First Hawaiian, Inc. Reports Third Quarter 2021 Financial Results and Declares Dividend

Source: Nasdaq GlobeNewswire / 22 Oct 2021 08:00:02 America/New_York

HONOLULU, Oct. 22, 2021 (GLOBE NEWSWIRE) -- First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended September 30, 2021.

“We are pleased with the bank’s solid performance in the third quarter. It was also a milestone quarter, as total assets exceeded $25 billion at quarter-end for the first time in our history,” said Bob Harrison, Chairman, President and CEO. “We had good growth in deposit balances, credit quality remained excellent, and we are seeing an increase in loan activity.”

On October 20, 2021 the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on December 3, 2021 to stockholders of record at the close of business on November 22, 2021.

Third Quarter 2021 Highlights:

Net income of $64.3 million, or $0.50 per diluted share
Total loans and leases decreased $269.4 million versus prior quarter, reflecting a $308.0 million decline in PPP loans
Total deposits increased $1.3 billion versus prior quarter
Recorded a $4.0 million negative provision for credit losses
Board of Directors declared a quarterly dividend of $0.26 per share
Repurchased $21.6 million of stock under share repurchase program

Balance Sheet
Total assets were $25.5 billion as of September 30, 2021, compared to $24.2 billion as of June 30, 2021.

Gross loans and leases were $12.8 billion as of September 30, 2021, a decrease of $269.4 million, or 2.1%, from $13.1 billion as of June 30, 2021.

Total deposits were $22.1 billion as of September 30, 2021, an increase of $1.3 billion, or 6.2%, from $20.8 billion as of June 30, 2021.

Net Interest Income
Net interest income for the third quarter of 2021 was $132.6 million, an increase of $1.1 million, or 0.8%, compared to $131.5 million for the prior quarter.

The net interest margin (NIM) was 2.36% in the third quarter of 2021, a decrease of 10 basis points compared to 2.46% in the second quarter of 2021.

Provision Expense
During the quarter ended September 30, 2021, we recorded a $4.0 million negative provision for credit losses. In the quarter ended June 30, 2021 we recorded a $35.0 million negative provision for credit losses.

Noninterest Income
Noninterest income was $50.1 million in the third quarter of 2021, an increase of $0.7 million compared to noninterest income of $49.4 million in the second quarter of 2021.

Noninterest Expense
Noninterest expense was $101.0 million in the third quarter of 2021, an increase of $1.6 million compared to noninterest expense of $99.4 million in the second quarter of 2021.

The efficiency ratio was 55.1% and 54.7% for the quarters ended September 30, 2021 and June 30, 2021, respectively.

Taxes
The effective tax rate was 25.0% for the quarter ended September 30, 2021 and 25.5% for the quarter ended June 30, 2021.

Asset Quality
The allowance for credit losses was $161.2 million, or 1.26% of total loans and leases, as of September 30, 2021, compared to $169.1 million, or 1.29% of total loans and leases, as of June 30, 2021. The reserve for unfunded commitments was $32.5 million as of September 30, 2021 compared to $29.2 million as of June 30, 2021. Net charge-offs were $0.6 million, or 0.02% of average loans and leases on an annualized basis, for the quarter ended September 30, 2021, compared to net charge-offs of $1.1 million, or 0.03% of average loans and leases on an annualized basis, for the quarter ended June 30, 2021. Total non-performing assets were $8.6 million, or 0.07% of total loans and leases and other real estate owned, at September 30, 2021, compared to total non-performing assets of $8.9 million, or 0.07% of total loans and leases and other real estate owned at June 30, 2021.

Capital
Total stockholders' equity was $2.7 billion at both September 30, 2021 and June 30, 2021.

The tier 1 leverage, common equity tier 1 and total capital ratios were 7.39%, 12.63% and 13.88%, respectively, at September 30, 2021, compared with 7.68%, 12.76% and 14.01%, respectively, at June 30, 2021.

The Company repurchased 0.8 million shares of common stock at a total cost of $21.6 million under the stock repurchase program in the third quarter. The average cost was $27.76 per share repurchased. Remaining buyback authority under the stock repurchase program was $21.5 million at September 30, 2021.

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, 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: 2438538. 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 October 29, 2021. Access the replay by dialing (855) 859-2056 or (404) 537-3406 and entering the conference ID: 2438538.

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 and June 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.com

