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First Hawaiian, Inc. Reports First Quarter 2023 Financial Results and Declares Dividend
Source: Nasdaq GlobeNewswire / 28 Apr 2023 08:00:02 America/New_York
HONOLULU, April 28, 2023 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended March 31, 2023.
“Our first quarter results reflect the strength of our balance sheet, the value of our customer relationships and our commitment to the communities we serve,” said Bob Harrison, Chairman, President and CEO. “Our financial results were solid, we grew capital and our credit quality metrics remained excellent. We remain well positioned to serve our customers and the community.”
On April 26, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on June 2, 2023, to stockholders of record at the close of business on May 22, 2023.
First Quarter 2023 Highlights:
- Net income of $66.8 million, or $0.52 per diluted share
- Total loans and leases increased $129.3 million versus prior quarter
- Total deposits decreased $407.5 million versus prior quarter
- Net interest margin decreased 4 basis points to 3.11%
- Recorded a $8.8 million provision for credit losses
- Board of Directors declared a quarterly dividend of $0.26 per share
Balance Sheet
Total assets were $24.9 billion as of March 31, 2023, compared to $24.6 billion as of December 31, 2022.Gross loans and leases were $14.2 billion as of March 31, 2023, an increase of $129.3 million, or 0.9%, from $14.1 billion as of December 31, 2022.
Total deposits were $21.3 billion as of March 31, 2023, a decrease of $407.5 million, or 1.9%, from $21.7 billion as of December 31, 2022.
Net Interest Income
Net interest income for the first quarter of 2023 was $167.2 million, a decrease of $4.5 million, or 2.6%, compared to $171.8 million for the prior quarter.The net interest margin was 3.11% in the first quarter of 2023, a decrease of 4 basis points compared to 3.15% in the prior quarter.
Provision Expense
During the quarter ended March 31, 2023, we recorded a $8.8 million provision for credit losses. In the quarter ended December 31, 2022, we recorded a $3.0 million provision for credit losses.Noninterest Income
Noninterest income was $49.0 million in the first quarter of 2023, an increase of $0.9 million compared to noninterest income of $48.2 million in the prior quarter.Noninterest Expense
Noninterest expense was $118.6 million in the first quarter of 2023, an increase of $4.6 million compared to noninterest expense of $113.9 million in the prior quarter.The efficiency ratio was 54.5% and 51.5% for the quarters ended March 31, 2023 and December 31, 2022, respectively.
Taxes
The effective tax rate was 24.8% and 22.8% for the quarters ended March 31, 2023 and December 31, 2022, respectively.Asset Quality
The allowance for credit losses was $147.1 million, or 1.03% of total loans and leases, as of March 31, 2023, compared to $143.9 million, or 1.02% of total loans and leases, as of December 31, 2022. The reserve for unfunded commitments was $36.2 million as of March 31, 2023, compared to $33.8 million as of December 31, 2022. Net charge-offs were $3.2 million, or 0.09% of average loans and leases on an annualized basis, for the quarter ended March 31, 2023, compared to net charge-offs of $3.5 million, or 0.10% of average loans and leases on an annualized basis, for the quarter ended December 31, 2022. Total non-performing assets were $13.8 million, or 0.10% of total loans and leases and other real estate owned, on March 31, 2023, compared to total non-performing assets of $12.0 million, or 0.09% of total loans and leases and other real estate owned, on December 31, 2022.Capital
Total stockholders' equity was $2.3 billion on March 31, 2023 and December 31, 2022.The tier 1 leverage, common equity tier 1 and total capital ratios were 8.26%, 11.97%, and 13.09%, respectively, on March 31, 2023, compared with 8.11%, 11.82%, and 12.92%, respectively, on December 31, 2022.
The Company did not repurchase any shares in the first quarter.
First Hawaiian, Inc.
First Hawaiian, Inc. (NASDAQ:FHB) is a bank holding company headquartered in Honolulu, Hawaii. Its principal subsidiary, First Hawaiian Bank, founded in 1858 under the name Bishop & Company, is Hawaii’s oldest and largest financial institution with branch locations throughout Hawaii, Guam and Saipan. The company offers a comprehensive suite of banking services to consumer and commercial customers including deposit products, loans, wealth management, insurance, trust, retirement planning, credit card and merchant processing services. Customers may also access their accounts through ATMs, online and mobile banking channels. For more information about First Hawaiian, Inc., visit the Company’s website, www.fhb.com.Conference Call Information
First Hawaiian will host a conference call to discuss the Company’s results today at 1:00 p.m. Eastern Time, 7:00 a.m. Hawaii Time.To access the call by phone, please register via the following link: https://register.vevent.com/register/BI2a46e3679b7649d98326df98e6359e6f, and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time.
