FHB First Hawaiian Inc

First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended June 30, 2023.

“I’m pleased to report that we had a solid second quarter in spite of a challenging interest rate environment,” said Bob Harrison, Chairman, President and CEO. “We grew loans and capital, credit quality remains excellent, and our profitability measures continue to be strong.”

On July 19, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on September 1, 2023, to stockholders of record at the close of business on August 21, 2023.  

Second Quarter 2023 Highlights:

• Net income of $62.4 million, or $0.49 per diluted share
• Total loans and leases increased $141.6 million versus prior quarter
• Total deposits decreased $203.3 million versus prior quarter
• Net interest margin decreased 20 basis points to 2.91%
• Recorded a $5.0 million provision for credit losses
• Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet Total assets were $24.5 billion as of June 30, 2023, compared to $24.9 billion as of March 31, 2023.

Gross loans and leases were $14.4 billion as of June 30, 2023, an increase of $141.6 million, or 1.0%, from $14.2 billion as of March 31, 2023.

Total deposits were $21.1 billion as of June 30, 2023, a decrease of $203.3 million, or 1.0%, from $21.3 billion as of March 31, 2023.  

Net Interest Income Net interest income for the second quarter of 2023 was $159.9 million, a decrease of $7.3 million, or 4.4%, compared to $167.2 million for the prior quarter.  

The net interest margin was 2.91% in the second quarter of 2023, a decrease of 20 basis points compared to 3.11% in the prior quarter.

Provision Expense During the quarter ended June 30, 2023, we recorded a $5.0 million provision for credit losses. In the quarter ended March 31, 2023, we recorded a $8.8 million provision for credit losses.

Noninterest Income Noninterest income was $47.3 million in the second quarter of 2023, a decrease of $1.7 million compared to noninterest income of $49.0 million in the prior quarter.     

Noninterest Expense Noninterest expense was $120.9 million in the second quarter of 2023, an increase of $2.3 million compared to noninterest expense of $118.6 million in the prior quarter.  

The efficiency ratio was 58.0% and 54.5% for the quarters ended June 30, 2023 and March 31, 2023, respectively.

Taxes The effective tax rate was 23.3% and 24.8% for the quarters ended June 30, 2023 and March 31, 2023, respectively.

Asset Quality The allowance for credit losses was $148.6 million, or 1.03% of total loans and leases, as of June 30, 2023, compared to $147.1 million, or 1.03% of total loans and leases, as of March 31, 2023. The reserve for unfunded commitments was $36.2 million as of both June 30, 2023 and March 31, 2023.   Net charge-offs were $3.5 million, or 0.10% of average loans and leases on an annualized basis, for the quarter ended June 30, 2023, compared to net charge-offs of $3.2 million, or 0.09% of average loans and leases on an annualized basis, for the quarter ended March 31, 2023. Total non-performing assets were $13.2 million, or 0.09% of total loans and leases and other real estate owned, on June 30, 2023, compared to total non-performing assets of $13.8 million, or 0.10% of total loans and leases and other real estate owned, on March 31, 2023.

Capital Total stockholders' equity was $2.4 billion and $2.3 billion on June 30, 2023 and March 31, 2023, respectively.    

The tier 1 leverage, common equity tier 1 and total capital ratios were 8.30%, 12.05% and 13.17%, respectively, on June 30, 2023, compared with 8.26%, 11.97%, and 13.09%, respectively, on March 31, 2023.

The Company did not repurchase any shares in the second 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/BI348950fc095448439d48b25a0e9c5697, 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 StatementsThis 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, 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 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 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.

Use of Non-GAAP Financial MeasuresReturn on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We believe that these measurements are useful for investors, regulators, management and others to evaluate financial performance and capital adequacy relative to other financial institutions. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results or financial condition as reported under GAAP. Investors should consider our performance and capital adequacy as reported under GAAP and all other relevant information when assessing our performance and capital adequacy.

Table 14 at the end of this document provides a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.

Investor Relations Contact: Kevin Haseyama, CFA(808) 525-6268khaseyama@fhb.com

Media Contact:Lindsay Chambers(808) 525-6254lchambers@fhb.com

Financial Highlights		Table 1
		For the Three Months Ended									For the Six Months Ended
		June 30,			March 31,			June 30,			June 30,
(dollars in thousands, except per share data)		2023			2023			2022			2023			2022
Operating Results:
Net interest income		$	159,939		$	167,247		$	145,147		$	327,186		$	279,019
Provision for credit losses			5,000			8,800			1,000			13,800			(4,747	)
Noninterest income			47,348			49,023			44,137			96,371			85,517
Noninterest expense			120,881			118,567			109,175			239,448			213,217
Net income			62,442			66,818			59,360			129,260			117,079
Basic earnings per share			0.49			0.52			0.46			1.01			0.92
Diluted earnings per share			0.49			0.52			0.46			1.01			0.91
Dividends declared per share			0.26			0.26			0.26			0.52			0.52
Dividend payout ratio			53.06	%		50.00	%		56.52	%		51.49	%		57.14		%
Performance Ratios(1):
Net interest margin			2.91	%		3.11	%		2.60	%		3.01	%		2.51		%
Efficiency ratio			57.96	%		54.46	%		57.33	%		56.17	%		58.15		%
Return on average total assets			1.01	%		1.10	%		0.94	%		1.06	%		0.94		%
Return on average tangible assets (non-GAAP)(2)			1.05	%		1.15	%		0.98	%		1.10	%		0.98		%
Return on average total stockholders' equity			10.68	%		11.78	%		10.52	%		11.23	%		9.82		%
Return on average tangible stockholders' equity (non-GAAP)(2)			18.57	%		20.78	%		18.79	%		19.65	%		16.76		%
Average Balances:
Average loans and leases		$	14,283,222		$	14,079,337		$	13,058,558		$	14,181,842		$	12,939,745
Average earning assets			22,186,316			21,873,259			22,520,605			22,030,652			22,492,066
Average assets			24,821,486			24,548,124			25,250,176			24,685,560			25,165,783
Average deposits			21,057,259			21,468,624			22,401,558			21,261,805			22,182,406
Average stockholders' equity			2,344,285			2,299,422			2,262,654			2,321,977			2,404,471
Market Value Per Share:
Closing			18.01			20.63			22.80			18.01			22.80
High			21.00			28.28			28.44			28.28			31.16
Low			15.08			19.68			21.49			15.08			21.49