Media Contact:
Susan Kam
(808) 525-6254
skam@fhb.com

Financial Highlights																	Table 1
	For the Three Months Ended											For the Nine Months Ended
	September 30,				June 30,				September 30,			September 30,
(dollars in thousands, except per share data)	2021				2021				2020			2021				2020
Operating Results:
Net interest income	$	132,593			$	131,481			$	134,002		$	393,232			$	400,507
Provision for credit losses		(4,000	)			(35,000	)			5,072			(39,000	)			101,718
Noninterest income		50,104				49,371				48,898			143,343				143,782
Noninterest expense		101,036				99,388				91,629			296,730				279,545
Net income		64,279				86,741				65,101			208,713				124,015
Basic earnings per share		0.50				0.67				0.50			1.61				0.95
Diluted earnings per share		0.50				0.67				0.50			1.61				0.95
Dividends declared per share		0.26				0.26				0.26			0.78				0.78
Dividend payout ratio		52.00		%		38.81		%		52.00	%		48.45		%		82.11	%
Supplemental Income Statement Data (non-GAAP):
Core net interest income	$	132,593			$	131,481			$	134,002		$	393,232			$	400,507
Core noninterest income		50,104				49,269				48,874			143,241				143,884
Core noninterest expense		98,936				98,228				91,629			293,470				279,545
Core net income		65,819				87,704				65,083			211,216				124,090
Core basic earnings per share		0.51				0.68				0.50			1.63				0.96
Core diluted earnings per share		0.51				0.68				0.50			1.63				0.95
Performance Ratios⁽¹⁾:
Net interest margin		2.36		%		2.46		%		2.70	%		2.45		%		2.79	%
Core net interest margin (non-GAAP)		2.36		%		2.46		%		2.70	%		2.45		%		2.79	%
Efficiency ratio		55.07		%		54.74		%		50.01	%		55.10		%		51.32	%
Core efficiency ratio (non-GAAP)		53.92		%		54.13		%		50.02	%		54.51		%		51.31	%
Return on average total assets		1.02		%		1.45		%		1.16	%		1.16		%		0.76	%
Core return on average total assets (non-GAAP)		1.04		%		1.46		%		1.16	%		1.18		%		0.76	%
Return on average tangible assets (non-GAAP)		1.06		%		1.51		%		1.21	%		1.21		%		0.80	%
Core return on average tangible assets (non-GAAP)⁽²⁾		1.09		%		1.53		%		1.21	%		1.23		%		0.80	%
Return on average total stockholders' equity		9.31		%		12.92		%		9.58	%		10.26		%		6.16	%
Core return on average total stockholders' equity (non-GAAP)		9.54		%		13.07		%		9.57	%		10.38		%		6.17	%
Return on average tangible stockholders' equity (non-GAAP)		14.63		%		20.51		%		15.16	%		16.19		%		9.79	%
Core return on average tangible stockholders’ equity (non-GAAP)⁽³⁾		14.98		%		20.74		%		15.15	%		16.38		%		9.80	%
Average Balances:
Average loans and leases	$	12,881,885			$	13,205,086			$	13,559,367		$	13,108,427			$	13,569,119
Average earning assets		22,533,174				21,539,264				19,846,674			21,523,731				19,174,349
Average assets		25,058,085				24,015,065				22,341,485			24,013,691				21,667,948
Average deposits		21,621,836				20,638,015				18,892,033			20,595,400				17,995,196
Average stockholders' equity		2,738,540				2,691,966				2,704,129			2,719,442				2,687,632
Market Value Per Share:
Closing		29.35				28.34				14.47			29.35				14.47
High		30.06				29.85				18.96			30.80				31.25
Low		25.75				24.75				14.32			23.14				13.56

	As of			As of			As of			As of
	September 30,			June 30,			December 31,			September 30,
(dollars in thousands, except per share data)	2021			2021			2020			2020
Balance Sheet Data:
Loans and leases	$	12,834,339		$	13,103,785		$	13,279,097		$	13,499,969
Total assets		25,548,322			24,246,328			22,662,831			22,310,701
Total deposits		22,120,003			20,835,115			19,227,723			18,897,762
Long-term borrowings		200,000			200,000			200,010			200,010
Total stockholders' equity		2,711,734			2,731,341			2,744,104			2,733,934

Per Share of Common Stock:
Book value	$	21.14		$	21.17		$	21.12		$	21.04
Tangible book value (non-GAAP)⁽⁴⁾		13.38			13.45			13.46			13.38

Asset Quality Ratios:
Non-accrual loans and leases / total loans and leases		0.07	%		0.07	%		0.07	%		0.13	%
Allowance for credit losses for loans and leases / total loans and leases		1.26	%		1.29	%		1.57	%		1.45	%

Capital Ratios:
Common Equity Tier 1 Capital Ratio		12.63	%		12.76	%		12.47	%		12.22	%
Tier 1 Capital Ratio		12.63	%		12.76	%		12.47	%		12.22	%
Total Capital Ratio		13.88	%		14.01	%		13.73	%		13.47	%
Tier 1 Leverage Ratio		7.39	%		7.68	%		8.00	%		7.91	%
Total stockholders' equity to total assets		10.61	%		11.26	%		12.11	%		12.25	%
Tangible stockholders' equity to tangible assets (non-GAAP)		6.99	%		7.47	%		8.07	%		8.16	%

Non-Financial Data:
Number of branches		54			54			54			58
Number of ATMs		298			294			297			302
Number of Full-Time Equivalent Employees		2,025			2,087			2,103			2,099

