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First Hawaiian, Inc. Reports Fourth Quarter 2021 Financial Results and Declares Dividend
Source: Nasdaq GlobeNewswire / 21 Jan 2022 08:00:02 America/New_York
HONOLULU, Jan. 21, 2022 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended December 31, 2021.
“We are pleased to report that we closed 2021 with a solid fourth quarter,” said Bob Harrison, Chairman, President and CEO. “We saw strong loan growth, continued to grow consumer and commercial deposits while reducing excess liquidity, and credit quality remained excellent.”
On January 19, 2022 the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on March 4, 2022 to stockholders of record at the close of business on February 18, 2022.
Additionally, the Company’s Board of Directors adopted a stock repurchase program for up to $75 million of its outstanding common stock during 2022.
Fourth Quarter 2021 Highlights:
- Net income of $57.0 million, or $0.44 per diluted share
- Total loans and leases increased $127.7 million versus prior quarter
- Total deposits decreased $303.9 million versus prior quarter, reduced public deposits by $978.4 million
- Incurred a $9.0 million charge in connection with the prepayment of $200.0 million of Federal Home Loan Bank advances at a weighted average rate of 2.73%
- No provision for credit losses was taken in the quarter
- Board of Directors declared a quarterly dividend of $0.26 per share
- Repurchased $21.5 million of stock under share repurchase program
Balance Sheet
Total assets were $25.0 billion as of December 31, 2021, compared to $25.5 billion as of September 30, 2021.
Gross loans and leases were $13.0 billion as of December 31, 2021, an increase of $127.7 million, or 1.0%, from $12.8 billion as of September 30, 2021.
Total deposits were $21.8 billion as of December 31, 2021, a decrease of $303.9 million, or 1.4%, from $22.1 billion as of September 30, 2021.
Net Interest Income
Net interest income for the fourth quarter of 2021 was $137.3 million, an increase of $4.7 million, or 3.6%, compared to $132.6 million for the prior quarter.
The net interest margin (NIM) was 2.38% in the fourth quarter of 2021, an increase of 2 basis points compared to 2.36% in the third quarter of 2021.
Provision Expense
During the quarter ended December 31, 2021, we did not record a provision for credit losses. In the quarter ended September 30, 2021 we recorded a $4.0 million negative provision for credit losses.
Noninterest Income
Noninterest income was $41.6 million in the fourth quarter of 2021, a decrease of $8.5 million compared to noninterest income of $50.1 million in the third quarter of 2021.
Noninterest Expense
Noninterest expense was $108.7 million in the fourth quarter of 2021, an increase of $7.7 million compared to noninterest expense of $101.0 million in the third quarter of 2021.
The efficiency ratio was 60.5% and 55.1% for the quarters ended December 31, 2021 and September 30, 2021, respectively.
Taxes
The effective tax rate was 18.7% for the quarter ended December 31, 2021 and 25.0% for the quarter ended September 30, 2021.
Asset Quality
The allowance for credit losses was $157.3 million, or 1.21% of total loans and leases, as of December 31, 2021, compared to $161.2 million, or 1.26% of total loans and leases, as of September 30, 2021. The reserve for unfunded commitments was $30.3 million as of December 31, 2021 compared to $32.5 million as of September 30, 2021. Net charge-offs were $6.2 million, or 0.19% of average loans and leases on an annualized basis, for the quarter ended December 31, 2021, compared to net charge-offs of $0.6 million, or 0.02% of average loans and leases on an annualized basis, for the quarter ended September 30, 2021. Total non-performing assets were $7.3 million, or 0.06% of total loans and leases and other real estate owned, at December 31, 2021, compared to total non-performing assets of $8.6 million, or 0.07% of total loans and leases and other real estate owned at September 30, 2021.
Capital
Total stockholders’ equity was $2.7 billion at both December 31, 2021 and September 30, 2021.
The tier 1 leverage, common equity tier 1 and total capital ratios were 7.24%, 12.24% and 13.49%, respectively, at December 31, 2021, compared with 7.39%, 12.63% and 13.88%, respectively, at September 30, 2021.
The Company repurchased 0.77 million shares of common stock at a total cost of $21.5 million under the stock repurchase program in the fourth quarter. The average cost was $27.92 per share repurchased. Total repurchases in 2021 were $75.0 million.
As to the stock repurchase program approved for 2022, repurchases of shares of the Company’s common stock may be conducted through open-market purchases, which may include purchases under a trading plan adopted pursuant to Securities and Exchange Commission Rule 10b5-1, or through privately negotiated transactions. The timing and exact amount of share repurchases, if any, will be subject to management’s discretion and various factors, including the Company’s capital position and financial performance, as well as market conditions. The repurchase program may be suspended, terminated or modified at any time for any reason.
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, 8:00 a.m. Hawaii Time. To access the call, participants should dial (844) 452-2942 (US/Canada), or (574) 990-9846 (International) ten minutes prior to the start of the call and enter the conference ID: 8790379. A live webcast of the conference call, including a slide presentation, will be available at the following link: www.fhb.com/earnings. The archive of the webcast will be available at the same location. A telephonic replay of the conference call will be available two hours after the conclusion of the call until 4:30 p.m. (Eastern Time) on January 28, 2022. Access the replay by dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID: 8790379.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized” and “outlook”, or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Further, statements about the potential effects of the COVID-19 pandemic on our businesses and financial results and conditions may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, there can be no assurance that actual results will not prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements, including (without limitation) the risks and uncertainties associated with the ongoing impacts of COVID-19, the domestic and global economic environment and capital market conditions and other risk factors. For a discussion of some of these risks and important factors that could affect our future results and financial condition, see our U.S. Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2020 and our Quarterly Report on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021, and September 30, 2021.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 14 and 15 at the end of this document provide a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.
