Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 09, 2023 | Jun. 30, 2022 | |
Cover page | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-14585 | ||
Entity Registrant Name | FIRST HAWAIIAN, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 99-0156159 | ||
Entity Address, Address Line One | 999 Bishop Street, 29th Floor | ||
Entity Address, City or Town | Honolulu | ||
Entity Address, Postal Zip Code | 96813 | ||
Local Phone Number | 525-7000 | ||
City Area Code | 808 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | FHB | ||
Security Exchange Name | NASDAQ | ||
Entity Address, State or Province | HI | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 127,685,476 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Public Float | $ 2.9 | ||
Entity Central Index Key | 0000036377 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | DELOITTE & TOUCHE LLP | ||
Auditor Firm ID | 34 | ||
Auditor Location | Honolulu, Hawaii |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Interest income | |||
Loans and lease financing | $ 509,820 | $ 444,488 | $ 496,523 |
Available-for-sale investment securities | 87,108 | 101,410 | 81,808 |
Held-to-maturity investment securities | 55,376 | ||
Other | 10,916 | 3,413 | 4,428 |
Total interest income | 663,220 | 549,311 | 582,759 |
Interest expense | |||
Deposits | 49,201 | 13,853 | 35,471 |
Short-term and long-term borrowings | 470 | 4,899 | 11,554 |
Total interest expense | 49,671 | 18,752 | 47,025 |
Net interest income | 613,549 | 530,559 | 535,734 |
Provision for credit losses | 1,392 | (39,000) | 121,718 |
Net interest income after provision for credit losses | 612,157 | 569,559 | 414,016 |
Noninterest income | |||
Service charges on deposit accounts | 28,809 | 27,510 | 28,169 |
Credit and debit card fees | 66,028 | 63,580 | 55,451 |
Other service charges and fees | 37,036 | 38,578 | 33,876 |
Trust and investment services income | 36,465 | 34,719 | 35,652 |
Bank-owned life insurance | 1,248 | 13,185 | 15,754 |
Investment securities gains, net | 102 | (114) | |
Other | 9,939 | 7,242 | 28,592 |
Total noninterest income | 179,525 | 184,916 | 197,380 |
Noninterest expense | |||
Salaries and employee benefits | 199,129 | 182,384 | 174,221 |
Contracted services and professional fees | 70,027 | 63,349 | 60,546 |
Occupancy | 31,034 | 29,348 | 28,821 |
Equipment | 34,506 | 24,719 | 20,277 |
Regulatory assessment and fees | 9,603 | 8,245 | 8,659 |
Advertising and marketing | 7,996 | 6,108 | 5,695 |
Card rewards program | 30,990 | 25,244 | 22,114 |
Other | 57,186 | 66,082 | 47,339 |
Total noninterest expense | 440,471 | 405,479 | 367,672 |
Income before provision for income taxes | 351,211 | 348,996 | 243,724 |
Provision for income taxes | 85,526 | 83,261 | 57,970 |
Net income | $ 265,685 | $ 265,735 | $ 185,754 |
Basic earnings per share (in dollars per share) | $ 2.08 | $ 2.06 | $ 1.43 |
Diluted earnings per share (in dollars per share) | $ 2.08 | $ 2.05 | $ 1.43 |
Basic weighted-average outstanding shares (in shares) | 127,489,889 | 128,963,131 | 129,890,225 |
Diluted weighted-average outstanding shares (in shares) | 127,981,699 | 129,537,922 | 130,220,077 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | |||
Net income | $ 265,685 | $ 265,735 | $ 185,754 |
Other comprehensive (loss) income, net of tax: | |||
Net change in pensions and other benefits | 18,959 | 7,347 | (3,655) |
Net change in investment securities | (531,818) | (160,644) | 67,008 |
Net change in cash flow derivative hedges | (4,702) | ||
Other comprehensive (loss) income | (517,561) | (153,297) | 63,353 |
Total comprehensive (loss) income | $ (251,876) | $ 112,438 | $ 249,107 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and due from banks | $ 297,502 | $ 246,716 |
Interest-bearing deposits in other banks | 229,122 | 1,011,753 |
Available-for-sale, at fair value (amortized cost: $3,549,599 as of December 31, 2022 and $8,560,733 as of December 31, 2021) | 3,151,133 | 8,428,032 |
Held-to-maturity, at amortized cost (fair value: $3,814,822 as of December 31, 2022 and nil as of December 31, 2021) | 4,320,639 | |
Loans held for sale | 538 | |
Loans and leases | 14,092,012 | 12,961,999 |
Less: allowance for credit losses | 143,900 | 157,262 |
Net loans and leases | 13,948,112 | 12,804,737 |
Premises and equipment, net | 280,355 | 318,448 |
Other real estate owned and repossessed personal property | 91 | 175 |
Accrued interest receivable | 78,194 | 63,158 |
Bank-owned life insurance | 473,067 | 471,819 |
Goodwill | 995,492 | 995,492 |
Mortgage servicing rights | 6,562 | 8,302 |
Other assets | 796,954 | 643,240 |
Total assets | 24,577,223 | 24,992,410 |
Deposits: | ||
Interest-bearing | 12,824,383 | 12,422,283 |
Noninterest-bearing | 8,864,646 | 9,393,863 |
Total deposits | 21,689,029 | 21,816,146 |
Short-term borrowings | 75,000 | |
Retirement benefits payable | 102,577 | 134,491 |
Other liabilities | 441,612 | 384,861 |
Total liabilities | 22,308,218 | 22,335,498 |
Commitments and contingent liabilities (Note 17) | ||
Stockholders' equity | ||
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 140,963,918 / 127,363,327 as of December 31, 2022; issued/outstanding: 140,581,715 / 127,502,472 as of December 31, 2021) | 1,410 | 1,406 |
Additional paid-in capital | 2,538,336 | 2,527,663 |
Retained earnings | 736,544 | 604,534 |
Accumulated other comprehensive loss, net | (639,254) | (121,693) |
Treasury stock (13,600,591 shares as of December 31, 2022 and 13,079,243 shares as of December 31, 2021) | (368,031) | (354,998) |
Total stockholders' equity | 2,269,005 | 2,656,912 |
Total liabilities and stockholders' equity | $ 24,577,223 | $ 24,992,410 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Available-for-sale investment securities, amortized cost | $ 3,549,599 | $ 8,560,733 |
Held-to-maturity investment securities, fair value | $ 3,814,822 | $ 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, issued (in shares) | 140,963,918 | 140,581,715 |
Common stock outstanding (in shares) | 127,363,327 | 127,502,472 |
Treasury stock (in shares) | 13,600,591 | 13,079,243 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings Cumulative-effect adjustment of a change in accounting principle, net of tax: ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Cumulative-effect adjustment of a change in accounting principle, net of tax: ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments | Total |
Balance at Dec. 31, 2019 | $ 1,399 | $ 2,503,677 | $ 437,072 | $ (31,749) | $ (270,141) | $ 2,640,258 | ||
Balance (in shares) at Dec. 31, 2019 | 129,928,479 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 185,754 | 185,754 | ||||||
Cash dividends declared | (135,099) | (135,099) | ||||||
Common stock issued under Employee Stock Purchase Plan | 312 | 312 | ||||||
Common stock issued under Employee Stock Purchase Plan (in shares) | 19,069 | |||||||
Equity-based awards | $ 3 | 10,025 | (1,236) | (1,749) | 7,043 | |||
Equity-based awards (in shares) | 182,483 | |||||||
Common stock repurchased | (5,000) | (5,000) | ||||||
Common stock repurchased (in shares) | (217,759) | |||||||
Other comprehensive (loss) income, net of tax | 63,353 | 63,353 | ||||||
Balance at Dec. 31, 2020 | $ 1,402 | 2,514,014 | $ (12,517) | 473,974 | 31,604 | (276,890) | $ (12,517) | 2,744,104 |
Balance (in shares) at Dec. 31, 2020 | 129,912,272 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 265,735 | 265,735 | ||||||
Cash dividends declared | (134,133) | (134,133) | ||||||
Common stock issued under Employee Stock Purchase Plan | 547 | 547 | ||||||
Common stock issued under Employee Stock Purchase Plan (in shares) | 21,070 | |||||||
Equity-based awards | $ 4 | 13,102 | (1,042) | (3,108) | 8,956 | |||
Equity-based awards (in shares) | 248,662 | |||||||
Common stock repurchased | (75,000) | (75,000) | ||||||
Common stock repurchased (in shares) | (2,679,532) | |||||||
Other comprehensive (loss) income, net of tax | (153,297) | (153,297) | ||||||
Balance at Dec. 31, 2021 | $ 1,406 | 2,527,663 | 604,534 | (121,693) | (354,998) | $ 2,656,912 | ||
Balance (in shares) at Dec. 31, 2021 | 127,502,472 | 127,502,472 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Treasury Stock Balance | $ 354,998 | |||||||
Net income | 265,685 | 265,685 | ||||||
Cash dividends declared | (132,588) | (132,588) | ||||||
Common stock issued under Employee Stock Purchase Plan | 379 | 379 | ||||||
Common stock issued under Employee Stock Purchase Plan (in shares) | 16,680 | |||||||
Equity-based awards | $ 4 | 10,294 | (1,087) | (3,555) | 5,656 | |||
Equity-based awards (in shares) | 241,360 | |||||||
Common stock repurchased | (9,478) | (9,478) | ||||||
Common stock repurchased (in shares) | (397,185) | |||||||
Other comprehensive (loss) income, net of tax | (517,561) | (517,561) | ||||||
Balance at Dec. 31, 2022 | $ 1,410 | $ 2,538,336 | $ 736,544 | $ (639,254) | $ (368,031) | $ 2,269,005 | ||
Balance (in shares) at Dec. 31, 2022 | 127,363,327 | 127,363,327 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Treasury Stock Balance | $ 368,031 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | |||
Cash dividends declared (in dollars per share) | $ 1.04 | $ 1.04 | $ 1.04 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net income | $ 265,685 | $ 265,735 | $ 185,754 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for credit losses | 1,392 | (39,000) | 121,718 |
Depreciation, amortization and accretion, net | 56,747 | 51,844 | 63,071 |
Deferred income tax provision (benefits) | 22,138 | 14,120 | (19,396) |
Stock-based compensation | 10,298 | 13,106 | 10,028 |
Other losses (gains) | 2,658 | (1,437) | (4) |
Originations of loans held for sale | (15,694) | (87,336) | (327,076) |
Proceeds from sales of loans held for sale | 15,234 | 100,499 | 326,785 |
Net losses (gains) on sales of loans originated for investment and held for sale | 164 | (2,706) | (18,995) |
Net (gains) losses on investment securities | (102) | 114 | |
Change in assets and liabilities: | |||
Net decrease (increase) in other assets | 18,469 | (8,211) | (17,880) |
Net increase (decrease) in other liabilities | 53,523 | 110,613 | (114,613) |
Net cash provided by operating activities | 430,614 | 417,125 | 209,506 |
Available-for-sale securities: | |||
Proceeds from maturities and principal repayments | 873,747 | 1,814,514 | 1,474,587 |
Proceeds from calls and sales | 1,080 | 11,115 | 644,983 |
Purchases | (938,268) | (4,428,656) | (4,045,871) |
Held-to-maturity securities: | |||
Proceeds from maturities and principal repayments | 350,593 | ||
Proceeds from calls | 585 | ||
Purchases | (79,470) | ||
Other investments: | |||
Proceeds from sales | 7,967 | 28,483 | 34,822 |
Purchases | (31,087) | (80,464) | (77,927) |
Loans: | |||
Net (increase) decrease in loans and leases resulting from originations and principal repayments | (914,318) | 594,642 | (217,530) |
Proceeds from sales of loans originated for investment | 288 | 2,200 | 153,647 |
Purchases of loans | (235,884) | (309,760) | (41,146) |
Proceeds from bank-owned life insurance | 7,903 | 3,089 | |
Purchases of premises, equipment and software | (13,295) | (20,458) | (33,390) |
Proceeds from sales of premises and equipment | 17,304 | 4,021 | |
Proceeds from sales of other real estate owned | 337 | 141 | 787 |
Other | (4,679) | 186 | |
Net cash used in investing activities | (965,100) | (2,376,319) | (2,103,763) |
Cash flows from financing activities | |||
Net (decrease) increase in deposits | (127,117) | 2,588,423 | 2,782,729 |
Proceeds (repayments) of short-term borrowings | 75,000 | (400,000) | |
Repayment of long-term borrowings | (200,010) | (9) | |
Dividends paid | (132,588) | (134,133) | (135,099) |
Stock tendered for payment of withholding taxes | (3,555) | (3,108) | (1,749) |
Proceeds from employee stock purchase plan | 379 | 547 | 312 |
Common stock repurchased | (9,478) | (75,000) | (5,000) |
Net cash provided by (used in) financing activities | (197,359) | 2,176,719 | 2,241,184 |
Net (decrease) increase in cash and cash equivalents | (731,845) | 217,525 | 346,927 |
Cash and cash equivalents at beginning of year | 1,258,469 | 1,040,944 | 694,017 |
Cash and cash equivalents at end of year | 526,624 | 1,258,469 | 1,040,944 |
Supplemental disclosures | |||
Interest paid | 44,325 | 23,001 | 52,865 |
Income taxes paid, net of income tax refunds | 24,692 | 55,354 | 53,272 |
Noncash investing and financing activities: | |||
Transfers from loans and leases and other assets to other real estate owned | 226 | 316 | 437 |
Operating lease right-of-use assets obtained in exchange for new lease obligations | 4,676 | 31,792 | 3,796 |
Transfers (to) from loans and leases (from) to loans held for sale | 1,616 | 145,036 | |
Transfers to loans and leases from loans held for sale | (546) | ||
Obligation to fund low-income housing partnerships | 7,569 | $ 35,721 | $ 13,767 |
Transfers of securities from available-for-sale to held-to-maturity | $ 4,550,748 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Organization and Summary of Significant Accounting Policies | |
Organization and Summary of Significant Accounting Policies | 1. Organization and Summary of Significant Accounting Policies Basis of Presentation First Hawaiian, Inc. (“FHI” or the “Parent”), a bank holding company, owns 100% of the outstanding common stock of First Hawaiian Bank (“FHB” or the “Bank”). FHB is a state-chartered bank that is not a member of the Federal Reserve System. FHB, the oldest financial institution in Hawaii, was established as Bishop & Company in 1858. As of December 31, 2022, FHB was the largest bank in Hawaii in terms of total assets, loans and leases, deposits, and net income. FHB has 51 branches located throughout the State of Hawaii, Guam and Saipan, and offers a comprehensive suite of banking services to consumer and commercial customers including loans, deposit products, wealth management, insurance, trust, retirement planning, credit card and merchant processing services. The accounting and reporting principles of First Hawaiian, Inc. and Subsidiary (the “Company”) conform to U.S. generally accepted accounting principles (“GAAP”) and prevailing practices within the financial services industry. Intercompany accounts and transactions have been eliminated in consolidation. Transition to an Independent Public Company Prior to FHI’s initial public offering in August 2016 (“IPO”), the Company was an indirect wholly owned subsidiary of BNP Paribas (“BNPP”), a global financial institution based in France. On April 1, 2016, BNPP effected a series of transactions (“Reorganization Transactions”) pursuant to which FHI, which was then known as BancWest Corporation (“BancWest”), contributed Bank of the West (“BOW”), its subsidiary at the time, to BancWest Holding Inc. (“BWHI”), a newly formed bank holding company and a wholly owned subsidiary of BancWest. Following the contribution of BOW to BWHI, BancWest distributed its interest in BWHI to BNPP, and BWHI became a wholly owned subsidiary of BNPP. As part of these transactions, the Company amended its certificate of incorporation to change its name to First Hawaiian, Inc., with First Hawaiian Bank remaining its only direct wholly owned subsidiary. On July 1, 2016, we became an indirect wholly owned subsidiary of BNP Paribas USA, Inc. (“BNP Paribas USA”), BNPP’s U.S. intermediate holding company. As part of that reorganization, the Company became a direct wholly owned subsidiary of BancWest Corporation (“BWC”), a direct wholly owned subsidiary of BNP Paribas USA. In August 2016, FHI completed its IPO and shares of FHI’s common stock began trading on the NASDAQ Global Select Market (“NASDAQ”) under the ticker symbol “FHB” on August 4, 2016. In 2017, 2018 and 2019, BNPP, acting through BWC, sold all of the shares of FHI common stock that it beneficially owned in underwritten public offerings and share repurchases by the Company. FHI did not receive any of the proceeds from the sales of shares of FHI common stock in any such offering or the IPO. As a result of the completion of the February 1, 2019 public offering, BNPP (through BWC, the selling stockholder) fully Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events, actual results may differ from these estimates. Variable Interest Entities A variable interest entity (“VIE”) is a legal entity that lacks the ability to financially support its activities or whose equity investors lack the ability to control its activities or absorb profits and losses proportionately with their investment in the entity. The primary beneficiary consolidates the VIE. The primary beneficiary is defined as the enterprise that has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE. The Company has a limited partnership interest or is a member in a limited liability company (“LLC”) in several low-income housing partnerships. These partnerships or LLCs provide funds for the construction and operation of apartment complexes that provide affordable housing to that segment of the population with lower family income. If these developments successfully attract a specified percentage of residents falling in that lower income range, state and/or federal income tax credits are made available to the partners or members. The tax credits are generally recognized over 5 or 10 years. In order to continue receiving the tax credits each year over the life of the partnership or LLC, the low-income residency targets must be maintained. The Company generally accounts for its interests in these low-income housing partnerships using the proportional amortization method. The Company’s investments in these partnership interests are included in other assets in the consolidated balance sheets. Unfunded commitments to fund these investments were $47.2 million and $62.6 million as of December 31, 2022 and 2021, respectively. These unfunded commitments are unconditional and legally binding and are recorded in other liabilities in the consolidated balance sheets. These low-income housing partnership and LLC entities meet the definition of a VIE; however, the Company is not the primary beneficiary of the entities, as the general partner or managing member has both the power to direct the activities that most significantly impact the economic performance of the entities and the obligation to absorb losses or the right to receive benefits that could be significant to the entities. While the partnership or LLC agreements allow the limited partners and members, through a majority vote, to remove the general partner or managing member, this right is not deemed to be substantive as the general partner or managing member can only be removed for cause. Cash and Due from Banks Cash and due from banks include amounts due from other financial institutions as well as in-transit clearings. Because amounts due from other financial institutions often exceed the Federal Deposit Insurance Corporation (“FDIC”) deposit insurance limit, the Company evaluates the credit risk of these institutions through periodic review of their financial condition and regulatory capital position. Under the terms of the Depository Institutions Deregulation and Monetary Control Act, the Company is required to maintain reserves with the Federal Reserve Bank of San Francisco (“FRB”) based on the amount of deposits held. Reserve requirements for all depository institutions were eliminated in March 2020. Cash and cash equivalents include cash and due from banks and interest-bearing deposits in other banks. All amounts are readily convertible to cash and have maturities of less than 90 days. Interest-bearing Deposits in Other Banks Interest-bearing deposits in other banks include funds held in other financial institutions that are either fixed or variable rate instruments, including certificates of deposits. Interest income is recorded when earned and presented within other interest income in the Company’s consolidated statements of income. Investment Securities As of December 31, 2022 and December 31, 2021, investment securities were comprised primarily of debt securities, mortgage-backed securities and collateralized mortgage obligations issued by the U.S. Government, its agencies and government-sponsored enterprises, with under 4% of the investment securities comprised of collateralized loan obligations rated AA or better and obligations issued by local state and political subdivisions rated AA or better. The Company amortizes premiums and accretes discounts using the interest method over the expected lives of the individual securities. Premiums on callable debt securities are amortized to their next call date. All investment securities transactions are recorded on a trade-date basis. As of December 31, 2022, the Company’s investment securities were categorized as either available-for-sale (investment securities that may be sold before maturity at the discretion of management) or held-to-maturity (investment securities that management has the positive intent and ability to hold to maturity). As of December 31, 2021, all of the Company’s investment securities were categorized as available-for-sale. Available-for-sale investment securities are reported at fair value, with unrealized gains and losses reported in accumulated other comprehensive income. Gains and losses realized on sales of available-for-sale investment securities are determined using the specific identification method. Held-to-maturity investment securities are reported at amortized cost and may have a realized gain or loss if the investment security is retired or redeemed before the original maturity date. Transfers of debt securities from the available-for-sale category to the held-to-maturity category are made at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer remains in accumulated other comprehensive income and in the carrying value of the held-to-maturity investment security. Premiums or discounts on investment securities are amortized or accreted as an adjustment of yield using the interest method over the expected life of the security. Unrealized holding gains or losses that remain in accumulated other comprehensive income are also amortized or accreted over the expected life of the security as an adjustment of yield, offsetting the related amortization of the premium or accretion of the discount. For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates at the individual security level whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. For held-to-maturity debt securities, the Company utilizes the Current Expected Credit Loss (“CECL”) approach to estimate lifetime expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of held-to-maturity debt securities to present the net amount expected to be collected from held-to-maturity debt securities. Changes in the allowance for credit losses, if any, are recorded as a provision for (or reversal of) credit losses. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale or held-to-maturity investment security is confirmed or when either of the criteria regarding intent or requirement to sell an available-for-sale investment security is met. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. As of December 31, 2022, the Company’s available-for-sale and held-to-maturity investment securities were comprised primarily of debt securities, mortgage-backed securities and collateralized mortgage obligations issued by the U.S. Government, its agencies and government-sponsored enterprises. Management has concluded that the long history with no credit losses from these issuers indicates an expectation that nonpayment of the amortized cost basis is zero, and these securities are explicitly or implicitly fully guaranteed by the U.S. government. The U.S. government can print its own currency and its currency is routinely held by central banks and other major financial institutions. The dollar is used in international commerce, and commonly is viewed as a reserve currency, all of which qualitatively indicates that historical credit loss information should be minimally affected by current conditions and reasonable and supportable forecasts. Under 4% of the investment securities were comprised of collateralized loan obligations rated AA or better and obligations issued by local state and political subdivisions rated AA or better. These securities are investment grade and highly rated and carry either sufficient credit enhancement or days cash on hand to support timely payments of principal and interest. As a result, the Company does not expect any future payment defaults and has not recorded an allowance for credit losses for its available-for-sale and held-to-maturity debt securities as of December 31, 2022. Similarly, for the same reasons noted above, the Company did not record an allowance for credit losses for its available-for-sale debt securities as of December 31, 2021. Accrued interest receivable related to available-for-sale and held-to-maturity investment securities are recorded separately from the amortized cost basis of investment securities on the Company's consolidated balance sheet. Loans Held for Sale The Company originates certain loans for individual sale or for sale as a pool of loans to government-sponsored enterprises. Loans held for sale are carried, on an aggregate basis, at the lower of cost or fair value. The fair value of loans held for sale is primarily determined based on quoted prices for similar loans in active markets. Net gains and losses on loan sales are recorded as a component of other noninterest income. Direct loan origination costs and fees are deferred at origination of the loan and are recognized in other noninterest income upon sale of the loan. Loans and Leases Loans are reported at amortized cost, which includes the principal amount outstanding net of unamortized and unaccreted deferred loan fees and costs, and cumulative net charge-offs. Interest income is recognized on an accrual basis. Loan origination fees, certain direct costs and unearned discounts and premiums, if any, are deferred and are generally accreted or amortized into interest income as yield adjustments using the interest method over the contractual life of the loan. Other credit-related fees are recognized as fee income, a component of noninterest income, when earned. Direct financing leases are carried at the aggregate of lease payments receivable plus the estimated residual value of leased property, less unearned income. Unearned income on direct financing leases is amortized over the lease term by methods that approximate the interest method. Residual values on leased assets are periodically reviewed for impairment. Accrued interest receivable related to loans and leases is recorded separately from the amortized cost basis of loans and leases on the Company’s consolidated balance sheet. Nonaccrual Loans and Leases The Company generally places a loan or lease on nonaccrual status when management believes that collection of principal or interest has become doubtful or when a loan or lease becomes 90 days past due as to principal or interest, unless it is well secured and in the process of collection. A full or partial charge-off is recorded in the period in which the loan or lease is deemed uncollectible. When the Company places a loan or lease on nonaccrual status, previously accrued and uncollected interest is concurrently reversed against interest income. When the Company receives an interest payment on a nonaccrual loan or lease, the payment is applied as a reduction of the principal balance. Nonaccrual loans and leases are generally returned to accrual status when they become current as to principal and interest and future payments are reasonably assured. Troubled Debt Restructurings A restructuring of debt constitutes a troubled debt restructuring (“TDR”) if the Company, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The Company offers various types of concessions when modifying a loan, including term extensions, temporary deferral of principal and temporary interest rate reductions. However, forgiveness of principal is rarely granted. Generally, a non-accrual loan that has been modified in a TDR remains on non-accrual status for at least six months to demonstrate that the borrower is able to meet the terms of the modified loan. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. However, if the borrower’s ability to meet the revised payment terms is uncertain, the loan remains on non-accrual status. Allowance for Credit Losses The allowance for credit losses for loans and leases (the “ACL”) is a valuation account that is deducted from the amortized cost basis of loans and leases to present the net amount expected to be collected from loans and leases. Loans and leases are charged-off against the ACL when management believes the uncollectibility of a loan or lease balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The Company’s ACL and the reserve for unfunded commitments under the Current Expected Credit Losses (“CECL”) approach utilizes both quantitative and qualitative components. The Company’s methodology utilizes a quantitative model based on a single forward-looking macroeconomic forecast. The quantitative estimation is overlaid with qualitative adjustments to account for current conditions and forward-looking events not captured in the quantitative model. Qualitative adjustments that are considered include adjustments for regulatory determinants, model limitations, model maturity, and other current or forecasted events that are not captured in the Company’s historical loss experience. The Company generally evaluates loans and leases on a collective or pool basis when similar risk characteristics exist. However, loans and leases that do not share similar risk characteristics are evaluated on an individual basis. Such loans and leases evaluated individually are excluded from the collective evaluation. Individually assessed loans are measured for estimated credit loss (“ECL”) based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral, less estimated selling costs, if the loan is collateral-dependent. Management reviews relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts about the future. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency levels, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. The Company utilizes a Probability of Default (“PD”)/Loss Given Default (“LGD”) framework to estimate the ACL and the reserve for unfunded commitments. The PD represents the percentage expectation to default, measured by assessing loans and leases that migrate to default status (i.e., nonaccrual status, troubled debt restructurings (“TDRs”), 90 days or more past due, partial or full charge-offs or bankruptcy). LGD is defined as the percentage of the exposure at default (“EAD”) lost at the time of default, net of any recoveries, and will be unique to each of the collateral types securing the Company’s loans. PD and LGD’s are based on past experience of the Company and management’s expectations of the future. The ECL on loans and leases is calculated by taking the product of the credit exposure, lifetime default probability (“LDP”) and the LGD. The ECL model is applied to current credit exposures at the account level, using assumptions calibrated at the portfolio segment level using internal historical loan and lease level data. The Company estimates the default risk of a credit exposure over the remaining life of each account using a transition probability matrix approach which captures both the average rate of up/down-grade and default transitions, as well as withdrawal rates which capture the historical rate of exposure decline due to loan and lease amortization and prepayment. To apply the transition matrices, each credit exposure’s remaining life is split into two time segments. The first time segment is for the reasonable and supportable forecast period over which the transition matrices which are applied have been adjusted to incorporate current and forecasted conditions over that period. Management has determined that using a one year time horizon for the reasonable and supportable forecast period for all classes of loans and leases is a reasonable forecast horizon given the difficulty in predicting future economic conditions with a high degree of certainty. The second time segment is the reversion period from the end of the reasonable and supportable forecast period to the maturity of the exposure, over which long-run average transition matrices are applied. Management elected to use an immediate reversion to the mean approach. Lifetime loss rates are applied against the amortized cost basis of loans and leases and unfunded commitments to estimate the ACL and the reserve for unfunded commitments, respectively. On at least a quarterly basis, management convenes the Bank’s forecasting team which is responsible for reviewing the economic forecast model inputs and outputs and approving the resulting economic adjustment. The model uses a one-variable econometric model to produce factors that modify the long-run default rate assumptions used in the CECL model. These factors are applied to calculate the economic adjustment over the Reasonable and Supportable Forecast Period. At the meeting, management is presented with the economic forecast model input and output as well as the resulting economic adjustment. Depending on the current economic conditions, a range of inputs and outputs may be presented, in which case, using judgment, management will select an input and output. The economic forecast framework also allows management to use judgment in selecting the economic model input in cases where management’s outlook diverges from the official forecasts, and to apply qualitative dollar overlays to account for other economic related conditions not captured in the economic forecast model but are expected to potentially impact losses. The team also reviews other relevant economic variables and economic factors at the time of the meeting that could potentially impact future losses. These materials are presented to the economic forecasting team as they are economic in nature. If determined to be relevant and needing to be considered in the ACL estimate, these risks will be included in the ACL estimate through a qualitative dollar overlay that is determined using either quantitative analysis or qualitative judgment, or a mix of both. These other factors could include inflation indicators, personal income, or visitor arrivals, for example. The Company has identified three portfolio segments in estimating the ACL: commercial, residential real estate and consumer lending. The Company’s commercial portfolio segment is comprised of four distinct classes: commercial and industrial loans, commercial real estate loans, construction loans and lease financing. The key risk drivers related to this portfolio segment include risk rating, collateral type, and remaining maturity. The Company’s residential real estate portfolio segment is comprised of two distinct classes: residential real estate loans and home equity lines of credit. Specific risk characteristics related to this portfolio include the value of the underlying collateral, credit score and remaining maturity. Finally, the Company’s consumer portfolio segment is not further segmented, but consists primarily of automobile loans, credit cards and other installment loans. Automobile loans constitute the majority of this segment and are monitored using credit scores, collateral values and remaining maturity. The remainder of the consumer portfolio is predominantly unsecured. Regarding accrued interest receivable, the Company made accounting policy elections to (1) not measure an ACL on accrued interest receivable, (2) write-off accrued interest receivable by reversing interest income and (3) present accrued interest receivable separately from the related financial asset on the balance sheet. Furthermore, regarding collateral-dependent financial assets, the Company elected the practical expedient to use the fair value of collateral at the reporting date when recording the net carrying amount of the asset and determining the ACL for a financial asset for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Company’s assessment as of the reporting date. Reserve for Unfunded Commitments The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The reserve for unfunded commitments, which is a component of other liabilities in the consolidated balance sheets, is adjusted through the provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Provision for Credit Losses The provision for credit losses (the “Provision”) represents the amount charged against current period earnings to achieve an ACL and reserve for unfunded commitments that in management’s judgment is adequate to absorb expected credit losses related to the Company’s loan and lease portfolio and off-balance sheet credit exposures. Accordingly, the Provision will vary from period to period based on management’s ongoing assessment of the overall adequacy of the ACL and reserve for unfunded commitments. Premises and Equipment Premises and equipment, including leasehold improvements, are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of 7 to 39 years for premises, 3 to 20 years for equipment and the shorter of the lease term or remaining useful life for leasehold improvements. On a periodic basis, long-lived assets are reviewed for impairment. An impairment loss is recognized if the carrying amount of a long-lived asset exceeds its fair value and is not recoverable. An impairment analysis is performed whenever events or changes in circumstances suggest that the carrying value of an asset or group of assets may not be recoverable. Operating lease rental income for leased assets, primarily premises, is recognized on a straight-line basis as an offset to rental expense. Other Real Estate Owned and Repossessed Personal Property Other real estate owned (“OREO”) and repossessed personal property are comprised primarily of properties that the Company acquires through foreclosure proceedings. The Company values these properties at fair value less estimated costs to sell the property upon acquisition, which establishes the new carrying value. The Company charges losses arising upon the acquisition of the property against the ACL. If the fair value of the property at the time of acquisition exceeds the carrying amount of the loan, the excess is recorded either as a recovery to the ACL if a charge-off had previously been recorded, or as a gain on initial transfer in other noninterest income. After acquisition, the Company carries such properties at the lower of cost or fair value less estimated selling costs on a nonrecurring basis. Any write-downs or losses from the subsequent disposition of such properties are included in other noninterest income. Gains recognized on the sale of such properties are included in other noninterest income. Goodwill Goodwill represents the cost of acquired businesses in excess of the fair value of the net assets acquired. The Company performs impairment testing of goodwill, an indefinite-lived intangible asset, as required under GAAP on an annual basis or when circumstances change that indicate that a potential impairment may have occurred. The Company has assigned goodwill to its operating segments for impairment testing purposes. The goodwill impairment guidance provides the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing further impairment tests is unnecessary. However, if an entity concludes otherwise, or does not elect this option, it is required to perform impairment testing. The quantitative impairment test identifies potential impairments at the reporting unit level by comparing the estimated fair value of each identified reporting unit to its carrying amount. If the estimated fair value of a reporting unit exceeds its carrying amount, there is no impairment of goodwill. However, if the carrying amount exceeds the estimated fair value, an impairment exists, and an impairment loss is recognized in an amount equal to that excess. Subsequent reversals of goodwill impairment are prohibited. Mortgage Servicing Rights Mortgage servicing rights are recognized as assets when residential mortgage loans are sold and the rights to service those loans are retained. Mortgage servicing rights are initially recorded at fair value by using a discounted cash flow model to calculate the present value of estimated future net servicing income, incorporating assumptions that market participants would use in their estimates of fair value. The Company’s mortgage servicing rights are accounted for under the amortization method and periodically assessed for impairment. The Company amortizes the mortgage servicing rights over the period of estimated net servicing income, taking into account prepayment assumptions. Any such indicated impairment is recognized in earnings during the period in which the impairment occurs. Mortgage servicing income, net of the amortization of mortgage servicing rights, is recorded as a component of other noninterest income in the consolidated statements of income. Non-Marketable Equity Securities The Company is required to own Federal Home Loan Bank (“FHLB”) of Des Moines stock as a condition of membership. These securities are accounted for under the cost method, which equals par value, and are included in other assets in the consolidated balance sheets. These securities do not have a readily determinable fair value as ownership is restricted and there i |
Transactions with Affiliates an
Transactions with Affiliates and Related Parties | 12 Months Ended |
Dec. 31, 2022 | |
Transactions with Affiliates and Related Parties | |
Transactions with Affiliates and Related Parties | 2. Transactions with Affiliates and Related Parties In the normal course of business, the Company makes loans to executive officers and directors of the Company and its subsidiary and to entities and individuals affiliated with those executive officers and directors. These loans are made on terms no less favorable to the Company than those prevailing at the time for comparable transactions with unrelated persons or, in the case of certain residential real estate loans, on terms that are widely available to employees of the Company who are not directors or executive officers. Changes in the loans to such executive officers, directors and affiliates during 2022, 2021 and 2020 were as follows: Year Ended December 31, (dollars in thousands) 2022 2021 2020 Balance at beginning of year $ 86,035 $ 91,226 $ 85,280 New loans made 10,776 2,659 18,133 Repayments (39,564) (7,850) (12,187) Balance at end of year $ 57,247 $ 86,035 $ 91,226 There were no noninterest expense and noninterest income to and from affiliates during the years ended December 31, 2022, 2021 and 2020. Additionally, the Company had no other liabilities with affiliates and no off-balance sheet commitments with affiliates to purchase and sell foreign currencies as of December 31, 2022 and 2021. |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2022 | |
Investment Securities | |