		As of			As of			As of			As of
		June 30,			March 31,			December 31,			June 30,
(dollars in thousands, except per share data)		2023			2023			2022			2022
Balance Sheet Data:
Loans and leases		$	14,362,832		$	14,221,272		$	14,092,012		$	13,262,781
Total assets			24,511,566			24,884,207			24,577,223			25,377,533
Total deposits			21,078,166			21,281,500			21,689,029			22,601,454
Short-term borrowings			—			250,000			75,000			—
Long-term borrowings			500,000			500,000			—			—
Total stockholders' equity			2,359,738			2,329,012			2,269,005			2,252,611
Per Share of Common Stock:
Book value		$	18.49		$	18.26		$	17.82		$	17.67
Tangible book value (non-GAAP)(2)			10.69			10.45			10.00			9.86
Asset Quality Ratios:
Non-accrual loans and leases / total loans and leases			0.09	%		0.10	%		0.08	%		0.06	%
Allowance for credit losses for loans and leases / total loans and leases			1.03	%		1.03	%		1.02	%		1.12	%
Capital Ratios:
Common Equity Tier 1 Capital Ratio			12.05	%		11.97	%		11.82	%		11.98	%
Tier 1 Capital Ratio			12.05	%		11.97	%		11.82	%		11.98	%
Total Capital Ratio			13.17	%		13.09	%		12.92	%		13.14	%
Tier 1 Leverage Ratio			8.30	%		8.26	%		8.11	%		7.54	%
Total stockholders' equity to total assets			9.63	%		9.36	%		9.23	%		8.88	%
Tangible stockholders' equity to tangible assets (non-GAAP)(2)			5.80	%		5.58	%		5.40	%		5.16	%
Non-Financial Data:
Number of branches			51			51			51			51
Number of ATMs			296			296			294			297
Number of Full-Time Equivalent Employees			2,126			2,100			2,063			2,021

_____________________

 (1)   Except for the efficiency ratio, amounts are annualized for the three and six months ended June 30, 2023 and 2022 and three months ended March 31, 2023.

 (2)   Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We compute our return on average tangible assets as the ratio of net income to average tangible assets, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total assets. We compute our return on average tangible stockholders’ equity as the ratio of net income to average tangible stockholders’ equity, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total stockholders’ equity. We compute our tangible book value per share as the ratio of tangible stockholders’ equity to outstanding shares. Tangible stockholders’ equity is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our total stockholders’ equity. We compute our tangible stockholders’ equity to tangible assets as the ratio of tangible stockholders’ equity to tangible assets, each of which we calculate by subtracting (and thereby effectively excluding) the value of our goodwill. For a reconciliation to the most directly comparable GAAP financial measure, see Table 14, GAAP to Non-GAAP Reconciliation.

Consolidated Statements of Income		Table 2
		For the Three Months Ended										For the Six Months Ended
		June 30,			March 31,			June 30,				June 30,
(dollars in thousands, except per share amounts)		2023			2023			2022				2023			2022
Interest income
Loans and lease financing		$	185,340		$	172,339		$	111,916			$	357,679		$	215,648
Available-for-sale investment securities			18,094			18,688			16,643				36,782			48,750
Held-to-maturity investment securities			18,282			18,957			18,289				37,239			18,289
Other			7,489			3,561			2,896				11,050			3,678
Total interest income			229,205			213,545			149,744				442,750			286,365
Interest expense
Deposits			58,071			43,284			4,597				101,355			7,346
Short-term and long-term borrowings			10,656			2,563			—				13,219			—
Other			539			451			—				990			—
Total interest expense			69,266			46,298			4,597				115,564			7,346
Net interest income			159,939			167,247			145,147				327,186			279,019
Provision for credit losses			5,000			8,800			1,000				13,800			(4,747	)
Net interest income after provision for credit losses			154,939			158,447			144,147				313,386			283,766
Noninterest income
Service charges on deposit accounts			7,246			7,231			6,843				14,477			14,344
Credit and debit card fees			15,461			16,298			17,056				31,759			31,906
Other service charges and fees			9,056			9,162			9,018				18,218			18,672
Trust and investment services income			9,448			9,614			8,759				19,062			17,642
Bank-owned life insurance			3,271			5,120			(859	)			8,391			(1,276	)
Other			2,866			1,598			3,320				4,464			4,229
Total noninterest income			47,348			49,023			44,137				96,371			85,517
Noninterest expense
Salaries and employee benefits			57,904			56,032			49,902				113,936			98,128
Contracted services and professional fees			17,498			16,313			18,617				33,811			35,764
Occupancy			7,554			7,782			7,334				15,336			14,744
Equipment			11,000			9,736			7,754				20,736			13,731
Regulatory assessment and fees			3,676			3,836			2,301				7,512			4,525
Advertising and marketing			1,891			1,994			1,994				3,885			4,022
Card rewards program			7,681			8,085			7,285				15,766			14,168
Other			13,677			14,789			13,988				28,466			28,135
Total noninterest expense			120,881			118,567			109,175				239,448			213,217
Income before provision for income taxes			81,406			88,903			79,109				170,309			156,066
Provision for income taxes			18,964			22,085			19,749				41,049			38,987
Net income		$	62,442		$	66,818		$	59,360			$	129,260		$	117,079
Basic earnings per share		$	0.49		$	0.52		$	0.46			$	1.01		$	0.92
Diluted earnings per share		$	0.49		$	0.52		$	0.46			$	1.01		$	0.91
Basic weighted-average outstanding shares			127,591,371			127,453,820			127,672,244				127,522,975			127,614,564
Diluted weighted-average outstanding shares			127,832,351			128,033,812			128,014,777				127,901,225			128,108,630