Investor Relations Contact:
Kevin Haseyama, CFA
(808) 525-6268
khaseyama@fhb.comMedia Contact:
Susan Kam
(808) 525-6254
skam@fhb.comFinancial 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) 2021 2021 2020 2021 2020 Operating Results: Net interest income $ 137,327 $ 132,593 $ 135,227 $ 530,559 $ 535,734 Provision for credit losses — (4,000 ) 20,000 (39,000 ) 121,718 Noninterest income 41,573 50,104 53,598 184,916 197,380 Noninterest expense 108,749 101,036 88,127 405,479 367,672 Net income 57,022 64,279 61,739 265,735 185,754 Basic earnings per share 0.45 0.50 0.48 2.06 1.43 Diluted earnings per share 0.44 0.50 0.47 2.05 1.43 Dividends declared per share 0.26 0.26 0.26 1.04 1.04 Dividend payout ratio 59.09 % 52.00 % 55.32 % 50.73 % 72.73 % Supplemental Income Statement Data (non-GAAP): Core net interest income $ 137,327 $ 132,593 $ 135,227 $ 530,559 $ 535,734 Core noninterest income 47,587 50,104 58,438 190,828 202,322 Core noninterest expense 99,775 98,936 88,127 393,245 367,672 Core net income 68,013 65,819 65,288 279,229 189,378 Core basic earnings per share 0.53 0.51 0.50 2.17 1.46 Core diluted earnings per share 0.53 0.51 0.50 2.16 1.45 Performance Ratios(1): Net interest margin 2.38 % 2.36 % 2.71 % 2.43 % 2.77 % Core net interest margin (non-GAAP) 2.38 % 2.36 % 2.71 % 2.43 % 2.77 % Efficiency ratio 60.50 % 55.07 % 46.59 % 56.45 % 50.10 % Core efficiency ratio (non-GAAP) 53.71 % 53.92 % 45.43 % 54.30 % 49.77 % Return on average total assets 0.88 % 1.02 % 1.09 % 1.09 % 0.85 % Core return on average total assets (non-GAAP) 1.05 % 1.04 % 1.16 % 1.14 % 0.87 % Return on average tangible assets (non-GAAP) 0.92 % 1.06 % 1.14 % 1.13 % 0.89 % Core return on average tangible assets (non-GAAP)(2) 1.09 % 1.09 % 1.21 % 1.19 % 0.91 % Return on average total stockholders’ equity 8.46 % 9.31 % 8.99 % 9.81 % 6.88 % Core return on average total stockholders’ equity (non-GAAP) 10.09 % 9.54 % 9.51 % 10.31 % 7.02 % Return on average tangible stockholders’ equity (non-GAAP) 13.47 % 14.63 % 14.14 % 15.51 % 10.91 % Core return on average tangible stockholders’ equity (non-GAAP)(3) 16.06 % 14.98 % 14.95 % 16.30 % 11.12 % Average Balances: Average loans and leases $ 12,814,316 $ 12,881,885 $ 13,366,980 $ 13,034,295 $ 13,518,308 Average earning assets 23,100,445 22,533,174 19,977,933 21,921,149 19,376,343 Average assets 25,650,505 25,058,085 22,468,040 24,426,258 21,869,064 Average deposits 22,246,577 21,621,836 19,020,800 21,011,587 18,252,998 Average stockholders’ equity 2,675,513 2,738,540 2,732,271 2,708,370 2,698,853 Market Value Per Share: Closing 27.33 29.35 23.58 27.33 23.58 High 30.14 30.06 23.90 30.80 31.25 Low 25.17 25.75 14.16 23.14 13.56 As of As of As of December 31, September 30, December 31, (dollars in thousands, except per share data) 2021 2021 2020 Balance Sheet Data: Loans and leases $ 12,961,999 $ 12,834,339 $ 13,279,097 Total assets 24,992,410 25,548,322 22,662,831 Total deposits 21,816,146 22,120,003 19,227,723 Long-term borrowings — 200,000 200,010 Total stockholders’ equity 2,656,912 2,711,734 2,744,104 Per Share of Common Stock: Book value $ 20.84 $ 21.14 $ 21.12 Tangible book value (non-GAAP)(4) 13.03 13.38 13.46 Asset Quality Ratios: Non-accrual loans and leases / total loans and leases 0.05 % 0.07 % 0.07 % Allowance for credit losses for loans and leases / total loans and leases 1.21 % 1.26 % 1.57 % Capital Ratios: Common Equity Tier 1 Capital Ratio 12.24 % 12.63 % 12.47 % Tier 1 Capital Ratio 12.24 % 12.63 % 12.47 % Total Capital Ratio 13.49 % 13.88 % 13.73 % Tier 1 Leverage Ratio 7.24 % 7.39 % 8.00 % Total stockholders’ equity to total assets 10.63 % 10.61 % 12.11 % Tangible stockholders’ equity to tangible assets (non-GAAP) 6.92 % 6.99 % 8.07 % Non-Financial Data: Number of branches 54 54 54 Number of ATMs 299 298 297 Number of Full-Time Equivalent Employees 2,036 2,025 2,103
(1) Except for the efficiency ratio and the core efficiency ratio, amounts are annualized for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020.
(2) Core return on average tangible assets is a non-GAAP financial measure. We compute our core return on average tangible assets as the ratio of core net income to average tangible assets, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total assets. For a reconciliation to the most directly comparable GAAP financial measure for core net income, see Table 14, 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 14, 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 14, GAAP to Non-GAAP Reconciliation.