^{________________________}

⁽¹⁾	Except for the efficiency ratio and the core efficiency ratio, amounts are annualized for the three and nine months ended September 30, 2021 and 2020 and the three months ended June 30, 2021.
⁽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 Nine Months Ended
	September 30,			June 30,			September 30,		September 30,
(dollars in thousands, except per share amounts)	2021			2021			2020		2021			2020
Interest income
Loans and lease financing	$	110,765		$	110,919		$	120,940	$	332,623		$	378,209
Available-for-sale securities		25,234			24,637			20,317		73,017			59,056
Other		1,205			666			670		2,362			3,813
Total interest income		137,204			136,222			141,927		408,002			441,078
Interest expense
Deposits		3,218			3,363			6,227		10,637			30,410
Short-term and long-term borrowings		1,393			1,378			1,698		4,133			10,161
Total interest expense		4,611			4,741			7,925		14,770			40,571
Net interest income		132,593			131,481			134,002		393,232			400,507
Provision for credit losses		(4,000	)		(35,000	)		5,072		(39,000	)		101,718
Net interest income after provision for credit losses		136,593			166,481			128,930		432,232			298,789
Noninterest income
Service charges on deposit accounts		6,989			6,632			6,523		20,339			21,400
Credit and debit card fees		16,017			16,746			14,049		47,314			39,868
Other service charges and fees		10,233			10,303			9,021		29,382			25,472
Trust and investment services income		8,625			8,707			8,664		25,824			26,919
Bank-owned life insurance		4,841			3,104			4,903		10,334			11,595
Investment securities gains (losses), net		—			102			24		102			(102	)
Other		3,399			3,777			5,714		10,048			18,630
Total noninterest income		50,104			49,371			48,898		143,343			143,782
Noninterest expense
Salaries and employee benefits		46,484			45,982			44,291		136,402			131,534
Contracted services and professional fees		15,042			16,516			15,073		48,746			46,606
Occupancy		6,790			7,314			6,921		21,274			21,466
Equipment		6,549			6,362			5,137		18,402			15,052
Regulatory assessment and fees		1,828			1,826			2,445		5,688			6,491
Advertising and marketing		1,469			1,469			1,374		4,529			4,599
Card rewards program		6,676			6,262			5,046		17,773			17,224
Other		16,198			13,657			11,342		43,916			36,573
Total noninterest expense		101,036			99,388			91,629		296,730			279,545
Income before provision for income taxes		85,661			116,464			86,199		278,845			163,026
Provision for income taxes		21,382			29,723			21,098		70,132			39,011
Net income	$	64,279		$	86,741		$	65,101	$	208,713		$	124,015
Basic earnings per share	$	0.50		$	0.67		$	0.50	$	1.61		$	0.95
Diluted earnings per share	$	0.50		$	0.67		$	0.50	$	1.61		$	0.95
Basic weighted-average outstanding shares		128,660,038			129,392,339			129,896,054		129,323,973			129,882,878
Diluted weighted-average outstanding shares		129,210,448			129,828,847			130,085,534		129,895,311			130,129,690

Consolidated Balance Sheets	Table 3
	September 30,			June 30,			December 31,			September 30,
(dollars in thousands)	2021			2021			2020			2020
Assets
Cash and due from banks	$	268,467		$	347,861		$	303,373		$	333,744
Interest-bearing deposits in other banks		2,130,615			1,558,437			737,571			482,585
Investment securities, at fair value (amortized cost: $7,994,266 as of September 30, 2021, $6,951,153 as of June 30, 2021, $5,985,031 as of December 31, 2020 and $5,584,556 as of September 30, 2020)		7,953,727			6,953,930			6,071,415			5,692,883
Loans held for sale		2,052			1,241			11,579			34,669
Loans and leases		12,834,339			13,103,785			13,279,097			13,499,969
Less: allowance for credit losses		161,246			169,148			208,454			195,876
Net loans and leases		12,673,093			12,934,637			13,070,643			13,304,093

Premises and equipment, net		317,272			319,452			322,401			321,229
Accrued interest receivable		64,855			66,734			69,626			66,005
Bank-owned life insurance		468,968			466,402			466,537			462,422
Goodwill		995,492			995,492			995,492			995,492
Mortgage servicing rights		9,107			10,007			10,731			10,922
Other assets		664,674			592,135			603,463			606,657
Total assets	$	25,548,322		$	24,246,328		$	22,662,831		$	22,310,701
Liabilities and Stockholders' Equity
Deposits:
Interest-bearing	$	13,246,579		$	12,245,193		$	11,705,609		$	11,989,492
Noninterest-bearing		8,873,424			8,589,922			7,522,114			6,908,270
Total deposits		22,120,003			20,835,115			19,227,723			18,897,762
Long-term borrowings		200,000			200,000			200,010			200,010
Retirement benefits payable		144,400			144,101			143,373			138,806
Other liabilities		372,185			335,771			347,621			340,189
Total liabilities		22,836,588			21,514,987			19,918,727			19,576,767

Stockholders' equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 140,563,799 / 128,255,570 shares as of September 30, 2021, issued/outstanding: 140,542,398 / 129,019,871 shares as of June 30, 2021, issued/outstanding: 140,191,133 / 129,912,272 shares as of December 31, 2020 and issued/outstanding: 140,190,428 / 129,911,789 shares as of September 30, 2020)		1,406			1,405			1,402			1,402
Additional paid-in capital		2,524,168			2,520,790			2,514,014			2,511,849
Retained earnings		581,094			550,511			473,974			446,315
Accumulated other comprehensive (loss) income, net		(61,463	)		(29,702	)		31,604			51,254
Treasury stock (12,308,229 shares as of September 30, 2021, 11,522,527 shares as of June 30, 2021, 10,278,861 shares as of December 31, 2020 and 10,278,639 shares as of September 30, 2020)		(333,471	)		(311,663	)		(276,890	)		(276,886	)
Total stockholders' equity		2,711,734			2,731,341			2,744,104			2,733,934
Total liabilities and stockholders' equity	$	25,548,322		$	24,246,328		$	22,662,831		$	22,310,701