Consolidated Balance Sheets		Table 3
		June 30,				March 31,				December 31,				June 30,
(dollars in thousands, except share amount)		2023				2023				2022				2022
Assets
Cash and due from banks		$	318,333			$	253,705			$	297,502			$	279,629
Interest-bearing deposits in other banks			239,798				611,887				229,122				1,254,047
Investment securities:
Available-for-sale, at fair value (amortized cost: $3,296,825 as of June 30, 2023, $3,427,708 as of March 31, 2023, $3,549,599 as of December 31, 2022 and $4,267,809 as of June 30, 2022)			2,909,372				3,054,280				3,151,133				3,967,746
Held-to-maturity, at amortized cost (fair value: $3,697,261 as of June 30, 2023, $3,824,478 as of March 31, 2023, $3,814,822 as of December 31, 2022 and $3,910,780 as of June 30, 2022)			4,180,408				4,261,361				4,320,639				4,093,215
Loans held for sale			—				—				—				180
Loans and leases			14,362,832				14,221,272				14,092,012				13,262,781
Less: allowance for credit losses			148,581				147,122				143,900				148,942
Net loans and leases			14,214,251				14,074,150				13,948,112				13,113,839
Premises and equipment, net			277,817				278,121				280,355				310,047
Other real estate owned and repossessed personal property			—				91				91				—
Accrued interest receivable			80,710				79,200				78,194				63,240
Bank-owned life insurance			476,177				473,255				473,067				470,542
Goodwill			995,492				995,492				995,492				995,492
Mortgage servicing rights			6,072				6,299				6,562				7,152
Other assets			813,136				796,366				796,954				822,404
Total assets		$	24,511,566			$	24,884,207			$	24,577,223			$	25,377,533
Liabilities and Stockholders' Equity
Deposits:
Interest-bearing		$	12,911,539			$	12,579,155			$	12,824,383			$	12,990,571
Noninterest-bearing			8,166,627				8,702,345				8,864,646				9,610,883
Total deposits			21,078,166				21,281,500				21,689,029				22,601,454
Short-term borrowings			—				250,000				75,000				—
Long-term borrowings			500,000				500,000				—				—
Retirement benefits payable			100,671				101,622				102,577				134,151
Other liabilities			472,991				422,073				441,612				389,317
Total liabilities			22,151,828				22,555,195				22,308,218				23,124,922
Stockholders' equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 141,327,860 / 127,608,037 shares as of June 30, 2023, 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: 140,943,908 / 127,451,087 shares as of June 30, 2022)			1,413				1,413				1,410				1,409
Additional paid-in capital			2,543,226				2,540,653				2,538,336				2,533,407
Retained earnings			799,045				769,791				736,544				654,777
Accumulated other comprehensive loss, net			(612,736	)			(611,679	)			(639,254	)			(571,457	)
Treasury stock (13,719,823 shares as of June 30, 2023, 13,717,406 shares as of March 31, 2023, 13,600,591 shares as of December 31, 2022 and 13,492,821 shares as of June 30, 2022)			(371,210	)			(371,166	)			(368,031	)			(365,525	)
Total stockholders' equity			2,359,738				2,329,012				2,269,005				2,252,611
Total liabilities and stockholders' equity		$	24,511,566			$	24,884,207			$	24,577,223			$	25,377,533