Consolidated Statements of Income Table 2 For the Three Months Ended For the Year Ended December 31, September 30, December 31, December 31, (dollars in thousands, except per share amounts) 2021 2021 2020 2021 2020 Interest income Loans and lease financing $ 111,865 $ 110,765 $ 118,314 $ 444,488 $ 496,523 Available-for-sale securities 28,393 25,234 22,752 101,410 81,808 Other 1,051 1,205 615 3,413 4,428 Total interest income 141,309 137,204 141,681 549,311 582,759 Interest expense Deposits 3,216 3,218 5,061 13,853 35,471 Short-term and long-term borrowings 766 1,393 1,393 4,899 11,554 Total interest expense 3,982 4,611 6,454 18,752 47,025 Net interest income 137,327 132,593 135,227 530,559 535,734 Provision for credit losses — (4,000 ) 20,000 (39,000 ) 121,718 Net interest income after provision for credit losses 137,327 136,593 115,227 569,559 414,016 Noninterest income Service charges on deposit accounts 7,171 6,989 6,769 27,510 28,169 Credit and debit card fees 16,266 16,017 15,583 63,580 55,451 Other service charges and fees 9,196 10,233 8,404 38,578 33,876 Trust and investment services income 8,895 8,625 8,733 34,719 35,652 Bank-owned life insurance 2,851 4,841 4,159 13,185 15,754 Investment securities (losses) gains, net — — (12 ) 102 (114 ) Other (2,806 ) 3,399 9,962 7,242 28,592 Total noninterest income 41,573 50,104 53,598 184,916 197,380 Noninterest expense Salaries and employee benefits 45,982 46,484 42,687 182,384 174,221 Contracted services and professional fees 14,603 15,042 13,940 63,349 60,546 Occupancy 8,074 6,790 7,355 29,348 28,821 Equipment 6,317 6,549 5,225 24,719 20,277 Regulatory assessment and fees 2,557 1,828 2,168 8,245 8,659 Advertising and marketing 1,579 1,469 1,096 6,108 5,695 Card rewards program 7,471 6,676 4,890 25,244 22,114 Other 22,166 16,198 10,766 66,082 47,339 Total noninterest expense 108,749 101,036 88,127 405,479 367,672 Income before provision for income taxes 70,151 85,661 80,698 348,996 243,724 Provision for income taxes 13,129 21,382 18,959 83,261 57,970 Net income $ 57,022 $ 64,279 $ 61,739 $ 265,735 $ 185,754 Basic earnings per share $ 0.45 $ 0.50 $ 0.48 $ 2.06 $ 1.43 Diluted earnings per share $ 0.44 $ 0.50 $ 0.47 $ 2.05 $ 1.43 Basic weighted-average outstanding shares 127,893,011 128,660,038 129,912,104 128,963,131 129,890,225 Diluted weighted-average outstanding shares 128,512,257 129,210,448 130,314,381 129,537,922 130,220,077 Consolidated Balance Sheets Table 3 December 31, September 30, December 31, (dollars in thousands) 2021 2021 2020 Assets Cash and due from banks $ 246,716 $ 268,467 $ 303,373 Interest-bearing deposits in other banks 1,011,753 2,130,615 737,571 Investment securities, at fair value (amortized cost: $8,560,733 as of
December 31, 2021, $7,994,266 as of September 30, 2021 and
$5,985,031 as of December 31, 2020)8,428,032 7,953,727 6,071,415 Loans held for sale 538 2,052 11,579 Loans and leases 12,961,999 12,834,339 13,279,097 Less: allowance for credit losses 157,262 161,246 208,454 Net loans and leases 12,804,737 12,673,093 13,070,643 Premises and equipment, net 318,448 317,272 322,401 Other real estate owned and repossessed personal property 175 — — Accrued interest receivable 63,158 64,855 69,626 Bank-owned life insurance 471,819 468,968 466,537 Goodwill 995,492 995,492 995,492 Mortgage servicing rights 8,302 9,107 10,731 Other assets 643,240 664,674 603,463 Total assets $ 24,992,410 $ 25,548,322 $ 22,662,831 Liabilities and Stockholders’ Equity Deposits: Interest-bearing $ 12,422,283 $ 13,246,579 $ 11,705,609 Noninterest-bearing 9,393,863 8,873,424 7,522,114 Total deposits 21,816,146 22,120,003 19,227,723 Long-term borrowings — 200,000 200,010 Retirement benefits payable 134,491 144,400 143,373 Other liabilities 384,861 372,185 347,621 Total liabilities 22,335,498 22,836,588 19,918,727 Stockholders’ equity Common stock ($0.01 par value; authorized 300,000,000 shares;
issued/outstanding: 140,581,715 / 127,502,472 shares as of
December 31, 2021, issued/outstanding: 140,563,799 / 128,255,570
shares as of September 30, 2021 and issued/outstanding:
140,191,133 / 129,912,272 shares as of December 31, 2020)1,406 1,406 1,402 Additional paid-in capital 2,527,663 2,524,168 2,514,014 Retained earnings 604,534 581,094 473,974 Accumulated other comprehensive (loss) income, net (121,693 ) (61,463 ) 31,604 Treasury stock (13,079,243 shares as of December 31, 2021,
12,308,229 shares as of September 30, 2021 and 10,278,861 shares