Average Balances and Interest Rates																	Table 4
	Three Months Ended						Three Months Ended						Three Months Ended
	September 30, 2021						June 30, 2021						September 30, 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	$	2,356.4	$	0.9	0.16	%	$	1,503.0	$	0.4	0.10	%	$	889.6	$	0.2	0.10	%
Available-for-Sale Investment Securities
Taxable		6,654.6		22.9	1.37			6,298.3		22.5	1.43			5,308.5		20.2	1.52
Non-Taxable		561.1		2.9	2.11			468.4		2.7	2.30			25.7		0.1	2.11
Total Available-for-Sale Investment Securities		7,215.7		25.8	1.43			6,766.7		25.2	1.49			5,334.2		20.3	1.53
Loans Held for Sale		2.2		—	2.39			2.0		—	1.44			10.2		0.1	2.67
Loans and Leases⁽¹⁾
Commercial and industrial		2,367.2		19.7	3.29			2,882.1		21.1	2.94			3,230.4		21.6	2.67
Commercial real estate		3,447.0		25.4	2.92			3,419.7		25.3	2.97			3,418.0		27.8	3.23
Construction		862.4		7.0	3.24			800.9		6.3	3.15			637.6		5.2	3.22
Residential:
Residential mortgage		3,866.1		34.6	3.58			3,765.4		34.0	3.62			3,680.5		37.9	4.12
Home equity line		837.7		5.5	2.62			812.6		5.5	2.72			871.1		6.6	3.02
Consumer		1,260.2		16.8	5.28			1,277.9		16.9	5.32			1,474.4		20.2	5.46
Lease financing		241.3		2.0	3.23			246.5		1.9	3.06			247.4		1.8	2.90
Total Loans and Leases		12,881.9		111.0	3.43			13,205.1		111.0	3.37			13,559.4		121.1	3.56
Other Earning Assets		77.0		0.3	1.34			62.5		0.3	1.91			53.3		0.5	3.32
Total Earning Assets⁽²⁾		22,533.2		138.0	2.44			21,539.3		136.9	2.55			19,846.7		142.2	2.86
Cash and Due from Banks		290.5						290.7						307.9
Other Assets		2,234.4						2,185.1						2,186.9
Total Assets	$	25,058.1					$	24,015.1					$	22,341.5

Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings	$	6,886.0	$	0.6	0.03	%	$	6,361.8	$	0.5	0.03	%		5,768.3	$	0.6	0.04	%
Money Market		3,957.1		0.5	0.05			3,783.1		0.5	0.06			3,288.2		0.4	0.05
Time		1,884.4		2.1	0.45			2,034.5		2.3	0.45			3,029.8		5.2	0.69
Total Interest-Bearing Deposits		12,727.5		3.2	0.10			12,179.4		3.3	0.11			12,086.3		6.2	0.20
Short-Term Borrowings		—		—	—			—		—	—			45.1		0.3	2.69
Long-Term Borrowings		200.0		1.4	2.76			200.0		1.4	2.76			200.0		1.4	2.77
Total Interest-Bearing Liabilities		12,927.5		4.6	0.14			12,379.4		4.7	0.15			12,331.4		7.9	0.26
Net Interest Income			$	133.4					$	132.2					$	134.3
Interest Rate Spread					2.30	%					2.40	%					2.60	%
Net Interest Margin					2.36	%					2.46	%					2.70	%
Noninterest-Bearing Demand Deposits		8,894.3						8,458.6						6,805.7
Other Liabilities		497.7						485.1						500.3
Stockholders' Equity		2,738.6						2,692.0						2,704.1
Total Liabilities and Stockholders' Equity	$	25,058.1					$	24,015.1					$	22,341.5

^{________________________}

⁽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 $0.8 million, $0.7 million and $0.3 million for the three months ended September 30, 2021, June 30, 2021 and September 30, 2020, respectively.

Average Balances and Interest Rates											Table 5
	Nine Months Ended						Nine Months Ended
	September 30, 2021						September 30, 2020
	Average		Income/		Yield/		Average		Income/		Yield/
(dollars in millions)	Balance		Expense		Rate		Balance		Expense		Rate
Earning Assets
Interest-Bearing Deposits in Other Banks	$	1,604.6	$	1.5	0.13	%	$	947.3	$	2.2	0.31	%
Available-for-Sale Investment Securities
Taxable		6,303.5		67.5	1.43			4,579.8		59.0	1.72
Non-Taxable		436.9		6.9	2.11			8.9		0.1	2.11
Total Available-for-Sale Investment Securities		6,740.4		74.4	1.47			4,588.7		59.1	1.72
Loans Held for Sale		4.4		0.1	2.31			11.9		0.2	2.31
Loans and Leases⁽¹⁾
Commercial and industrial		2,756.2		61.2	2.97			3,202.4		70.5	2.94
Commercial real estate		3,417.5		75.6	2.96			3,423.9		90.7	3.54
Construction		803.8		19.2	3.19			586.9		15.8	3.59
Residential:
Residential mortgage		3,776.5		103.3	3.65			3,700.8		111.3	4.01
Home equity line		824.1		16.7	2.71			881.2		21.1	3.20
Consumer		1,287.1		51.4	5.34			1,537.5		63.9	5.55
Lease financing		243.2		5.7	3.10			236.4		5.1	2.90
Total Loans and Leases		13,108.4		333.1	3.39			13,569.1		378.4	3.72
Other Earning Assets		65.9		0.8	1.65			57.3		1.6	3.78
Total Earning Assets⁽²⁾		21,523.7		409.9	2.54			19,174.3		441.5	3.07
Cash and Due from Banks		291.7						310.1
Other Assets		2,198.3						2,183.5
Total Assets	$	24,013.7					$	21,667.9

Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings	$	6,410.9	$	1.7	0.04	%	$	5,454.7	$	4.7	0.12	%
Money Market		3,758.3		1.5	0.05			3,208.1		6.1	0.25
Time		2,067.7		7.4	0.48			2,966.9		19.6	0.88
Total Interest-Bearing Deposits		12,236.9		10.6	0.12			11,629.7		30.4	0.35
Short-Term Borrowings		—		—	—			279.9		6.0	2.87
Long-Term Borrowings		200.0		4.2	2.76			200.0		4.2	2.77
Total Interest-Bearing Liabilities		12,436.9		14.8	0.16			12,109.6		40.6	0.45
Net Interest Income			$	395.1					$	400.9
Interest Rate Spread					2.38	%					2.62	%
Net Interest Margin					2.45	%					2.79	%
Noninterest-Bearing Demand Deposits		8,358.5						6,365.5
Other Liabilities		498.9						505.2
Stockholders' Equity		2,719.4						2,687.6
Total Liabilities and Stockholders' Equity	$	24,013.7					$	21,667.9

^{________________________}

⁽¹⁾	Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
⁽²⁾	Interest income includes taxable-equivalent basis adjustments of $1.9 million and $0.4 million for the nine months ended September 30, 2021 and 2020, respectively.

