity1,2  of  17.22%;

·

Grew loans and leases by $368 million, or 2.9%;

·

Cost of deposits fell 10 basis points to 44 basis points;

·

Reported efficiency ratio was 48.9% and core efficiency ratio1 was 47.7%;

·

Continued excellent credit quality. The ratio of non-performing assets to total loans and leases and other real estate owned was 0.04% at the end of the fourth quarter.

 

Balance Sheet

Total assets were $20.2 billion as of December 31, 2019, compared to $20.6 billion as of September 30, 2019.

Gross loans and leases were $13.2 billion as of December 31, 2019, an increase of $368 million, or 2.9%, from $12.8 billion as of September 30, 2019.

Total deposits were $16.4 billion as of December 31, 2019, a decrease of $412 million, or 2.4%, from $16.9 billion as of September 30, 2019, primarily reflecting the withdrawal of a $400 million commercial deposit that was deposited at the end of the third quarter and withdrawn early in the fourth quarter, and a $266 million reduction in public deposits.

Net Interest Income

Net interest income for the fourth quarter of 2019 was $139.6 million, a decrease of $3.5 million, or 2.4%, compared to $143.1 million for the prior quarter. The decrease in net interest income compared to the third quarter of 2019 was primarily due to lower yields on loans and lower investment and loan balances, partially offset by lower deposit rates and balances. Average loan balances in the fourth quarter were lower than the prior quarter as a result of the sale of $409 million of shared national credits in the third quarter.

Net interest margin (“NIM”) was 3.15% in the fourth quarter of 2019, a decrease of four basis points compared to 3.19% in the third quarter of 2019.

1

Core measurements are non-GAAP financial measures. Core excludes certain gains, expenses and one-time items. See Tables 13 and 14 at the end of this document for reconciliations of core measurements, including core net income, core noninterest income, core efficiency ratio and core earnings per diluted share to the comparable GAAP measurements.

2

Return on Average Tangible Assets (“ROATA”) and Return on Average Tangible Common Equity (“ROATCE”) are non-GAAP financial measures. A reconciliation of average tangible assets and average tangible stockholders’ equity to the comparable GAAP measurements is provided in Table 13 at the end of this document.

Provision Expense

Results for the quarter ended December 31, 2019 included a provision for credit losses of $4.3 million.  No provision for credit losses was taken in the quarter ended September 30, 2019.

Noninterest Income

Noninterest income was $46.7 million in the fourth quarter of 2019, a decrease of $3.3 million compared to noninterest income of $50.0 million in the third quarter of 2019.

Noninterest Expense

Noninterest expense was $91.1 million in the fourth quarter of 2019, a decrease of $2.4 million from $93.5 million in the third quarter of 2019.

The efficiency ratio was 48.9% and 48.4% for the quarters ended December 31, 2019 and September 30, 2019, respectively.

Taxes

The effective tax rate was 25.5% for both the quarters ended December 31, 2019 and September 30, 2019.

Asset Quality

The allowance for loan and lease losses was $130.5 million, or 0.99% of total loans and leases, as of December 31, 2019, compared to $133.0 million, or 1.04% of total loans and leases, as of September 30, 2019. Net charge-offs were $6.7 million, or 0.20% of average loans and leases on an annualized basis for the quarter ended December 31, 2019, compared to $5.6 million, or 0.17% of average loans and leases on an annualized basis for the quarter ended September 30, 2019. Total non-performing assets were $5.8 million, or 0.04% of total loans and leases and other real estate owned, at December 31, 2019, compared to non-performing assets of $4.3 million, or 0.03% of total loans and leases and other real estate owned, at September 30, 2019.

Capital

Total stockholders' equity was $2.6 billion at December 31, 2019, compared to $2.7 billion at September 30, 2019.

The tier 1 leverage, common equity tier 1 and total capital ratios were 8.79%, 11.88% and 12.81%, respectively, at December 31, 2019, compared with 8.68%, 12.15% and 13.11%, respectively, at September 30, 2019.

The Company repurchased 1.3 million shares of common stock at a total cost of $37.4 million under the stock repurchase program in the fourth quarter. The average cost was $27.92 per share repurchased.  For the full year 2019, the Company repurchased 5.1 million shares at a total cost of $136.2 million.

The Company’s Board of Directors approved a stock repurchase program for up to $80 million of its outstanding common stock during 2020.

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: 7588548. 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, 2020. Access the replay by dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID: 7588548.

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, 2018 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.

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 13 and 14 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:

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)

    

2019

    

2019

    

2018

    

2019

    

2018

 

Operating Results:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

139,619

 

$

143,081

 

$

143,985

 

$

573,402

 

$

566,318

 

Provision for loan and lease losses

 

 

4,250

 

 

 —

 

 

5,750

 

 

13,800

 

 

22,180

 

Noninterest income

 

 

46,708

 

 

49,980

 

 

33,091

 

 

192,533

 

 

178,993

 

Noninterest expense

 

 

91,058

 

 

93,466

 

 

89,354

 

 

370,437

 

 

364,953

 

Net income

 

 

67,836

 

 

74,199

 

 

59,995

 

 

284,392

 

 

264,394

 

Basic earnings per share

 

 

0.52

 

 

0.56

 

 

0.44

 

 

2.14

 

 

1.93

 

Diluted earnings per share

 

 

0.52

 

 

0.56

 

 

0.44

 

 

2.13

 

 

1.93

 

Dividends declared per share

 

 

0.26

 

 

0.26

 

 

0.24

 

 

1.04

 

 

0.96

 

Dividend payout ratio

 

 

50.00

%

 

46.43

%

 

54.55

%

 

48.83

%

 

49.74

%

Supplemental Income Statement Data (non-GAAP):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core net interest income

 

$

139,619

 

$

143,081

 

$

143,985

 

$

573,402

 

$

566,318

 

Core noninterest income

 

 

51,331

 

 

49,980

 

 

57,176

 

 

199,748

 

 

203,078

 

Core noninterest expense

 

 

91,010

 

 

91,222

 

 

88,919

 

 

367,623

 

 

358,561

 

Core net income

 

 

71,250

 

 

75,871

 

 

77,914

 

 

291,785

 

 

286,711

 