A live webcast of the conference call, including a slide presentation, will be available at the following link: www.fhb.com/earnings. The archive of the webcast will be available at the same location.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized” and “outlook”, or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Further, statements about the potential effects of the COVID-19 pandemic on our businesses and financial results and conditions may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, there can be no assurance that actual results will not prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements, including (without limitation) the risks and uncertainties associated with the ongoing impacts of COVID-19, the domestic and global economic environment and capital market conditions and other risk factors. For a discussion of some of these risks and important factors that could affect our future results and financial condition, see our U.S. Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2022.Use of Non-GAAP Financial Measures
Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We believe that these measurements are useful for investors, regulators, management and others to evaluate financial performance and capital adequacy relative to other financial institutions. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results or financial condition as reported under GAAP. Investors should consider our performance and capital adequacy as reported under GAAP and all other relevant information when assessing our performance and capital adequacy.Table 12 at the end of this document provides a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.
Investor Relations Contact:
Kevin Haseyama, CFA
(808) 525-6268
khaseyama@fhb.comMedia Contact:
Lindsay Chambers
(808) 525-6254
lchambers@fhb.comFinancial Highlights Table 1 For the Three Months Ended March 31, December 31, March 31, (dollars in thousands, except per share data) 2023 2022 2022 Operating Results: Net interest income $ 167,247 $ 171,794 $ 133,872 Provision for credit losses 8,800 2,956 (5,747 ) Noninterest income 49,023 48,151 41,380 Noninterest expense 118,567 113,922 104,042 Net income 66,818 79,588 57,719 Basic earnings per share 0.52 0.62 0.45 Diluted earnings per share 0.52 0.62 0.45 Dividends declared per share 0.26 0.26 0.26 Dividend payout ratio 50.00 % 41.94 % 57.78 % Performance Ratios(1): Net interest margin 3.11 % 3.15 % 2.42 % Efficiency ratio 54.46 % 51.47 % 59.04 % Return on average total assets 1.10 % 1.28 % 0.93 % Return on average tangible assets (non-GAAP)(2) 1.15 % 1.34 % 0.97 % Return on average total stockholders' equity 11.78 % 14.27 % 9.19 % Return on average tangible stockholders' equity (non-GAAP)(2) 20.78 % 25.93 % 15.08 % Average Balances: Average loans and leases $ 14,079,337 $ 13,876,136 $ 12,819,612 Average earning assets 21,873,259 21,856,135 22,463,209 Average assets 24,548,124 24,575,648 25,080,453 Average deposits 21,468,624 21,725,177 21,960,819 Average stockholders' equity 2,299,422 2,213,030 2,547,865 Market Value Per Share: Closing 20.63 26.04 27.89 High 28.28 27.16 31.16 Low 19.68 24.06 26.93 As of As of As of March 31, December 31, March 31, (dollars in thousands, except per share data) 2023 2022 2022 Balance Sheet Data: Loans and leases $ 14,221,272 $ 14,092,012 $ 12,891,743 Total assets 24,884,207 24,577,223 25,042,720 Total deposits 21,281,500 21,689,029 22,270,430 Short-term borrowings 250,000 75,000 — Long-term borrowings 500,000 — — Total stockholders' equity 2,329,012 2,269,005 2,285,149 Per Share of Common Stock: Book value $ 18.26 $ 17.82 $ 17.90 Tangible book value (non-GAAP)(2) 10.45 10.00 10.10 Asset Quality Ratios: Non-accrual loans and leases / total loans and leases 0.10 % 0.08 % 0.07 % Allowance for credit losses for loans and leases / total loans and leases 1.03 % 1.02 % 1.17 % Capital Ratios: Common Equity Tier 1 Capital Ratio 11.97 % 11.82 % 12.27 % Tier 1 Capital Ratio 11.97 % 11.82 % 12.27 % Total Capital Ratio 13.09 % 12.92 % 13.48 % Tier 1 Leverage Ratio 8.26 % 8.11 % 7.50 % Total stockholders' equity to total assets 9.36 % 9.23 % 9.13 % Tangible stockholders' equity to tangible assets (non-GAAP)(2) 5.58 % 5.40 % 5.36 % Non-Financial Data: Number of branches 51 51 51 Number of ATMs 296 294 298 Number of Full-Time Equivalent Employees 2,100 2,063 2,022 ________________________
(1) Except for the efficiency ratio, amounts are annualized for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022.(2) Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We compute our return on average tangible assets as the ratio of net income to average tangible assets, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total assets. We compute our return on average tangible stockholders’ equity as the ratio of net income to average tangible stockholders’ equity, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total stockholders’ equity. We compute our tangible book value per share as the ratio of tangible stockholders’ equity to outstanding shares. Tangible stockholders’ equity is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our total stockholders’ equity. We compute our tangible stockholders’ equity to tangible assets as the ratio of tangible stockholders’ equity to tangible assets, each of which we calculate by subtracting (and thereby effectively excluding) the value of our goodwill. For a reconciliation to the most directly comparable GAAP financial measure, see Table 12, GAAP to Non-GAAP Reconciliation.