Average Balances and Interest Rates																								Table 4
		Three Months Ended								Three Months Ended								Three Months Ended
		June 30, 2023								March 31, 2023								June 30, 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		$	569.3		$	7.2		5.07	%	$	299.6		$	3.4		4.60	%	$	1,297.3		$	2.8		0.85	%
Available-for-Sale Investment Securities
Taxable			2,978.6			18.0		2.42			3,081.4			18.4		2.39			3,946.4			16.6		1.68
Non-Taxable			5.8			0.1		5.74			31.1			0.4		5.55			8.4			0.1		5.26
Held-to-Maturity Investment Securities
Taxable			3,618.7			15.3		1.69			3,683.8			15.7		1.70			3,533.6			15.0		1.70
Non-Taxable			610.4			3.7		2.46			612.2			4.1		2.74			607.0			4.1		2.71
Total Investment Securities			7,213.5			37.1		2.06			7,408.5			38.6		2.09			8,095.4			35.8		1.77
Loans Held for Sale			0.5			—		5.87			0.1			—		5.53			0.3			—		5.06
Loans and Leases(1)
Commercial and industrial			2,265.7			36.2		6.41			2,192.9			32.4		5.98			1,951.3			15.0		3.09
Commercial real estate			4,183.6			64.9		6.22			4,105.7			58.3		5.76			3,808.9			30.7		3.23
Construction			874.3			15.2		6.96			873.9			14.7		6.83			711.3			6.3		3.57
Residential:
Residential mortgage			4,314.0			39.1		3.62			4,307.0			38.4		3.57			4,183.0			36.7		3.51
Home equity line			1,119.3			9.2		3.31			1,074.9			8.7		3.27			945.7			5.9		2.49
Consumer			1,196.6			17.7		5.92			1,213.5			17.2		5.75			1,218.0			15.5		5.09
Lease financing			329.7			3.6		4.43			311.4			3.1		4.10			240.4			2.1		3.53
Total Loans and Leases			14,283.2			185.9		5.22			14,079.3			172.8		4.96			13,058.6			112.2		3.44
Other Earning Assets			119.8			0.3		0.99			85.8			0.2		0.76			69.0			0.1		0.79
Total Earning Assets(2)			22,186.3			230.5		4.16			21,873.3			215.0		3.97			22,520.6			150.9		2.68
Cash and Due from Banks			257.9								286.1								300.8
Other Assets			2,377.3								2,388.7								2,428.8
Total Assets		$	24,821.5							$	24,548.1							$	25,250.2
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings		$	6,099.4		$	16.1		1.05	%	$	6,354.3		$	13.9		0.89	%		6,971.3		$	1.7		0.10	%
Money Market			3,809.8			19.6		2.07			3,853.5			14.3		1.50			4,127.4			1.4		0.14
Time			2,877.8			22.4		3.12			2,515.6			15.1		2.44			1,671.4			1.5		0.36
Total Interest-Bearing Deposits			12,787.0			58.1		1.82			12,723.4			43.3		1.38			12,770.1			4.6		0.14
Federal Funds Purchased			2.9			—		5.00			67.1			0.7		4.43			—			—		—
Other Short-Term Borrowings			362.9			4.7		5.16			52.8			0.7		5.02			—			—		—
Long-Term Borrowings			500.0			6.0		4.78			105.5			1.2		4.52			—			—		—
Other Interest-Bearing Liabilities			54.0			0.5		4.00			42.8			0.4		4.27			—			—		—
Total Interest-Bearing Liabilities			13,706.8			69.3		2.03			12,991.6			46.3		1.45			12,770.1			4.6		0.14
Net Interest Income					$	161.2							$	168.7							$	146.3
Interest Rate Spread								2.13	%							2.52	%							2.54	%
Net Interest Margin								2.91	%							3.11	%							2.60	%
Noninterest-Bearing Demand Deposits			8,270.3								8,745.2								9,631.4
Other Liabilities			500.1								511.9								586.0
Stockholders' Equity			2,344.3								2,299.4								2,262.7
Total Liabilities and Stockholders' Equity		$	24,821.5							$	24,548.1							$	25,250.2

______________________________

(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 $1.3 million, $1.4 million and $1.2 million for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

Average Balances and Interest Rates																Table 5
		Six Months Ended								Six Months Ended
		June 30, 2023								June 30, 2022
		Average			Income/			Yield/		Average			Income/			Yield/
(dollars in millions)		Balance			Expense			Rate		Balance			Expense			Rate
Earning Assets
Interest-Bearing Deposits in Other Banks		$	435.2		$	10.6		4.91	%	$	1,218.3		$	3.3		0.55	%
Available-for-Sale Investment Securities
Taxable			3,029.7			36.4		2.41			5,862.7			45.7		1.56
Non-Taxable			18.4			0.5		5.58			320.8			3.9		2.41
Held-to-Maturity Investment Securities
Taxable			3,651.1			30.9		1.70			1,776.6			15.0		1.69
Non-Taxable			611.3			7.9		2.60			305.2			4.1		2.71
Total Investment Securities			7,310.5			75.7		2.08			8,265.3			68.7		1.66
Loans Held for Sale			0.3			—		5.79			0.8			—		2.60
Loans and Leases(1)
Commercial and industrial			2,229.5			68.6		6.20			1,962.1			29.7		3.05
Commercial real estate			4,144.9			123.2		5.99			3,721.0			56.4		3.06
Construction			874.1			29.9		6.89			738.9			12.1		3.30
Residential:
Residential mortgage			4,310.5			77.5		3.59			4,147.2			71.5		3.45
Home equity line			1,097.2			17.9		3.29			918.8			11.3		2.48
Consumer			1,205.0			34.8		5.84			1,218.3			31.1		5.14
Lease financing			320.6			6.8		4.27			233.4			4.0		3.48
Total Loans and Leases			14,181.8			358.7		5.09			12,939.7			216.1		3.36
Other Earning Assets			102.9			0.5		0.90			68.0			0.4		1.05
Total Earning Assets(2)			22,030.7			445.5		4.07			22,492.1			288.5		2.58
Cash and Due from Banks			271.9								296.5
Other Assets			2,383.0								2,377.2
Total Assets		$	24,685.6							$	25,165.8
Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings		$	6,226.2		$	30.0		0.97	%	$	6,820.7		$	2.2		0.07	%
Money Market			3,831.5			33.9		1.78			4,088.3			2.0		0.09
Time			2,697.7			37.5		2.80			1,709.8			3.2		0.38
Total Interest-Bearing Deposits			12,755.4			101.4		1.60			12,618.8			7.4		0.12
Federal Funds Purchased			34.8			0.8		4.45			—			—		—
Other Short-Term Borrowings			208.7			5.3		5.14			—			—		—
Long-Term Borrowings			303.8			7.1		4.73			—			—		—
Other Interest-Bearing Liabilities			48.5			1.0		4.12			—			—		—
Total Interest-Bearing Liabilities			13,351.2			115.6		1.75			12,618.8			7.4		0.12
Net Interest Income					$	329.9							$	281.1
Interest Rate Spread								2.32	%							2.46	%
Net Interest Margin								3.01	%							2.51	%
Noninterest-Bearing Demand Deposits			8,506.4								9,563.6
Other Liabilities			506.0								578.9
Stockholders' Equity			2,322.0								2,404.5
Total Liabilities and Stockholders' Equity		$	24,685.6							$	25,165.8