as of December 31, 2020)(354,998 ) (333,471 ) (276,890 ) Total stockholders’ equity 2,656,912 2,711,734 2,744,104 Total liabilities and stockholders’ equity $ 24,992,410 $ 25,548,322 $ 22,662,831 Average Balances and Interest Rates Table 4 Three Months Ended Three Months Ended Three Months Ended December 31, 2021 September 30, 2021 December 31, 2020 Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ (dollars in millions) Balance Expense Rate Balance Expense Rate Balance Expense Rate Earning Assets Interest-Bearing Deposits in Other Banks $ 2,074.5 $ 0.8 0.15 % $ 2,356.4 $ 0.9 0.16 % $ 688.1 $ 0.2 0.10 % Available-for-Sale Investment Securities Taxable 7,515.2 25.8 1.37 6,654.6 22.9 1.37 5,632.9 22.0 1.56 Non-Taxable 615.3 3.3 2.14 561.1 2.9 2.11 220.0 0.9 1.74 Total Available-for-Sale Investment Securities 8,130.5 29.1 1.43 7,215.7 25.8 1.43 5,852.9 22.9 1.57 Loans Held for Sale 1.0 — 1.35 2.2 — 2.39 16.2 0.1 2.00 Loans and Leases(1) Commercial and industrial 2,084.0 21.1 4.01 2,367.2 19.7 3.29 3,077.6 22.6 2.93 Commercial real estate 3,572.9 26.0 2.89 3,447.0 25.4 2.92 3,407.2 26.2 3.06 Construction 806.6 6.3 3.09 862.4 7.0 3.24 703.1 5.6 3.14 Residential: Residential mortgage 4,014.9 34.9 3.48 3,866.1 34.6 3.58 3,679.6 37.1 4.03 Home equity line 864.4 5.5 2.52 837.7 5.5 2.62 856.8 6.1 2.81 Consumer 1,241.3 16.3 5.22 1,260.2 16.8 5.28 1,394.5 19.0 5.43 Lease financing 230.2 1.9 3.27 241.3 2.0 3.23 248.2 1.8 2.89 Total Loans and Leases 12,814.3 112.0 3.48 12,881.9 111.0 3.43 13,367.0 118.4 3.53 Other Earning Assets 80.1 0.3 1.27 77.0 0.3 1.34 53.7 0.4 3.26 Total Earning Assets(2) 23,100.4 142.2 2.45 22,533.2 138.0 2.44 19,977.9 142.0 2.83 Cash and Due from Banks 282.2 290.5 289.2 Other Assets 2,267.9 2,234.4 2,200.9 Total Assets $ 25,650.5 $ 25,058.1 $ 22,468.0 Interest-Bearing Liabilities Interest-Bearing Deposits Savings $ 7,086.0 $ 0.8 0.04 % $ 6,886.0 $ 0.6 0.03 % 5,786.4 $ 0.5 0.03 % Money Market 4,048.3 0.5 0.05 3,957.1 0.5 0.05 3,440.9 0.4 0.05 Time 1,819.0 1.9 0.42 1,884.4 2.1 0.45 2,461.3 4.2 0.67 Total Interest-Bearing Deposits 12,953.3 3.2 0.10 12,727.5 3.2 0.10 11,688.6 5.1 0.17 Long-Term Borrowings 110.9 0.8 2.74 200.0 1.4 2.76 200.0 1.4 2.77 Total Interest-Bearing Liabilities 13,064.2 4.0 0.12 12,927.5 4.6 0.14 11,888.6 6.5 0.22 Net Interest Income $ 138.2 $ 133.4 $ 135.5 Interest Rate Spread 2.33 % 2.30 % 2.61 % Net Interest Margin 2.38 % 2.36 % 2.71 % Noninterest-Bearing Demand Deposits 9,293.3 8,894.3 7,332.2 Other Liabilities 617.5 497.7 514.9 Stockholders’ Equity 2,675.5 2,738.6 2,732.3 Total Liabilities and Stockholders’ Equity $ 25,650.5 $ 25,058.1 $ 22,468.0
(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) Interest income includes taxable-equivalent basis adjustments of $0.9 million, $0.8 million and $0.3 million for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
Average Balances and Interest Rates Table 5 Year Ended Year Ended December 31, 2021 December 31, 2020 Average Income/ Yield/ Average Income/ Yield/ (dollars in millions) Balance Expense Rate Balance Expense Rate Earning Assets Interest-Bearing Deposits in Other Banks $ 1,723.0 $ 2.3 0.14 % $ 882.1 $ 2.4 0.27 % Available-for-Sale Investment Securities Taxable 6,608.9 93.3 1.41 4,844.5 80.9 1.67 Non-Taxable 481.9 10.2 2.12 62.0 1.1 1.77 Total Available-for-Sale Investment Securities 7,090.8 103.5 1.46 4,906.5 82.0 1.67 Loans Held for Sale 3.6 0.1 2.24 13.0 0.3 2.21 Loans and Leases(1) Commercial and industrial 2,586.8 82.2 3.18 3,168.7 93.2 2.94 Commercial real estate 3,456.7 101.6 2.94 3,419.1 116.9 3.42 Construction 804.5 25.4 3.16 615.7 21.3 3.46 Residential: Residential mortgage 3,836.6 138.3 3.60 3,698.7 148.4 4.01 Home equity line 834.3 22.2 2.66 875.1 27.1 3.10 Consumer 1,275.5 67.8 5.31 1,501.6 82.9 5.52 Lease financing 239.9 7.6 3.14 239.4 6.9 2.90 Total Loans and Leases 13,034.3 445.1 3.42 13,518.3 496.7 3.67 Other Earning Assets 69.4 1.1 1.54 56.4 2.0 3.66 Total Earning Assets(2) 21,921.1 552.1 2.52 19,376.3 583.4 3.01 Cash and Due from Banks 289.3 304.9 Other Assets 2,215.9 2,187.9 Total Assets $ 24,426.3 $ 21,869.1 Interest-Bearing Liabilities Interest-Bearing Deposits Savings $ 6,581.1 $ 2.5 0.04 % $ 5,538.1 $ 5.2 0.09 % Money Market 3,831.4 2.1 0.05 3,266.6 6.6 0.20 Time 2,005.0 9.3 0.47 2,839.8 23.7 0.83 Total Interest-Bearing Deposits 12,417.5 13.9 0.11 11,644.5 35.5 0.30 Federal Funds Purchased — — — 1.4 — 0.43 Short-Term Borrowings — — — 208.2 6.0 2.88 Long-Term Borrowings 177.5 4.9 2.76 200.0 5.5 2.77 Total Interest-Bearing Liabilities 12,595.0 18.8 0.15 12,054.1 47.0 0.39 Net Interest Income $ 533.3 $ 536.4 Interest Rate Spread 2.37 % 2.62 % Net Interest Margin 2.43 % 2.77 % Noninterest-Bearing Demand Deposits 8,594.1 6,608.5 Other Liabilities 528.8 507.6 Stockholders’ Equity 2,708.4 2,698.9 Total Liabilities and Stockholders’ Equity $ 24,426.3 $ 21,869.1
(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) Interest income includes taxable-equivalent basis adjustments of $2.8 million and $0.7 million for the years ended December 31, 2021 and 2020, respectively.