Core basic earnings per share

 

 

0.55

 

 

0.57

 

 

0.58

 

 

2.19

 

 

2.09

 

Core diluted earnings per share

 

 

0.54

 

 

0.57

 

 

0.58

 

 

2.19

 

 

2.09

 

Performance Ratio(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

3.15

%  

 

3.19

%  

 

3.23

%  

 

3.20

%  

 

3.16

%

Core net interest margin (non-GAAP)

 

 

3.15

%  

 

3.19

%  

 

3.23

%  

 

3.20

%  

 

3.16

%

Efficiency ratio

 

 

48.86

%  

 

48.41

%  

 

50.45

%  

 

48.36

%  

 

48.96

%

Core efficiency ratio (non-GAAP)

 

 

47.65

%  

 

47.25

%  

 

44.19

%  

 

47.55

%  

 

46.59

%

Return on average total assets

 

 

1.34

%  

 

1.45

%  

 

1.19

%  

 

1.40

%  

 

1.31

%

Core return on average total assets (non-GAAP)

 

 

1.41

%  

 

1.48

%  

 

1.54

%  

 

1.44

%  

 

1.42

%

Return on average tangible assets (non-GAAP)

 

 

1.41

%  

 

1.52

%  

 

1.25

%  

 

1.47

%  

 

1.37

%

Core return on average tangible assets (non-GAAP)(2)

 

 

1.48

%  

 

1.56

%  

 

1.62

%  

 

1.51

%  

 

1.49

%

Return on average total stockholders' equity

 

 

10.21

%  

 

11.12

%  

 

9.77

%  

 

10.90

%  

 

10.76

%

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

 

 

10.72

%  

 

11.37

%  

 

12.68

%  

 

11.18

%  

 

11.67

%

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

 

 

16.40

%  

 

17.81

%  

 

16.51

%  

 

17.62

%  

 

18.08

%

Core return on average tangible stockholders’ equity (non-GAAP)(3)

 

 

17.22

%  

 

18.21

%  

 

21.44

%  

 

18.08

%  

 

19.61

%

Average Balances:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average loans and leases

 

$

12,940,956

 

$

13,032,349

 

$

12,829,635

 

$

13,063,716

 

$

12,570,182

 

Average earning assets

 

 

17,649,343

 

 

17,862,564

 

 

17,701,301

 

 

17,892,440

 

 

17,911,545

 

Average assets

 

 

20,089,601

 

 

20,332,457

 

 

20,069,988

 

 

20,325,697

 

 

20,247,135

 

Average deposits

 

 

16,355,254

 

 

16,573,796

 

 

16,608,611

 

 

16,613,379

 

 

17,115,380

 

Average stockholders' equity

 

 

2,636,651

 

 

2,648,428

 

 

2,437,504

 

 

2,609,432

 

 

2,457,771

 

Market Value Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Closing

 

 

28.85

 

 

26.70

 

 

22.51

 

 

28.85

 

 

22.51

 

    High

 

 

29.47

 

 

27.84

 

 

27.49

 

 

29.47

 

 

32.36

 

    Low

 

 

25.48

 

 

24.25

 

 

21.19

 

 

22.13

 

 

21.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

As of

 

As of

 

 

 

 

December 31, 

 

September 30, 

 

December 31, 

 

 

 

    

2019

 

2019

 

2018

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

Loans and leases

 

 

$

13,211,650

 

$

12,843,396

 

$

13,076,191

 

Total assets

 

 

 

20,166,734

 

 

20,598,220

 

 

20,695,678

 

Total deposits

 

 

 

16,444,994

 

 

16,857,246

 

 

17,150,068

 

Short-term borrowings

 

 

 

400,000

 

 

400,000

 

 

 —

 

Long-term borrowings

 

 

 

200,019

 

 

200,018

 

 

600,026

 

Total stockholders' equity

 

 

 

2,640,258

 

 

2,654,558

 

 

2,524,839

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share of Common Stock:

 

 

 

 

 

 

 

 

 

 

 

Book value

 

 

$

20.32

 

$

20.22

 

$

18.72

 

Tangible book value (non-GAAP)(4)

 

 

 

12.66

 

 

12.64

 

 

11.34

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans and leases / total loans and leases

 

 

 

0.04

%  

 

0.03

%

 

0.05

%

Allowance for loan and lease losses / total loans and leases

 

 

 

0.99

%  

 

1.04

%

 

1.08

%

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital Ratio

 

 

  

11.88

%  

  

12.15

%

  

11.97

%

Tier 1 Capital Ratio

 

 

 

11.88

%  

 

12.15

%

 

11.97

%

Total Capital Ratio

 

 

 

12.81

%  

 

13.11

%

 

12.99

%

Tier 1 Leverage Ratio

 

 

 

8.79

%  

 

8.68

%

 

8.72

%

Total stockholders' equity to total assets

 

 

 

13.09

%  

 

12.89

%

 

12.20

%

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

 

 

 

8.58

%  

 

8.46

%

 

7.76

%

 

 

 

 

 

 

 

 

 

 

 

 

Non-Financial Data:

 

 

 

 

 

 

 

 

 

 

 

Number of branches

 

 

 

58

 

 

58

 

 

60

 

Number of ATMs

 

 

 

301

 

 

293

 

 

295

 

Number of Full-Time Equivalent Employees

 

 

 

2,092

 

 

2,099

 

 

2,155

 

(1)

Except for the efficiency ratio and the core efficiency ratio, amounts are annualized for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018.