______________________________

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

(2)   Interest income includes taxable-equivalent basis adjustments of $2.7 million and $2.1 million for the six months ended June 30, 2023 and 2022, respectively.

Analysis of Change in Net Interest Income											Table 6
		Three Months Ended June 30, 2023
		Compared to March 31, 2023
(dollars in millions)		Volume				Rate				Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks		$	3.4			$	0.4			$	3.8
Available-for-Sale Investment Securities
Taxable			(0.6	)			0.2				(0.4	)
Non-Taxable			(0.3	)			—				(0.3	)
Held-to-Maturity Investment Securities
Taxable			(0.3	)			(0.1	)			(0.4	)
Non-Taxable			—				(0.4	)			(0.4	)
Total Investment Securities			(1.2	)			(0.3	)			(1.5	)
Loans and Leases
Commercial and industrial			1.2				2.6				3.8
Commercial real estate			1.3				5.3				6.6
Construction			—				0.5				0.5
Residential:
Residential mortgage			0.1				0.6				0.7
Home equity line			0.4				0.1				0.5
Consumer			(0.2	)			0.7				0.5
Lease financing			0.2				0.3				0.5
Total Loans and Leases			3.0				10.1				13.1
Other Earning Assets			0.1				—				0.1
Total Change in Interest Income			5.3				10.2				15.5
Change in Interest Expense:
Interest-Bearing Deposits
Savings			(0.5	)			2.7				2.2
Money Market			(0.2	)			5.5				5.3
Time			2.5				4.8				7.3
Total Interest-Bearing Deposits			1.8				13.0				14.8
Federal Funds Purchased			(0.8	)			0.1				(0.7	)
Other Short-Term Borrowings			4.0				—				4.0
Long-Term Borrowings			4.7				0.1				4.8
Other Interest-Bearing Liabilities			0.1				—				0.1
Total Change in Interest Expense			9.8				13.2				23.0
Change in Net Interest Income		$	(4.5	)		$	(3.0	)		$	(7.5	)

Analysis of Change in Net Interest Income											Table 7
		Three Months Ended June 30, 2023
		Compared to June 30, 2022
(dollars in millions)		Volume				Rate				Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks		$	(2.3	)		$	6.7			$	4.4
Available-for-Sale Investment Securities
Taxable			(4.7	)			6.1				1.4
Held-to-Maturity Investment Securities
Taxable			0.3				—				0.3
Non-Taxable			—				(0.4	)			(0.4	)
Total Investment Securities			(4.4	)			5.7				1.3
Loans and Leases
Commercial and industrial			2.8				18.4				21.2
Commercial real estate			3.3				30.9				34.2
Construction			1.7				7.2				8.9
Residential:
Residential mortgage			1.2				1.2				2.4
Home equity line			1.2				2.1				3.3
Consumer			(0.3	)			2.5				2.2
Lease financing			0.9				0.6				1.5
Total Loans and Leases			10.8				62.9				73.7
Other Earning Assets			0.1				0.1				0.2
Total Change in Interest Income			4.2				75.4				79.6
Change in Interest Expense:
Interest-Bearing Deposits
Savings			(0.2	)			14.6				14.4
Money Market			(0.1	)			18.3				18.2
Time			1.8				19.1				20.9
Total Interest-Bearing Deposits			1.5				52.0				53.5
Other Short-Term Borrowings			4.7				—				4.7
Long-Term Borrowings			6.0				—				6.0
Other Interest-Bearing Liabilities			0.5				—				0.5
Total Change in Interest Expense			12.7				52.0				64.7
Change in Net Interest Income		$	(8.5	)		$	23.4			$	14.9