Investment Securities | 3. Investment Securities As of December 31, 2022 and 2021, investment securities consisted predominantly of the following investment categories: U.S. Treasury and debt securities Mortgage-backed securities Collateralized mortgage obligations Collateralized loan obligations Debt securities issued by states and political subdivisions As of December 31, 2022, the Company’s investment securities were classified as either available-for-sale or held-to-maturity. As of December 31, 2021, all of the Company’s investment securities were classified as available-for-sale. Amortized cost and fair value of securities as of December 31, 2022 and 2021 were as follows: 2022 2021 Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Cost Gains Losses Value U.S. Treasury and government agency debt securities $ 163,309 $ — $ (12,327) $ 150,982 $ 196,662 $ 125 $ (4,224) $ 192,563 Government-sponsored enterprises debt securities 45,000 — (699) 44,301 — — — — Mortgage-backed securities: Residential - Government agency 66,792 — (7,069) 59,723 135,764 1,791 (291) 137,264 Residential - Government-sponsored enterprises 1,317,718 — (157,263) 1,160,455 1,496,605 6,914 (12,419) 1,491,100 Commercial - Government agency 282,700 — (44,847) 237,853 392,443 1,741 (6,521) 387,663 Commercial - Government-sponsored enterprises 130,612 — (11,039) 119,573 1,415,511 2,646 (48,714) 1,369,443 Commercial - Non-agency 21,964 — (493) 21,471 — — — — Collateralized mortgage obligations: Government agency 738,524 — (85,202) 653,322 2,103,187 7,768 (31,432) 2,079,523 Government-sponsored enterprises 533,103 — (70,971) 462,132 2,671,131 3,608 (53,695) 2,621,044 Collateralized loan obligations 249,877 50 (8,606) 241,321 105,245 2 — 105,247 Debt securities issued by states and political subdivisions — — — — 44,185 — — 44,185 Total available-for-sale securities $ 3,549,599 $ 50 $ (398,516) $ 3,151,133 $ 8,560,733 $ 24,595 $ (157,296) $ 8,428,032 Government agency debt securities $ 54,318 $ — $ (5,674) $ 48,644 $ — $ — $ — $ — Mortgage-backed securities: Residential - Government agency 46,302 — (6,294) 40,008 — — — — Residential - Government-sponsored enterprises 106,534 — (12,978) 93,556 — — — — Commercial - Government agency 30,544 — (5,229) 25,315 — — — — Commercial - Government-sponsored enterprises 1,150,449 — (138,451) 1,011,998 — — — — Collateralized mortgage obligations: Government agency 1,080,492 — (122,378) 958,114 — — — — Government-sponsored enterprises 1,798,178 — (207,045) 1,591,133 — — — — Debt securities issued by states and political subdivisions 53,822 — (7,768) 46,054 — — — — Total held-to-maturity securities $ 4,320,639 $ — $ (505,817) $ 3,814,822 $ — $ — $ — $ — During the year ended December 31, 2022, the Company reclassified at fair value approximately $4.6 billion in available-for-sale investment securities to the held-to-maturity category. The related total unrealized after-tax losses of approximately $372.4 million remained in accumulated other comprehensive loss to be amortized over the estimated remaining life of the securities as an adjustment of yield, offsetting the related accretion of the discount on the transferred securities. No gains or losses were recognized at the time of reclassification. Management considers the held-to-maturity classification of these investment securities to be appropriate as the Company has the positive intent and ability to hold these securities to maturity. As of December 31, 2022, the weighted average life of the transferred securities was approximately 8.2 years. Material changes in prepayment speeds may result in a significant impact to the estimated remaining life of these securities. Accrued interest receivable related to available-for-sale investment securities was $8.9 million and $14.1 million as of December 31, 2022 and 2021, respectively. Accrued interest receivable related to held-to-maturity investment securities was $7.5 million and nil as of December 31, 2022 and 2021, respectively. Accrued interest receivable is recorded separately from the amortized cost basis of investment securities on the Company’s consolidated balance sheets. Proceeds from calls and sales of investment securities were $1.7 million and nil, respectively, for the year ended December 31, 2022. Proceeds from calls and sales of investment securities were $8.6 million and $2.5 million, respectively, for the year ended December 31, 2021. Proceeds from calls and sales of investment securities were $102.0 million and $543.0 million, respectively, for the year ended December 31, 2020. The Company recorded gross realized gains of nil and gross realized losses of nil for the year ended December 31, 2022. The Company recorded gross realized gains of $0.1 million and gross realized losses of nil for the year ended December 31, 2021. The Company recorded gross realized gains of $0.6 million and gross realized losses of $0.7 million for the year ended December 31, 2020. The income tax expense related to the Company’s net realized gains on the sale of investment securities was nil for both the years ended December 31, 2022 and 2021. The income tax benefit related to the Company’s net realized loss on the sale of investment securities was nil for the year ended December 31, 2020. Gains and losses realized on sales of securities are determined using the specific identification method. Interest income from taxable investment securities was $128.7 million, $93.3 million and $80.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. Interest income from non-taxable investment securities was $13.8 million, $8.1 million and $0.9 million for the years ended December 31, 2022, 2021 and 2020. The amortized cost and fair value of debt securities issued by the U.S. Treasury, government agencies, government-sponsored enterprises and states and political subdivisions, non-agency mortgage-backed securities and collateralized loan obligations as of December 31, 2022, by contractual maturity, are shown below. Mortgage-backed securities and collateralized mortgage obligations issued by government agencies and government-sponsored enterprises are disclosed separately in the table below as remaining expected maturities will differ from contractual maturities as borrowers have the right to prepay obligations. December 31, 2022 Amortized Fair (dollars in thousands) Cost Value Available-for-sale securities Due in one year or less $ 55,021 $ 54,644 Due after one year through five years 80,163 76,492 Due after five years through ten years 180,105 170,568 Due after ten years 164,861 156,371 480,150 458,075 Mortgage-backed securities: Residential - Government agency 66,792 59,723 Residential - Government-sponsored enterprises 1,317,718 1,160,455 Commercial - Government agency 282,700 237,853 Commercial - Government-sponsored enterprises 130,612 119,573 Total mortgage-backed securities 1,797,822 1,577,604 Collateralized mortgage obligations: Government agency 738,524 653,322 Government-sponsored enterprises 533,103 462,132 Total collateralized mortgage obligations 1,271,627 1,115,454 Total available-for-sale securities $ 3,549,599 $ 3,151,133 Held-to-maturity securities Due in one year or less $ — $ — Due after one year through five years — — Due after five years through ten years 10,208 8,932 Due after ten years 97,932 85,766 108,140 94,698 Mortgage-backed securities: Residential - Government agency 46,302 40,008 Residential - Government-sponsored enterprises 106,534 93,556 Commercial - Government agency 30,544 25,315 Commercial - Government-sponsored enterprises 1,150,449 1,011,998 Total mortgage-backed securities 1,333,829 1,170,877 Collateralized mortgage obligations: Government agency 1,080,492 958,114 Government-sponsored enterprises 1,798,178 1,591,133 Total collateralized mortgage obligations 2,878,670 2,549,247 Total held-to-maturity securities $ 4,320,639 $ 3,814,822 At December 31, 2022, pledged securities totaled $3.2 billion, of which $3.0 billion was pledged to secure public deposits and $207.8 million was pledged to secure other financial transactions. At December 31, 2021, pledged securities totaled $2.1 billion, of which $1.9 billion was pledged to secure public deposits and $193.2 million was pledged to secure other financial transactions. The Company held no securities of any single issuer, other than debt securities issued by the U.S. government, government agencies and government-sponsored enterprises, which were in excess of 10% of stockholders’ equity as of December 31, 2022 and 2021. The following tables present the unrealized gross losses and fair values of securities in the available-for-sale portfolio by length of time that the 275 and 318 individual securities in each category have been in a continuous loss position as of December 31, 2022 and 2021, respectively. The unrealized losses on investment securities were attributable to market conditions. Time in Continuous Loss as of December 31, 2022 Less Than 12 Months 12 Months or More Total Unrealized Unrealized Unrealized (dollars in thousands) Losses Fair Value Losses Fair Value Losses Fair Value U.S. Treasury and government agency debt securities $ (2,962) $ 83,870 $ (9,365) $ 67,112 $ (12,327) $ 150,982 Government-sponsored enterprises debt securities (699) 44,301 — — (699) 44,301 Mortgage-backed securities: Residential - Government agency (7,069) 59,723 — — (7,069) 59,723 Residential - Government-sponsored enterprises (73,954) 645,338 (83,309) 515,117 (157,263) 1,160,455 Commercial - Government agency (15,852) 108,842 (28,995) 129,011 (44,847) 237,853 Commercial - Government-sponsored enterprises (7,348) 94,657 (3,691) 24,916 (11,039) 119,573 Commercial - Non-agency (493) 21,471 — — (493) 21,471 Collateralized mortgage obligations: Government agency (74,797) 596,907 (10,405) 56,415 (85,202) 653,322 Government-sponsored enterprises (21,916) 198,108 (49,055) 264,024 (70,971) 462,132 Collateralized loan obligations (8,606) 170,042 — — (8,606) 170,042 Total available-for-sale securities with unrealized losses $ (213,696) $ 2,023,259 $ (184,820) $ 1,056,595 $ (398,516) $ 3,079,854 Time in Continuous Loss as of December 31, 2021 Less Than 12 Months 12 Months or More Total Unrealized Unrealized Unrealized (dollars in thousands) Losses Fair Value Losses Fair Value Losses Fair Value U.S. Treasury and government agency debt securities $ (3,355) $ 134,468 $ (869) $ 16,642 $ (4,224) $ 151,110 Mortgage-backed securities: Residential - Government agency (291) 51,231 — — (291) 51,231 Residential - Government-sponsored enterprises (10,876) 1,230,104 (1,543) 32,415 (12,419) 1,262,519 Commercial - Government agency (5,239) 186,024 (1,282) 26,063 (6,521) 212,087 Commercial - Government-sponsored enterprises (22,179) 744,819 (26,535) 397,123 (48,714) 1,141,942 Collateralized mortgage obligations: Government agency (31,432) 1,441,848 — — (31,432) 1,441,848 Government-sponsored enterprises (52,551) 2,255,535 (1,144) 24,959 (53,695) 2,280,494 Total available-for-sale securities with unrealized losses $ (125,923) $ 6,044,029 $ (31,373) $ 497,202 $ (157,296) $ 6,541,231 At December 31, 2022 and 2021, the Company did not have any available-for-sale securities with the intent to sell and determined it was more likely than not that the Company would not be required to sell the securities prior to recovery of the amortized cost basis. As the Company had the intent and ability to hold the remaining available-for-sale securities in an unrealized loss position as of December 31, 2022 and 2021, each security with an unrealized loss position in the above tables has been further assessed to determine if a credit loss exists. As of December 31, 2022 and 2021, the Company did not expect any credit losses in its available-for-sale debt securities and no credit losses were recognized on available-for-sale securities during the years ended December 31, 2022 and 2021. As of December 31, 2022 and 2021, the Company’s investment securities were comprised primarily of debt securities, mortgage-backed securities and collateralized mortgage obligations issued by the U.S. Government, its agencies and government-sponsored enterprises, with under 4% of the investment securities comprised of collateralized loan obligations rated AA or better and obligations issued by local state and political subdivisions rated AA or better. For investment securities issued by the U.S. Government, its agencies and government-sponsored enterprises, management has concluded that the long history with no credit losses from these issuers indicates an expectation that nonpayment of the amortized cost basis is zero, and these securities are explicitly or implicitly fully guaranteed by the U.S. government. The U.S. government can print its own currency and its currency is routinely held by central banks and other major financial institutions. The dollar is used in international commerce, and commonly is viewed as a reserve currency, all of which qualitatively indicates that historical credit loss information should be minimally affected by current conditions and reasonable and supportable forecasts. For collateralized loan obligations and debt securities issued by local state and political subdivisions, these securities are investment grade and highly rated and carry either sufficient credit enhancement or days cash on hand to support timely payments of principal and interest. As a result, the Company does not expect any future payment defaults and has not recorded an allowance for credit losses for its available-for-sale and held-to-maturity debt securities as of December 31, 2022. Similarly, for the same reasons noted above, the Company did not record an allowance for credit losses for its available-for-sale debt securities as of December 31, 2021. The Company held approximately 120,000 Visa Class B restricted shares as of both December 31, 2022 and 2021. These shares continued to be carried at $0 cost basis during each of the respective periods. |
Loans and Leases
Loans and Leases | 12 Months Ended |
Dec. 31, 2022 | |
Loans and Leases. | |
Loans and Leases | 4. Loans and Leases As of December 31, 2022 and 2021, loans and leases were comprised of the following: December 31, December 31, (dollars in thousands) 2022 2021 Commercial and industrial $ 2,235,897 $ 2,087,099 Commercial real estate 4,132,309 3,639,623 Construction 844,643 813,969 Residential: Residential mortgage 4,302,788 4,083,367 Home equity line 1,055,351 876,608 Total residential 5,358,139 4,959,975 Consumer 1,222,934 1,229,939 Lease financing 298,090 231,394 Total loans and leases $ 14,092,012 $ 12,961,999 Outstanding loan balances are reported net of deferred loan costs and fees of $56.1 million and $42.2 million at December 31, 2022 and 2021, respectively. Accrued interest receivable related to loans and leases was $61.6 million and $49.0 million as of December 31, 2022 and 2021, respectively, and is recorded separately from the amortized cost basis of loans and leases on the Company’s consolidated balance sheets. As of December 31, 2022, residential real estate loans totaling $3.5 billion were pledged to collateralize the Company’s borrowing capacity at the FHLB, and consumer, commercial and industrial, commercial real estate and residential real estate loans totaling $1.7 billion were pledged to collateralize the borrowing capacity at the FRB. As of December 31, 2021, residential real estate loans totaling $2.4 billion were pledged to collateralize the Company’s borrowing capacity at the FHLB, and consumer, commercial and industrial, commercial real estate and residential real estate loans totaling $1.7 billion were pledged to collateralize the borrowing capacity at the FRB. Residential real estate loans collateralized by properties that were in the process of foreclosure totaled $2.8 million and $4.7 million at December 31, 2022 and 2021, respectively. Net losses related to the sales of loans, recorded as a component of other noninterest income, were nil for the year ended December 31, 2022. Net gains related to the sales of loans, recorded as a component of other noninterest income, were $1.3 million and $14.5 million for the years ended December 31, 2021 and 2020, respectively. |
Allowance for Credit Losses
Allowance for Credit Losses | 12 Months Ended |
Dec. 31, 2022 | |
Allowance for Credit Losses | |
Allowance for Credit Losses | 5. Allowance for Credit Losses The Company maintains an ACL that is deducted from the amortized cost basis of loans and leases to present the net carrying value of loans and leases expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount of loans and leases. The Company also maintains an estimated reserve for unfunded commitments on the consolidated balance sheets. The reserve for unfunded commitments is reduced in the period in which the off-balance sheet financial instruments expire, loan funding occurs, or is otherwise settled. Rollforward of the Allowance for Credit Losses The following presents the activity in the ACL by class of loans and leases for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 Commercial Lending Residential Lending Commercial Commercial Home and Real Lease Residential Equity (dollars in thousands) Industrial Estate Construction Financing Mortgage Line Consumer Total Allowance for credit losses: Balance at beginning of year $ 20,080 $ 42,951 $ 9,773 $ 1,659 $ 34,364 $ 5,642 $ 42,793 $ 157,262 Charge-offs (2,012) (750) — — (103) (1,175) (16,848) (20,888) Recoveries 897 14 — 60 418 713 7,545 9,647 Provision (4,401) 1,595 (3,930) (168) 496 3,116 1,171 (2,121) Balance at end of year $ 14,564 $ 43,810 $ 5,843 $ 1,551 $ 35,175 $ 8,296 $ 34,661 $ 143,900 Year Ended December 31, 2021 Commercial Lending Residential Lending Commercial Commercial Home and Real Lease Residential Equity (dollars in thousands) Industrial Estate Construction Financing Mortgage Line Consumer Total Allowance for credit losses: Balance at beginning of year $ 24,711 $ 58,123 $ 10,039 $ 3,298 $ 40,461 $ 7,163 $ 64,659 $ 208,454 Charge-offs (5,949) (66) — — (632) (342) (16,634) (23,623) Recoveries 867 39 266 — 261 117 9,600 11,150 Provision 451 (15,145) (532) (1,639) (5,726) (1,296) (14,832) (38,719) Balance at end of year $ 20,080 $ 42,951 $ 9,773 $ 1,659 $ 34,364 $ 5,642 $ 42,793 $ 157,262 Year Ended December 31, 2020 Commercial Lending Residential Lending Commercial Commercial Home and Real Lease Residential Equity (dollars in thousands) Industrial Estate Construction Financing Mortgage Line Consumer Unallocated Total Allowance for credit losses: Balance at beginning of year $ 28,975 $ 22,325 $ 4,844 $ 424 $ 29,303 $ 9,876 $ 34,644 $ 139 $ 130,530 Adoption of ASU No. 2016-13 (16,105) 10,559 (1,803) 207 (2,793) (4,731) 15,575 (139) 770 Charge-offs (15,572) (2,753) (379) — (14) (54) (28,791) — (47,563) Recoveries 5,005 615 200 — 216 167 10,499 — 16,702 Provision 22,408 27,377 7,177 2,667 13,749 1,905 32,732 — 108,015 Balance at end of year $ 24,711 $ 58,123 $ 10,039 $ 3,298 $ 40,461 $ 7,163 $ 64,659 $ — $ 208,454 Rollforward of the Reserve for Unfunded Commitments The following presents the activity in the Reserve for Unfunded Commitments for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 Commercial Lending Residential Lending Commercial Commercial Home and Real Lease Residential Equity (dollars in thousands) Industrial Estate Construction Financing Mortgage Line Consumer Total Reserve for unfunded commitments: Balance at beginning of year $ 8,615 $ 2,114 $ 8,963 $ — $ 15 $ 10,546 $ 69 $ 30,322 Provision (804) (110) (1,493) — 15 5,937 (32) 3,513 Balance at end of year $ 7,811 $ 2,004 $ 7,470 $ — $ 30 $ 16,483 $ 37 $ 33,835 Year Ended December 31, 2021 Commercial Lending Residential Lending Commercial Commercial Home and Real Lease Residential Equity (dollars in thousands) Industrial Estate Construction Financing Mortgage Line Consumer Total Reserve for unfunded commitments: Balance at beginning of year $ 11,719 $ 1,328 $ 9,037 $ — $ 2 $ 8,452 $ 65 $ 30,603 Provision (3,104) 786 (74) — 13 2,094 4 (281) Balance at end of year $ 8,615 $ 2,114 $ 8,963 $ — $ 15 $ 10,546 $ 69 $ 30,322 Year Ended December 31, 2020 Commercial Lending Residential Lending Commercial Commercial Home and Real Lease Residential Equity (dollars in thousands) Industrial Estate Construction Financing Mortgage Line Consumer Total Reserve for unfunded commitments: Balance at beginning of year $ — $ — $ — $ — $ — $ — $ 600 $ 600 Adoption of ASU No. 2016-13 5,390 778 4,119 — 7 6,587 (581) 16,300 Provision 6,329 550 4,918 — (5) 1,865 46 13,703 Balance at end of year $ 11,719 $ 1,328 $ 9,037 $ — $ 2 $ 8,452 $ 65 $ 30,603 Credit Quality Information The Company performs an internal loan review and grading or scoring procedures on an ongoing basis. The review provides management with periodic information as to the quality of the loan portfolio and effectiveness of the Company’s lending policies and procedures. The objective of the loan review and grading or scoring procedures is to identify, in a timely manner, existing or emerging credit quality issues so that appropriate steps can be initiated to avoid or minimize future losses. Loans and leases subject to grading primarily include: commercial and industrial loans, commercial real estate loans, construction loans and lease financing. Other loans subject to grading include installment loans to businesses or individuals for business and commercial purposes, overdraft lines of credit, commercial credit cards, and other credits as may be determined. Credit quality indicators for internally graded loans and leases are generally updated on an annual basis or on a quarterly basis for those loans and leases deemed to be of potentially higher risk. An internal credit risk rating system is used to determine loan grade and is based on borrower credit risk and transactional risk. The loan grading process is a mechanism used to determine the risk of a particular borrower and is based on the following factors of a borrower: character, earnings and operating cash flow, asset and liability structure, debt capacity, management and controls, borrowing entity, and industry and operating environment. Pass Special Mention Substandard Doubtful Loss Loans that are primarily monitored for credit quality using FICO scores include: residential mortgage loans, home equity lines and consumer loans. FICO scores are calculated primarily based on a consideration of payment history, the current amount of debt, the length of credit history available, a recent history of new sources of credit and the mix of credit type. FICO scores are updated on a monthly, quarterly or bi-annual basis, depending on the product type. The amortized cost basis by year of origination and credit quality indicator of the Company's loans and leases as of December 31, 2022 was as follows: Revolving Loans Converted Term Loans Revolving to Term Amortized Cost Basis by Origination Year Loans Loans Amortized Amortized (dollars in thousands) 2022 2021 2020 2019 2018 Prior Cost Basis Cost Basis Total Commercial Lending Commercial and Industrial Risk rating: Pass $ 359,881 $ 422,567 $ 54,656 $ 170,222 $ 51,476 $ 137,257 $ 894,384 $ 15,715 $ 2,106,158 Special Mention 2,059 240 1,371 2,643 184 1,431 22,897 378 31,203 Substandard 625 289 1,117 1,092 668 885 14,733 65 19,474 Other (1) 17,679 7,721 4,329 3,965 1,881 1,167 42,320 — 79,062 Total Commercial and Industrial 380,244 430,817 61,473 177,922 54,209 140,740 974,334 16,158 2,235,897 Commercial Real Estate Risk rating: Pass 889,583 695,882 319,838 565,587 395,474 1,173,163 48,081 — 4,087,608 Special Mention 170 — 555 14,878 