Analysis of Change in Net Interest Income

Table 6

Three Months Ended September 30, 2021

Compared to June 30, 2021

(dollars in millions)

Volume

Rate

Total

Change in Interest Income:

Interest-Bearing Deposits in Other Banks

0.2

0.3

0.5

Available-for-Sale Investment Securities

Taxable

1.3

(0.9

)

0.4

Non-Taxable

0.5

(0.3

)

0.2

Total Available-for-Sale Investment Securities

1.8

(1.2

)

0.6

Loans and Leases

Commercial and industrial

(3.9

)

2.5

(1.4

)

Commercial real estate

0.3

(0.2

)

0.1

Construction

0.5

0.2

0.7

Residential:

Residential mortgage

1.0

(0.4

)

0.6

Home equity line

0.2

(0.2

)

—

Consumer

(0.1

)

—

(0.1

)

Lease financing

—

0.1

Total Loans and Leases

(2.0

)

2.0

—

Other Earning Assets

0.1

(0.1

)

—

Total Change in Interest Income

0.1

1.0

1.1

Change in Interest Expense:

Interest-Bearing Deposits

Savings

0.1

—

0.1

Time

(0.2

)

—

(0.2

)

Total Interest-Bearing Deposits

(0.1

)

—

(0.1

)

Total Change in Interest Expense

(0.1

)

—

(0.1

)

Change in Net Interest Income

0.2

1.0

1.2

Analysis of Change in Net Interest Income

Table 7

Three Months Ended September 30, 2021

Compared to September 30, 2020

(dollars in millions)

Volume

Rate

Total

Change in Interest Income:

Interest-Bearing Deposits in Other Banks

0.5

0.2

0.7

Available-for-Sale Investment Securities

Taxable

4.8

(2.1

)

2.7

Non-Taxable

2.8

—

2.8

Total Available-for-Sale Investment Securities

7.6

(2.1

)

5.5

Loans Held for Sale

(0.1

)

—

(0.1

)

Loans and Leases

Commercial and industrial

(6.3

)

4.4

(1.9

)

Commercial real estate

0.2

(2.6

)

(2.4

)

Construction

1.8

—

1.8

Residential:

Residential mortgage

1.8

(5.1

)

(3.3

)

Home equity line

(0.2

)

(0.9

)

(1.1

)

Consumer

(2.8

)

(0.6

)

(3.4

)

Lease financing

—

0.2

Total Loans and Leases

(5.5

)

(4.6

)

(10.1

)

Other Earning Assets

0.1

(0.3

)

(0.2

)

Total Change in Interest Income

2.6

(6.8

)

(4.2

)

Change in Interest Expense:

Interest-Bearing Deposits

Savings

0.1

(0.1

)

—

Money Market

0.1

—

0.1

Time

(1.6

)

(1.5

)

(3.1

)

Total Interest-Bearing Deposits

(1.4

)

(1.6

)

(3.0

)

Short-Term Borrowings

(0.2

)

(0.1

)

(0.3

)

Total Change in Interest Expense

(1.6

)

(1.7

)

(3.3

)

Change in Net Interest Income

4.2

(5.1

)

(0.9

)

Analysis of Change in Net Interest Income

Table 8

Nine Months Ended September 30, 2021

Compared to September 30, 2020

(dollars in millions)

Volume

Rate

Total

Change in Interest Income:

Interest-Bearing Deposits in Other Banks

1.0

(1.7

)

(0.7

)

Available-for-Sale Investment Securities

Taxable

19.6

(11.1

)

8.5

Non-Taxable

6.8

—

6.8

Total Available-for-Sale Investment Securities

26.4

(11.1

)

15.3

Loans Held for Sale

(0.1

)

—

(0.1

)

Loans and Leases

Commercial and industrial

(10.0

)

0.7

(9.3

)

Commercial real estate

(0.2

)

(14.9

)

(15.1

)

Construction

5.3

(1.9

)

3.4

Residential:

Residential mortgage

2.2

(10.2

)

(8.0

)

Home equity line

(1.3

)

(3.1

)

(4.4

)

Consumer

(10.1

)

(2.4

)

(12.5

)

Lease financing

0.2

0.4

0.6

Total Loans and Leases

(13.9

)

(31.4

)

(45.3

)

Other Earning Assets

0.2

(1.0

)

(0.8

)

Total Change in Interest Income

13.6

(45.2

)

(31.6

)

Change in Interest Expense:

Interest-Bearing Deposits

Savings

0.7

(3.7

)

(3.0

)

Money Market

0.9

(5.5

)

(4.6

)

Time

(4.9

)

(7.3

)

(12.2

)

Total Interest-Bearing Deposits

(3.3

)

(16.5

)

(19.8

)