Consolidated Statements of Income Table 2 For the Three Months Ended March 31, December 31, March 31, (dollars in thousands, except per share amounts) 2023 2022 2022 Interest income Loans and lease financing $ 172,339 $ 159,526 $ 103,732 Available-for-sale investment securities 18,688 18,714 32,107 Held-to-maturity investment securities 18,957 19,137 — Other 3,561 3,088 782 Total interest income 213,545 200,465 136,621 Interest expense Deposits 43,284 28,202 2,749 Short-term and long-term borrowings 2,563 469 — Other 451 — — Total interest expense 46,298 28,671 2,749 Net interest income 167,247 171,794 133,872 Provision for credit losses 8,800 2,956 (5,747 ) Net interest income after provision for credit losses 158,447 168,838 139,619 Noninterest income Service charges on deposit accounts 7,231 7,376 7,501 Credit and debit card fees 16,298 16,376 14,850 Other service charges and fees 9,162 9,185 9,654 Trust and investment services income 9,614 9,023 8,883 Bank-owned life insurance 5,120 2,865 (417 ) Other 1,598 3,326 909 Total noninterest income 49,023 48,151 41,380 Noninterest expense Salaries and employee benefits 56,032 49,629 48,226 Contracted services and professional fees 16,313 17,638 17,147 Occupancy 7,782 8,175 7,410 Equipment 9,736 9,984 5,977 Regulatory assessment and fees 3,836 2,591 2,224 Advertising and marketing 1,994 2,072 2,028 Card rewards program 8,085 8,681 6,883 Other 14,789 15,152 14,147 Total noninterest expense 118,567 113,922 104,042 Income before provision for income taxes 88,903 103,067 76,957 Provision for income taxes 22,085 23,479 19,238 Net income $ 66,818 $ 79,588 $ 57,719 Basic earnings per share $ 0.52 $ 0.62 $ 0.45 Diluted earnings per share $ 0.52 $ 0.62 $ 0.45 Basic weighted-average outstanding shares 127,453,820 127,356,795 127,556,242 Diluted weighted-average outstanding shares 128,033,812 127,894,773 128,121,126 Consolidated Balance Sheets Table 3 March 31, December 31, March 31, (dollars in thousands) 2023 2022 2022 Assets Cash and due from banks $ 253,705 $ 297,502 $ 274,022 Interest-bearing deposits in other banks 611,887 229,122 1,352,138 Investment securities: Available-for-sale, at fair value (amortized cost: $3,427,708 as of March 31, 2023, $3,549,599 as of December 31, 2022 and $8,733,170 as of March 31, 2022) 3,054,280 3,151,133 8,062,384 Held-to-maturity, at amortized cost (fair value: $3,824,478 as of March 31, 2023, $3,814,822 as of December 31, 2022 and nil as of March 31, 2022) 4,261,361 4,320,639 — Loans and leases 14,221,272 14,092,012 12,891,743 Less: allowance for credit losses 147,122 143,900 150,280 Net loans and leases 14,074,150 13,948,112 12,741,463 Premises and equipment, net 278,121 280,355 315,766 Other real estate owned and repossessed personal property 91 91 — Accrued interest receivable 79,200 78,194 61,561 Bank-owned life insurance 473,255 473,067 471,401 Goodwill 995,492 995,492 995,492 Mortgage servicing rights 6,299 6,562 7,650 Other assets 796,366 796,954 760,843 Total assets $ 24,884,207 $ 24,577,223 $ 25,042,720 Liabilities and Stockholders' Equity Deposits: Interest-bearing $ 12,579,155 $ 12,824,383 $ 12,504,821 Noninterest-bearing 8,702,345 8,864,646 9,765,609 Total deposits 21,281,500 21,689,029 22,270,430 Short-term borrowings 250,000 75,000 — Long-term borrowings 500,000 — — Retirement benefits payable 101,622 102,577 134,323 Other liabilities 422,073 441,612 352,818 Total liabilities 22,555,195 22,308,218 22,757,571 Stockholders' equity Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 