512 11,398 675 — 28,188 Substandard — — 173 — 1,704 14,485 — — 16,362 Other (1) — — — — — 151 — — 151 Total Commercial Real Estate 889,753 695,882 320,566 580,465 397,690 1,199,197 48,756 — 4,132,309 Construction Risk rating: Pass 124,464 261,536 96,423 97,000 88,973 84,704 25,957 — 779,057 Special Mention — — — 221 — — — — 221 Substandard — — — — 21 490 — — 511 Other (1) 29,694 21,339 4,686 2,201 3,784 2,196 954 — 64,854 Total Construction 154,158 282,875 101,109 99,422 92,778 87,390 26,911 — 844,643 Lease Financing Risk rating: Pass 113,563 24,052 43,497 37,502 6,004 67,687 — — 292,305 Special Mention — 411 2,498 1,299 — — — — 4,208 Substandard — — 197 12 11 1,357 — — 1,577 Total Lease Financing 113,563 24,463 46,192 38,813 6,015 69,044 — — 298,090 Total Commercial Lending $ 1,537,718 $ 1,434,037 $ 529,340 $ 896,622 $ 550,692 $ 1,496,371 $ 1,050,001 $ 16,158 $ 7,510,939 (continued) Revolving Loans Converted Term Loans Revolving to Term Amortized Cost Basis by Origination Year Loans Loans (continued) Amortized Amortized (dollars in thousands) 2022 2021 2020 2019 2018 Prior Cost Basis Cost Basis Total Residential Lending Residential Mortgage FICO: 740 and greater $ 557,636 $ 1,064,444 $ 560,463 $ 245,241 $ 165,258 $ 920,100 $ — $ — $ 3,513,142 680 - 739 73,929 112,672 82,416 40,355 22,126 130,508 — — 462,006 620 - 679 12,320 13,804 9,881 3,649 3,054 35,441 — — 78,149 550 - 619 2,455 2,246 1,791 263 601 6,955 — — 14,311 Less than 550 — 1,321 367 — 966 5,304 — — 7,958 No Score (3) 22,289 14,671 6,820 10,599 15,921 47,245 — — 117,545 Other (2) 18,970 18,211 15,287 9,201 9,124 29,128 9,202 554 109,677 Total Residential Mortgage 687,599 1,227,369 677,025 309,308 217,050 1,174,681 9,202 554 4,302,788 Home Equity Line FICO: 740 and greater — — — — — — 817,123 2,059 819,182 680 - 739 — — — — — — 171,117 2,714 173,831 620 - 679 — — — — — — 45,368 2,100 47,468 550 - 619 — — — — — — 7,485 1,029 8,514 Less than 550 — — — — — — 1,151 481 1,632 No Score (3) — — — — — — 4,724 — 4,724 Total Home Equity Line — — — — — — 1,046,968 8,383 1,055,351 Total Residential Lending 687,599 1,227,369 677,025 309,308 217,050 1,174,681 1,056,170 8,937 5,358,139 Consumer Lending FICO: 740 and greater 200,887 111,047 53,534 43,912 24,951 8,432 125,126 185 568,074 680 - 739 99,787 67,140 37,260 31,751 15,874 7,665 72,101 514 332,092 620 - 679 25,949 29,587 14,226 16,872 9,672 6,488 31,854 937 135,585 550 - 619 3,017 5,475 5,226 8,056 5,396 3,924 11,269 854 43,217 Less than 550 656 1,351 2,286 3,779 1,869 1,593 3,541 443 15,518 No Score (3) 3,205 258 — 51 24 29 38,805 227 42,599 Other (2) 1,615 4,082 353 1,368 — — 78,430 1 85,849 Total Consumer Lending 335,116 218,940 112,885 105,789 57,786 28,131 361,126 3,161 1,222,934 Total Loans and Leases $ 2,560,433 $ 2,880,346 $ 1,319,250 $ 1,311,719 $ 825,528 $ 2,699,183 $ 2,467,297 $ 28,256 $ 14,092,012 (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. The amortized cost basis by year of origination and credit quality indicator of the Company's loans and leases as of December 31, 2021 was as follows: 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 Estate 693,370 338,140 582,386 496,985 440,863 986,450 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. There were no loans and leases graded as Loss as of December 31, 2022 and 2021. The amortized cost basis of revolving loans that were converted to term loans during the years ended December 31, 2022 and 2021 was as follows: Year Ended (dollars in thousands) December 31, 2022 Commercial and industrial $ 480 Home equity line 2,189 Consumer 1,323 Total Revolving Loans Converted to Term Loans During the Year $ 3,992 Year Ended (dollars in thousands) December 31, 2021 Commercial and industrial $ 1,153 Commercial real estate 14,891 Residential mortgage 577 Home equity line 3,656 Consumer 1,574 Total Revolving Loans Converted to Term Loans During the Year $ 21,851 Past-Due Status The Company continually updates its aging analysis for loans and leases to monitor the migration of loans and leases into past due categories. The Company considers loans and leases that are delinquent for 30 days or more to be past due. As of December 31, 2022 and 2021, the aging analysis of the amortized cost basis of the Company’s past due loans and leases was as follows: December 31, 2022 Past Due Loans and Greater Leases Past Than or Due 90 Days 30-59 60-89 Equal to or More and Days Days 90 Days Total Total Loans Still Accruing (dollars in thousands) Past Due Past Due Past Due Past Due Current and Leases Interest Commercial and industrial $ 2,682 $ 769 $ 1,441 $ 4,892 $ 2,231,005 $ 2,235,897 $ 291 Commercial real estate 4,505 — 727 5,232 4,127,077 4,132,309 — Construction 109 — — 109 844,534 844,643 — Lease financing — — — — 298,090 298,090 — Residential mortgage 3,681 1,983 2,572 8,236 4,294,552 4,302,788 58 Home equity line 5,161 1,381 2,072 8,614 1,046,737 1,055,351 — Consumer 29,927 6,801 2,886 39,614 1,183,320 1,222,934 2,885 Total $ 46,065 $ 10,934 $ 9,698 $ 66,697 $ 14,025,315 $ 14,092,012 $ 3,234 December 31, 2021 Past Due Loans and Greater Leases Past Than or Due 90 Days 30-59 60-89 Equal to or More and Days Days 90 Days Total Total Loans Still Accruing (dollars in thousands) Past Due Past Due Past Due Past Due Current and Leases Interest Commercial and industrial $ 1,195 $ 1,195 $ 1,318 $ 3,708 $ 2,083,391 $ 2,087,099 $ 740 Commercial real estate 631 — — 631 3,638,992 3,639,623 — Construction 162 — — 162 813,807 813,969 — Lease financing — — — — 231,394 231,394 — Residential mortgage 3,030 1,002 5,617 9,649 4,073,718 4,083,367 987 Home equity line 1,538 538 3,681 5,757 870,851 876,608 3,681 Consumer 16,534 3,366 1,800 21,700 1,208,239 1,229,939 1,800 Total $ 23,090 $ 6,101 $ 12,416 $ 41,607 $ 12,920,392 $ 12,961,999 $ 7,208 Nonaccrual Loans and Leases The Company generally places a loan or lease on nonaccrual status when management believes that collection of principal or interest has become doubtful or when a loan or lease becomes 90 days past due as to principal or interest, unless it is well secured and in the process of collection. The Company charges off a loan or lease when facts indicate that the loan or lease is considered uncollectible. The amortized cost basis of loans and leases on nonaccrual status as of December 31, 2022 and 2021 and the amortized cost basis of loans and leases on nonaccrual status with no allowance for credit losses as of December 31, 2022 and 2021 were as follows: December 31, 2022 Nonaccrual Loans and Leases With No Nonaccrual Allowance Loans (dollars in thousands) for Credit Losses and Leases Commercial and industrial $ 665 $ 1,215 Commercial real estate 727 727 Residential mortgage 1,560 6,166 Home equity line 596 3,797 Total Nonaccrual Loans and Leases $ 3,548 $ 11,905 December 31, 2021 Nonaccrual Loans and Leases With No Nonaccrual Allowance Loans (dollars in thousands) for Credit Losses and Leases Commercial and industrial $ — $ 718 Commercial real estate 727 727 Residential mortgage 1,192 5,637 Total Nonaccrual Loans and Leases $ 1,919 $ 7,082 During the years ended December 31, 2022, 2021 and 2020, the Company recognized interest income of $0.4 million, $0.4 million and $0.2 million, respectively, on nonaccrual loans and leases. Furthermore, for the years ended December 31, 2022, 2021 and 2020, the amount of accrued interest receivables written off by reversing interest income was $0.9 million, $0.8 million and $1.4 million, respectively. Collateral-Dependent Loans and Leases Collateral-dependent loans and leases are those for which repayment (on the basis of the Company’s assessment as of the reporting date) is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. As of December 31, 2022 and 2021, the amortized cost basis of collateral-dependent loans was $8.2 million and $7.5 million, respectively. As of both December 31, 2022 and 2021, these loans were primarily collateralized by residential real estate property and the fair value of collateral on substantially all collateral-dependent loans were significantly in excess of their amortized cost basis. Modifications Commercial and industrial loans modified in a TDR may involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Modifications of commercial real estate and construction loans in a TDR may involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Modifications of construction loans in a TDR may also involve extending the interest-only payment period. Interest continues to accrue on the missed payments and as a result, the effective yield on the loan remains unchanged. Residential real estate loans modified in a TDR may be comprised of loans where monthly payments are lowered to accommodate the borrowers' financial needs for a period of time, including extended interest-only periods and re-amortization of the balance. Modifications of consumer loans in a TDR may involve temporary or permanent reduced payments, temporary interest-only payments and below-market interest rates. Loans modified in a TDR may already be on nonaccrual status and in some cases, partial charge-offs may have already been taken against the outstanding loan balance. Loans modified in a TDR are evaluated for impairment. As a result, this may have a financial effect of increasing the specific ACL associated with the loan. An ACL for impaired commercial loans, including commercial real estate and construction loans, that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan's effective interest rate or if the loan is collateral-dependent, the estimated fair value of the collateral, less any selling costs. An ACL for impaired residential real estate loans that have been modified in a TDR is measured based on the estimated fair value of the collateral, less any selling costs. Management exercises significant judgment in developing these estimates. The following presents, by class, information related to loans modified in a TDR during the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 Number of Recorded Related (dollars in thousands) Contracts (1) Investment (2) ACL Commercial and industrial 5 $ 205 $ 17 Residential mortgage 1 247 31 Consumer 258 2,173 443 Total 264 $ 2,625 $ 491 Year Ended December 31, 2021 Number of Recorded Related (dollars in thousands) Contracts (1) Investment (2) ACL Commercial and industrial 11 $ 1,481 $ 124 Commercial real estate 1 346 78 Construction 12 689 69 Residential mortgage 13 5,539 207 Consumer 1,652 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Premises and Equipment | |
Premises and Equipment | 6. Premises and Equipment At December 31, 2022 and 2021, premises and equipment were comprised of the following: December 31, (dollars in thousands) 2022 2021 Buildings $ 294,051 $ 295,286 Furniture and equipment 92,276 95,824 Land 97,955 113,720 Leasehold improvements 53,216 66,772 Total premises and equipment 537,498 571,602 Less: Accumulated depreciation and amortization 257,143 253,154 Net book value $ 280,355 $ 318,448 Depreciation and amortization expenses included in occupancy and equipment expenses for 2022, 2021 and 2020 were as follows: Year Ended December 31, (dollars in thousands) 2022 2021 2020 Occupancy $ 9,192 $ 9,149 $ 9,231 Equipment 6,126 6,682 6,721 Total $ 15,318 $ 15,831 $ 15,952 |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2022 | |
Other Assets. | |
Other Assets | 7. Other Assets Goodwill Goodwill originated from the acquisition of BancWest by BNPP in December 2001. Goodwill generated in that acquisition was recorded on the Company’s consolidated balance sheets as a result of push-down accounting treatment. The carrying amount of goodwill reported in two of the Company’s reporting segments as of December 31, 2022 and 2021 were as shown below. The Treasury and Other segment is not assigned goodwill. Retail Commercial (in thousands) Banking Banking Total December 31, 2022 $ 687,492 $ 308,000 $ 995,492 December 31, 2021 687,492 308,000 995,492 There was no impairment of the Company’s goodwill for the years ended December 31, 2022, 2021 and 2020. Mortgage Servicing Rights (“MSRs”) Mortgage servicing activities include collecting principal, interest, tax and insurance payments from borrowers while accounting for and remitting payments to investors, taxing authorities and insurance companies. The Company also monitors delinquencies and administers foreclosure proceedings. Mortgage loan servicing income is recorded in noninterest income as a part of other service charges and fees and amortization of the servicing assets is recorded in noninterest income as part of other income. The unpaid principal amount of residential real estate loans serviced for others was $1.4 billion and $1.7 billion as of December 31, 2022 and 2021, respectively. Servicing fees include contractually specified fees, late charges and ancillary fees and were $3.8 million, $4.8 million and $5.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. Amortization of MSRs was $1.9 million, $3.7 million and $6.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. The estimated future amortization expenses for MSRs over the next five years are as follows: Estimated (dollars in thousands) Amortization Year ending December 31: 2023 $ 949 2024 843 2025 747 2026 660 2027 583 The details of the Company’s MSRs are presented below: Year Ended December 31, (dollars in thousands) 2022 2021 Gross carrying amount $ 69,273 $ 69,103 Less: accumulated amortization 62,711 60,801 Net carrying value $ 6,562 $ 8,302 The following table presents changes in amortized MSRs for the years indicated: Year Ended December 31, (dollars in thousands) 2022 2021 Balance at beginning of year $ 8,302 $ 10,731 Originations 170 1,247 Amortization (1,910) (3,676) Balance at end of year $ 6,562 $ 8,302 Fair value of amortized MSRs at beginning of year $ 12,243 $ 14,029 Fair value of amortized MSRs at end of year $ 15,193 $ 12,243 Balance of loans serviced for others $ 1,441,202 $ 1,673,158 MSRs are evaluated for impairment if events and circumstances indicate a possible impairment. No impairment of MSRs was recorded for the years ended December 31, 2022, 2021 and 2020. The quantitative assumptions used in determining the lower of cost or fair value of the Company’s MSRs were as follows: December 31, 2022 December 31, 2021 Weighted Weighted Range Average Range Average Conditional prepayment rate 7.02 % - 13.58 % 7.11 % 13.77 % - 25.19 % 14.61 % Life in years (of the MSR) 3.35 - 7.37 7.20 1.99 - 5.31 5.03 Weighted-average coupon rate 3.55 % - 6.24 % 3.68 % 3.58 % - 6.56 % 3.71 % Discount rate 10.41 % - 10.54 % 10.51 % 10.00 % - 10.01 % 10.00 % The sensitivities surrounding MSRs are expected to have an immaterial impact on fair value. Other The Company had $167.4 million and $184.3 million in affordable housing and other tax credit investment partnership interest as of December 31, 2022 and 2021, respectively, included in other assets on the consolidated balance sheets. The amount of amortization of such investments reported in the provision for income taxes was $24.4 million, $21.7 million and $10.5 million during the years ended December 31, 2022, 2021 and 2020, respectively. The affordable housing tax credits and other benefits recognized during the years ended December 31, 2022, 2021 and 2020 were $26.9 million, $22.7 million and $15.8 million, respectively. Nonmarketable equity securities include FHLB stock, which the Company holds to meet regulatory requirements. As a member of the FHLB system, the Company is required to maintain a minimum level of investment in FHLB non-publicly traded stock based on specific percentages of the Company’s total assets and outstanding advances in accordance with the FHLB’s capital plan which may be amended or revised periodically. Amounts in excess of the required minimum may be transferred at par to another member institution subject to prior approval of the FHLB. Excess stock may also be sold to the FHLB subject to a five-year redemption notice period and at the sole discretion of the FHLB. These securities are accounted for under the cost method. These investments are considered long-term investments by management and accordingly, the ultimate recoverability of its par value is considered rather than considering temporary declines in value. The investment in FHLB stock was included in other assets on the consolidated balance sheets and was $10.1 million as of both December 31, 2022 and 2021. Capitalized internal-use software was included as a component of other assets on the consolidated balance sheets. As of December 31, 2022, total capitalized internal-use software was $54.9 million with an accumulated amortization of $39.8 million for a net book value of $15.1 million. As of December 31, 2021, total capitalized internal-use software was $56.9 million with an accumulated amortization of $43.6 million for a net book value of $13.3 million. Total amortization expense for all capitalized internal-use software was recorded in other noninterest expense on the consolidated statements of income and was $5.4 million, $8.6 million and $6.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. Capitalized implementation costs associated with hosting arrangements that are service contracts were included as a component of other assets on the consolidated balance sheets. As of December 31, 2022, total capitalized implementation costs amounted to $118.2 million with an accumulated amortization of $7.7 million for a net book value of $110.5 million. As of December 31, 2021, total capitalized implementation costs amounted to $78.3 million with an accumulated amortization of $0.6 million for a net book value of $77.7 million. Total amortization expense for all capitalized implementation costs of hosting arrangements that are service contracts was recorded in equipment expense on the consolidated statements of income and was $7.2 million, $0.5 million and $0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Transfers of Financial Assets
Transfers of Financial Assets | 12 Months Ended |
Dec. 31, 2022 | |
Transfers of Financial Assets | |
Transfers of Financial Assets | 8. Transfers of Financial Assets The Company’s transfers of financial assets with continuing interest may include pledges of collateral to secure public deposits and repurchase agreements, FHLB and FRB borrowing capacity, automated clearing house (“ACH”) transactions and interest rate swaps. For public deposits and repurchase agreements, the Company enters into bilateral agreements with the entity to pledge investment securities as collateral in the event of default. The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral pledged by the Company would be used to settle the fair value of the repurchase agreement should the Company be in default. The counterparty has the right to sell or repledge the investment securities. The Company is required by the counterparty to maintain adequate collateral levels. In the event the collateral fair value falls below stipulated levels, the Company will pledge additional investment securities. For transfers of assets with the FHLB and the FRB, the Company enters into bilateral agreements to pledge loans as collateral to secure borrowing capacity. For ACH transactions, the Company enters into bilateral agreements to collateralize possible daylight overdrafts. For interest rate swaps, the Company enters into bilateral agreements to pledge collateral when either party is in a negative fair value position to mitigate counterparty credit risk. Counterparties to ACH transactions, certain interest rate swaps, the FHLB and the FRB do not have the right to sell or repledge the collateral. The carrying amounts of the assets pledged as collateral to secure public deposits, borrowing arrangements and other transactions as of December 31, 2022 and 2021 were as follows: (dollars in thousands) 2022 2021 Public deposits $ 2,977,693 $ 1,913,369 Federal Home Loan Bank 3,451,070 2,380,042 Federal Reserve Bank 1,704,803 1,724,279 ACH transactions 133,173 115,038 Interest rate swaps 31,091 48,430 Total $ 8,297,830 $ 6,181,158 As the Company did not enter into reverse repurchase agreements or repurchase agreements, no collateral was accepted as of December 31, 2022 and 2021. In addition, no debt was extinguished by in-substance defeasance. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2022 | |
Deposits | |
Deposits | 9. Deposits As of December 31, 2022 and 2021, deposits were categorized as interest-bearing or noninterest-bearing as follows: December 31, (dollars in thousands) 2022 2021 U.S.: Interest-bearing $ 11,936,775 $ 11,553,298 Noninterest-bearing 7,978,046 8,498,187 Foreign: Interest-bearing 887,608 868,985 Noninterest-bearing 886,600 895,676 Total deposits $ 21,689,029 $ 21,816,146 The following table presents the maturity distribution of time certificates of deposit as of December 31, 2022: Under $250,000 (dollars in thousands) $250,000 or More Total Three months or less $ 207,766 $ 888,815 $ 1,096,581 Over three through six months 182,985 263,725 446,710 Over six through twelve months 260,583 273,106 533,689 2024 166,340 62,314 228,654 2025 59,458 26,550 86,008 2026 40,504 5,608 46,112 2027 29,216 8,620 37,836 Thereafter 460 — 460 Total $ 947,312 $ 1,528,738 $ 2,476,050 Time certificates of deposit in denominations of $250,000 or more, in the aggregate, were $1.5 billion and $0.8 billion as of December 31, 2022 and 2021, respectively. Overdrawn deposit accounts are classified as loans and totaled $2.5 million and $2.1 million at December 31, 2022 and 2021, respectively. |
Short-Term Borrowings
Short-Term Borrowings | 12 Months Ended |
Dec. 31, 2022 | |
Short-Term Borrowings | |