Analysis of Change in Net Interest Income Table 6 Three Months Ended December 31, 2021 Compared to September 30, 2021 (dollars in millions) Volume Rate Total Change in Interest Income: Interest-Bearing Deposits in Other Banks $ (0.1 ) $ — $ (0.1 ) Available-for-Sale Investment Securities Taxable 2.9 — 2.9 Non-Taxable 0.3 0.1 0.4 Total Available-for-Sale Investment Securities 3.2 0.1 3.3 Loans and Leases Commercial and industrial (2.5 ) 3.9 1.4 Commercial real estate 0.9 (0.3 ) 0.6 Construction (0.4 ) (0.3 ) (0.7 ) Residential: Residential mortgage 1.3 (1.0 ) 0.3 Home equity line 0.2 (0.2 ) — Consumer (0.3 ) (0.2 ) (0.5 ) Lease financing (0.1 ) — (0.1 ) Total Loans and Leases (0.9 ) 1.9 1.0 Total Change in Interest Income 2.2 2.0 4.2 Change in Interest Expense: Interest-Bearing Deposits Savings — 0.2 0.2 Time (0.1 ) (0.1 ) (0.2 ) Total Interest-Bearing Deposits (0.1 ) 0.1 — Long-Term Borrowings (0.6 ) — (0.6 ) Total Change in Interest Expense (0.7 ) 0.1 (0.6 ) Change in Net Interest Income $ 2.9 $ 1.9 $ 4.8 Analysis of Change in Net Interest Income Table 7 Three Months Ended December 31, 2021 Compared to December 31, 2020 (dollars in millions) Volume Rate Total Change in Interest Income: Interest-Bearing Deposits in Other Banks $ 0.5 $ 0.1 $ 0.6 Available-for-Sale Investment Securities Taxable 6.7 (2.9 ) 3.8 Non-Taxable 2.1 0.3 2.4 Total Available-for-Sale Investment Securities 8.8 (2.6 ) 6.2 Loans Held for Sale (0.1 ) — (0.1 ) Loans and Leases Commercial and industrial (8.5 ) 7.0 (1.5 ) Commercial real estate 1.3 (1.5 ) (0.2 ) Construction 0.8 (0.1 ) 0.7 Residential: Residential mortgage 3.2 (5.4 ) (2.2 ) Home equity line — (0.6 ) (0.6 ) Consumer (2.0 ) (0.7 ) (2.7 ) Lease financing (0.1 ) 0.2 0.1 Total Loans and Leases (5.3 ) (1.1 ) (6.4 ) Other Earning Assets 0.2 (0.3 ) (0.1 ) Total Change in Interest Income 4.1 (3.9 ) 0.2 Change in Interest Expense: Interest-Bearing Deposits Savings 0.1 0.2 0.3 Money Market 0.1 — 0.1 Time (0.9 ) (1.4 ) (2.3 ) Total Interest-Bearing Deposits (0.7 ) (1.2 ) (1.9 ) Long-Term Borrowings (0.6 ) — (0.6 ) Total Change in Interest Expense (1.3 ) (1.2 ) (2.5 ) Change in Net Interest Income $ 5.4 $ (2.7 ) $ 2.7 Analysis of Change in Net Interest Income Table 8 Year Ended December 31, 2021 Compared to December 31, 2020 (dollars in millions) Volume Rate Total Change in Interest Income: Interest-Bearing Deposits in Other Banks $ 1.5 $ (1.6 ) $ (0.1 ) Available-for-Sale Investment Securities Taxable 26.3 (13.9 ) 12.4 Non-Taxable 8.8 0.3 9.1 Total Available-for-Sale Investment Securities 35.1 (13.6 ) 21.5 Loans Held for Sale (0.2 ) — (0.2 ) Loans and Leases Commercial and industrial (18.1 ) 7.1 (11.0 ) Commercial real estate 1.3 (16.6 ) (15.3 ) Construction 6.1 (2.0 ) 4.1 Residential: Residential mortgage 5.4 (15.5 ) (10.1 ) Home equity line (1.2 ) (3.7 ) (4.9 ) Consumer (12.1 ) (3.0 ) (15.1 ) Lease financing 0.1 0.6 0.7 Total Loans and Leases (18.5 ) (33.1 ) (51.6 ) Other Earning Assets 0.4 (1.3 ) (0.9 ) Total Change in Interest Income 18.3 (49.6 ) (31.3 ) Change in Interest Expense: Interest-Bearing Deposits Savings 0.7 (3.4 ) (2.7 ) Money Market 1.0 (5.5 ) (4.5 ) Time (5.8 ) (8.6 ) (14.4 ) Total Interest-Bearing Deposits (4.1 ) (17.5 ) (21.6 ) Short-Term Borrowings (3.0 ) (3.0 ) (6.0 ) Long-Term Borrowings (0.6 ) — (0.6 ) Total Change in Interest Expense (7.7 ) (20.5 ) (28.2 ) Change in Net Interest Income $ 26.0 $ (29.1 ) $ (3.1 ) Loans and Leases Table 9 December 31, September 30, December 31, (dollars in thousands) 2021 2021 2020 Commercial and industrial: Commercial and industrial excluding Paycheck Protection