Analysis of Change in Net Interest Income											Table 8
		Six Months Ended June 30, 2023
		Compared to June 30, 2022
(dollars in millions)		Volume				Rate				Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks		$	(3.4	)		$	10.7			$	7.3
Available-for-Sale Investment Securities
Taxable			(27.6	)			18.3				(9.3	)
Non-Taxable			(5.6	)			2.2				(3.4	)
Held-to-Maturity Investment Securities
Taxable			15.8				0.1				15.9
Non-Taxable			4.0				(0.2	)			3.8
Total Investment Securities			(13.4	)			20.4				7.0
Loans and Leases
Commercial and industrial			4.5				34.4				38.9
Commercial real estate			7.1				59.7				66.8
Construction			2.5				15.3				17.8
Residential:
Residential mortgage			3.0				3.0				6.0
Home equity line			2.5				4.1				6.6
Consumer			(0.4	)			4.1				3.7
Lease financing			1.7				1.1				2.8
Total Loans and Leases			20.9				121.7				142.6
Other Earning Assets			0.2				(0.1	)			0.1
Total Change in Interest Income			4.3				152.7				157.0
Change in Interest Expense:
Interest-Bearing Deposits
Savings			(0.2	)			28.0				27.8
Money Market			(0.1	)			32.0				31.9
Time			2.8				31.5				34.3
Total Interest-Bearing Deposits			2.5				91.5				94.0
Federal Funds Purchased			0.8				—				0.8
Other Short-Term Borrowings			5.3				—				5.3
Long-Term Borrowings			7.1				—				7.1
Other Interest-Bearing Liabilities			1.0				—				1.0
Total Change in Interest Expense			16.7				91.5				108.2
Change in Net Interest Income		$	(12.4	)		$	61.2			$	48.8

Loans and Leases												Table 9
		June 30,			March 31,			December 31,			June 30,
(dollars in thousands)		2023			2023			2022			2022
Commercial and industrial:
Commercial and industrial excluding Paycheck Protection Program loans		$	2,175,841		$	2,254,506		$	2,217,604		$	1,898,899
Paycheck Protection Program loans			11,990			13,826			18,293			43,233
Total commercial and industrial			2,187,831			2,268,332			2,235,897			1,942,132
Commercial real estate			4,290,948			4,106,200			4,132,309			3,956,828
Construction			913,837			913,959			844,643			727,771
Residential:
Residential mortgage			4,317,537			4,318,742			4,302,788			4,212,768
Home equity line			1,138,163			1,095,365			1,055,351			971,569
Total residential			5,455,700			5,414,107			5,358,139			5,184,337
Consumer			1,182,116			1,191,552			1,222,934			1,207,051
Lease financing			332,400			327,122			298,090			244,662
Total loans and leases		$	14,362,832		$	14,221,272		$	14,092,012		$	13,262,781

Deposits												Table 10
		June 30,			March 31,			December 31,			June 30,
(dollars in thousands)		2023			2023			2022			2022
Demand		$	8,166,627		$	8,702,345		$	8,864,646		$	9,610,883
Savings			5,835,975			6,173,398			6,382,910			7,243,185
Money Market			3,767,792			3,818,355			3,965,423			4,079,706
Time			3,307,772			2,587,402			2,476,050			1,667,680
Total Deposits		$	21,078,166		$	21,281,500		$	21,689,029		$	22,601,454

Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More												Table 11
		June 30,			March 31,			December 31,			June 30,
(dollars in thousands)		2023			2023			2022			2022
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial Loans:
Commercial and industrial		$	1,024		$	1,158		$	1,215		$	682
Commercial real estate			—			727			727			727
Total Commercial Loans			1,024			1,885			1,942			1,409
Residential Loans:
Residential mortgage			6,097			6,896			6,166			6,450
Home equity line			6,107			4,903			3,797			—
Total Residential Loans			12,204			11,799			9,963			6,450
Total Non-Accrual Loans and Leases			13,228			13,684			11,905			7,859
Other Real Estate Owned			—			91			91			—
Total Non-Performing Assets		$	13,228		$	13,775		$	11,996		$	7,859
Accruing Loans and Leases Past Due 90 Days or More
Commercial Loans:
Commercial and industrial		$	599		$	461		$	291		$	2,230
Commercial real estate			619			1,346			—			176
Construction			—			102			—			352
Total Commercial Loans			1,218			1,909			291			2,758
Residential Loans:
Residential mortgage			58			58			58			750
Home equity line			—			—			—			1,039
Total Residential Loans			58			58			58			1,789
Consumer			1,975			2,502			2,885			1,218
Total Accruing Loans and Leases Past Due 90 Days or More		$	3,251		$	4,469		$	3,234		$	5,765
Total Loans and Leases		$	14,362,832		$	14,221,272		$	14,092,012		$	13,262,781