(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 13, 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 13, 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 13, GAAP to Non-GAAP Reconciliation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

    

2019

    

2019

    

2018

    

2019

    

2018

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and lease financing

 

$

138,033

 

$

144,691

 

$

140,649

 

$

574,013

 

$

529,877

Available-for-sale securities

 

 

20,979

 

 

22,256

 

 

25,537

 

 

92,505

 

 

107,123

Other

 

 

3,120

 

 

3,234

 

 

1,858

 

 

12,174

 

 

9,051

Total interest income

 

 

162,132

 

 

170,181

 

 

168,044

 

 

678,692

 

 

646,051

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

18,222

 

 

22,753

 

 

20,152

 

 

87,865

 

 

72,976

Short-term and long-term borrowings

 

 

4,291

 

 

4,347

 

 

3,907

 

 

17,425

 

 

6,757

Total interest expense

 

 

22,513

 

 

27,100

 

 

24,059

 

 

105,290

 

 

79,733

Net interest income

 

 

139,619

 

 

143,081

 

 

143,985

 

 

573,402

 

 

566,318

Provision for loan and lease losses

 

 

4,250

 

 

 —

 

 

5,750

 

 

13,800

 

 

22,180

Net interest income after provision for loan and lease losses

 

 

135,369

 

 

143,081

 

 

138,235

 

 

559,602

 

 

544,138

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

9,041

 

 

8,554

 

 

8,427

 

 

33,778

 

 

32,036

Credit and debit card fees

 

 

16,626

 

 

16,839

 

 

16,755

 

 

66,749

 

 

65,716

Other service charges and fees

 

 

8,818

 

 

8,903

 

 

9,763

 

 

36,253

 

 

38,316

Trust and investment services income

 

 

8,855

 

 

8,698

 

 

7,895

 

 

35,102

 

 

31,324

Bank-owned life insurance

 

 

2,533

 

 

5,743

 

 

1,086

 

 

15,479

 

 

9,217

Investment securities losses, net

 

 

(123)

 

 

 —

 

 

 —

 

 

(2,715)

 

 

 —

Other-than-temporary impairment (OTTI) losses on available-for-sale debt securities

 

 

 —

 

 

 —

 

 

(24,085)

 

 

 —

 

 

(24,085)

Other

 

 

958

 

 

1,243

 

 

13,250

 

 

7,887

 

 

26,469

Total noninterest income

 

 

46,708

 

 

49,980

 

 

33,091

 

 

192,533

 

 

178,993

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

41,098

 

 

44,955

 

 

41,407

 

 

173,098

 

 

167,162

Contracted services and professional fees

 

 

13,724

 

 

14,649

 

 

13,005

 

 

56,321

 

 

49,775

Occupancy

 

 

7,231

 

 

7,250

 

 

7,181

 

 

28,753

 

 

27,330

Equipment

 

 

4,491

 

 

4,024

 

 

4,610

 

 

17,343

 

 

17,714

Regulatory assessment and fees

 

 

1,802

 

 

1,992

 

 

2,053

 

 

7,390

 

 

14,217

Advertising and marketing

 

 

1,317

 

 

1,647

 

 

1,687

 

 

6,910

 

 

4,813

Card rewards program

 

 

8,635

 

 

6,930

 

 

6,978

 

 

29,961

 

 

24,860

Other

 

 

12,760

 

 

12,019

 

 

12,433

 

 

50,661

 

 

59,082

Total noninterest expense

 

 

91,058

 

 

93,466

 

 

89,354

 

 

370,437

 

 

364,953

Income before provision for income taxes

 

 

91,019

 

 

99,595

 

 

81,972

 

 

381,698

 

 

358,178

Provision for income taxes

 

 

23,183

 

 

25,396

 

 

21,977

 

 

97,306

 

 

93,784

Net income

 

$

67,836

 

$

74,199

 

$

59,995

 

$

284,392

 

$

264,394

Basic earnings per share

 

$

0.52

 

$

0.56

 

$

0.44

 

$

2.14

 

$

1.93

Diluted earnings per share

 

$

0.52

 

$

0.56

 

$

0.44

 

$

2.13

 

$

1.93

Basic weighted-average outstanding shares

 

 

130,463,102

 

 

132,583,902

 

 

134,874,277

 

 

133,076,489

 

 

136,945,134

Diluted weighted-average outstanding shares

 

 

130,845,645

 

 

132,877,769

 

 

135,100,162

 

 

133,387,157

 

 

137,111,420

 

 

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets

 

Table 3

 

 

December 31, 

 

September 30, 

 

December 31, 

(dollars in thousands)

    

2019

    

2019

    

2018

Assets

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

360,375

 

$

358,863

 

$

396,836

Interest-bearing deposits in other banks

 

 

333,642

 

 

985,154

 

 

606,801

Investment securities

 

 

4,075,644

 

 

4,157,082

 

 

4,498,342

Loans held for sale

 

 

904

 

 

1,594

 

 

432

Loans and leases

 

 

13,211,650

 

 

12,843,396

 

 

13,076,191

Less: allowance for loan and lease losses

 

 

130,530

 

 

132,964

 

 

141,718

Net loans and leases

 

 

13,081,120

 

 

12,710,432

 

 

12,934,473

 

 

 

 

 

 

 

 

 

 

Premises and equipment, net

 

 

316,885

 

 

315,309

 

 

304,996

Other real estate owned and repossessed personal property

 

 

319

 

 

82

 

 

751

Accrued interest receivable

 

 

45,239

 

 

44,671

 

 

48,920

Bank-owned life insurance

 

 

453,873

 

 

453,410

 

 

446,076

Goodwill

 

 

995,492

 

 

995,492

 

 

995,492

Mortgage servicing rights

 

 

12,668

 

 

13,630

 

 

16,155

Other assets

 

 

490,573

 

 

562,501

 

 

446,404

Total assets

 

$

20,166,734

 

$

20,598,220

 

$

20,695,678

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Interest-bearing

 

$

10,564,922

 

$

11,136,424

 

$

11,142,127

Noninterest-bearing

 

 

5,880,072

 

 

5,720,822

 

 

6,007,941

Total deposits

 

 

16,444,994

 

 

16,857,246

 

 

17,150,068

Short-term borrowings

 

 

400,000

 

 

400,000

 

 

 —

Long-term borrowings

 

 

200,019

 

 

200,018

 

 

600,026

Retirement benefits payable

 

 

138,222

 

 

128,442

 

 

127,909

Other liabilities

 

 

343,241

 

 

357,956

 

 

292,836

Total liabilities

 

 

17,526,476

 

 

17,943,662

 

 

18,170,839

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

 

Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 139,917,150 / 129,928,479 shares as of December 31, 2019, issued/outstanding: 139,908,699 / 131,260,900 shares as of September 30, 2019 and issued/outstanding: 139,656,674 / 134,874,302 shares as of December 31, 2018)

 

 