Program loans$ 1,870,657 $ 1,692,315 $ 2,218,266 Paycheck Protection Program loans 216,442 503,069 801,241 Total commercial and industrial 2,087,099 2,195,384 3,019,507 Commercial real estate 3,639,623 3,569,768 3,392,676 Construction 813,969 826,078 735,819 Residential: Residential mortgage 4,083,367 3,914,632 3,690,218 Home equity line 876,608 852,074 841,624 Total residential 4,959,975 4,766,706 4,531,842 Consumer 1,229,939 1,238,714 1,353,842 Lease financing 231,394 237,689 245,411 Total loans and leases $ 12,961,999 $ 12,834,339 $ 13,279,097 Deposits Table 10 December 31, September 30, December 31, (dollars in thousands) 2021 2021 2020 Demand $ 9,393,863 $ 8,873,424 $ 7,522,114 Savings 6,612,775 7,347,079 6,020,075 Money Market 4,033,070 4,019,250 3,337,236 Time 1,776,438 1,880,250 2,348,298 Total Deposits $ 21,816,146 $ 22,120,003 $ 19,227,723 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) 2021 2021 2020 Non-Performing Assets Non-Accrual Loans and Leases Commercial Loans: Commercial and industrial $ 718 $ 746 $ 518 Commercial real estate 727 745 80 Construction — — 2,043 Total Commercial Loans 1,445 1,491 2,641 Residential Loans: Residential mortgage 5,637 7,137 6,441 Total Residential Loans 5,637 7,137 6,441 Total Non-Accrual Loans and Leases 7,082 8,628 9,082 Other Real Estate Owned 175 — — Total Non-Performing Assets $ 7,257 $ 8,628 $ 9,082 Accruing Loans and Leases Past Due 90 Days or More Commercial Loans: Commercial and industrial $ 740 $ 439 $ 2,108 Commercial real estate — — 882 Construction — — 93 Total Commercial Loans 740 439 3,083 Residential Loans: Residential mortgage 987 100 — Home equity line 3,681 3,871 4,818 Total Residential Loans 4,668 3,971 4,818 Consumer 1,800 1,376 3,266 Total Accruing Loans and Leases Past Due 90 Days or More $ 7,208 $ 5,786 $ 11,167 Restructured Loans on Accrual Status and Not Past Due 90 Days or More $ 34,893 $ 36,234 $ 16,684 Total Loans and Leases $ 12,961,999 $ 12,834,339 $ 13,279,097 Allowance for Credit 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) 2021 2021 2020 2021 2020 Balance at Beginning of Period $ 161,246 $ 169,148 $ 195,876 $ 208,454 $ 130,530 Adjustment to Adopt ASC Topic 326 — — — — 770 After Adoption of ASC Topic 326 161,246 169,148 195,876 208,454 131,300 Loans and Leases Charged-Off Commercial Loans: Commercial and industrial (4,432 ) (224 ) (799 ) (5,949 ) (15,572 ) Commercial real estate — — (30 ) (66 ) (2,753 ) Construction — — — — (379 ) Total Commercial Loans (4,432 ) (224 ) (829 ) (6,015 ) (18,704 ) Residential Loans: Residential mortgage (534 ) — — (632 ) (14 ) Home equity line (107 ) (235 ) (46 ) (342 ) (54 ) Total Residential Loans (641 ) (235 ) (46 ) (974 ) (68 ) Consumer (3,250 ) (2,926 ) (7,049 ) (16,634 ) (28,791 ) Total Loans and Leases Charged-Off (8,323 ) (3,385 ) (7,924 ) (23,623 ) (47,563 ) Recoveries on Loans and Leases Previously Charged-Off Commercial Loans: Commercial and industrial 244 121 2,986 867 5,005 Commercial real estate 9 15 615 39 615 Construction 100 — 30 266 200 Total Commercial Loans 353 136 3,631 1,172 5,820 Residential Loans: Residential mortgage 15 215 37 261 216 Home equity line 28 27 21 117 167 Total Residential Loans 43 242 58 378 383 Consumer 1,743 2,405 2,812 9,600 10,499 Total Recoveries on Loans and Leases Previously Charged-Off 2,139 2,783 6,501 11,150 16,702 Net Loans and Leases Charged-Off (6,184 ) (602 ) (1,423 ) (12,473 ) (30,861 ) Provision for Credit Losses - Loans and Leases 2,200 (7,300 ) 14,001 (38,719 ) 108,015 Balance at End of Period $ 157,262 $ 161,246 $ 208,454 $ 157,262 $ 208,454 Average Loans and Leases Outstanding $ 12,814,316 $ 12,881,885 $ 13,366,980 $ 13,034,295 $ 13,518,308 Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1) 0.19 % 0.02 % 0.04 % 0.10 % 0.23 % Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding 1.21 % 1.26 % 1.57 % 1.21 % 1.57 % Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases 22.21x 18.69x 22.95x 22.21x 22.95x
(1) Annualized for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020.