Short-Term Borrowings | 10. Short-Term Borrowings As of December 31, 2022 and 2021, short-term borrowings were comprised of the following: December 31, (dollars in thousands) 2022 2021 Federal funds purchased $ 75,000 $ — Total short-term borrowings $ 75,000 $ — As of December 31, 2022, the Company’s short-term borrowings consisted of $75.0 million in federal funds purchased with a 4.35% annual interest rate that matured in January 2023. The Company’s long-term borrowings were terminated in November 2021 and included $200.0 million in FHLB fixed-rate advances with a weighted average interest rate of 2.73% and original maturity dates ranging from 2023 to 2024. The FHLB fixed-rate advances required monthly interest-only payments with the principal amount due on the maturity date. The Company incurred fees of $9.0 million related to the early termination of the FHLB fixed-rate advances. These fees were recorded as a component of other noninterest expense in the Company’s consolidated statements of income. As of December 31, 2022, the Company had a remaining line of credit of $2.5 billion with the FHLB. As of December 31, 2021, the Company had an undrawn line of credit of $1.8 billion available from the FHLB. The FHLB borrowing capacity as of December 31, 2022 and 2021, were secured by residential real estate loan collateral. As of December 31, 2022 and 2021, the Company had an undrawn line of credit of $1.2 billion and $1.1 billion available from the FRB, respectively. The borrowing capacity with the FRB was secured by consumer, commercial and industrial, commercial real estate and residential mortgage loans as of December 31, 2022 and 2021. See “Note 8. Transfers of Financial Assets” for more information. The table below provides selected information for short-term borrowings during the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, (dollars in thousands) 2022 2021 2020 Federal funds purchased: Weighted-average interest rate at December 31, 4.35 % — % — % Highest month-end balance $ 75,000 $ — $ — Average outstanding balance $ 11,521 $ — $ 1,366 Weighted-average interest rate paid 4.08 % — % 0.43 % Short-term FHLB fixed-rate advance: Weighted-average interest rate at December 31, — % — % — % Highest month-end balance $ — $ — $ 400,000 Average outstanding balance $ — $ — $ 208,197 Weighted-average interest rate paid — % — % 2.88 % The Company treats securities sold under agreements to repurchase as collateralized financings. The Company reflects the obligations to repurchase the same or similar securities sold as liabilities, with the dollar amount of securities underlying the agreements remaining in the asset accounts. Generally, for these types of agreements, there is a requirement that collateral be maintained with a market value equal to or in excess of the principal amount borrowed. As such, the collateral pledged may be increased or decreased over time to meet contractual obligations. The securities underlying the agreements to repurchase are held in collateral accounts with a third-party custodian. The Company did not enter into any repurchase agreements in 2022 and 2021. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | 11. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) is defined as the revenues, expenses, gains and losses that are included in comprehensive income, but excluded from net income. The Company’s significant items of accumulated other comprehensive income (loss) are pension and other benefits, net unrealized gains or losses on investment securities and net unrealized gains or losses on cash flow derivative hedges. Changes in accumulated other comprehensive income (loss) for the years ended December 31, 2022, 2021 and 2020 are presented below: Income Tax Pre-tax Benefit Net of (dollars in thousands) Amount (Expense) Tax Accumulated other comprehensive loss at December 31, 2021 $ (165,967) $ 44,274 $ (121,693) Year ended December 31, 2022 Pension and other benefits: Net actuarial gains arising during the year 20,710 (5,524) 15,186 Amortization of net loss included in net income 5,146 (1,373) 3,773 Net change in pension and other benefits 25,856 (6,897) 18,959 Investment securities: Unrealized net losses arising during the year (773,667) 206,376 (567,291) Reclassification of net losses to net income: Amortization of unrealized holding losses on held-to-maturity securities 48,378 (12,905) 35,473 Net change in investment securities (725,289) 193,471 (531,818) Cash flow derivative hedges: Unrealized net losses arising during the year (6,710) 1,790 (4,920) Reclassification of net losses included in net income 297 (79) 218 Net change in cash flow derivative hedges (6,413) 1,711 (4,702) Other comprehensive loss (705,846) 188,285 (517,561) Accumulated other comprehensive loss at December 31, 2022 $ (871,813) $ 232,559 $ (639,254) Income Tax Pre-tax Benefit Net of (dollars in thousands) Amount (Expense) Tax Accumulated other comprehensive income at December 31, 2020 $ 43,098 $ (11,494) $ 31,604 Year ended December 31, 2021 Pension and other benefits: Net actuarial gains arising during the year 3,107 (829) 2,278 Amortization of net loss included in net income 6,913 (1,844) 5,069 Net change in pension and other benefits 10,020 (2,673) 7,347 Investment securities: Unrealized net losses arising during the year (218,983) 58,414 (160,569) Reclassification of net gains to net income: Investment securities gains, net (102) 27 (75) Net change in investment securities (219,085) 58,441 (160,644) Other comprehensive loss (209,065) 55,768 (153,297) Accumulated other comprehensive loss at December 31, 2021 $ (165,967) $ 44,274 $ (121,693) Income Tax Pre-tax Benefit Net of (dollars in thousands) Amount (Expense) Tax Accumulated other comprehensive loss at December 31, 2019 $ (43,450) $ 11,701 $ (31,749) Year ended December 31, 2020 Pension and other benefits: Net actuarial losses arising during the year (10,399) 2,774 (7,625) Prior service credit (51) 14 (37) Amortization of net loss included in net income 5,595 (1,492) 4,103 Change in Company tax rate — (96) (96) Net change in pension and other benefits (4,855) 1,200 (3,655) Investment securities: Unrealized net gains arising during the year 91,289 (24,365) 66,924 Reclassification of net losses to net income: Investment securities losses, net 114 (30) 84 Net change in investment securities 91,403 (24,395) 67,008 Other comprehensive income 86,548 (23,195) 63,353 Accumulated other comprehensive income at December 31, 2020 $ 43,098 $ (11,494) $ 31,604 The following table summarizes changes in accumulated other comprehensive income (loss), net of tax, for the years indicated: Pensions Accumulated and Available-for-Sale Held-to-Maturity Cash Flow Other Other Investment Investment Derivative Comprehensive (dollars in thousands) Benefits Securities Securities Hedges Income (Loss) Year Ended December 31, 2022 Balance at beginning of year $ (24,390) $ (97,303) $ — $ — $ (121,693) Unrealized net losses related to the transfer of securities from available-for-sale to held-to-maturity — 372,419 (372,419) — — Other comprehensive income (loss) 18,959 (567,291) 35,473 (4,702) (517,561) Balance at end of year $ (5,431) $ (292,175) $ (336,946) $ (4,702) $ (639,254) Year Ended December 31, 2021 Balance at beginning of year $ (31,737) $ 63,341 $ — $ — $ 31,604 Other comprehensive income (loss) 7,347 (160,644) — — (153,297) Balance at end of year $ (24,390) $ (97,303) $ — $ — $ (121,693) Year Ended December 31, 2020 Balance at beginning of year $ (28,082) $ (3,667) $ — $ — $ (31,749) Other comprehensive (loss) income (3,655) 67,008 — — 63,353 Balance at end of year $ (31,737) $ 63,341 $ — $ — $ 31,604 As of December 31, 2022, 2021 and 2020, the Company did not have any available-for-sale debt securities in an unrealized loss position with the intent to sell and determined it was not more likely than not that the Company would be required to sell the securities prior to recovery of the amortized cost basis. Thus, for the years ended December 31, 2022, 2021 and 2020, there was no incremental non-credit-related impairment loss recognized in earnings on these securities. |
Regulatory Capital Requirements
Regulatory Capital Requirements | 12 Months Ended |
Dec. 31, 2022 | |
Regulatory Capital Requirements | |
Regulatory Capital Requirements | 12. Regulatory Capital Requirements Federal and state laws and regulations limit the amount of dividends the Company may declare or pay. The Company depends primarily on dividends from FHB as the source of funds for the Company’s payment of dividends. The following provides definitions for the regulatory risk-based capital ratios and leverage ratio, which are calculated as per standard regulatory guidance: Risk-Weighted Assets Common Equity Tier 1 Risk-Based Capital Ratio Tier 1 Risk-Based Capital Ratio Total Risk-Based Capital Ratio Tier 1 Leverage Ratio The table below sets forth those ratios at December 31, 2022 and 2021: First Hawaiian Minimum Well- First Hawaiian, Inc. Bank Capital Capitalized (dollars in thousands) Amount Ratio Amount Ratio Ratio (1) Ratio (1) December 31, 2022: Common equity tier 1 capital to risk-weighted assets $ 1,912,767 11.82 % $ 1,895,693 11.71 % 4.50 % 6.50 % Tier 1 capital to risk-weighted assets 1,912,767 11.82 % 1,895,693 11.71 % 6.00 % 8.00 % Total capital to risk-weighted assets 2,090,502 12.92 % 2,073,428 12.81 % 8.00 % 10.00 % Tier 1 capital to average assets (leverage ratio) 1,912,767 8.11 % 1,895,693 8.04 % 4.00 % 5.00 % December 31, 2021: Common equity tier 1 capital to risk-weighted assets $ 1,783,113 12.24 % $ 1,769,214 12.14 % 4.50 % 6.50 % Tier 1 capital to risk-weighted assets 1,783,113 12.24 % 1,769,214 12.14 % 6.00 % 8.00 % Total capital to risk-weighted assets 1,965,280 13.49 % 1,951,377 13.40 % 8.00 % 10.00 % Tier 1 capital to average assets (leverage ratio) 1,783,113 7.24 % 1,769,214 7.18 % 4.00 % 5.00 % (1) As defined by the regulations issued by the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the FDIC. A 2.5% capital conservation buffer, comprised of CET1 capital, was established above the regulatory minimum capital requirements, effectively resulting in minimum ratios of (i) 7% CET1 to risk-weighted assets, (ii) 8.5% Tier 1 capital to risk-weighted assets, and (iii) 10.5% total capital to risk-weighted assets. The Federal Deposit Insurance Act of 1950’s prompt corrective action provisions apply only to depository institutions such as the Bank, and not to bank holding companies. Under the Federal Reserve’s regulations, a bank holding company, such as FHI, is considered “well capitalized” if the bank holding company (i) has a total risk based capital ratio of at least 10%, (ii) has a Tier 1 risk-based capital ratio of at least 6%, and (iii) is not subject to any written agreement order, capital directive or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. The Company meets all capital ratio requirements to be well-capitalized under the Federal Reserve’s regulations, and, although the prompt corrective action provisions apply only to depository institutions and not to bank holding companies, if the provisions applied to bank holding companies, the Company would meet all capital ratio requirements to be well-capitalized. As of December 31, 2022, under the bank regulatory capital guidelines, the Company and Bank were both classified as well-capitalized and exceeded the aforementioned capital conservation buffer. Management is not aware of any conditions or events that have occurred since December 31, 2022, to change the capital adequacy category of the Company or the Bank. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | 13. Leases The Company, as lessee, is obligated under a number of noncancelable operating leases primarily for branch premises and related real estate. Terms of such leases extend for periods up to 41 years, many of which provide for periodic adjustment of rent payments based on changes in various economic indicators. Renewal options are included in the Company’s lease liabilities and related right-of-use assets to the extent that the Company is reasonably certain to exercise such options. For all of the Company’s short-term leases (i.e., leases with an initial term of 12 months or less), the Company recognizes lease expense on a straight-line basis over the lease term. Variable lease payments are recognized in the period in which the obligation for those payments is incurred. The Company’s branch premises leases typically require that the Company is responsible to pay for variable lease expense, primarily maintenance expense, as well as real property taxes, property insurance and sales taxes. Maintenance expense is paid to maintain common areas and covers costs including landscaping, cleaning and general maintenance. Such variable costs are typically re-evaluated by the landlord on an annual basis and are charged to the Company based on the portion of the total building premises that is occupied by the Company. The Company subleases certain premises and real estate to third parties. The sublease portfolio consists of operating leases for space connected with three of the Company’s branch properties. The components of the Company’s net lease expense for the years ended December 31, 2022, 2021 and 2020 were as follows: Year Ended December 31, (dollars in thousands) 2022 2021 2020 Operating lease expense $ 8,883 $ 9,432 $ 9,169 Short-term lease expense 26 246 397 Variable lease expense 2,135 2,204 2,353 Finance lease expense: Amortization of right-of-use assets 1 3 3 Interest on lease liabilities — — 1 Total finance lease expense 1 3 4 Less: Sublease income (637) (744) (1,222) Net lease expense $ 10,408 $ 11,141 $ 10,701 Other information related to the Company’s lease liabilities as of and for the years ended December 31, 2022, 2021 and 2020 were as follows: Year Ended December 31, (dollars in thousands) 2022 2021 2020 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating leases $ 8,418 $ 7,981 $ 8,848 Financing cash flows paid for finance leases $ — $ 10 $ 10 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 4,676 $ 31,792 $ 3,796 Weighted Average Remaining Lease Term Operating leases (years) 22.2 22.8 16.1 Finance leases (years) — 0.5 1.5 Weighted Average Discount Rate Operating leases 2.98 % 3.01 % 3.17 % Finance leases — % 6.78 % 6.78 % Operating lease right-of-use assets were $62.8 million and $64.2 million as of December 31, 2022 and 2021, respectively, and were recorded as a component of other assets. Operating lease liabilities were $64.8 million and $65.8 million as of December 31, 2022 and 2021, respectively, and were recorded as a component of other liabilities. The most significant assumption related to the Company’s application of Topic 842 was the discount rate assumption. As most of the Company’s lease agreements do not provide for an implicit interest rate, the Company used the collateralized interest rate that the Company would have to pay to borrow over a similar term to estimate the Company’s lease liabilities. The following table sets forth future minimum rental payments under noncancelable operating leases with terms in excess of one year as of December 31, 2022: Net Operating Lease (dollars in thousands) Payments Year ending December 31: 2023 $ 6,198 2024 5,990 2025 5,369 2026 4,964 2027 4,322 Thereafter 65,249 Total future minimum lease payments 92,092 Less: Imputed interest (27,279) Total $ 64,813 The Company had several operating leases with related parties associated with its branch premises. The lease payments to related parties were nil for each of the years ended December 31, 2022, 2021 and 2020. The Company, as lessor, rents office space in its headquarters office building as well as office space located primarily in Hawaii to third party lessees. Terms of such leases, including renewal options, may be extended for up to ten years, many of which provide for periodic adjustment of rent payments based on changes in consumer or other price indices. The Company recognizes lease income on a straight-line basis over the lease term. Non-lease components, primarily consisting of costs incurred by the Company for maintenance and utilities, are recognized as income in the period in which the payments are due. The Company recognized operating lease income related to lease payments of $6.1 million, $6.4 million and $6.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. In addition, the Company recognized $6.5 million, $6.1 million and $5.6 million of lease income related to variable lease payments for the years ended December 31, 2022, 2021 and 2020, respectively. Certain of the Company’s leases are with related parties for the use of space at the Company’s headquarters office building. The rental income paid by the related parties for the years ended December 31, 2022, 2021 and 2020 was nil, nil and $0.4 million, respectively. There are no future minimum rental income from related parties. The following table sets forth future minimum rental income under noncancelable operating leases with terms in excess of one year as of December 31, 2022: Minimum Rental (dollars in thousands) Income Year ending December 31: 2023 $ 5,249 2024 4,405 2025 3,751 2026 2,958 2027 1,360 Thereafter 3,492 Total $ 21,215 |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Benefit Plans | |
Benefit Plans | 14. Benefit Plans Qualified Pension Plan The Company’s employees participate in the Employees’ Retirement Plan of First Hawaiian, Inc. (the “FHI ERP”). The FHI ERP is a frozen plan whereby there are no further benefit accruals for the Company’s employees. However, employees retain rights to participant benefits accrued as of the date of the plan freeze. No contributions to the pension trust are expected to be made during 2023 for the Company’s participants in the FHI ERP. However, should contributions be required in accordance with the funding rules under the Employee Retirement Income Security Act of 1974 (“ERISA”), including the impact of the Pension Protection Act of 2006, the Company would make those required contributions. Nonqualified Pension and Other Postretirement Benefit Plans The Company also sponsors an unfunded supplemental executive retirement plan for certain key executives (“SERP”). In addition, the Company sponsors a directors’ retirement plan (“Directors’ Plan”), a non-qualified pension plan for eligible FHI and FHB directors that qualify for retirement benefits based on their years of service as a director. Both the SERP and the Directors’ Plan were frozen as of January 1, 2005 to new participants. In March 2019, the Company’s board of directors approved an amendment to the SERP to freeze the SERP, which became effective on July 1, 2019. As a result of the amendment, since the effective date, there have not been any, and there will be no, new accruals of benefits, including service accruals. Existing benefits under the SERP, as of the effective date of the amendment described above, will otherwise continue in accordance with the terms of the SERP. No contributions to the SERP are expected to be made in 2023. A postretirement benefit plan is also offered to eligible employees that provides life insurance and healthcare benefits upon retirement. The Company provides access to medical coverage for eligible retirees under age 65 at active employee premium rates and a monthly stipend to both retiree and retiree’s spouse after age 62. The Company expects to contribute $0.2 million to its Directors’ Plan and $1.2 million to its postretirement medical and life insurance plans in 2023. These contributions reflect the estimated benefit payments for the unfunded plans and may vary depending on retirements during 2023. Defined Contribution Plans 401(k) Savings Plan and Money Purchase Pension Plan The Company matched employee contributions to the First Hawaiian, Inc. 401(k) Savings Plan, a qualified defined contribution plan, up to 5% of the employee’s pay in 2022, 2021 and 2020. The Company also contributed 2.5% of employee pay to the First Hawaiian, Inc. Future Plan, a money purchase pension plan. The plans cover all employees who satisfy eligibility requirements. A select group of key executives who participate in an unqualified grandfathered supplemental executive retirement plan may participate in the 401(k) plan but are not eligible to receive the matching contribution. The employer contributions to the above-mentioned plans for the years ended December 31, 2022, 2021 and 2020 were $9.2 million, $9.1 million and $8.6 million, respectively, and are included in salaries and employee benefits within the consolidated statements of income. Annual Incentive Awards for Key Executives The Company makes cash-based annual incentive awards under the First Hawaiian, Inc. Bonus Plan (the “Bonus Plan”). The Bonus Plan limits the aggregate and individual value of the awards that could be issued in any one fiscal year. The Bonus Plan expenses totaled $15.5 million, $13.5 million and $15.2 million for the years ended December 31, 2022, 2021 and 2020, respectively, and are included in salaries and employee benefits within the consolidated statements of income. The following table details the amounts recognized in other comprehensive (loss) income during the years presented. Pension benefits include benefits from the qualified and non-qualified plans. Other benefits include life insurance and healthcare benefits from the postretirement benefit plan. Pension Benefits Other Benefits (dollars in thousands) 2022 2021 2020 2022 2021 2020 Amounts arising during the year: Net loss (gain) on pension assets $ 24,047 $ 3,581 $ (4,839) $ — $ — $ — Net (gain) loss on pension obligations (38,949) (4,614) 14,935 (5,808) (2,074) 303 Reclassification adjustments recognized as components of net periodic benefit cost during the year: Net (gain) loss (5,643) (6,961) (5,806) 497 48 211 Prior service credit — — — — — 51 Amount recognized in other comprehensive (loss) income $ (20,545) $ (7,994) $ 4,290 $ (5,311) $ (2,026) $ 565 The following table shows the amounts within accumulated other comprehensive loss that had not yet been recognized as components of net periodic benefit cost as of December 31, 2022 and 2021: Pension Benefits Other Benefits (dollars in thousands) 2022 2021 2022 2021 Net actuarial loss (gain) $ 15,812 $ 36,357 $ (8,405) $ (3,094) Prior service credit — — — — Total, pretax effect 15,812 36,357 (8,405) (3,094) Tax impact (4,218) (9,698) 2,242 825 Ending balance in accumulated other comprehensive loss $ 11,594 $ 26,659 $ (6,163) $ (2,269) The following tables summarize the changes to the projected benefit obligation (“PBO”) and fair value of plan assets for pension benefits and the accumulated postretirement benefit obligation (“APBO”) and fair value of plan assets for other benefits: Pension Benefits Other Benefits (dollars