1,399

 

 

1,399

 

 

1,397

Additional paid-in capital

 

 

2,503,677

 

 

2,501,324

 

 

2,495,853

Retained earnings

 

 

437,072

 

 

403,317

 

 

291,919

Accumulated other comprehensive loss, net

 

 

(31,749)

 

 

(18,774)

 

 

(132,195)

Treasury stock (9,988,671 shares as of December 31, 2019, 8,647,799 shares as of September 30, 2019 and 4,782,372 shares as of December 31, 2018)

 

 

(270,141)

 

 

(232,708)

 

 

(132,135)

Total stockholders' equity

 

 

2,640,258

 

 

2,654,558

 

 

2,524,839

Total liabilities and stockholders' equity

 

$

20,166,734

 

$

20,598,220

 

$

20,695,678

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balances and Interest Rates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 4

 

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

 

 

December 31, 2019

 

September 30, 2019

 

December 31, 2018

 

 

 

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

 

$

548.5

 

$

2.3

 

1.68

%  

$

447.8

 

$

2.3

 

2.02

%  

$

290.0

 

$

1.5

 

2.04

%

Available-for-Sale Investment Securities

 

 

4,092.2

 

 

21.0

 

2.05

 

 

4,296.3

 

 

22.3

 

2.07

 

 

4,521.3

 

 

25.5

 

2.24

 

Loans Held for Sale

 

 

1.5

 

 

 —

 

2.55

 

 

1.4

 

 

 —

 

2.36

 

 

0.3

 

 

 —

 

3.51

 

Loans and Leases(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

2,668.5

 

 

25.3

 

3.76

 

 

2,885.9

 

 

30.0

 

4.12

 

 

3,120.9

 

 

32.7

 

4.16

 

Commercial real estate

 

 

3,325.8

 

 

35.9

 

4.28

 

 

3,294.7

 

 

37.3

 

4.49

 

 

3,013.0

 

 

32.4

 

4.27

 

Construction

 

 

497.8

 

 

5.4

 

4.36

 

 

477.2

 

 

5.6

 

4.67

 

 

623.9

 

 

7.1

 

4.51

 

Residential:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgages

 

 

3,720.2

 

 

38.5

 

4.14

 

 

3,644.9

 

 

38.6

 

4.23

 

 

3,351.8

 

 

36.0

 

4.26

 

Home equity lines

 

 

905.6

 

 

8.2

 

3.58

 

 

912.8

 

 

8.6

 

3.74

 

 

904.5

 

 

8.7

 

3.78

 

Consumer

 

 

1,635.2

 

 

23.3

 

5.66

 

 

1,651.4

 

 

23.3

 

5.61

 

 

1,657.9

 

 

22.7

 

5.44

 

Lease financing

 

 

187.8

 

 

1.4

 

2.94

 

 

165.4

 

 

1.3

 

3.14

 

 

157.6

 

 

1.1

 

2.70

 

Total Loans and Leases

 

 

12,940.9

 

 

138.0

 

4.24

 

 

13,032.3

 

 

144.7

 

4.41

 

 

12,829.6

 

 

140.7

 

4.35

 

Other Earning Assets

 

 

66.2

 

 

0.8

 

4.76

 

 

84.8

 

 

0.9

 

4.47

 

 

60.1

 

 

0.4

 

2.42

 

Total Earning Assets(2)

 

 

17,649.3

 

 

162.1

 

3.66

 

 

17,862.6

 

 

170.2

 

3.79

 

 

17,701.3

 

 

168.1

 

3.77

 

Cash and Due from Banks

 

 

316.5

 

 

 

 

 

 

 

341.7

 

 

 

 

 

 

 

339.7

 

 

 

 

 

 

Other Assets

 

 

2,123.8

 

 

 

 

 

 

 

2,128.2

 

 

 

 

 

 

 

2,029.0

 

 

 

 

 

 

Total Assets

 

$

20,089.6

 

 

 

 

 

 

$

20,332.5

 

 

 

 

 

 

$

20,070.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

$

4,943.2

 

$

3.8

 

0.31

%  

$

4,891.5

 

$

4.6

 

0.37

%  

 

4,708.4

 

$

3.6

 

0.30

%

Money Market

 

 

3,117.6

 

 

5.6

 

0.72

 

 

3,067.4

 

 

7.1

 

0.92

 

 

3,021.9

 

 

6.1

 

0.80

 

Time

 

 

2,538.4

 

 

8.8

 

1.37

 

 

2,872.6

 

 

11.1

 

1.54

 

 

3,026.2

 

 

10.5

 

1.37

 

Total Interest-Bearing Deposits

 

 

10,599.2

 

 

18.2

 

0.68

 

 

10,831.5

 

 

22.8

 

0.83

 

 

10,756.5

 

 

20.2

 

0.74

 

Short-Term Borrowings

 

 

400.1

 

 

2.9

 

2.87

 

 

370.0

 

 

2.6

 

2.84

 

 

112.9

 

 

0.6

 

2.26

 

Long-Term Borrowings

 

 

200.0

 

 

1.4

 

2.76

 

 

239.1

 

 

1.7

 

2.82

 

 

452.2

 

 

3.3

 

2.86

 

Total Interest-Bearing Liabilities

 

 

11,199.3

 

 

22.5

 

0.80

 

 

11,440.6

 

 

27.1

 

0.94

 

 

11,321.6

 

 

24.1

 

0.84

 

Net Interest Income

 

 

 

 

$

139.6

 

 

 

 

 

 

$

143.1

 

 

 

 

 

 

$

144.0

 

 

 

Interest Rate Spread

 

 

 

 

 

 

 

2.86

%  

 

 

 

 

 

 

2.85

%  

 

 

 

 

 

 

2.93

%

Net Interest Margin

 

 

 

 

 

 

 

3.15

%  

 

 

 

 

 

 

3.19

%  

 

 

 

 

 

 

3.23

%

Noninterest-Bearing Demand Deposits

 

 

5,756.0

 

 

 

 

 

 

 

5,742.3

 

 

 

 

 

 

 

5,852.1

 

 

 

 

 

 

Other Liabilities

 

 

497.6

 

 

 

 

 

 

 

501.2

 

 

 

 