Short-Term Borrowings

(3.0

)

(3.0

)

(6.0

)

Total Change in Interest Expense

(6.3

)

(19.5

)

(25.8

)

Change in Net Interest Income

19.9

(25.7

)

(5.8

)

Loans and Leases								Table 9
	September 30,		June 30,		December 31,		September 30,
(dollars in thousands)	2021		2021		2020		2020
Commercial and industrial:
Commercial and industrial excluding Paycheck Protection Program loans	$	1,692,315	$	1,753,444	$	2,218,266	$	2,250,094
Paycheck Protection Program loans		503,069		811,103		801,241		920,168
Total commercial and industrial		2,195,384		2,564,547		3,019,507		3,170,262
Commercial real estate		3,569,768		3,528,068		3,392,676		3,461,085
Construction		826,078		853,865		735,819		662,871
Residential:
Residential mortgage		3,914,632		3,821,407		3,690,218		3,669,051
Home equity line		852,074		825,368		841,624		864,789
Total residential		4,766,706		4,646,775		4,531,842		4,533,840
Consumer		1,238,714		1,267,559		1,353,842		1,425,934
Lease financing		237,689		242,971		245,411		245,977
Total loans and leases	$	12,834,339	$	13,103,785	$	13,279,097	$	13,499,969

Deposits								Table 10
	September 30,		June 30,		December 31,		September 30,
(dollars in thousands)	2021		2021		2020		2020
Demand	$	8,873,424	$	8,589,922	$	7,522,114	$	6,908,270
Savings		7,347,079		6,421,053		6,020,075		5,994,687
Money Market		4,019,250		3,920,477		3,337,236		3,379,985
Time		1,880,250		1,903,663		2,348,298		2,614,820
Total Deposits	$	22,120,003	$	20,835,115	$	19,227,723	$	18,897,762

Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More								Table 11
	September 30,		June 30,		December 31,		September 30,
(dollars in thousands)	2021		2021		2020		2020
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial Loans:
Commercial and industrial	$	746	$	828	$	518	$	725
Commercial real estate		745		937		80		7,067
Construction		—		—		2,043		2,043
Total Commercial Loans		1,491		1,765		2,641		9,835
Residential Loans:
Residential mortgage		7,137		7,140		6,441		7,798
Total Residential Loans		7,137		7,140		6,441		7,798
Total Non-Accrual Loans and Leases		8,628		8,905		9,082		17,633
Total Non-Performing Assets	$	8,628	$	8,905	$	9,082	$	17,633

Accruing Loans and Leases Past Due 90 Days or More
Commercial Loans:
Commercial and industrial	$	439	$	494	$	2,108	$	1,938
Commercial real estate		—		—		882		1,307
Construction		—		60		93		100
Total Commercial Loans		439		554		3,083		3,345
Residential Loans:
Residential mortgage		100		—		—		—
Home equity line		3,871		4,680		4,818		4,503
Total Residential Loans		3,971		4,680		4,818		4,503
Consumer		1,376		1,134		3,266		2,897
Total Accruing Loans and Leases Past Due 90 Days or More	$	5,786	$	6,368	$	11,167	$	10,745

Restructured Loans on Accrual Status and Not Past Due 90 Days or More	$	36,234	$	36,668	$	16,684	$	9,726
Total Loans and Leases	$	12,834,339	$	13,103,785	$	13,279,097	$	13,499,969

Allowance for Credit Losses																		Table 12
	For the Three Months Ended												For the Nine Months Ended
	September 30,				June 30,				September 30,				September 30,				September 30,
(dollars in thousands)	2021				2021				2020				2021				2020
Balance at Beginning of Period	$	169,148			$	200,366			$	192,120			$	208,454			$	130,530
Adjustment to Adopt ASC Topic 326		—				—				—				—				770
After Adoption of ASC Topic 326		169,148				200,366				192,120				208,454				131,300
Loans and Leases Charged-Off
Commercial Loans:
Commercial and industrial		(224	)			(330	)			(598	)			(1,517	)			(14,773	)
Commercial real estate		—				—				—				(66	)			(2,723	)
Construction		—				—				—				—				(379	)
Total Commercial Loans		(224	)			(330	)			(598	)			(1,583	)			(17,875	)
Residential Loans:
Residential mortgage		—				—				—				(98	)			(14	)
Home equity line		(235	)			—				—				(235	)			(8	)
Total Residential Loans		(235	)			—				—				(333	)			(22	)
Consumer		(2,926	)			(3,917	)			(4,238	)			(13,384	)			(21,742	)
Total Loans and Leases Charged-Off		(3,385	)			(4,247	)			(4,836	)			(15,300	)			(39,639	)
Recoveries on Loans and Leases Previously Charged-Off
Commercial Loans:
Commercial and industrial		121				287				1,699				623				2,019
Commercial real estate		15				12				—				30				—
Construction		—				—				30				166				170
Total Commercial Loans		136				299				1,729				819				2,189
Residential Loans:
Residential mortgage		215				14				27				246				179
Home equity line		27				38				16				89				146
Total Residential Loans		242				52				43				335				325
Consumer		2,405				2,797				3,148				7,857				7,687
Total Recoveries on Loans and Leases Previously Charged-Off		2,783				3,148				4,920				9,011				10,201
Net Loans and Leases (Charged-Off) Recovered		(602	)			(1,099	)			84				(6,289	)			(29,438	)
Provision for Credit Losses - Loans and Leases		(7,300	)			(30,119	)			3,672				(40,919	)			94,014
Balance at End of Period	$	161,246			$	169,148			$	195,876			$	161,246			$	195,876
Average Loans and Leases Outstanding	$	12,881,885			$	13,205,086			$	13,559,367			$	13,108,427			$	13,569,119
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding⁽¹⁾		0.02		%		0.03		%		—		%		0.06		%		0.29		%
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding		1.26		%		1.29		%		1.45		%		1.26		%		1.45		%

^{________________________}

⁽¹⁾	Annualized for the three and nine months ended September 30, 2021 and 2020 and three months ended June 30, 2021.