in thousands) 2022 2021 2022 2021 Benefit obligation at beginning of year $ 204,432 $ 219,392 $ 21,362 $ 22,538 Service cost — — 789 874 Interest cost 5,518 5,065 565 515 Actuarial gain (38,949) (4,614) (5,808) (2,074) Benefit payments (15,413) (15,411) (483) (491) Benefit obligation at end of year $ 155,588 $ 204,432 $ 16,425 $ 21,362 The actuarial gains related to changes in the Company’s PBO for pension benefits and APBO for other benefits are primarily due to changes in discount rates for both years ended December 31, 2022 and 2021. Pension Benefits Other Benefits (dollars in thousands) 2022 2021 2022 2021 Fair value of plan assets at beginning of year $ 106,648 $ 114,795 $ — $ — Actual return on plan assets (20,924) (536) — — Benefit payments from trust (7,575) (7,611) — — Fair value of plan assets at end of year $ 78,149 $ 106,648 $ — $ — The following table summarizes the funded status of the Company’s plans and amounts recognized in the Company’s consolidated balance sheets as of December 31, 2022 and 2021: Pension Benefits Other Benefits (dollars in thousands) 2022 2021 2022 2021 Pension assets for overfunded plans $ 8,713 $ 15,345 $ — $ — Pension liabilities for underfunded plans (86,152) (113,129) (16,425) (21,362) Funded status $ (77,439) $ (97,784) $ (16,425) $ (21,362) The following table provides information regarding the PBO, accumulated benefit obligation (“ABO”), and fair value of plan assets as of December 31, 2022 and 2021: Funded Pension Plan Unfunded Pension Plans Total Pension Plans (dollars in thousands) 2022 2021 2022 2021 2022 2021 Projected benefit obligation $ 69,436 $ 91,303 $ 86,152 $ 113,129 $ 155,588 $ 204,432 Accumulated benefit obligation 69,436 91,303 86,152 113,129 155,588 204,432 Fair value of plan assets 78,149 106,648 — — 78,149 106,648 Overfunded (underfunded) portion of PBO/ABO 8,713 15,345 (86,152) (113,129) (77,439) (97,784) The Company recognizes the overfunded and underfunded status of its pension plans as an asset and liability in the consolidated balance sheets. Unrecognized net gains or losses that exceed 5% of the greater of the PBO or the fair value of plan assets as of the beginning of the year are amortized on a straight-line basis over five years in accordance with ASC 715. Amortization of the unrecognized net gain or loss is included as a component of net periodic pension cost. If amortization results in an amount less than the minimum amortization required under GAAP, the minimum required amount is recorded. The following table summarizes the change in net actuarial loss (gain) and amortization for the years ended December 31, 2022 and 2021: Pension Benefits Other Benefits (dollars in thousands) 2022 2021 2022 2021 Net actuarial loss (gain) at beginning of year $ 36,357 $ 44,351 $ (3,094) $ (1,068) Amortization cost (5,643) (6,961) 497 48 Liability gain (38,949) (4,614) (5,808) (2,074) Asset loss 24,047 3,581 — — Net actuarial loss (gain) at end of year $ 15,812 $ 36,357 $ (8,405) $ (3,094) The following table sets forth the components of net periodic benefit cost for the years ended December 31, 2022, 2021 and 2020: Income line item where recognized in Pension Benefits Other Benefits (dollars in the consolidated statements of income 2022 2021 2020 2022 2021 2020 Service cost Salaries and employee benefits $ — $ — $ — $ 789 $ 874 $ 768 Interest cost Other noninterest expense 5,518 5,065 6,519 565 515 640 Expected return on plan assets Other noninterest expense (3,124) (3,044) (4,800) — — — Prior service credit Other noninterest expense — — — — — (51) Recognized net actuarial loss (gain) Other noninterest expense 5,643 6,961 5,806 (497) (48) (211) Total net periodic benefit cost $ 8,037 $ 8,982 $ 7,525 $ 857 $ 1,341 $ 1,146 The funded pension benefit amounts included in pension benefits for the years ended December 31, 2022, 2021 and 2020 were as follows: Funded Pension Benefits (dollars in thousands) 2022 2021 2020 Interest cost $ 2,466 $ 2,261 $ 2,946 Expected return on plan assets (3,124) (3,044) (4,800) Recognized net actuarial loss 1,906 1,609 1,421 Total net periodic benefit cost $ 1,248 $ 826 $ (433) Assumptions The following weighted-average assumptions were used to determine benefit obligations at December 31, 2022 and 2021: FHI ERP Pension Benefits SERP Pension Benefits Other Benefits 2022 2021 2022 2021 2022 2021 Discount rate 5.57 % 2.77 % 5.57 % 2.77 % 5.57 % 2.77 % Rate of compensation increase NA NA NA NA NA NA Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2022, 2021 and 2020 were as follows: FHI ERP Pension Benefits SERP Pension Benefits Other Benefits 2022 2021 2020 2022 2021 2020 2022 2021 2020 Discount rate 2.77 % 2.37 % 3.16 % 2.77 % 2.37 % 3.16 % 2.77 % 2.37 % 3.16 % Expected long-term return on plan assets 3.05 % 2.75 % 4.40 % NA NA NA NA NA NA Rate of compensation increase NA NA NA NA NA NA NA NA NA To select the discount rate, the Company reviews the yield on high quality corporate bonds. This rate is adjusted to convert the yield to an annual discount rate basis and may be adjusted for the population of plan participants to reflect the expected duration of the benefit payments of the plan. Assumed healthcare cost trend rates were as follows at December 31, 2022, 2021 and 2020: 2022 2021 2020 Healthcare cost trend rate assumed for next year 6.00 % 6.00 % 6.25 % Rate to which the cost trend is assumed to decline (the ultimate trend rate) 5.00 % 5.00 % 5.00 % Year that the rate reaches the ultimate trend rate 2028 2026 2026 Plan Assets The Company’s pension plan assets were allocated as follows as of December 31, 2022 and 2021: Asset Allocation 2022 2021 Equity securities 11 % 11 % Debt securities 87 % 85 % Other securities 2 % 4 % Total 100 % 100 % There were no holdings of FHI or BNPP stock included in equity securities at December 31, 2022 and 2021. The assets within the pension plan are managed in accordance with ERISA. The objective of the plan is to achieve, over full market cycles, a compounded annual rate of return equal to or greater than the pension plan’s expected long-term rate of return. The pension plan’s participants recognize that capital markets can be unpredictable and that any investment could result in periods where the market value of the pension plan’s assets will decline in value. Asset allocation is likely to be the primary determinant of the pension plan’s return and the associated volatility of returns for the pension plan. The Company estimated the long-term rate of return for the 2022 net periodic pension cost to be 3.05%. The return was selected based on a model of U.S. capital market assumptions with expected returns reflecting the anticipated asset allocation of the pension plan. The target asset allocation for the pension plan at December 31, 2022, was as follows: Target Allocation Equity securities 10 % Debt securities 88 % Other securities 2 % Estimated Future Benefit Payments The following table presents benefit payments that are expected to be paid over the next ten years, giving consideration to expected future service as appropriate: Pension Other (dollars in thousands) Benefits Benefits 2023 $ 15,453 $ 1,217 2024 15,115 1,345 2025 15,263 1,413 2026 15,350 1,468 2027 14,397 1,530 2028 to 2032 63,403 7,810 Fair Value Measurement of Plan Assets The Company’s overall investment strategy includes a wide diversification of asset types, fund strategies and fund managers. Investments in exchange-traded funds consist primarily of investments in large-cap companies located in the United States. Fixed income securities include U.S. government agencies and corporate bonds of companies from diversified industries. The fair values of the Company’s pension plan assets at December 31, 2022 and 2021, by asset class, were as follows: December 31, 2022 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (dollars in thousands) (Level 1) (Level 2) (Level 3) Total Asset classes: Cash and cash equivalents $ 1,712 $ — $ — $ 1,712 Fixed income - U.S. Treasury securities — 6,593 — 6,593 Fixed income - U.S. government agency securities — 6,656 — 6,656 Fixed income - U.S. corporate securities — 53,051 — 53,051 Fixed income - municipal securities — 382 — 382 Fixed income - international securities 1,199 — — 1,199 Equity - large-cap exchange-traded funds 5,544 — — 5,544 Equity - mid-cap exchange-traded funds 1,001 — — 1,001 Equity - small-cap exchange-traded funds 461 — — 461 Equity - international funds 1,550 — — 1,550 Total $ 11,467 $ 66,682 $ — $ 78,149 December 31, 2021 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (dollars in thousands) (Level 1) (Level 2) (Level 3) Total Asset classes: Cash and cash equivalents $ 4,451 $ — $ — $ 4,451 Fixed income - U.S. Treasury securities — 8,343 — 8,343 Fixed income - U.S. government agency securities — 9,674 — 9,674 Fixed income - U.S. corporate securities — 69,926 — 69,926 Fixed income - municipal securities — 495 — 495 Fixed income - international securities 1,779 — — 1,779 Equity - large-cap exchange-traded funds 7,840 — — 7,840 Equity - mid-cap exchange-traded funds 1,360 — — 1,360 Equity - small-cap exchange-traded funds 654 — — 654 Equity - international funds 2,126 — — 2,126 Total $ 18,210 $ 88,438 $ — $ 106,648 No fair value measurements used Level 3 inputs as of December 31, 2022 and 2021. The plan’s investments in fixed income securities represent approximately 86.9% and 84.6% of total plan assets as of December 31, 2022 and 2021, respectively, which is the most significant concentration of risk in the plan. Valuation Methodologies Cash and cash equivalents U.S. Treasury securities U.S. government agency securities U.S. corporate securities Municipal securities International securities Large-cap exchange-traded fund Mid-cap exchange-traded funds Small-cap exchange-traded funds International funds |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | 15. Income Taxes For the years ended December 31, 2022, 2021 and 2020, the provision (benefit) for income taxes was comprised of the following: Year Ended December 31, (dollars in thousands) 2022 2021 2020 Current: Federal $ 50,895 $ 53,534 $ 55,535 State and local 12,493 15,607 21,831 Total current 63,388 69,141 77,366 Deferred: Federal 13,639 8,837 (10,638) State and local 8,499 5,283 (8,758) Total deferred 22,138 14,120 (19,396) Total provision for income taxes $ 85,526 $ 83,261 $ 57,970 The Company files Federal and state income tax returns for its subsidiaries. The Company’s subsidiary also files income tax returns in Guam, Saipan and certain other state jurisdictions. The Company had a current income tax receivable due from various jurisdictions of $14.2 million and $27.9 million as of December 31, 2022 and 2021, respectively, for its share of consolidated and combined tax overpayments that had not yet been received. The components of net deferred income tax assets and liabilities at December 31, 2022 and 2021, were as follows: December 31, (dollars in thousands) 2022 2021 Assets: Deferred compensation expense $ 51,064 $ 58,497 Allowance for credit losses and nonperforming assets 47,517 50,161 Lease liabilities 17,284 17,534 Investment securities 233,859 40,108 State income taxes 2,619 3,440 Total deferred income tax assets before valuation allowance 352,343 169,740 Valuation allowance (983) (1,082) Total deferred income tax assets after valuation allowance 351,360 168,658 Liabilities: Leases (15,739) (15,785) Deferred income (20,893) (14,213) Lease right-of-use assets (16,763) (17,132) Intangible assets (736) (577) Other (34,910) (24,779) Total deferred income tax liabilities (89,041) (72,486) Net deferred income tax assets $ 262,319 $ 96,172 Net deferred income tax assets were included in other assets in the consolidated balance sheets as of December 31, 2022 and 2021. Management evaluated the deferred income tax assets for recoverability by considering negative and positive evidence. Negative evidence included the uncertainty of generating future capital gains and restrictions on the ability to sell low-income housing investments during periods when carrybacks of capital losses are allowed. Positive evidence included the generation of capital gains in the current year and carryback years. Based on the weight of all available evidence, management determined a valuation allowance to offset deferred tax assets related to investments in low-income housing projects that can only be utilized to offset capital gains was required. Management further concluded it is more likely than not that the remaining deferred tax assets will be realized through carryback to taxable income in prior years, future reversals of existing taxable temporary differences, and projected future taxable income. Consequently, the remaining deferred income tax assets are not subject to a valuation allowance. The following analysis reconciles the Federal statutory income tax rate to the effective income tax rate for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (dollars in thousands) Amount Percent Amount Percent Amount Percent Federal statutory income tax expense and rate $ 73,754 21.00 % $ 73,289 21.00 % $ 51,182 21.00 % State and local taxes, net of federal income tax benefit 16,584 4.72 16,503 4.73 10,327 4.24 Tax credits (3,963) (1.13) (2,745) (0.79) (3,914) (1.60) Nontaxable income (1,133) (0.32) (3,274) (0.94) (3,678) (1.51) Other 284 0.08 (512) (0.14) 4,053 1.66 Income tax expense and effective income tax rate $ 85,526 24.35 % $ 83,261 23.86 % $ 57,970 23.79 % The Company is subject to examination by the Internal Revenue Service (“IRS”) and tax authorities in states in which the Company has significant business operations. The tax years under examination and open for examination vary by jurisdiction. The Company’s 2010 to 2013, 2016 and 2017 tax returns are currently under IRS examination. In addition, refund claims and tax returns for certain years are being reviewed by state jurisdictions. No material adjustments are anticipated as a result of these examinations and reviews. The Company’s income tax returns for 2019 and subsequent tax years generally remain subject to examination by U.S. federal and foreign jurisdictions, and 2018 and subsequent years are subject to examination by state taxing authorities. A reconciliation of the amount of unrecognized tax benefits is as follows for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 Interest Interest Interest and and and (dollars in thousands) Tax Penalties Total Tax Penalties Total Tax Penalties Total Balance at beginning of year $ 183,311 $ 20,743 $ 204,054 $ 135,595 $ 18,926 $ 154,521 $ 134,312 $ 14,701 $ 149,013 Additions for current year tax positions 1,289 — 1,289 1,366 — 1,366 1,426 — 1,426 Additions for Reorganization Transactions — 974 974 47,282 941 48,223 — 1,479 1,479 Additions for prior years' tax positions: Accrual of interest and penalties — 860 860 — 1,264 1,264 — 2,812 2,812 Reductions for prior years' tax positions: Expiration of statute of limitations (849) (103) (952) (932) (388) (1,320) (143) (66) (209) Balance at December 31, $ 183,751 $ 22,474 $ 206,225 $ 183,311 $ 20,743 $ 204,054 $ 135,595 $ 18,926 $ 154,521 Included in the balance of unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020, was $24.2 million, $23.1 million and $22.2 million, respectively, of unrecognized tax benefits that, if recognized, would impact the effective tax rate. In connection with the Reorganization Transactions discussed below, the Company recorded unrecognized tax benefits and interest and penalties of $121.4 million and $7.0 million, respectively. Included in the balance of the unrecognized tax benefits as of December 31, 2022, was $141.2 million attributable to tax refund claims with respect to tax years 2005 through 2013 and 2015 in the State of California. Such refund claims were filed by the Company in 2015, 2019 and 2021, on behalf of the Company and its affiliates, including BOW, concerning the determination of taxes for which no benefit is currently recognized. It is reasonably possible that the amount of unrecognized tax benefits could decrease within the next 12 months by as much as $2.1 million of taxes and $0.8 million of accrued interest and penalties as a result of settlements and the expiration of the statute of limitations in various states. On February 1, 2023, Bank of Montreal acquired Bank of the West from BNP Paribas SA. This transaction, and the resulting change in ownership, could affect the unrecognized tax benefits related to the years when the Company was included in consolidated and combined returns with Bank of the West. The Company recognizes interest and penalties attributable to both unrecognized tax benefits and undisputed tax adjustments in the provision for income taxes. For the years ended December 31, 2022, 2021 and 2020, the Company recorded $0.8 million, $0.8 million and $4.4 million, respectively, of net expense attributable to interest and penalties. The Company had a liability of $24.1 million and $22.3 million as of December 31, 2022 and 2021, respectively, accrued for interest and penalties, of which $22.5 million and $20.7 million as of December 31, 2022 and 2021, respectively, were attributable to unrecognized tax benefits and the remainder was attributable to tax adjustments which are not expected to be in dispute. Prior to the Reorganization Transactions, the Company filed consolidated U.S. Federal and combined state tax returns that incorporated the tax receivables and unrecognized tax benefits of FHB and BOW. The consummation of the Reorganization Transactions did not relieve the Company of the pre-Reorganization Transactions tax receivables and unrecognized tax benefits recognized by BOW that were included in the Company's consolidated and combined tax returns. As a result, on April 1, 2016, the Company recorded $72.8 million related to current tax receivables, $116.6 million related to unrecognized tax benefits, and an indemnification payable of $28.6 million. As of both December 31, 2022 and 2021, the Company maintained balances of $130.5 million related to current tax receivables. As of December 31, 2022 and 2021, the Company maintained balances of $158.1 million and $157.4 million, respectively, related to unrecognized tax benefits, and an indemnification receivable of $27.6 million and $26.9 million, respectively. Additionally, in connection with the Reorganization Transactions, the Company has incurred certain tax-related liabilities related to the distribution of its interest in BWHI amounting to $95.4 million. The amount necessary to pay the distribution taxes (net of the expected federal tax benefit of $33.4 million) was paid by BNPP to the Company on April 1, 2016. The Company reported total distribution taxes of $92.1 million in the 2016 tax returns of various state and local jurisdictions, and reimbursed BWHI approximately $2.1 million pursuant to a tax sharing agreement entered into on April 1, 2016 and pursuant to certain tax allocation agreements entered into among the parties. The Company expects that any future adjustment to such taxes will be similarly reimbursed to, or funded by, BWHI, BNPP or their affiliates. Accordingly, the assumption of the pre-Reorganization Transactions tax receivables, unrecognized tax benefits and distribution tax liabilities and the offsetting indemnification receivables or payables were reflected as equity contributions and distributions on April 1, 2016. The reimbursement of distribution taxes to BWHI was also reflected as an adjustment to equity. If there are any future adjustments to the indemnified tax receivables or unrecognized tax benefits, including as a result of the IRS audit of the Company’s income tax returns, an offsetting adjustment to the indemnification receivables or payables will be recorded to the provision for income taxes and other noninterest income or expense. For the years ended December 31, 2022, 2021 and 2020, the Company recorded nil, nil and $1.2 million, respectively, of such adjustments through the provision for income taxes and noninterest income. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 16. Derivative Financial Instruments The Company enters into derivative contracts primarily to manage its interest rate risk, as well as for customer accommodation purposes. Derivatives used for risk management purposes consist of interest rate swaps and collars that are designated as either a fair value hedge or a cash flow hedge. The derivatives are recognized on the consolidated balance sheets as either assets or liabilities at fair value. Derivatives entered into for customer accommodation purposes consist of various free-standing interest rate derivative products and foreign exchange contracts. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The following table summarizes notional amounts and fair values of derivatives held by the Company as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 Fair Value Fair Value Notional Asset Liability Notional Asset Liability (dollars in thousands) Amount Derivatives (1) Derivatives (2) Amount Derivatives (1) Derivatives (2) Derivatives designated as hedging instruments: Interest rate swaps $ 267,500 $ 7,276 $ (6,840) $ 67,500 $ — $ (1,211) Interest rate collars 200,000 491 (63) — — — Derivatives not designated as hedging instruments: Interest rate swaps 2,849,776 3,178 (42,365) 2,827,582 50,898 — Visa derivative 121,013 — (851) 105,916 — (5,530) Interest rate caps and floors — — — 148,800 27 (27) Foreign exchange contracts 210 — — 217 — — (1) The positive fair values of derivative assets are included in other assets. (2) The negative fair values of derivative liabilities are included in other liabilities. Certain interest rate swaps noted above, are cleared through clearinghouses, rather than directly with counterparties. Those transactions cleared through a clearinghouse require initial margin collateral and variation margin payments depending on the contracts being in a net asset or liability position. As of December 31, 2022, the amount of initial margin cash collateral posted by the Company was $1.2 million. As of December 31, 2021, the amount of initial margin cash collateral received by the Company was $1.7 million. As of December 31, 2022 and 2021, the variation margin was $39.2 million and $50.9 million, respectively. As of December 31, 2022, the Company pledged $29.9 million in financial instruments and $1.2 million in cash and received $48.1 million in cash as collateral for interest rate swaps. As of December 31, 2021, the Company pledged $30.3 million in financial instruments and $18.1 million in cash as collateral for interest rate swaps. As of December 31, 2022 and 2021, the cash collateral includes the excess initial margin for interest rate swaps cleared through clearinghouses and cash collateral for interest rate swaps with financial institution counterparties. Fair Value Hedges To manage the risk related to the Company’s net interest margin, interest rate swaps are utilized to hedge certain fixed-rate loans. These swaps have maturity, amortization and prepayment features that correspond to the loans hedged and are designated and qualify as fair value hedges. Any gain or loss on the swaps, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, is recognized in current period earnings. At December 31, 2022 and 2021, the Company carried one interest rate swap with a notional amount of $67.5 million, which was designated and qualified as a fair value hedge for a commercial and industrial loan. As of December 31, 2022 and 2021, the interest rate swap had a positive fair value of $7.3 million and a negative fair value of $1.0 million, respectively. The swap was executed in the fourth quarter of 2021, will start in the fourth quarter of 2023, and will mature in 2041. The Company will receive a USD Federal Funds floating rate and will pay a fixed rate of 2.07%. Gains (losses) recognized in Year Ended the consolidated statements December 31, (dollars in of income line item 2022 2021 2020 Gains (losses) on fair value hedging relationships recognized in interest income: Recognized on interest rate swap Loans and lease financing $ 8,487 $ (605) $ (594) Recognized on hedged item Loans and lease financing (8,880) 383 470 As of December 31, 2022 and 2021, the following amounts were recorded in the consolidated balance sheets related to the cumulative basis adjustments for fair value hedges: Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset Carrying Amount of the Hedged Asset (dollars in December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Line item in the consolidated balance sheets in which the hedged item is included Loans and leases $ 60,189 $ 68,707 $ (7,311) $ 1,207 Cash Flow Hedges The Company utilized interest rate swaps to reduce asset sensitivity and enhance current yields associated with interest payments received on a pool of floating-rate loans. The Company entered into interest rate swaps paying floating rates and receiving fixed rates. The floating-rate index (Bloomberg Short-Term Bank Yield Index, or “BSBY”) corresponds to the floating-rate nature of the interest receipts being hedged (based on USD Prime). The swaps provided an initial benefit to interest income as the Company received the higher fixed rate, which persisted while the floating rate remained below the swap’s fixed rate. By hedging with interest rate swaps, the Company minimized the adverse impact on interest income previously associated with a low interest rate environment on floating-rate loans. As of December 31, 2022, the Company carried two interest rate swaps with notional amounts totaling $200.0 million, with a negative fair value totaling $6.8 million. The swaps mature in 2024. The Company received fixed rates ranging from 1.70% to 2.08% and paid 1-month BSBY. The Company also utilized interest rate collars to manage interest rate risk and protect against downside risk in yields associated with interest payments received on a pool of floating-rate assets. The floating-rate index of the collars (Secured Overnight Financing Rate, or “SOFR”) corresponds to the floating-rate nature of the interest receipts being hedged (based on 1-month USD LIBOR). Interest rate collars involve the payments of variable-rate amounts if the collar index exceeds the cap strike rate on the contract and receipts of variable-rate amounts if the collar index falls below the floor strike rate on the contract. No payments are required if the collar index falls between the cap and floor rates. By hedging with interest rate collars, the Company minimizes the adverse impact on interest income associated with possible future decreases in interest rates. As of December 31, 2022, the Company carried two interest rate collars with notional amounts totaling $200.0 million, with a positive fair value of $0.5 million and a negative fair value of $0.1 million. The collars mature in 2025 and 2027. The interest rate collars had a floor strike rate of 2.00% and cap strike rates ranging from 5.31% to 5.64% . The interest rate swaps and collars are designated and qualify as cash flow hedges. To the extent that the hedge is considered highly effective, the gain or loss on the interest rate swaps and collars is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period that the hedged transaction affects earnings. The following table summarizes the effect of cash flow hedging relationships for the year ended December 31, 2022: Year Ended (dollars in December 31, 2022 Pretax net losses recognized in other comprehensive income on cash flow derivative hedges $ (6,710) Pretax net losses reclassified from accumulated other comprehensive income to interest income from loans and lease financing 297 The estimated net amount to be reclassified within the next 12 months out of accumulated other comprehensive income (loss) into earnings is $5.6 million as a decrease to interest income from loans and lease financing. As of December 31, 2022, the maximum length of time over which forecasted transactions are hedged is approximately five years . Free-Standing Derivative Instruments For the derivatives that are not designated as hedges, changes in fair value are reported in current period earnings. The following table summarizes the impact on pretax earnings of derivatives not designated as hedges, as reported on the consolidated statements of income for the years ended December 31, 2022, 2021 and 2020: Net gains (losses) recognized Year Ended in the consolidated statements December 31, (dollars in of income line item 2022 2021 2020 Derivatives Not Designated As Hedging Instruments: Visa derivative Other noninterest income (707) (5,909) (4,641) As of December 31, 2022, the Company carried multiple interest rate swaps with notional amounts totaling $2.8 billion, all of which were related to the Company’s customer swap program, with a positive fair value of $3.2 million and a negative fair value of $42.4 million. The Company received floating rates ranging from 4.62% to 7.12% and paid fixed rates ranging from 2.39% to 6.13%. The swaps mature between 2023 and 2040. As of December 31, 2021, the Company carried multiple interest rate swaps with notional amounts totaling $2.8 billion, all of which were related to the Company’s customer swap program, with a positive fair value of $50.9 million and a negative fair value of nil. The Company received floating rates ranging from 0.00% to 3.55% and paid fixed rates ranging from 2.02% to 6.19%. These swaps resulted in net interest expense of nil during each of the years ended December 31, 2022, 2021 and 2020. The Company’s customer swap program is designed by offering customers a variable-rate loan that is swapped to fixed-rate through an interest-rate swap. The Company simultaneously executes an offsetting interest-rate swap with a swap dealer. Upfront fees on the dealer swap are recorded in other noninterest income and totaled $2.5 million, $2.6 million and $8.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. Visa Class B Restricted Shares In 2016, the Company recorded a $22.7 million net realized gain related to the sale of 274,000 Visa Class B restricted shares. Concurrent with the sale of the Visa Class B restricted shares, the Company entered into a funding swap agreement with the buyer that requires payment to the buyer in the event Visa reduces each member bank’s Class B conversion rate to unrestricted Class A common shares. During 2018 through 2022, Visa funded its litigation escrow account, thereby reducing each member bank’s Class B conversion rate to unrestricted Class A common shares from 1.6483 to the current conversion rate of 1.5991. Under the terms of the funding swap agreement, the Company will make monthly payments to the buyer based on Visa’s Class A stock price and the number of Visa Class B restricted shares that were sold until the date on which the covered litigation is settled. A derivative liability (“Visa derivative”) of $0.9 million and $5.5 million was included in the consolidated balance sheets at December 31, 2022 and 2021, respectively, to provide for the fair value of this liability. There were no sales of these shares prior to 2016. See “Note 21. Fair Value” in the notes to the consolidated financial statements for more information. Counterparty Credit Risk By using derivatives, the Company is exposed to counterparty credit risk if counterparties to the derivative contracts do not perform as expected. If a counterparty fails to perform, the Company’s counterparty credit risk is equal to the amount reported as a derivative asset, net of cash or other collateral received, and net of derivatives in a loss position with the same counterparty to the extent master netting arrangements exist. The Company minimizes counterparty credit risk through credit approvals, limits, monitoring procedures, executing master netting arrangements and obtaining collateral, where appropriate. Counterparty credit risk related to derivatives is considered in determining fair value. The Company’s interest rate swap agreements include bilateral collateral agreements with collateral requirements which begin with exposures in excess of $0.3 million. For each counterparty, the Company reviews the interest rate swap collateral daily. Collateral for customer interest rate swap agreements, calculated as the pledged asset less loan balance, requires valuation of the pledged asset. Counterparty credit risk adjustments of $0.1 million, $0.2 million and $0.1 million were recognized during each of the years ended December 31, 2022, 2021 and 2020. Credit Risk Related Contingent Features Certain of the Company’s derivative contracts contain provisions whereby if its credit rating were to be downgraded by certain major credit rating agencies as a result of a merger or material adverse change in the Company’s financial condition, the counterparty could require an early termination of derivative instruments. The aggregate fair value of all derivative instruments with such credit-risk related contingent features that are in a net liability position was nil and $26.9 million at December 31, 2022 and 2021, respectively, for which the Company posted nil and $19.8 million, respectively, in collateral in the normal course of business. If the Company’s credit rating had been downgraded on December 31, 2022 and 2021, the Company may have been required to settle the contract in an amount equal to its fair value. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingent Liabilities | |
Commitments and Contingent Liabilities | 17. Commitments and Contingent Liabilities Contingencies On November 2, 2020, a lawsuit was filed in Hawaii Circuit Court by a Bank customer related to the sale of credit facilities that the Bank had previously extended to the customer. The customer asserts claims against the Bank for interference with the customer’s contract and business opportunity, unfair methods of competition and declaratory and injunctive relief. The outcome of this legal proceeding is uncertain at this point. Based on information available to the Company at present, the Company cannot reasonably estimate a range of potential loss, if any, for this action. Accordingly, the Company has not recognized any liability associated with this action. Management disputes any wrongdoing and the case is being vigorously defended. In addition to the litigation noted above, various other legal proceedings are pending or threatened against the Company. After consultation with legal counsel, management does not expect that the aggregate liability, if any, resulting from these proceedings would have a material effect on the Company’s consolidated financial position, results of operations or cash flows. Financial Instruments with Off-Balance Sheet Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby and commercial letters of credit which are not reflected in the consolidated financial statements. Unfunded Commitments to Extend Credit A commitment to extend credit is a legally binding agreement to lend funds to a customer, usually at a stated interest rate and for a specified purpose. Commitments are reported net of participations sold to other institutions. Such commitments have fixed expiration dates and generally require a fee. The extension of a commitment gives rise to credit risk. The actual liquidity requirements or credit risk that the Company will experience is expected to be lower than the contractual amount of commitments to extend credit because a significant portion of those commitments are expected to expire without being drawn upon. Certain commitments are subject to loan agreements containing covenants regarding the financial performance of the customer that must be met before the Company is required to fund the commitment. The Company uses the same credit policies in making commitments to extend credit as it does in making loans. In addition, the Company manages the potential credit risk in commitments to extend credit by limiting the total amount of arrangements, both by individual customer and in the aggregate, by monitoring the size and expiration structure of these portfolios and by applying the same credit standards maintained for all of its related credit activities. Commitments to extend credit are reported net of participations sold to other institutions of $90.5 million and $95.5 million at December 31, 2022 and 2021, respectively. Standby and Commercial Letters of Credit Standby letters of credit are issued on behalf of customers in connection with contracts between the customers and third parties. Under standby letters of credit, the Company assures that the third parties will receive specified funds if customers fail to meet their contractual obligations. The credit risk to the Company arises from its obligation to make payment in the event of a customer’s contractual default. Standby letters of credit are reported net of participations sold to other institutions of $8.1 million and $10.7 million at December 31, 2022 and 2021, respectively. The Company also had commitments for commercial and similar letters of credit. Commercial letters of credit are issued specifically to facilitate commerce whereby the commitment is typically drawn upon when the underlying transaction between the customer and a third party is consummated. The maximum amount of potential future payments guaranteed by the Company is limited to the contractual amount of these letters. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Collateral held supports those commitments for which collateral is deemed necessary. The commitments outstanding as of December 31, 2022 have maturities ranging from January 2023 to September 2026. Substantially all fees received from the issuance of such commitments are deferred and amortized on a straight-line basis over the term of the commitment. Financial instruments with off-balance sheet risk at December 31, 2022 and 2021 were as follows: December 31, (dollars in 2022 2021 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 6,760,395 $ 6,490,301 Standby letters of credit 244,275 182,447 Commercial letters of credit 7,299 3,307 Guarantees The Company sells residential mortgage loans in the secondary market primarily to The Federal National Mortgage Association (“FNMA” or “Fannie Mae”) and The Federal Home Loan Mortgage Corporation (“FHLMC” or “Freddie Mac”) that may potentially require repurchase under certain conditions. This risk is managed through the Company’s underwriting practices. The Company services loans sold to investors and loans originated by other originators under agreements that may include repurchase remedies if certain servicing requirements are not met. This risk is managed through the Company’s quality assurance and monitoring procedures. Management does not anticipate any material losses as a result of these transactions. Lease Commitments The Company’s lease commitments are discussed in “Note 13. Leases” in the notes to the consolidated financial statements. Foreign Exchange Contracts The Company has forward foreign exchange contracts that represent commitments to purchase or sell foreign currencies at a future date at a specified price. The Company’s utilization of forward foreign exchange contracts is subject to the primary underlying risk of movements in foreign currency exchange rates and to additional counterparty risk should its counterparties fail to meet the terms of their contracts. Forward foreign exchange contracts are utilized to mitigate the Company’s risk to satisfy customer demand for foreign currencies and are not used for trading purposes. See “Note 16. Derivative Financial Instruments” in the notes to the consolidated financial statements for more information. Reorganization Transactions In connection with the Reorganization Transactions as discussed in “Note 1. Organization and Summary of Significant Accounting Policies” in the notes to the consolidated financial statements, FHI (formerly BancWest) distributed its interest in BWHI (including BOW) to BNPP so that BWHI was held directly by BNPP (BWHI is now held indirectly by BNPP through its intermediate holding company). As a result of the Reorganization Transactions that occurred on April 1, 2016, various tax or other contingent liabilities could arise related to the business of BOW, or related to the Company’s operations prior to the restructuring when it was known as BancWest, including its then wholly owned subsidiary, BOW. The Company is not able to determine the ultimate outcome or estimate the amounts of these contingent liabilities, if any, at this time. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contracts with Customers | |
Revenue from Contracts with Customers | 18. Revenue from Contracts with Customers In accordance with Topic 606, Revenue from Contracts with Customers Disaggregation of Revenue The following table summarizes the Company’s revenues, which includes net interest income on financial instruments and noninterest income, disaggregated by type of service and business segments for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 Treasury Retail Commercial and (dollars in thousands) Banking Banking Other Total Net interest income (1) $ 436,228 $ 157,128 $ 20,193 $ 613,549 Service charges on deposit accounts 25,871 1,972 966 28,809 Credit and debit card fees — 58,659 4,974 63,633 Other service charges and fees 25,062 2,243 1,888 29,193 Trust and investment services income 36,465 — — 36,465 Other 488 7,956 1,288 9,732 Not in scope of Topic 606 (1) 6,199 6,709 (1,215) 11,693 Total noninterest income 94,085 77,539 7,901 179,525 Total revenue $ 530,313 $ 234,667 $ 28,094 $ 793,074 Year Ended December 31, 2021 Treasury Retail Commercial and (dollars in thousands) Banking Banking Other Total Net interest income (1) $ 385,656 $ 162,997 $ (18,094) $ 530,559 Service charges on deposit accounts 24,413 1,225 1,872 27,510 Credit and debit card fees — 55,728 5,415 61,143 Other service charges and fees 23,917 3,547 1,594 29,058 Trust and investment services income 34,719 — — 34,719 Other 353 5,790 1,194 7,337 Not in scope of Topic 606 (1) 8,270 6,491 10,388 25,149 Total noninterest income 91,672 72,781 20,463 184,916 Total revenue $ 477,328 $ 235,778 $ 2,369 $ 715,475 Year Ended December 31, 2020 Treasury Retail Commercial and (dollars in thousands) Banking Banking Other Total Net interest income (1) $ 375,145 $ 151,622 $ 8,967 $ 535,734 Service charges on deposit accounts 25,326 1,305 1,538 28,169 Credit and debit card fees — 48,999 4,373 53,372 Other service charges and fees 20,084 1,550 1,533 23,167 Trust and investment services income 35,652 — — 35,652 Other 700 6,403 1,811 8,914 Not in scope of Topic 606 (1) 16,264 19,945 11,897 48,106 Total noninterest income 98,026 78,202 21,152 197,380 Total revenue $ 473,171 $ 229,824 $ 30,119 $ 733,114 (1) Most of the Company’s revenue is not within the scope of Topic 606. The guidance explicitly excludes net interest income from financial assets and liabilities as well as other noninterest income from loans, leases, investment securities and derivative financial instruments. For the years ended December 31, 2022, 2021 and 2020, substantially all of the Company’s revenues under the scope of Topic 606 were related to performance obligations satisfied at a point in time. The following is a discussion of revenues within the scope of Topic 606. Service Charges on Deposit Accounts Service charges on deposit accounts relate to fees generated from a variety of deposit products and services rendered to customers. Charges include, but are not limited to, overdraft fees, non-sufficient fund fees, dormant fees and monthly service charges. Such fees are recognized concurrent with the event on a daily basis or on a monthly basis depending upon the customer’s cycle date. Credit and Debit Card Fees Credit and debit card fees primarily represent revenues earned from interchange fees, ATM fees and merchant processing fees. Interchange and network revenues are earned on credit and debit card transactions conducted with payment networks. ATM fees are primarily earned as a result of surcharges assessed to non-FHB customers who use an FHB ATM. Merchant processing fees are primarily earned on transactions in which FHB is the acquiring bank. Such fees are generally recognized concurrently with the delivery of services on a daily basis. Trust and Investment Services Fees Trust and investment services fees represent revenue earned by directing, holding and managing customers’ assets. Fees are generally computed based on a percentage of the previous period’s value of assets under management. The transaction price (i.e., percentage of assets under management) is established at the inception of each contract. Trust and investment services fees also include broker dealer fees which represent revenue earned from buying and selling securities on behalf of customers. Such fees are recognized at the end of a valuation period or concurrently with the execution of a buy or sell transaction. Other Fees Other fees primarily include revenues generated from wire transfers, lockboxes, bank issuance of checks and insurance commissions. Such fees are recognized concurrent with the event or on a monthly basis. Contract Balances A contract liability is an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration (or the amount is due) from the customer. The Company received signing bonuses from three vendors in prior years and two vendors in the current year, which are being amortized over the term of the respective contracts. As of December 31, 2022 and 2021, the Company had contract liabilities of $2.7 million and $3.0 million, respectively, which will be recognized over the remaining term of the respective contracts with the vendors. For the years ended December 31, 2022, 2021 and 2020, the Company recognized revenues, thereby decreasing contract liabilities by approximately $0.9 million, $0.9 million and $0.8 million, respectively, due to the passage of time. There were no changes in contract liabilities due to changes in transaction price estimates. A contract asset is the right to consideration for transferred goods or services when the amount is conditioned on something other than the passage of time. As of December 31, 2022 and 2021, there were no material receivables from contracts with customers or contract assets recorded on the Company’s consolidated balance sheets. Other Except for the contract liabilities noted above, the Company did not have any significant performance obligations as of December 31, 2022 and 2021. The Company also did not have any material contract acquisition costs or use any significant judgments or estimates in recognizing revenue for financial reporting purposes. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings per Share | |