 

 

 

458.8

 

 

 

 

 

 

Stockholders' Equity

 

 

2,636.7

 

 

 

 

 

 

 

2,648.4

 

 

 

 

 

 

 

2,437.5

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

20,089.6

 

 

 

 

 

 

$

20,332.5

 

 

 

 

 

 

$

20,070.0

 

 

 

 

 

 

(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, 2019

 

December 31, 2018

 

 

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

 

(dollars in millions)

    

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

Earning Assets

    

 

 

    

 

 

    

 

    

 

 

    

 

 

    

 

  

Interest-Bearing Deposits in Other Banks

 

$

437.8

 

$

9.3

 

2.11

%  

$

460.8

 

$

8.3

 

1.81

%

Available-for-Sale Investment Securities

 

 

4,310.2

 

 

92.5

 

2.15

 

 

4,843.0

 

 

107.1

 

2.21

 

Loans Held for Sale

 

 

1.0

 

 

 —

 

2.53

 

 

1.0

 

 

 —

 

3.60

 

Loans and Leases(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

2,987.3

 

 

122.8

 

4.11

 

 

3,105.4

 

 

121.9

 

3.93

 

Commercial real estate

 

 

3,176.6

 

 

143.9

 

4.53

 

 

2,918.5

 

 

118.7

 

4.07

 

Construction

 

 

547.7

 

 

25.5

 

4.65

 

 

623.6

 

 

25.8

 

4.13

 

Residential:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgages

 

 

3,626.0

 

 

150.9

 

4.16

 

 

3,254.9

 

 

138.4

 

4.25

 

Home equity lines

 

 

910.7

 

 

34.1

 

3.74

 

 

874.2

 

 

32.2

 

3.68

 

Consumer

 

 

1,652.8

 

 

91.8

 

5.56

 

 

1,633.2

 

 

88.2

 

5.40

 

Lease financing

 

 

162.6

 

 

5.0

 

3.08

 

 

160.4

 

 

4.7

 

2.91

 

Total Loans and Leases

 

 

13,063.7

 

 

574.0

 

4.39

 

 

12,570.2

 

 

529.9

 

4.22

 

Other Earning Assets

 

 

79.8

 

 

2.9

 

3.66

 

 

36.5

 

 

0.7

 

1.93

 

Total Earning Assets(2)

 

 

17,892.5

 

 

678.7

 

3.79

 

 

17,911.5

 

 

646.0

 

3.61

 

Cash and Due from Banks

 

 

340.1

 

 

 

 

 

 

 

328.3

 

 

 

 

 

 

Other Assets

 

 

2,093.1

 

 

 

 

 

 

 

2,007.3

 

 

 

 

 

 

Total Assets

 

$

20,325.7

 

 

 

 

 

 

$

20,247.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

$

4,840.6

 

$

16.6

 

0.34

%  

$

4,638.6

 

$

11.0

 

0.24

%

Money Market

 

 

3,123.5

 

 

27.8

 

0.89

 

 

2,833.4

 

 

15.2

 

0.53

 

Time

 

 

2,882.9

 

 

43.5

 

1.51

 

 

3,743.5

 

 

46.8

 

1.25

 

Total Interest-Bearing Deposits

 

 

10,847.0

 

 

87.9

 

0.81

 

 

11,215.5

 

 

73.0

 

0.65

 

Short-Term Borrowings

 

 

209.8

 

 

5.9

 

2.82

 

 

39.9

 

 

0.8

 

2.13

 

Long-Term Borrowings

 

 

406.6

 

 

11.5

 

2.83

 

 

206.0

 

 

5.9

 

2.87

 

Total Interest-Bearing Liabilities

 

 

11,463.4

 

 

105.3

 

0.92

 

 

11,461.4

 

 

79.7

 

0.70

 

Net Interest Income

 

 

 

 

$

573.4

 

 

 

 

 

 

$

566.3

 

 

 

Interest Rate Spread

 

 

 

 

 

 

 

2.87

%  

 

 

 

 

 

 

2.91

%

Net Interest Margin

 

 

 

 

 

 

 

3.20

%  

 

 

 

 

 

 

3.16

%

Noninterest-Bearing Demand Deposits

 

 

5,766.4

 

 

 

 

 

 

 

5,899.9

 

 

 

 

 

 

Other Liabilities

 

 

486.5

 

 

 

 

 

 

 

428.0

 

 

 

 

 

 

Stockholders' Equity

 

 

2,609.4

 

 

 

 

 

 

 

2,457.8

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

20,325.7

 

 

 

 

 

 

$

20,247.1

 

 

 

 

 

 

(1)

Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.

(2)

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, 2019

 

 

Compared to September 30, 2019

(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

 

 

(1.1)

 

 

(0.2)

 

 

(1.3)

Loans and Leases

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

(2.2)

 

 

(2.5)

 

 

(4.7)

Commercial real estate

 

 

0.4

 

 

(1.8)

 

 

(1.4)

Construction

 

 

0.2

 

 

(0.4)

 

 

(0.2)

Residential:

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

0.8

 

 

(0.9)

 

 

(0.1)

Home equity line

 

 

(0.1)

 

 

(0.3)

 

 

(0.4)

Consumer

 

 

(0.2)

 

 

0.2

 

 

 —

Lease financing

 

 

0.2

 

 

(0.1)

 

 

0.1

Total Loans and Leases

 

 

(0.9)

 

 

(5.8)

 

 

(6.7)

Other Earning Assets

 

 

(0.2)

 

 

0.1

 

 

(0.1)

Total Change in Interest Income

 

 

(1.8)

 

 

(6.3)

 

 

(8.1)

 

 

 

 

 

 

 

 

 

 

Change in Interest Expense:

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

 

 

 

Savings

 

 

 —

 

 

(0.8)

 

 

(0.8)

Money Market

 

 

0.1

 

 

(1.6)

 

 

(1.5)

Time

 

 

(1.2)

 

 

(1.1)

 

 

(2.3)

Total Interest-Bearing Deposits

 

 

(1.1)

 

 

(3.5)

 

 

(4.6)

Short-Term Borrowings

 

 

0.2

 

 

0.1

 

 

0.3

Long-Term Borrowings

 

 