141,291,086 / 127,573,680 shares as of March 31, 2023, issued/outstanding: 140,963,918 / 127,363,327 shares as of December 31, 2022 and issued/outstanding: 140,875,595 / 127,686,307 shares as of March 31, 2022) 1,413 1,410 1,409 Additional paid-in capital 2,540,653 2,538,336 2,530,795 Retained earnings 769,791 736,544 628,642 Accumulated other comprehensive loss, net (611,679 ) (639,254 ) (517,502 ) Treasury stock (13,717,406 shares as of March 31, 2023, 13,600,591 shares as of December 31, 2022 and 13,189,288 shares as of March 31, 2022) (371,166 ) (368,031 ) (358,195 ) Total stockholders' equity 2,329,012 2,269,005 2,285,149 Total liabilities and stockholders' equity $ 24,884,207 $ 24,577,223 $ 25,042,720 Average Balances and Interest Rates Table 4 Three Months Ended Three Months Ended Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 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 $ 299.6 $ 3.4 4.60 % $ 321.3 $ 2.9 3.64 % $ 1,138.3 $ 0.6 0.20 % Available-for-Sale Investment Securities Taxable 3,081.4 18.4 2.39 3,180.8 18.3 2.30 7,800.3 29.2 1.50 Non-Taxable 31.1 0.4 5.55 37.9 0.5 5.42 636.7 3.6 2.32 Held-to-Maturity Investment Securities Taxable 3,683.8 15.7 1.70 3,754.9 15.8 1.69 — — — Non-Taxable 612.2 4.1 2.74 613.4 4.2 2.69 — — — Total Investment Securities 7,408.5 38.6 2.09 7,587.0 38.8 2.04 8,437.0 32.8 1.56 Loans Held for Sale 0.1 — 5.53 0.1 — 6.50 1.2 — 2.02 Loans and Leases(1) Commercial and industrial 2,192.9 32.4 5.98 2,126.3 28.1 5.24 1,973.1 14.6 3.01 Commercial real estate 4,105.7 58.3 5.76 4,116.8 53.9 5.19 3,632.2 25.8 2.88 Construction 873.9 14.7 6.83 804.4 11.8 5.83 766.9 5.7 3.03 Residential: Residential mortgage 4,307.0 38.4 3.57 4,280.6 38.1 3.56 4,111.0 34.8 3.38 Home equity line 1,074.9 8.7 3.27 1,029.7 8.1 3.10 891.6 5.5 2.48 Consumer 1,213.5 17.2 5.75 1,220.9 17.1 5.55 1,218.6 15.6 5.19 Lease financing 311.4 3.1 4.10 297.4 2.9 3.92 226.2 1.9 3.42 Total Loans and Leases 14,079.3 172.8 4.96 13,876.1 160.0 4.58 12,819.6 103.9 3.27 Other Earning Assets 85.8 0.2 0.76 71.6 0.2 0.80 67.1 0.2 1.31 Total Earning Assets(2) 21,873.3 215.0 3.97 21,856.1 201.9 3.67 22,463.2 137.5 2.47 Cash and Due from Banks 286.1 286.4 292.1 Other Assets 2,388.7 2,433.1 2,325.2 Total Assets $ 24,548.1 $ 24,575.6 $ 25,080.5 Interest-Bearing Liabilities Interest-Bearing Deposits Savings $ 6,354.3 $ 13.9 0.89 % $ 6,455.5 $ 10.3 0.63 % 6,668.4 $ 0.5 0.03 % Money Market 3,853.5 14.3 1.50 4,012.9 9.8 0.97 4,048.9 0.5 0.05 Time 2,515.6 15.1 2.44 2,163.2 8.1 1.48 1,748.5 1.7 0.39 Total Interest-Bearing Deposits 12,723.4 43.3 1.38 12,631.6 28.2 0.89 12,465.8 2.7 0.09 Federal Funds Purchased 67.1 0.7 4.43 45.5 0.5 4.09 — — — Other Short-Term Borrowings 52.8 0.7 5.02 — — — — — — Long-Term Borrowings 105.5 1.2 4.52 — — — — — — Other Interest-Bearing Liabilities 42.8 0.4 4.27 — — — — — — Total Interest-Bearing Liabilities 12,991.6 46.3 1.45 12,677.1 28.7 0.90 12,465.8 2.7 0.09 Net Interest Income $ 168.7 $ 173.2 $ 134.8 Interest Rate Spread 2.52 % 2.77 % 2.38 % Net Interest Margin 3.11 % 3.15 % 2.42 % Noninterest-Bearing Demand Deposits 8,745.2 9,093.6 9,495.0 Other Liabilities 511.9 591.9 571.8 Stockholders' Equity 2,299.4 2,213.0 2,547.9 Total Liabilities and Stockholders' Equity $ 24,548.1 $ 24,575.6 $ 25,080.5 ________________________
(1) Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.(2) Interest income includes taxable-equivalent basis adjustments of $1.4 million, $1.4 million and $1.0 million for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022, respectively.