Allowance for Credit Losses and Reserve for Unfunded Commitments		Table 12
		For the Three Months Ended												For the Six Months Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
(dollars in thousands)		2023				2023				2022				2023				2022
Balance at Beginning of Period		$	183,321			$	177,735			$	179,238				177,735				187,584
Loans and Leases Charged-Off
Commercial and industrial			(997	)			(791	)			(243	)			(1,788	)			(949	)
Residential Loans:
Residential mortgage			—				(122	)			—				(122	)			—
Home equity line			(137	)			(135	)			(1,120	)			(272	)			(1,163	)
Total Residential Loans			(137	)			(257	)			(1,120	)			(394	)			(1,163	)
Consumer			(4,516	)			(4,782	)			(3,659	)			(9,298	)			(7,768	)
Total Loans and Leases Charged-Off			(5,650	)			(5,830	)			(5,022	)			(11,480	)			(9,880	)
Recoveries on Loans and Leases Previously Charged-Off
Commercial Loans:
Commercial and industrial			292				246				301				538				354
Commercial real estate			—				—				—				—				14
Lease financing			—				—				60				—				60
Total Commercial Loans			292				246				361				538				428
Residential Loans:
Residential mortgage			30				27				192				57				208
Home equity line			59				177				191				236				219
Total Residential Loans			89				204				383				293				427
Consumer			1,728				2,166				1,940				3,894				4,088
Total Recoveries on Loans and Leases Previously Charged-Off			2,109				2,616				2,684				4,725				4,943
Net Loans and Leases Charged-Off			(3,541	)			(3,214	)			(2,338	)			(6,755	)			(4,937	)
Provision for Credit Losses			5,000				8,800				1,000				13,800				(4,747	)
Balance at End of Period		$	184,780			$	183,321			$	177,900			$	184,780			$	177,900
Components:
Allowance for Credit Losses		$	148,581			$	147,122			$	148,942			$	148,581			$	148,942
Reserve for Unfunded Commitments			36,199				36,199				28,958				36,199				28,958
Total Allowance for Credit Losses and Reserve for Unfunded Commitments		$	184,780			$	183,321			$	177,900			$	184,780			$	177,900
Average Loans and Leases Outstanding		$	14,283,222			$	14,079,337			$	13,058,558			$	14,181,842			$	12,939,745
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)			0.10		%		0.09		%		0.07		%		0.10		%		0.08		%
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding			1.03		%		1.03		%		1.12		%		1.03		%		1.12		%
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases			11.23x				10.75x				18.95x				11.23x				18.95x

_____________________________

(1)   Annualized for the three and six months ended June 30, 2023 and 2022 and three months ended March 31, 2023.

Loans and Leases by Year of Origination and Credit Quality Indicator																											Table 13
																							Revolving
																							Loans
																							Converted
		Term Loans																		Revolving			to Term
		Amortized Cost Basis by Origination Year																		Loans			Loans
																				Amortized			Amortized
(dollars in thousands)		2023			2022			2021			2020			2019			Prior			Cost Basis			Cost Basis			Total
Commercial Lending
Commercial and Industrial
Risk rating:
Pass		$	33,877		$	299,913		$	385,159		$	38,769		$	157,794		$	165,747		$	952,182		$	15,003		$	2,048,444
Special Mention			103			31,193			154			849			2,397			1,481			2,967			186			39,330
Substandard			352			563			260			936			819			1,100			12,539			17			16,586
Other(1)			11,743			13,284			6,301			3,275			2,644			1,668			44,556			—			83,471
Total Commercial and Industrial			46,075			344,953			391,874			43,829			163,654			169,996			1,012,244			15,206			2,187,831
Current period gross charge-offs			72			60			9			28			92			1,527			—			—			1,788
Commercial Real Estate
Risk rating:
Pass			212,159			876,558			655,847			333,142			564,881			1,499,805			72,447			—			4,214,839
Special Mention			1,737			156			—			547			6,983			12,389			12,952			—			34,764
Substandard			—			5,141			—			171			—			35,883			2			—			41,197
Other(1)			—			—			—			—			—			148			—			—			148
Total Commercial Real Estate			213,896			881,855			655,847			333,860			571,864			1,548,225			85,401			—			4,290,948
Current period gross charge-offs			—			—			—			—			—			—			—			—			—
Construction
Risk rating:
Pass			77,826			182,679			365,959			76,728			61,906			82,554			6,562			—			854,214
Special Mention			—			—			—			—			205			—			—			—			205
Other(1)			6,601			26,882			15,766			3,261			2,136			4,067			705			—			59,418
Total Construction			84,427			209,561			381,725			79,989			64,247			86,621			7,267			—			913,837
Current period gross charge-offs			—			—			—			—			—			—			—			—			—
Lease Financing
Risk rating:
Pass			69,487			94,276			21,167			39,215			35,964			70,312			—			—			330,421
Special Mention			—			—			365			60			—			—			—			—			425
Substandard			—			—			—			171			7			1,376			—			—			1,554
Total Lease Financing			69,487			94,276			21,532			39,446			35,971			71,688			—			—			332,400
Current period gross charge-offs			—			—			—			—			—			—			—			—			—
Total Commercial Lending		$	413,885		$	1,530,645		$	1,450,978		$	497,124		$	835,736		$	1,876,530		$	1,104,912		$	15,206		$	7,725,016
Current period gross charge-offs		$	72		$	60		$	9		$	28		$	92		$	1,527		$	—		$	—		$	1,788