(0.3)

 

 

 —

 

 

(0.3)

Total Change in Interest Expense

 

 

(1.2)

 

 

(3.4)

 

 

(4.6)

Change in Net Interest Income

 

$

(0.6)

 

$

(2.9)

 

$

(3.5)

 

 

 

 

 

 

 

 

 

 

 

Analysis of Change in Net Interest Income

 

 

 

 

 

 

 

 

Table 7

 

 

Three Months Ended December 31, 2019

 

 

Compared to December 31, 2018

(dollars in millions)

 

Volume

 

Rate

 

Total

Change in Interest Income:

    

 

 

    

 

 

    

 

 

Interest-Bearing Deposits in Other Banks

 

$

1.1

 

$

(0.3)

 

$

0.8

Available-for-Sale Investment Securities

 

 

(2.4)

 

 

(2.1)

 

 

(4.5)

Loans and Leases

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

(4.5)

 

 

(2.9)

 

 

(7.4)

Commercial real estate

 

 

3.4

 

 

0.1

 

 

3.5

Construction

 

 

(1.4)

 

 

(0.3)

 

 

(1.7)

Residential:

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

3.6

 

 

(1.1)

 

 

2.5

Home equity line

 

 

 —

 

 

(0.5)

 

 

(0.5)

Consumer

 

 

(0.2)

 

 

0.8

 

 

0.6

Lease financing

 

 

0.2

 

 

0.1

 

 

0.3

Total Loans and Leases

 

 

1.1

 

 

(3.8)

 

 

(2.7)

Other Earning Assets

 

 

 —

 

 

0.4

 

 

0.4

Total Change in Interest Income

 

 

(0.2)

 

 

(5.8)

 

 

(6.0)

 

 

 

 

 

 

 

 

 

 

Change in Interest Expense:

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

 

 

 

Savings

 

 

0.1

 

 

0.1

 

 

0.2

Money Market

 

 

0.2

 

 

(0.7)

 

 

(0.5)

Time

 

 

(1.7)

 

 

 —

 

 

(1.7)

Total Interest-Bearing Deposits

 

 

(1.4)

 

 

(0.6)

 

 

(2.0)

Short-Term Borrowings

 

 

2.1

 

 

0.2

 

 

2.3

Long-Term Borrowings

 

 

(1.8)

 

 

(0.1)

 

 

(1.9)

Total Change in Interest Expense

 

 

(1.1)

 

 

(0.5)

 

 

(1.6)

Change in Net Interest Income

 

$

0.9

 

$

(5.3)

 

$

(4.4)

 

 

 

 

 

 

 

 

 

 

 

Analysis of Change in Net Interest Income

 

 

 

 

 

 

 

 

Table 8

 

 

Year Ended December 31, 2019

 

 

Compared to December 31, 2018

(dollars in millions)

    

Volume

    

Rate

    

Total

Change in Interest Income:

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits in Other Banks

 

$

(0.4)

 

$

1.4

 

$

1.0

Available-for-Sale Investment Securities

 

 

(11.7)

 

 

(2.9)

 

 

(14.6)

Loans and Leases

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

(4.7)

 

 

5.6

 

 

0.9

Commercial real estate

 

 

11.0

 

 

14.2

 

 

25.2

Construction

 

 

(3.3)

 

 

3.0

 

 

(0.3)

Residential:

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

15.6

 

 

(3.1)

 

 

12.5

Home equity line

 

 

1.4

 

 

0.5

 

 

1.9

Consumer

 

 

1.0

 

 

2.6

 

 

3.6

Lease financing

 

 

 —

 

 

0.3

 

 

0.3

Total Loans and Leases

 

 

21.0

 

 

23.1

 

 

44.1

Other Earning Assets

 

 

1.3

 

 

0.9

 

 

2.2

Total Change in Interest Income

 

 

10.2

 

 

22.5

 

 

32.7

 

 

 

 

 

 

 

 

 

 

Change in Interest Expense:

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

 

 

 

Savings

 

 

0.5

 

 

5.1

 

 

5.6

Money Market

 

 

1.7

 

 

10.9

 

 

12.6

Time

 

 

(11.9)

 

 

8.6

 

 

(3.3)

Total Interest-Bearing Deposits

 

 

(9.7)

 

 

24.6

 

 

14.9

Short-Term Borrowings

 

 

4.7

 

 

0.4

 

 

5.1

Long-Term Borrowings

 

 

5.7

 

 

(0.1)

 

 

5.6

Total Change in Interest Expense

 

 

0.7

 

 

24.9

 

 

25.6

Change in Net Interest Income

 

$

9.5

 

$

(2.4)

 

$

7.1

 

 

 

 

 

 

 

 

 

 

 

 

Loans and Leases

 

 

 

 

 

 

 

 

 

Table 9

 

 

 

December 31, 

 

September 30, 

 

December 31, 

(dollars in thousands)

 

    

2019

    

2019

    

2018

Commercial and industrial

 

  

$

2,743,242

  

$

2,654,077

  

$

3,208,760

Commercial real estate

 

 

 

3,463,953

 

 

3,309,389

 

 

2,990,783

Construction

 

 

 

519,241

 

 

486,977

 

 

626,757

Residential:

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

 

3,768,936

 

 

3,671,424

 

 

3,527,101

Home equity line

 

 

 

893,239

 

 

916,106

 

 

912,517

Total residential

 

 

 

4,662,175

 

 

4,587,530

 

 

4,439,618

Consumer

 

 

 

1,620,556

 

 

1,637,549

 

 

1,662,504

Lease financing

 

 

 

202,483

 

 

167,874

 

 

147,769

Total loans and leases

 

 

$

13,211,650

 

$

12,843,396

 

$

13,076,191

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Table 10

 

 

 

December 31, 

 

September 30, 

 

December 31, 

(dollars in thousands)

 

    

2019

    

2019

    

2018

Demand

 

 

$

5,880,072

 

$

5,720,822

 

$

6,007,941

Savings

 

 

 

4,998,933

 

 

4,899,468

 

 

4,853,285

Money Market

 

 

 

3,055,832

 

 

3,529,363

 

 

3,196,678

Time

 

 

 

2,510,157

 

 

2,707,593

 