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) 2021 2020 2019 2018 2017 Prior Cost Basis Cost Basis Total Commercial Lending Commercial and Industrial Risk rating: Pass $ 623,098 $ 129,665 $ 223,388 $ 88,409 $ 29,380 $ 168,591 $ 644,947 $ 40,193 $ 1,947,671 Special Mention 397 4,382 4,213 12,552 974 5,313 4,804 986 33,621 Substandard 354 1,380 1,951 1,285 60 3,551 17,893 1,043 27,517 Other (1) 13,277 7,070 7,741 4,453 1,995 370 43,384 — 78,290 Total Commercial and Industrial 637,126 142,497 237,293 106,699 32,409 177,825 711,028 42,222 2,087,099 Commercial Real Estate Risk rating: Pass 693,370 338,140 533,887 487,739 415,186 940,732 78,479 14,891 3,502,424 Special Mention — — 48,499 7,470 25,513 30,255 7,600 — 119,337 Substandard — — — 1,776 164 15,303 459 — 17,702 Other (1) — — — — — 160 — — 160 Total Commercial
Real Estate693,370 338,140 582,386 496,985 440,863 986,450 86,538 14,891 3,639,623 Construction Risk rating: Pass 154,558 107,767 210,314 155,311 62,770 48,021 22,859 — 761,600 Special Mention — — 244 707 — 356 — — 1,307 Substandard — — — 363 — 839 — — 1,202 Other (1) 26,835 8,875 4,317 4,308 2,684 2,048 793 — 49,860 Total Construction 181,393 116,642 214,875 160,689 65,454 51,264 23,652 — 813,969 Lease Financing Risk rating: Pass 33,980 60,650 48,236 9,449 15,009 57,130 — — 224,454 Special Mention 501 2,702 1,506 311 153 — — — 5,173 Substandard — 270 140 16 871 470 — — 1,767 Total Lease Financing 34,481 63,622 49,882 9,776 16,033 57,600 — — 231,394 Total Commercial
Lending$ 1,546,370 $ 660,901 $ 1,084,436 $ 774,149 $ 554,759 $ 1,273,139 $ 821,218 $ 57,113 $ 6,772,085 Revolving Loans Converted Term Loans Revolving to Term Amortized Cost Basis by Origination Year Loans Loans (continued) Amortized Amortized (dollars in thousands) 2021 2020 2019 2018 2017 Prior Cost Basis Cost Basis Total Residential Lending Residential Mortgage FICO: 740 and greater $ 1,101,958 $ 635,061 $ 286,993 $ 198,622 $ 251,906 $ 829,175 $ — $ — $ 3,303,715 680 - 739 140,997 81,590 45,163 27,315 32,855 125,906 — — 453,826 620 - 679 15,781 11,943 5,268 10,149 9,069 37,404 — — 89,614 550 - 619 1,735 873 698 533 2,033 7,475 — — 13,347 Less than 550 — — — 345 2,603 2,838 — — 5,786 No Score (3) 18,882 7,938 15,051 18,107 17,333 42,185 — — 119,496 Other (2) 25,625 16,263 10,242 11,297 16,242 17,152 44 718 97,583 Total Residential Mortgage 1,304,978 753,668 363,415 266,368 332,041 1,062,135 44 718 4,083,367 Home Equity Line FICO: 740 and greater — — — — — — 671,566 1,873 673,439 680 - 739 — — — — — — 141,889 3,968 145,857 620 - 679 — — — — — — 37,815 2,500 40,315 550 - 619 — — — — — — 9,090 948 10,038 Less than 550 — — — — — — 2,574 68 2,642 No Score (3) — — — — — — 4,317 — 4,317 Total Home Equity Line — — — — — — 867,251 9,357 876,608 Total Residential Lending 1,304,978 753,668 363,415 266,368 332,041 1,062,135 867,295 10,075 4,959,975 Consumer Lending FICO: 740 and greater 155,929 83,337 79,617 56,707 24,525 8,067 117,843 209 526,234 680 - 739 93,214 56,327 55,126 34,049 17,527 6,315 69,366 707 332,631 620 - 679 41,671 21,986 28,491 19,403 12,952 5,324 31,165 1,175 162,167 550 - 619 7,836 8,265 13,265 10,497 7,469 3,244 10,359 1,089 62,024 Less than 550 2,272 3,867 6,646 3,484 2,739 1,175 3,195 536 23,914 No Score (3) 481 19 56 40 65 2 35,414 320 36,397 Other (2) 4,737 365 1,712 17 2,182 31 77,528 — 86,572 Total Consumer Lending 306,140 174,166 184,913 124,197 67,459 24,158 344,870 4,036 1,229,939 Total Loans and Leases $ 3,157,488 $ 1,588,735 $ 1,632,764 $ 1,164,714 $ 954,259 $ 2,359,432 $ 2,033,383 $ 71,224 $ 12,961,999