Analysis of Change in Net Interest Income Table 5 Three Months Ended March 31, 2023 Compared to December 31, 2022 (dollars in millions) Volume Rate Total Change in Interest Income: Interest-Bearing Deposits in Other Banks $ (0.2 ) $ 0.7 $ 0.5 Available-for-Sale Investment Securities Taxable (0.6 ) 0.7 0.1 Non-Taxable (0.1 ) — (0.1 ) Held-to-Maturity Investment Securities Taxable (0.2 ) 0.1 (0.1 ) Non-Taxable (0.1 ) — (0.1 ) Total Investment Securities (1.0 ) 0.8 (0.2 ) Loans and Leases Commercial and industrial 0.8 3.5 4.3 Commercial real estate (0.2 ) 4.6 4.4 Construction 1.0 1.9 2.9 Residential: Residential mortgage 0.2 0.1 0.3 Home equity line 0.3 0.3 0.6 Consumer (0.2 ) 0.3 0.1 Lease financing 0.1 0.1 0.2 Total Loans and Leases 2.0 10.8 12.8 Total Change in Interest Income 0.8 12.3 13.1 Change in Interest Expense: Interest-Bearing Deposits Savings (0.2 ) 3.8 3.6 Money Market (0.4 ) 4.9 4.5 Time 1.4 5.6 7.0 Total Interest-Bearing Deposits 0.8 14.3 15.1 Federal Funds Purchased 0.2 — 0.2 Other Short-Term Borrowings 0.7 — 0.7 Long-Term Borrowings 1.2 — 1.2 Other Interest-Bearing Liabilities 0.4 — 0.4 Total Change in Interest Expense 3.3 14.3 17.6 Change in Net Interest Income $ (2.5 ) $ (2.0 ) $ (4.5 ) Analysis of Change in Net Interest Income Table 6 Three Months Ended March 31, 2023 Compared to March 31, 2022 (dollars in millions) Volume Rate Total Change in Interest Income: Interest-Bearing Deposits in Other Banks $ (0.7 ) $ 3.5 $ 2.8 Available-for-Sale Investment Securities Taxable (23.0 ) 12.2 (10.8 ) Non-Taxable (5.5 ) 2.3 (3.2 ) Held-to-Maturity Investment Securities Taxable 15.7 — 15.7 Non-Taxable 4.1 — 4.1 Total Investment Securities (8.7 ) 14.5 5.8 Loans and Leases Commercial and industrial 1.8 16.0 17.8 Commercial real estate 3.7 28.8 32.5 Construction 0.9 8.1 9.0 Residential: Residential mortgage 1.7 1.9 3.6 Home equity line 1.3 1.9 3.2 Consumer (0.1 ) 1.7 1.6 Lease financing 0.8 0.4 1.2 Total Loans and Leases 10.1 58.8 68.9 Other Earning Assets 0.1 (0.1 ) — Total Change in Interest Income 0.8 76.7 77.5 Change in Interest Expense: Interest-Bearing Deposits Savings — 13.4 13.4 Money Market — 13.8 13.8 Time 1.0 12.4 13.4 Total Interest-Bearing Deposits 1.0 39.6 40.6 Federal Funds Purchased 0.7 — 0.7 Other Short-Term Borrowings 0.7 — 0.7 Long-Term Borrowings 1.2 — 1.2 Other Interest-Bearing Liabilities 0.4 — 0.4 Total Change in Interest Expense 4.0 39.6 43.6 Change in Net Interest Income $ (3.2 ) $ 37.1 $ 33.9 Loans and Leases Table 7 March 31, December 31, March 31, (dollars in thousands) 2023 2022 2022 Commercial and industrial: Commercial and industrial excluding Paycheck Protection Program loans $ 2,254,506 $ 2,217,604 $ 1,817,346 Paycheck Protection Program loans 13,826 18,293 106,188 Total commercial and industrial 2,268,332 2,235,897 1,923,534 Commercial real estate 4,106,200 4,132,309 3,759,980 Construction 913,959 844,643 708,300 Residential: Residential mortgage 4,318,742 4,302,788 4,153,824 Home equity line 1,095,365 1,055,351 918,101 Total residential 5,414,107 5,358,139 5,071,925 Consumer 1,191,552 1,222,934 1,204,834 Lease financing 327,122 298,090 223,170 Total loans and leases $ 14,221,272 $ 14,092,012 $ 12,891,743 Deposits Table 8 March 31, December 31, March 31, (dollars in thousands) 2023 2022 2022 Demand $ 8,702,345 $ 8,864,646 $ 9,765,609 Savings 6,173,398 6,382,910 6,812,758 Money Market 3,818,355 3,965,423 3,990,225 Time 2,587,402 2,476,050 1,701,838 Total Deposits $ 21,281,500 $ 21,689,029 $ 22,270,430 Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More Table 9 March 31, December 31, March 31, (dollars in thousands) 2023 2022 2022 Non-Performing Assets Non-Accrual Loans and Leases Commercial Loans: Commercial and industrial $ 1,158 $ 1,215 $ 707 Commercial real estate 727 727 727 Lease financing — — 75 Total Commercial Loans 1,885 1,942 1,509 Residential Loans: Residential mortgage 6,896 6,166 7,092 Home equity line 4,903 3,797 — Total Residential Loans 11,799 9,963 7,092 Total Non-Accrual Loans and Leases 13,684 11,905 8,601 Other Real Estate Owned 91 91 — Total Non-Performing Assets $ 13,775 $ 11,996 $ 8,601 Accruing Loans and Leases Past Due 90 Days or More Commercial Loans: Commercial and industrial $ 461 $ 291 $ 591 Commercial real estate 1,346 — — Construction 102 — — Total Commercial Loans 1,909 291 591 Residential Loans: Residential mortgage 58 58 13 Home equity line — — 2,252 Total Residential Loans 58 58 2,265 Consumer 2,502 2,885 1,588 Total Accruing Loans and Leases Past Due 90 Days or More $ 4,469 $ 3,234 $ 4,444 Total Loans and Leases $ 14,221,272 $ 14,092,012 $ 12,891,743 Allowance for Credit Losses and Reserve for Unfunded Commitments Table 10 For the Three Months Ended March 31, December 31, March 31, (dollars in thousands) 2023 2022 2022 Balance at Beginning of Period $ 177,735 $ 178,304 $ 187,584 Loans and Leases Charged-Off Commercial and industrial (791 ) (735 ) (706 ) Residential Loans: Residential mortgage (122 ) (102 ) — Home equity line (135 ) (12 ) (43 ) Total Residential Loans (257 ) (114 ) (43 ) Consumer (4,782 ) (5,094 ) (4,109 ) Total Loans and Leases Charged-Off (5,830 ) (5,943 ) (4,858 ) Recoveries on Loans and Leases Previously Charged-Off Commercial Loans: Commercial and industrial 246 303 53 Commercial real estate — — 14 Total Commercial Loans 246 303 67 Residential Loans: Residential mortgage 27 173 16 Home equity line 177 138 28 Total Residential Loans 204 311 44 Consumer 2,166 1,804 2,148 Total Recoveries on Loans and Leases Previously Charged-Off 2,616 2,418 2,259 Net Loans and Leases Charged-Off (3,214 ) (3,525 ) (2,599 ) Provision for Credit Losses 8,800 2,956 (5,747 ) Balance at End of Period $ 183,321 $ 177,735 $ 179,238 Components: Allowance for Credit Losses $ 147,122 $ 143,900 $ 150,280 Reserve for Unfunded Commitments 36,199 33,835 28,958 Total Allowance for Credit Losses and Reserve for Unfunded Commitments $ 183,321 $ 177,735 $ 179,238 Average Loans and Leases Outstanding $ 14,079,337 $ 13,876,136 $ 12,819,612 Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1) 0.09 % 0.10 % 0.08 % Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding 1.03 % 1.02 % 1.17 % Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases 10.75x 12.09x 17.47x ________________________