 

3,092,164

    Total Deposits

 

 

$

16,444,994

 

$

16,857,246

 

$

17,150,068

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

    

2019

    

2019

    

2018

Non-Performing Assets

 

 

 

 

 

 

 

 

 

 

Non-Accrual Loans and Leases

 

 

 

 

 

 

 

 

 

 

Commercial Loans:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

$

32

 

$

12

 

$

274

Commercial real estate

 

 

 

30

 

 

33

 

 

1,658

Total Commercial Loans

 

 

 

62

 

 

45

 

 

1,932

Residential Loans:

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

 

5,406

 

 

3,959

 

 

4,611

Total Residential Loans

 

 

 

5,406

 

 

3,959

 

 

4,611

Consumer

 

 

 

 —

 

 

200

 

 

 —

Total Non-Accrual Loans and Leases

 

 

 

5,468

 

 

4,204

 

 

6,543

Other Real Estate Owned

 

 

 

319

 

 

82

 

 

751

Total Non-Performing Assets

 

 

$

5,787

 

$

4,286

 

$

7,294

 

 

 

 

 

 

 

 

 

 

 

Accruing Loans and Leases Past Due 90 Days or More

 

 

 

 

 

 

 

 

 

 

Commercial Loans:

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

$

1,429

 

$

750

 

$

141

Construction

 

 

 

2,367

 

 

 —

 

 

 —

Commercial real estate

 

 

 

1,013

 

 

 —

 

 

 —

Total Commercial Loans

 

 

 

4,809

 

 

750

 

 

141

Residential Loans:

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

 

74

 

 

139

 

 

32

Home equity line

 

 

 

2,995

 

 

3,192

 

 

2,842

Total Residential Loans

 

 

 

3,069

 

 

3,331

 

 

2,874

Consumer

 

 

 

4,272

 

 

3,076

 

 

3,373

Total Accruing Loans and Leases Past Due 90 Days or More

 

 

$

12,150

 

$

7,157

 

$

6,388

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

14,493

 

 

22,350

 

 

24,033

Total Loans and Leases

 

 

$

13,211,650

 

$

12,843,396

 

$

13,076,191

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

    

2019

    

2019

    

2018

    

2019

    

2018

   

Balance at Beginning of Period

 

$

132,964

 

$

138,535

 

$

141,250

 

$

141,718

 

$

137,253

 

Loans and Leases Charged-Off

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

(204)

 

 

(514)

 

 

 —

 

 

(2,718)

 

 

(778)

 

Lease financing

 

 

 —

 

 

 —

 

 

 —

 

 

(24)

 

 

 —

 

Total Commercial Loans

 

 

(204)

 

 

(514)

 

 

 —

 

 

(2,742)

 

 

(778)

 

Residential

 

 

(431)

 

 

(7)

 

 

(6)

 

 

(438)

 

 

(165)

 

Consumer

 

 

(8,689)

 

 

(8,015)

 

 

(8,015)

 

 

(32,807)

 

 

(26,630)

 

Total Loans and Leases Charged-Off

 

 

(9,324)

 

 

(8,536)

 

 

(8,021)

 

 

(35,987)

 

 

(27,573)

 

Recoveries on Loans and Leases Previously Charged-Off

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

107

 

 

241

 

 

78

 

 

410

 

 

232

 

Commercial real estate

 

 

170

 

 

30

 

 

41

 

 

263

 

 

216

 

Total Commercial Loans

 

 

277

 

 

271

 

 

119

 

 

673

 

 

448

 

Residential

 

 

107

 

 

425

 

 

256

 

 

967

 

 

940

 

Consumer

 

 

2,256

 

 

2,269

 

 

2,364

 

 

9,359

 

 

8,470

 

Total Recoveries on Loans and Leases Previously Charged-Off

 

 

2,640

 

 

2,965

 

 

2,739

 

 

10,999

 

 

9,858

 

Net Loans and Leases Charged-Off

 

 

(6,684)

 

 

(5,571)

 

 

(5,282)

 

 

(24,988)

 

 

(17,715)

 

Provision for Loan and Lease Losses

 

 

4,250

 

 

 —

 

 

5,750

 

 

13,800

 

 

22,180

 

Balance at End of Period

 

$

130,530

 

$

132,964

 

$

141,718

 

$

130,530

 

$

141,718

 

Average Loans and Leases Outstanding

 

$

12,940,956

 

$

13,032,349

 

$

12,829,635

 

$

13,063,716

 

$

12,570,182

 

Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)

 

 

0.20

%  

 

0.17

%  

 

0.16

%  

 

0.19

%  

 

0.14

%

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

 

 

0.99

%  

 

1.04

%  

 

1.08

%  

 

0.99

%  

 

1.08

%

(1)

Annualized for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

    

2019

    

2019

    

2018

    

2019

    

2018

 

Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

67,836

 

$

74,199

 

$

59,995

 

$

284,392

 

$

264,394

 

Core net income

 

$

71,250

 

$

75,871

 

$

77,914

 

$

291,785

 

$

286,711

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total stockholders' equity

 

$

2,636,651

 

$

2,648,428

 

$

2,437,504

 

$

2,609,432

 

$

2,457,771

 

Less: average goodwill

 

 

995,492

 

 

995,492

 

 

995,492

 

 

995,492

 

 

995,492

 

Average tangible stockholders' equity

 

$

1,641,159

 

$

1,652,936

 

$

1,442,012

 

$

1,613,940

 

$

1,462,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total assets

 

$

20,089,601

 

$

20,332,457

 

$

20,069,988

 

$

20,325,697

 

$

20,247,135

 

Less: average goodwill

 

 

995,492

 

 

995,492

 

 

995,492

 

 

995,492

 

 

995,492

 

Average tangible assets

 

$

19,094,109

 

$

19,336,965

 

$

19,074,496

 

$

19,330,205

 

$

19,251,643

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average total stockholders' equity(1)

 

 

10.21

%  

 

11.12

%  

 

9.77

%  

 

10.90

%  

 

10.76

%  

Core return on average total stockholders' equity (non-GAAP)(1)

 

 

10.72

%  

 

11.37

%  

 

12.68

%  

 

11.18

%  

 

11.67

%  

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

 