(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 Year Ended December 31, September 30, December 31, December 31, (dollars in thousands, except per share amounts) 2021 2021 2020 2021 2020 Income Statement Data: Net income $ 57,022 $ 64,279 $ 61,739 $ 265,735 $ 185,754 Core net income $ 68,013 $ 65,819 $ 65,288 $ 279,229 $ 189,378 Average total stockholders’ equity $ 2,675,513 $ 2,738,540 $ 2,732,271 $ 2,708,370 $ 2,698,853 Less: average goodwill 995,492 995,492 995,492 995,492 995,492 Average tangible stockholders’ equity $ 1,680,021 $ 1,743,048 $ 1,736,779 $ 1,712,878 $ 1,703,361 Average total assets $ 25,650,505 $ 25,058,085 $ 22,468,040 $ 24,426,258 $ 21,869,064 Less: average goodwill 995,492 995,492 995,492 995,492 995,492 Average tangible assets $ 24,655,013 $ 24,062,593 $ 21,472,548 $ 23,430,766 $ 20,873,572 Return on average total stockholders’ equity(1) 8.46 % 9.31 % 8.99 % 9.81 % 6.88 % Core return on average total stockholders’ equity (non-GAAP)(1) 10.09 % 9.54 % 9.51 % 10.31 % 7.02 % Return on average tangible stockholders’ equity (non-GAAP)(1) 13.47 % 14.63 % 14.14 % 15.51 % 10.91 % Core return on average tangible stockholders’ equity (non-GAAP)(1) 16.06 % 14.98 % 14.95 % 16.30 % 11.12 % Return on average total assets(1) 0.88 % 1.02 % 1.09 % 1.09 % 0.85 % Core return on average total assets (non-GAAP)(1) 1.05 % 1.04 % 1.16 % 1.14 % 0.87 % Return on average tangible assets (non-GAAP)(1) 0.92 % 1.06 % 1.14 % 1.13 % 0.89 % Core return on average tangible assets (non-GAAP)(1) 1.09 % 1.09 % 1.21 % 1.19 % 0.91 % As of As of As of December 31, September 30, December 31, 2021 2021 2020 Balance Sheet Data: Total stockholders’ equity $ 2,656,912 $ 2,711,734 $ 2,744,104 Less: goodwill 995,492 995,492 995,492 Tangible stockholders’ equity $ 1,661,420 $ 1,716,242 $ 1,748,612 Total assets $ 24,992,410 $ 25,548,322 $ 22,662,831 Less: goodwill 995,492 995,492 995,492 Tangible assets $ 23,996,918 $ 24,552,830 $ 21,667,339 Shares outstanding 127,502,472 128,255,570 129,912,272 Total stockholders’ equity to total assets 10.63 % 10.61 % 12.11 % Tangible stockholders' equity to tangible assets (non-GAAP) 6.92 % 6.99 % 8.07 % Book value per share $ 20.84 $ 21.14 $ 21.12 Tangible book value per share (non-GAAP) $ 13.03 $ 13.38 $ 13.46
(1) Annualized for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020.
GAAP to Non-GAAP Reconciliation Table 15 For the Three Months Ended For the Year Ended December 31, September 30, December 31, December 31, (dollars in thousands, except per share amounts) 2021 2021 2020 2021 2020 Net interest income $ 137,327 $ 132,593 $ 135,227 $ 530,559 $ 535,734 Core net interest income (non-GAAP) $ 137,327 $ 132,593 $ 135,227 $ 530,559 $ 535,734 Noninterest income $ 41,573 $ 50,104 $ 53,598 $ 184,916 $ 197,380 Losses (gains) on sale of securities — — 12 (102 ) 114 Costs associated with the sale of stock(1) 6,014 — 4,828 6,014 4,828 Core noninterest income (non-GAAP) $ 47,587 $ 50,104 $ 58,438 $ 190,828 $ 202,322 Noninterest expense $ 108,749 $ 101,036 $ 88,127 $ 405,479 $ 367,672 Loss on litigation — (2,100 ) — (2,100 ) — One-time items(2) (8,974 ) — — (10,134 ) — Core noninterest expense (non-GAAP) $ 99,775 $ 98,936 $ 88,127 $ 393,245 $ 367,672 Net income $ 57,022 $ 64,279 $ 61,739 $ 265,735 $ 185,754 Losses (gains) on sale of securities — — 12 (102 ) 114 Costs associated with the sale of stock(1) 6,014 — 4,828 6,014 4,828 Loss on litigation — 2,100 — 2,100 — One-time noninterest expense items(2) 8,974 — — 10,134 — Tax adjustments(3) (3,997 ) (560 ) (1,291 ) (4,652 ) (1,318 ) Total core adjustments 10,991 1,540 3,549 13,494 3,624 Core net income (non-GAAP) $ 68,013 $ 65,819 $ 65,288 $ 279,229 $ 189,378 Basic earnings per share $ 0.45 $ 0.50 $ 0.48 $ 2.06 $ 1.43 Diluted earnings per share $ 0.44 $ 0.50 $ 0.47 $ 2.05 $ 1.43 Efficiency ratio 60.50 % 55.07 % 46.59 % 56.45 % 50.10 % Core basic earnings per share (non-GAAP) $ 0.53 $ 0.51 $ 0.50 $ 2.17 $ 1.46 Core diluted earnings per share (non-GAAP) $ 0.53 $ 0.51 $ 0.50 $ 2.16 $ 1.45 Core efficiency ratio (non-GAAP) 53.71 % 53.92 % 45.43 % 54.30 % 49.77 %
(1) Costs associated with the sale of stock for both the three and twelve months ended December 31, 2021 and 2020 related to changes in the valuation of the funding swap entered into with the buyer of our Visa Class B restricted sales in 2016.
(2) One-time items for the three and twelve months ended December 31, 2021 consisted of fees related to the prepayment of $200.0 million of Federal Home Loan Bank advances. Additionally, one-time items for the twelve months ended December 31, 2021 consisted of severance costs.
(3) Represents the adjustments to net income, tax effected at the Company’s effective tax rate for the respective period.