(1) Annualized for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022.Loans and Leases by Year of Origination and Credit Quality Indicator Table 11 Revolving Loans Converted to Term Term Loans Revolving Loans Amortized Cost Basis by Origination Year Loans Amortized Amortized Cost (dollars in thousands) 2023 2022 2021 2020 2019 Prior Cost Basis Basis Total Commercial Lending Commercial and Industrial Risk rating: Pass $ 66,587 $ 338,534 $ 412,459 $ 48,560 $ 167,698 $ 178,991 $ 921,651 $ 13,566 $ 2,148,046 Special Mention 152 16,591 202 994 2,526 1,548 2,557 283 24,853 Substandard — 594 274 1,058 958 1,422 11,043 41 15,390 Other (1) 5,223 14,426 6,965 3,780 3,312 2,287 44,050 — 80,043 Total Commercial and Industrial 71,962 370,145 419,900 54,392 174,494 184,248 979,301 13,890 2,268,332 Current period gross charge-offs — 60 — — 20 711 — — 791 Commercial Real Estate Risk rating: Pass 105,554 880,292 661,523 321,162 521,596 1,533,711 56,034 — 4,079,872 Special Mention — 163 — 551 7,031 11,490 659 — 19,894 Substandard — — — 172 — 5,808 305 — 6,285 Other (1) — — — — — 149 — — 149 Total Commercial Real Estate 105,554 880,455 661,523 321,885 528,627 1,551,158 56,998 — 4,106,200 Current period gross charge-offs — — — — — — — — — Construction Risk rating: Pass 15,219 152,263 333,608 89,515 103,855 141,243 20,349 — 856,052 Special Mention — — — — 213 — — — 213 Substandard — — — — — 486 — — 486 Other (1) 817 29,615 16,206 2,991 2,160 4,478 941 — 57,208 Total Construction 16,036 181,878 349,814 92,506 106,228 146,207 21,290 — 913,959 Current period gross charge-offs — — — — — — — — — Lease Financing Risk rating: Pass 51,664 99,102 22,653 42,081 37,333 72,254 — — 325,087 Special Mention — — 388 82 — — — — 470 Substandard — — — 184 9 1,372 — — 1,565 Total Lease Financing 51,664 99,102 23,041 42,347 37,342 73,626 — — 327,122 Current period gross charge-offs — — — — — — — — — Total Commercial Lending $ 245,216 $ 1,531,580 $ 1,454,278 $ 511,130 $ 846,691 $ 1,955,239 $ 1,057,589 $ 13,890 $ 7,615,613 Current period gross charge-offs $ — $ 60 $ — $ — $ 20 $ 711 $ — $ — $ 791 Revolving Loans Converted to Term Term Loans Revolving Loans Amortized Cost Basis by Origination Year Loans Amortized (continued) Amortized Cost (dollars in thousands) 2023 2022 2021 2020 2019 Prior Cost Basis Basis Total Residential Lending Residential Mortgage FICO: 740 and greater $ 61,686 $ 550,291 $ 1,044,555 $ 546,035 $ 235,535 $ 1,057,166 $ — $ — $ 3,495,268 680 - 739 11,937 75,088 118,790 86,202 35,379 145,363 — — 472,759 620 - 679 2,776 11,464 17,424 9,946 9,243 36,678 — — 87,531 550 - 619 — 2,613 2,865 2,447 825 12,487 — — 21,237 Less than 550 — 530 2,445 1,498 275 7,276 — — 12,024 No Score (3) 4,909 19,766 14,573 6,773 10,494 61,168 — — 117,683 Other (2) 4,425 18,205 18,013 13,511 9,064 35,164 13,306 552 112,240 Total Residential Mortgage 85,733 677,957 1,218,665 666,412 300,815 1,355,302 13,306 552 4,318,742 Current period gross charge-offs — — — — — 122 — — 122 Home Equity Line FICO: 740 and greater — — — — — — 824,038 1,304 825,342 680 - 739 — — — — — — 190,187 2,440 192,627 620 - 679 — — — — — — 52,239 1,728 53,967 550 - 619 — — — — — — 12,734 1,566 14,300 Less than 550 — — — — — — 5,370 661 6,031 No Score (3) — — — — — — 3,098 — 3,098 Total Home Equity Line — — — — — — 1,087,666 7,699 1,095,365 Current period gross charge-offs — — — — — — 116 19 135 Total Residential Lending $ 85,733 $ 677,957 $ 1,218,665 $ 666,412 $ 300,815 $ 1,355,302 $ 1,100,972 $ 8,251 $ 5,414,107 Current period gross charge-offs $ — $ — $ — $ — $ — $ 122 $ 116 $ 19 $ 257 Consumer Lending FICO: 740 and greater 40,337 158,451 96,174 46,618 37,211 24,636 114,058 161 517,646 680 - 739 23,366 97,741 56,306 29,741 24,169 15,970 70,708 441 318,442 620 - 679 7,022 44,839 26,924 12,728 14,484 11,731 33,772 860 152,360 550 - 619 750 10,172 9,698 6,475 7,647 7,519 11,937 855 55,053 Less than 550 122 4,446 5,400 4,078 4,951 4,518 4,329 526 28,370 No Score (3) 866 2,376 8 — 16 36 36,396 167 39,865 Other (2) 76 1,588 4,060 348 1,136 — 72,608 — 79,816 Total Consumer Lending $ 72,539 $ 319,613 $ 198,570 $ 99,988 $ 89,614 $ 64,410 $ 343,808 $ 3,010 $ 1,191,552 Current period gross charge-offs $ — $ 635 $ 681 $ 312 $ 614 $ 867 $ 1,471 $ 202 $ 4,782 Total Loans and Leases $ 403,488 $ 2,529,150 $ 2,871,513 $ 1,277,530 $ 1,237,120 $ 3,374,951 $ 2,502,369 $ 25,151 $ 14,221,272 Current period gross charge-offs $ — $ 695 $ 681 $ 312 $ 634 $ 1,700 $ 1,587 $ 221 $ 5,830 ________________________
(1) Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score.(2) Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating.
(3) No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.
GAAP to Non-GAAP Reconciliation Table 12 For the Three Months Ended March 31, December 31, March 31, (dollars in thousands, except per share amounts) 2023 2022 2022 Income Statement Data: Net income $ 66,818 $ 79,588 $ 57,719 Average total stockholders' equity $ 2,299,422 $ 2,213,030 $ 2,547,865 Less: average goodwill 995,492 995,492 995,492 Average tangible stockholders' equity $ 1,303,930 $ 1,217,538 $ 1,552,373 Average total assets $ 24,548,124 $ 24,575,648 $ 25,080,453 Less: average goodwill 995,492 995,492 995,492 Average tangible assets $ 23,552,632 $ 23,580,156 $ 24,084,961 Return on average total stockholders' equity(1) 11.78 % 14.27 % 9.19 % Return on average tangible stockholders' equity (non-GAAP)(1) 20.78 % 25.93 % 15.08 % Return on average total assets(1) 1.10 % 1.28 % 0.93 % Return on average tangible assets (non-GAAP)(1) 1.15 % 1.34 % 0.97 % As of As of As of March 31, December 31, March 31, (dollars in thousands, except per share amounts) 2023 2022 2022 Balance Sheet Data: Total stockholders' equity $ 2,329,012 $ 2,269,005 $ 2,285,149 Less: goodwill 995,492 995,492 995,492 Tangible stockholders' equity $ 1,333,520 $ 1,273,513 $ 1,289,657 Total assets $ 24,884,207 $ 24,577,223 $ 25,042,720 Less: goodwill 995,492 995,492 995,492 Tangible assets $ 23,888,715 $ 23,581,731 $ 24,047,228 Shares outstanding 127,573,680 127,363,327 127,686,307 Total stockholders' equity to total assets 9.36 % 9.23 % 9.13 % Tangible stockholders' equity to tangible assets (non-GAAP) 5.58 % 5.40 % 5.36 % Book value per share $ 18.26 $ 17.82 $ 17.90 Tangible book value per share (non-GAAP) $ 10.45 $ 10.00 $ 10.10 ________________________
(1) Annualized for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022.