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

Amortized

(dollars in thousands)

2021

2020

2019

2018

2017

Prior

Cost Basis

Total

Commercial Lending

Commercial and Industrial

Risk rating:

Pass

633,079

172,147

162,921

128,968

31,439

194,494

578,257

21,767

1,923,072

Special Mention

5,421

4,709

104,973

4,083

1,069

4,292

23,127

289

147,963

Substandard

371

1,663

2,102

13,874

8,285

19,162

1,307

46,861

Other ⁽¹⁾

10,257

7,897

8,955

5,364

2,740

573

41,702

—

77,488

Total Commercial and Industrial

649,128

186,416

278,951

152,289

35,345

207,644

662,248

23,363

2,195,384

Commercial Real Estate

Risk rating:

Pass

493,286

342,433

578,079

522,123

429,840

967,286

59,685

—

3,392,732

Special Mention

—

1,472

48,916

16,054

28,264

56,319

7,604

—

158,629

Substandard

—

1,907

258

15,578

502

—

18,245

Other ⁽¹⁾

—

162

—

162

Total Commercial Real Estate

493,286

343,905

626,995

540,084

458,362

1,039,345

67,791

—

3,569,768

Construction

Risk rating:

Pass

57,368

94,127

285,960

151,714

63,031

67,670

58,013

—

777,883

Special Mention

—

473

708

—

359

—

1,540

Substandard

—

369

—

850

—

1,219

Other ⁽¹⁾

19,268

10,753

4,367

4,955

2,710

2,581

802

—

45,436

Total Construction

76,636

104,880

290,800

157,746

65,741

71,460

58,815

—

826,078

Lease Financing

Risk rating:

Pass

26,419

64,989

53,457

10,371

15,819

58,940

—

229,995

Special Mention

523

282

501

182

201

—

1,716

Substandard

—

2,720

1,506

225

1,037

490

—

5,978

Total Lease Financing

26,942

67,991

55,464

10,778

16,883

59,631

—

237,689

Total Commercial Lending

1,245,992

703,192

1,252,210

860,897

576,331

1,378,080

788,854

23,363

6,828,919

Revolving

Loans

Converted

Term Loans

Revolving

to Term

Amortized Cost Basis by Origination Year

Loans

(continued)

Amortized

(dollars in thousands)

2021

2020

2019

2018

2017

Prior

Cost Basis

Total

Residential Lending

Residential Mortgage

FICO:

740 and greater

804,889

661,402

306,706

209,819

270,664

879,063

—

3,132,543

680 - 739

104,415

79,553

52,470

36,440

40,109

141,178

—

454,165

620 - 679

14,479

11,825

6,941

5,683

10,341

41,481

—

90,750

550 - 619

231

818

193

2,059

1,428

7,378

—

12,107

Less than 550

—

490

2,533

3,127

—

6,150

No Score ⁽³⁾

13,307

8,559

15,727

20,112

18,265

46,312

—

122,282

Other ⁽²⁾

18,701

17,823

10,835

11,779

18,988

17,737

625

147

96,635

Total Residential Mortgage

956,022

779,980

392,872

286,382

362,328

1,136,276

625

147

3,914,632

Home Equity Line

FICO:

740 and greater

—

637,131

2,220

639,351

680 - 739

—

150,452

3,485

153,937

620 - 679

—

38,987

1,709

40,696

550 - 619

—

10,433

1,473

11,906

Less than 550

—

2,260

2,330

No Score ⁽³⁾

—

3,854

—

3,854

Total Home Equity Line

—

843,117

8,957

852,074

Total Residential Lending

956,022

779,980

392,872

286,382

362,328

1,136,276

843,742

9,104

4,766,706

Consumer Lending

FICO:

740 and greater

130,773

88,770

88,797

65,818

30,908

11,516

107,938

245

524,765

680 - 739

72,447

63,996

65,105

41,209

21,461

8,912

68,887

717

342,734

620 - 679

27,131

28,491

33,219

22,225

15,042

6,825

30,956

1,398

165,287

550 - 619

3,181

8,735

15,408

12,262

9,546

4,829

10,150

1,177

65,288

Less than 550

341

3,200

6,116

4,665

3,196

1,757

2,983

578

22,836

No Score ⁽³⁾

1,155

34,234

420

36,076

Other ⁽²⁾

709

368

1,735

2,183

76,665

—

81,728

Total Consumer Lending

235,737

193,620

210,461

146,255

82,413

33,880

331,813

4,535

1,238,714

Total Loans and Leases

2,437,751

1,676,792

1,855,543

1,293,534

1,021,072

2,548,236

1,964,409

37,002

12,834,339

^{________________________}

⁽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 Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
(dollars in thousands, except per share amounts)	2021			2021			2020			2021			2020
Income Statement Data:
Net income	$	64,279		$	86,741		$	65,101		$	208,713		$	124,015
Core net income	$	65,819		$	87,704		$	65,083		$	211,216		$	124,090