																							Revolving
																							Loans
																							Converted
		Term Loans																		Revolving			to Term
		Amortized Cost Basis by Origination Year																		Loans			Loans
(continued)																				Amortized			Amortized
(dollars in thousands)		2023			2022			2021			2020			2019			Prior			Cost Basis			Cost Basis			Total
Residential Lending
Residential Mortgage
FICO:
740 and greater		$	138,593		$	530,776		$	1,030,287		$	544,330		$	236,821		$	1,036,361		$	—		$	—		$	3,517,168
680 - 739			25,500			81,562			117,701			74,446			34,186			135,766			—			—			469,161
620 - 679			2,468			11,212			16,463			10,747			5,743			38,132			—			—			84,765
550 - 619			—			3,383			4,058			2,471			254			12,362			—			—			22,528
Less than 550			—			197			2,372			1,581			51			5,403			—			—			9,604
No Score(3)			6,075			19,497			12,552			6,378			9,837			56,201			—			—			110,540
Other(2)			9,916			18,075			17,857			12,952			8,915			28,438			7,618			—			103,771
Total Residential Mortgage			182,552			664,702			1,201,290			652,905			295,807			1,312,663			7,618			—			4,317,537
Current period gross charge-offs			—			—			—			—			—			122			—			—			122
Home Equity Line
FICO:
740 and greater			—			—			—			—			—			—			930,741			1,668			932,409
680 - 739			—			—			—			—			—			—			151,418			2,449			153,867
620 - 679			—			—			—			—			—			—			32,897			1,376			34,273
550 - 619			—			—			—			—			—			—			9,428			1,448			10,876
Less than 550			—			—			—			—			—			—			5,127			312			5,439
No Score(3)			—			—			—			—			—			—			1,299			—			1,299
Total Home Equity Line			—			—			—			—			—			—			1,130,910			7,253			1,138,163
Current period gross charge-offs			—			—			—			—			—			—			254			18			272
Total Residential Lending		$	182,552		$	664,702		$	1,201,290		$	652,905		$	295,807		$	1,312,663		$	1,138,528		$	7,253		$	5,455,700
Current period gross charge-offs		$	—		$	—		$	—		$	—		$	—		$	122		$	254		$	18		$	394
Consumer Lending
FICO:
740 and greater			70,561			153,960			93,788			45,022			34,093			19,410			117,437			140			534,411
680 - 739			44,064			84,900			49,136			23,895			19,424			11,352			72,327			431			305,529
620 - 679			14,643			37,576			19,488			9,771			11,007			8,482			33,692			941			135,600
550 - 619			2,255			10,974			8,135			5,608			6,314			5,207			11,730			748			50,971
Less than 550			418			4,358			4,478			2,695			2,975			2,765			4,247			560			22,496
No Score(3)			1,425			586			2			—			6			17			39,035			167			41,238
Other(2)			36			1,208			3,536			343			1,113			1			85,634			—			91,871
Total Consumer Lending		$	133,402		$	293,562		$	178,563		$	87,334		$	74,932		$	47,234		$	364,102		$	2,987		$	1,182,116
Current period gross charge-offs		$	58		$	1,244		$	1,260		$	630		$	1,239		$	1,388		$	3,131		$	348		$	9,298
Total Loans and Leases		$	729,839		$	2,488,909		$	2,830,831		$	1,237,363		$	1,206,475		$	3,236,427		$	2,607,542		$	25,446		$	14,362,832
Current period gross charge-offs		$	130		$	1,304		$	1,269		$	658		$	1,331		$	3,037		$	3,385		$	366		$	11,480

_______________________________

(1)   Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score.

(2)   Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating.

(3)   No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.

GAAP to Non-GAAP Reconciliation		Table 14
		For the Three Months Ended									For the Six Months Ended
		June 30,			March 31,			June 30,			June 30,
(dollars in thousands)		2023			2023			2022			2023			2022
Income Statement Data:
Net income		$	62,442		$	66,818		$	59,360		$	129,260		$	117,079
Average total stockholders' equity		$	2,344,285		$	2,299,422		$	2,262,654		$	2,321,977		$	2,404,471
Less: average goodwill			995,492			995,492			995,492			995,492			995,492
Average tangible stockholders' equity		$	1,348,793		$	1,303,930		$	1,267,162		$	1,326,485		$	1,408,979
Average total assets		$	24,821,486		$	24,548,124		$	25,250,176		$	24,685,560		$	25,165,783
Less: average goodwill			995,492			995,492			995,492			995,492			995,492
Average tangible assets		$	23,825,994		$	23,552,632		$	24,254,684		$	23,690,068		$	24,170,291
Return on average total stockholders' equity(1)			10.68	%		11.78	%		10.52	%		11.23	%		9.82	%
Return on average tangible stockholders' equity (non-GAAP)(1)			18.57	%		20.78	%		18.79	%		19.65	%		16.76	%
Return on average total assets(1)			1.01	%		1.10	%		0.94	%		1.06	%		0.94	%
Return on average tangible assets (non-GAAP)(1)			1.05	%		1.15	%		0.98	%		1.10	%		0.98	%

		As of			As of			As of			As of
		June 30,			March 31,			December 31,			June 30,
(dollars in thousands, except shares outstanding and per share amounts)		2023			2023			2022			2022
Balance Sheet Data:
Total stockholders' equity		$	2,359,738		$	2,329,012		$	2,269,005		$	2,252,611
Less: goodwill			995,492			995,492			995,492			995,492
Tangible stockholders' equity		$	1,364,246		$	1,333,520		$	1,273,513		$	1,257,119
Total assets		$	24,511,566		$	24,884,207		$	24,577,223		$	25,377,533
Less: goodwill			995,492			995,492			995,492			995,492
Tangible assets		$	23,516,074		$	23,888,715		$	23,581,731		$	24,382,041
Shares outstanding			127,608,037			127,573,680			127,363,327			127,451,087
Total stockholders' equity to total assets			9.63	%		9.36	%		9.23	%		8.88	%
Tangible stockholders' equity to tangible assets (non-GAAP)			5.80	%		5.58	%		5.40	%		5.16	%
Book value per share		$	18.49		$	18.26		$	17.82		$	17.67
Tangible book value per share (non-GAAP)		$	10.69		$	10.45		$	10.00		$	9.86

_____________________________

(1)   Annualized for the three and six months ended June 30, 2023 and 2022 and three months ended March 31, 2023.