 

16.40

%  

 

17.81

%  

 

16.51

%  

 

17.62

%  

 

18.08

%  

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

 

 

17.22

%  

 

18.21

%  

 

21.44

%  

 

18.08

%  

 

19.61

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average total assets(1)

 

 

1.34

%  

 

1.45

%  

 

1.19

%  

 

1.40

%  

 

1.31

%  

Core return on average total assets (non-GAAP)(1)

 

 

1.41

%  

 

1.48

%  

 

1.54

%  

 

1.44

%  

 

1.42

%  

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

 

 

1.41

%  

 

1.52

%  

 

1.25

%  

 

1.47

%  

 

1.37

%  

Core return on average tangible assets (non-GAAP)(1)

 

 

1.48

%  

 

1.56

%  

 

1.62

%  

 

1.51

%  

 

1.49

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

As of

 

As of

 

 

 

 

December 31, 

 

September 30, 

 

December 31, 

 

 

 

    

2019

    

2019

    

2018

    

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

$

2,640,258

 

$

2,654,558

 

$

2,524,839

 

Less: goodwill

 

 

 

995,492

 

 

995,492

 

 

995,492

 

Tangible stockholders' equity

 

 

$

1,644,766

 

$

1,659,066

 

$

1,529,347

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

$

20,166,734

 

$

20,598,220

 

$

20,695,678

 

Less: goodwill

 

 

 

995,492

 

 

995,492

 

 

995,492

 

Tangible assets

 

 

$

19,171,242

 

$

19,602,728

 

$

19,700,186

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding

 

 

 

129,928,479

 

 

131,260,900

 

 

134,874,302

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity to total assets

 

 

 

13.09

%  

 

12.89

%  

 

12.20

%  

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

 

 

8.58

%  

 

8.46

%  

 

7.76

%  

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

 

$

20.32

 

$

20.22

 

$

18.72

 

Tangible book value per share (non-GAAP)

 

 

$

12.66

 

$

12.64

 

$

11.34

 

(1)

Annualized for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

    

2019

    

2019

    

2018

    

2019

    

2018

   

Net interest income

 

$

139,619

 

$

143,081

 

$

143,985

 

$

573,402

 

$

566,318

 

Core net interest income (non-GAAP)

 

$

139,619

 

$

143,081

 

$

143,985

 

$

573,402

 

$

566,318

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

$

46,708

 

$

49,980

 

$

33,091

 

$

192,533

 

$

178,993

 

Loss on sale of securities

 

 

123

 

 

 —

 

 

 —

 

 

2,715

 

 

 —

 

Costs associated with the sale of stock

 

 

4,500

 

 

 —

 

 

 —

 

 

4,500

 

 

 —

 

OTTI losses on available-for-sale debt securities

 

 

 —

 

 

 —

 

 

24,085

 

 

 —

 

 

24,085

 

Core noninterest income (non-GAAP)

 

$

51,331

 

$

49,980

 

$

57,176

 

$

199,748

 

$

203,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

91,058

 

$

93,466

 

$

89,354

 

$

370,437

 

$

364,953

 

Loss on litigation settlement(1)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(4,125)

 

One-time items(2)

 

 

(48)

 

 

(2,244)

 

 

(435)

 

 

(2,814)

 

 

(2,267)

 

Core noninterest expense (non-GAAP)

 

$

91,010

 

$

91,222

 

$

88,919

 

$

367,623

 

$

358,561

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

67,836

 

$

74,199

 

$

59,995

 

$

284,392

 

$

264,394

 

Loss on sale of securities

 

 

123

 

 

 —

 

 

 —

 

 

2,715

 

 

 —

 

Costs associated with the sale of stock

 

 

4,500

 

 

 —

 

 

 —

 

 

4,500

 

 

 —

 

OTTI losses on available-for-sale debt securities

 

 

 —

 

 

 —

 

 

24,085

 

 

 —

 

 

24,085

 

Loss on litigation settlement(1)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

4,125

 

One-time noninterest expense items(2)

 

 

48

 

 

2,244

 

 

435

 

 

2,814

 

 

2,267

 

Tax adjustments(3)

 

 

(1,257)

 

 

(572)

 

 

(6,601)

 

 

(2,636)

 

 

(8,160)

 

Total core adjustments

 

 

3,414

 

 

1,672

 

 

17,919

 

 

7,393

 

 

22,317

 

Core net income (non-GAAP)

 

$

71,250

 

$

75,871

 

$

77,914

 

$

291,785

 

$

286,711

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.52

 

$

0.56

 

$

0.44

 

$

2.14

 

$

1.93

 

Diluted earnings per share

 

$

0.52

 

$

0.56

 

$

0.44

 

$

2.13

 

$

1.93

 

Efficiency ratio

 

 

48.86

%

 

48.41

%

 

50.45

%

 

48.36

%

 

48.96

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core basic earnings per share (non-GAAP)

 

$

0.55

 

$

0.57

 

$

0.58

 

$

2.19

 

$

2.09

 

Core diluted earnings per share (non-GAAP)

 

$

0.54

 

$

0.57

 

$

0.58

 

$

2.19

 

$

2.09

 

Core efficiency ratio (non-GAAP)

 

 

47.65

%

 

47.25

%

 

44.19

%

 

47.55

%

 

46.59

%

(1)

The Company reached an agreement in principle to resolve a putative class action lawsuit alleging that the Bank improperly charged certain overdraft fees. In connection with the settlement agreement, the Company recorded an expense of approximately $4.1 million during the year ended December 31, 2018.

(2)

One-time items for all periods shown included nonrecurring offering costs. Additionally, one-time items for the three months ended September 30, 2019 and the twelve months ended December 31, 2019 included costs related to a nonrecurring payment to a former executive of the Company pursuant to the Bank’s Executive Change-in-Control Retention Plan and the loss on our funding swap as a result of a 2019 decrease in the conversion rate of our Visa Class B restricted shares sold in 2016. One-time items for the year ended December 31, 2018 included the loss on our funding swap as a result of a 2018 decrease in the conversion rate of our Visa Class B restricted shares sold in 2016.

(3)

Represents the adjustments to net income, tax effected at the Company’s effective tax rate for the respective period.