Average total stockholders' equity	$	2,738,540		$	2,691,966		$	2,704,129		$	2,719,442		$	2,687,632
Less: average goodwill		995,492			995,492			995,492			995,492			995,492
Average tangible stockholders' equity	$	1,743,048		$	1,696,474		$	1,708,637		$	1,723,950		$	1,692,140

Average total assets	$	25,058,085		$	24,015,065		$	22,341,485		$	24,013,691		$	21,667,948
Less: average goodwill		995,492			995,492			995,492			995,492			995,492
Average tangible assets	$	24,062,593		$	23,019,573		$	21,345,993		$	23,018,199		$	20,672,456

Return on average total stockholders' equity⁽¹⁾		9.31	%		12.92	%		9.58	%		10.26	%		6.16	%
Core return on average total stockholders' equity (non-GAAP)⁽¹⁾		9.54	%		13.07	%		9.57	%		10.38	%		6.17	%
Return on average tangible stockholders' equity (non-GAAP)⁽¹⁾		14.63	%		20.51	%		15.16	%		16.19	%		9.79	%
Core return on average tangible stockholders' equity (non-GAAP)⁽¹⁾		14.98	%		20.74	%		15.15	%		16.38	%		9.80	%

Return on average total assets⁽¹⁾		1.02	%		1.45	%		1.16	%		1.16	%		0.76	%
Core return on average total assets (non-GAAP)⁽¹⁾		1.04	%		1.46	%		1.16	%		1.18	%		0.76	%
Return on average tangible assets (non-GAAP)⁽¹⁾		1.06	%		1.51	%		1.21	%		1.21	%		0.80	%
Core return on average tangible assets (non-GAAP)⁽¹⁾		1.09	%		1.53	%		1.21	%		1.23	%		0.80	%

	As of			As of			As of			As of
	September 30,			June 30,			December 31,			September 30,
	2021			2021			2020			2020
Balance Sheet Data:
Total stockholders' equity	$	2,711,734		$	2,731,341		$	2,744,104		$	2,733,934
Less: goodwill		995,492			995,492			995,492			995,492
Tangible stockholders' equity	$	1,716,242		$	1,735,849		$	1,748,612		$	1,738,442

Total assets	$	25,548,322		$	24,246,328		$	22,662,831		$	22,310,701
Less: goodwill		995,492			995,492			995,492			995,492
Tangible assets	$	24,552,830		$	23,250,836		$	21,667,339		$	21,315,209

Shares outstanding		128,255,570			129,019,871			129,912,272			129,911,789

Total stockholders' equity to total assets		10.61	%		11.26	%		12.11	%		12.25	%
Tangible stockholders' equity to tangible assets (non-GAAP)		6.99	%		7.47	%		8.07	%		8.16	%

Book value per share	$	21.14		$	21.17		$	21.12		$	21.04
Tangible book value per share (non-GAAP)	$	13.38		$	13.45		$	13.46		$	13.38

________________________

⁽¹⁾	Annualized for the three and nine months ended September 30, 2021 and 2020 and three months ended June 30, 2021.

GAAP to Non-GAAP Reconciliation																		Table 15
	For the Three Months Ended												For the Nine Months Ended
	September 30,				June 30,				September 30,				September 30,
(dollars in thousands, except per share amounts)	2021				2021				2020				2021				2020
Net interest income	$	132,593			$	131,481			$	134,002			$	393,232			$	400,507
Core net interest income (non-GAAP)	$	132,593			$	131,481			$	134,002			$	393,232			$	400,507

Noninterest income	$	50,104			$	49,371			$	48,898			$	143,343			$	143,782
(Gains) losses on sale of securities		—				(102	)			(24	)			(102	)			102
Core noninterest income (non-GAAP)	$	50,104			$	49,269			$	48,874			$	143,241			$	143,884

Noninterest expense	$	101,036			$	99,388			$	91,629			$	296,730			$	279,545
Loss on litigation		(2,100	)			—				—				(2,100	)			—
One-time items⁽¹⁾		—				(1,160	)			—				(1,160	)			—
Core noninterest expense (non-GAAP)	$	98,936			$	98,228			$	91,629			$	293,470			$	279,545

Net income	$	64,279			$	86,741			$	65,101			$	208,713			$	124,015
(Gains) losses on sale of securities		—				(102	)			(24	)			(102	)			102
Loss on litigation		2,100				—				—				2,100				—
One-time noninterest expense items⁽¹⁾		—				1,160				—				1,160				—
Tax adjustments⁽²⁾		(560	)			(95	)			6				(655	)			(27	)
Total core adjustments		1,540				963				(18	)			2,503				75
Core net income (non-GAAP)	$	65,819			$	87,704			$	65,083			$	211,216			$	124,090

Basic earnings per share	$	0.50			$	0.67			$	0.50			$	1.61			$	0.95
Diluted earnings per share	$	0.50			$	0.67			$	0.50			$	1.61			$	0.95
Efficiency ratio		55.07		%		54.74		%		50.01		%		55.10		%		51.32		%

Core basic earnings per share (non-GAAP)	$	0.51			$	0.68			$	0.50			$	1.63			$	0.96
Core diluted earnings per share (non-GAAP)	$	0.51			$	0.68			$	0.50			$	1.63			$	0.95
Core efficiency ratio (non-GAAP)		53.92		%		54.13		%		50.02		%		54.51		%		51.31		%

^{________________________}

⁽¹⁾	One-time items consisted of severance costs.
⁽²⁾	Represents the adjustments to net income, tax effected at the Company’s effective tax rate for the respective period.

First Hawaiian, Inc. Reports Third Quarter 2021 Financial Results and Declares Dividend

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