Earnings per Share | 19. Earnings per Share For the years ended December 31, 2022, 2021 and 2020, the Company made no adjustments to net income for the purpose of computing earnings per share and there were nil, 1,000 and 410,000 antidilutive securities, respectively. The computations of basic and diluted earnings per share were as follows for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, (dollars in 2022 2021 2020 Numerator: Net income $ 265,685 $ 265,735 $ 185,754 Denominator: Basic: weighted-average shares outstanding 127,489,889 128,963,131 129,890,225 Add: weighted-average equity-based awards 491,810 574,791 329,852 Diluted: weighted-average shares outstanding 127,981,699 129,537,922 130,220,077 Basic earnings per share $ 2.08 $ 2.06 $ 1.43 Diluted earnings per share $ 2.08 $ 2.05 $ 1.43 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 20. Stock-Based Compensation The Company has several stock-based compensation plans that allow for grants of restricted stock, restricted shares, performance share units, performance shares and restricted stock units to its employees and non-employee directors. The Company’s stock-based compensation plans are administered by the Compensation Committee of the Board of Directors. For the years ended December 31, 2022, 2021 and 2020, stock-based compensation expense was $10.3 million, $13.1 million and $10.0 million, respectively, and the related income tax benefit was $2.5 million, $3.1 million and $2.4 million, respectively. For the years ended December 31, 2022, 2021 and 2020, all common stock issuances in connection with stock-based compensation arrangements were issued from unissued shares. As of December 31, 2022, total shares authorized under the Company’s stock-based compensation plan for employees were 5.6 million shares, of which 3.0 million shares were available for future grants. As of December 31, 2022, total shares authorized under the 2016 Non-Employee Director Plan were 268,941 shares, of which 158,138 shares were available for future grants. Restricted Share Awards Restricted share awards (“Restricted Stock”) provide grantees with rights to shares of common stock contingent upon completion of a service period. Restricted Stock generally vests and any restrictions will lapse over a period of three years in equal annual installments on each of the first, second and third anniversaries of the grant date, provided that the grantee remain continuously employed through the applicable vesting date, subject to certain exceptions. Grantees have the right to receive all dividends without restrictions at the times and in the manner paid to shareholders generally. The fair value of Restricted Stock is determined based on the closing price of FHI’s common stock on the date of grant. The Company recognizes compensation expense related to Restricted Stock on a straight-line basis over the vesting period for service-based awards. The following presents the Company’s Restricted Stock activity for the years ended December 31, 2022, 2021 and 2020: Weighted Number Average Grant of Shares Date Fair Value Unvested as of December 31, 2019 139,718 $ 27.04 Granted 172,046 25.96 Vested (48,340) 27.03 Forfeited (1,047) 25.96 Unvested as of December 31, 2020 262,377 $ 26.35 Granted — — Vested (105,330) 26.46 Forfeited (7,172) 26.15 Unvested as of December 31, 2021 149,875 $ 26.28 Granted — — Vested (87,490) 26.44 Forfeited (15,528) 26.28 Unvested as of December 31, 2022 46,857 $ 25.96 For the year ended December 31, 2022 and 2021, the Company granted no shares of Restricted Stock to key employees. For the year ended December 31, 2020, the Company granted 172,046 shares of Restricted Stock with a weighted-average grant date fair value of $25.96 to key employees. The total grant date fair value of Restricted Stock that vested for the years ended December 31, 2022, 2021, and 2020 was $2.3 million, $2.8 million and $1.3 million, respectively. Unrecognized compensation expense related to unvested Restricted Stock was nil, $1.1 million and $4.1 million as of December 31, 2022, 2021 and 2020, respectively. Performance Share Units and Performance Share Awards Performance share units (“PSUs”) and performance share awards (“PSAs”) (collectively, “Performance Awards”) are an award of units or shares in which the recipient’s rights in the units or shares are contingent on the achievement of pre-established performance goals. At the end of the performance period, the Compensation Committee will determine to what extent the performance goals originally outlined when the Performance Awards were granted have been achieved. Depending on the level of performance achieved, 0-200% of the original grant (target number) of PSUs will be earned and will vest and 0-200% of the original grant (target number) of PSAs will be earned and will vest. All remaining unvested PSUs or PSAs will be immediately forfeited. Employees must be continuously employed by the Company from the grant date through the applicable vesting date, with any unvested Performance Awards being forfeited upon termination of employment, subject to certain exceptions. Following vesting, the Company will issue one share of FHI common stock for each vested PSU and evidence of ownership of one share of FHI common stock for each vested PSA. The fair value of Performance Awards is estimated based on the use of a Monte Carlo simulation or based on the closing price of FHI’s common stock on the date of grant and is amortized on a straight-line basis over the vesting period. For PSUs, grantees have no voting rights until the shares of common stock underlying vested PSUs are delivered to the grantee. Conversely, for PSAs, grantees have full voting rights as of the grant date. The Performance Awards are governed by the Company’s Long-Term Incentive Plan (the “LTIP”), which is designed to reward selected key executives for their individual performance and the Company’s performance measured over multi-year performance cycles. Awards related to the LTIP provide for equity-based awards based on the Company’s profitability and market conditions that are based on the Company’s performance relative to peer groups over a three-year performance period. The following presents the Company’s Performance Award activity for the years ended December 31, 2022, 2021 and 2020: Weighted Number Average Grant of Shares Date Fair Value Unvested as of December 31, 2019 695,316 $ 26.46 Granted 340,758 25.96 Vested (172,167) 29.95 Forfeited (6,625) 26.13 Unvested as of December 31, 2020 857,282 $ 25.43 Granted 376,810 27.07 Vested (214,163) 22.57 Forfeited (77,423) 24.62 Unvested as of December 31, 2021 942,506 $ 26.70 Granted 350,922 28.57 Vested (203,855) 27.02 Forfeited (135,439) 26.63 Unvested as of December 31, 2022 954,134 $ 27.36 For the years ended December 31, 2022, 2021 and 2020, the Company granted 350,922, 376,810 and 340,758 Performance Awards, respectively, to key employees. The Company granted these Performance Awards in connection with its LTIP for the three-year performance periods which began on January 1, 2022, 2021 and 2020. These awards have performance conditions that are based on the Company’s profitability and market conditions that are based on the Company’s performance relative to peer groups. The total grant date fair value of Performance Awards that vested for the years ended December 31, 2022, 2021 and 2020, was $5.5 million, $4.8 million and $5.2 million, respectively. Unrecognized compensation expense related to unvested Performance Shares was $7.3 million, $6.1 million and $6.2 million as of December 31, 2022, 2021 and 2020, respectively. The unrecognized compensation expense as of December 31, 2022 is expected to be recognized over a weighted average vesting period of 1.2 years. Restricted Stock Units Restricted stock units (“RSUs”) are an award of units that correspond in number and value to a specified number of shares of FHI’s common stock that are subject to vesting requirements, including certain service conditions, and transferability restrictions. RSUs do not represent actual ownership of common stock and grantees have no voting rights until the shares of common stock underlying the RSUs are delivered. Following vesting, the Company will issue one share of FHI common stock for each vested RSU. The fair value of RSUs is valued based on the closing price of FHI’s common stock on the date of grant and is amortized on a straight-line basis over the vesting period. The following presents the Company’s RSU activity for the years ended December 31, 2022, 2021 and 2020: Weighted Number Average Grant of Shares Date Fair Value Unvested as of December 31, 2019 44,783 $ 27.82 Granted 28,783 15.86 Vested (30,016) 27.47 Forfeited — — Unvested as of December 31, 2020 43,550 $ 21.93 Granted 198,771 27.13 Vested (49,519) 23.08 Forfeited (7,473) 26.37 Unvested as of December 31, 2021 185,329 $ 27.09 Granted 169,497 28.35 Vested (74,178) 27.18 Forfeited (17,488) 26.80 Unvested as of December 31, 2022 263,160 $ 27.91 For the year ended December 31, 2022, the Company granted 20,023 RSUs to non-employee directors with a weighted-average grant date fair value of $27.66 and 149,474 RSUs were granted to employees with a weighted-average grant date fair value of $28.44. For the year ended December 31, 2021, the Company granted 21,839 RSUs to non-employee directors with a weighted-average grant date fair value of $27.36 and 176,932 RSUs were granted to employees with a weighted-average grant date fair value of $27.10. For the year ended December 31, 2020, the Company granted 28,783 RSUs to non-employee directors with a weighted-average grant date fair value of $15.86 and no RSUs were granted to employees. The awards will vest on various dates. The total grant date fair value of RSUs that vested during the years ended December 31, 2022, 2021 and 2020 was $2.0 million, $1.0 million and $0.8 million, respectively. Unrecognized compensation expense related to unvested RSUs was $4.1 million, $3.3 million and $0.4 million as of December 31, 2022, 2021 and 2020, respectively. The unrecognized compensation expense as of December 31, 2022 is expected to be recognized over a weighted average vesting period of 0.9 years. For all awards of PSUs, PSAs, and RSUs, dividend equivalents will accrue from the date of grant and the Company, upon delivery of the common stock, with respect to the vested PSUs and RSUs, and evidence of ownership of the shares, with respect to the vested PSAs, will pay to each grantee a cash amount equal to the product of all cash dividends paid on a share of common stock from the grant date to such delivery date and the number of shares of common stock underlying such vested PSUs, PSAs, and RSUs, as applicable, on such delivery date. Employee Stock Purchase Plan The Company also has an employee stock purchase plan (“ESPP”) which permits employees to periodically purchase Company stock on a payroll deduction basis. Participant purchases through the ESPP receive a discount of 5% from the closing price of FHI’s common stock on the exercise date. Participants are required to adhere to a two-year holding period with regards to shares purchased through the ESPP. The ESPP has been determined to be non-compensatory in nature. As a result, the Company expects that expenses related to the ESPP will not be material. As of December 31, 2022, total shares authorized under the Company’s ESPP were 600,000 shares, of which 514,879 shares of common stock were available for future purchases. The Company issued 16,680 shares, 21,070 shares and 19,069 shares of common stock to employee participants in 2022, 2021 and 2020, respectively. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value | |
Fair Value | 21. Fair Value The Company determines the fair values of its financial instruments based on the requirements established in ASC 820, Fair Value Measurements Fair Value Hierarchy ASC 820 establishes three levels of fair values based on the markets in which the assets or liabilities are traded and the reliability of the assumptions used to determine fair value. The levels are: ● Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. ● Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3: Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability (“Company-level data”). Level 3 assets and liabilities include financial instruments whose value is determined using unobservable inputs to pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. ASC 820 requires that the Company disclose estimated fair values for certain financial instruments. Financial instruments include such items as investment securities, loans, deposits, interest rate and foreign exchange contracts, swaps and other instruments as defined by the standard. The Company has an organized and established process for determining and reviewing the fair value of financial instruments reported in the Company’s financial statements. The fair value measurements are reviewed to ensure they are reasonable and in line with market experience in similar asset and liability classes. Additionally, the Company may be required to record at fair value other assets on a nonrecurring basis, such as other real estate owned, other customer relationships, and other intangible assets. These nonrecurring fair value adjustments typically involve the application of lower-of-cost-or-fair-value accounting or write-downs of individual assets. Disclosure of fair values is not required for certain items such as lease financing, obligations for pension and other postretirement benefits, premises and equipment, prepaid expenses, deposit liabilities with no defined or contractual maturity, and income tax assets and liabilities. Reasonable comparisons of fair value information with that of other financial institutions cannot necessarily be made because the standard permits many alternative calculation techniques, and numerous assumptions have been used to estimate the Company’s fair values. Valuation Techniques Used in the Fair Value Measurement of Assets and Liabilities Carried at Fair Value For the assets and liabilities measured at fair value on a recurring basis (categorized in the valuation hierarchy table below), the Company applies the following valuation techniques: Available-for-sale securities Available-for-sale debt securities are recorded at fair value on a recurring basis. Fair value measurement is based on quoted prices, including estimates by third-party pricing services, if available. If quoted prices are not available, fair values are measured using proprietary valuation models that utilize market observable parameters from active market makers and inter-dealer brokers whereby securities are valued based upon available market data for securities with similar characteristics. Management reviews the pricing information received from the Company’s third-party pricing service to evaluate the inputs and valuation methodologies used to place securities into the appropriate level of the fair value hierarchy and transfers of securities within the fair value hierarchy are made if necessary. On a monthly basis, management reviews the pricing information received from the third-party pricing service which includes a comparison to non-binding third-party broker quotes, as well as a review of market-related conditions impacting the information provided by the third-party pricing service. Management also identifies investment securities which may have traded in illiquid or inactive markets by identifying instances of a significant decrease in the volume or frequency of trades, relative to historical levels, as well as instances of a significant widening of the bid-ask spread in the brokered markets. As of December 31, 2022 and 2021, management did not make adjustments to prices provided by the third-party pricing services as a result of illiquid or inactive markets. The Company’s third-party pricing service has also established processes for the Company to submit inquiries regarding quoted prices. Periodically, the Company will challenge the quoted prices provided by the third-party pricing service. The Company’s third-party pricing service will review the inputs to the evaluation in light of the new market data presented by the Company. The Company’s third-party pricing service may then affirm the original quoted price or may update the evaluation on a going forward basis. The Company classifies all available-for-sale securities as Level 2. Derivatives Most of the Company’s derivatives are traded in over-the-counter markets where quoted market prices are not readily available. For those derivatives, the Company measures fair value on a recurring basis using proprietary valuation models that primarily use market observable inputs, such as yield curves, and option volatilities. The fair value of derivatives includes values associated with counterparty credit risk and the Company’s own credit standing. The Company classifies these derivatives, included in other assets and other liabilities, as Level 2. Concurrent with the sale of the Visa Class B restricted shares, the Company entered into an agreement with the buyer that requires payment to the buyer in the event Visa reduces each member bank’s Class B conversion rate to unrestricted Class A common shares. During 2018 through 2022, Visa funded its litigation escrow account, thereby reducing each member bank’s Class B conversion rate to unrestricted Class A common shares from 1.6483 to the current conversion rate of 1.5991. The Visa derivative of $0.9 million and $5.5 million was included in the consolidated balance sheets at December 31, 2022 and 2021, respectively, to provide for the fair value of this liability. The potential liability related to this funding swap agreement was determined based on management’s estimate of the timing and the amount of Visa’s litigation settlement and the resulting payments due to the counterparty under the terms of the contract. As such, the funding swap agreement is classified as Level 3 in the fair value hierarchy. The significant unobservable inputs used in the fair value measurement of the Company’s funding swap agreement are the potential future changes in the conversion rate, expected term and growth rate of the market price of Visa Class A common shares. Material increases (or decreases) in any of those inputs may result in a significantly higher (or lower) fair value measurement. Assets and Liabilities Recorded at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021 are summarized below: Fair Value Measurements as of December 31, 2022 Quoted Prices in Significant Active Markets for Other Significant Identical Assets Observable Unobservable (dollars in (Level 1) Inputs (Level 2) Inputs (Level 3) Total Assets U.S. Treasury and government agency debt securities $ — $ 150,982 $ — $ 150,982 Government-sponsored enterprises debt securities — 44,301 — 44,301 Mortgage-backed securities: Residential - Government agency (1) — 59,723 — 59,723 Residential - Government-sponsored enterprises (1) — 1,160,455 — 1,160,455 Commercial - Government agency — 237,853 — 237,853 Commercial - Government-sponsored enterprises — 119,573 — 119,573 Commercial - Non-agency — 21,471 — 21,471 Collateralized mortgage obligations: Government agency — 653,322 — 653,322 Government-sponsored enterprises — 462,132 — 462,132 Collateralized loan obligations — 241,321 — 241,321 Total available-for-sale securities — 3,151,133 — 3,151,133 Other assets (2) 5,376 10,945 — 16,321 Liabilities Other liabilities (3) — (49,268) (851) (50,119) Total $ 5,376 $ 3,112,810 $ (851) $ 3,117,335 Fair Value Measurements as of December 31, 2021 Quoted Prices in Significant Active Markets for Other Significant Identical Assets Observable Unobservable (dollars in thousands) (Level 1) Inputs (Level 2) Inputs (Level 3) Total Assets U.S. Treasury and government agency debt securities $ — $ 192,563 $ — $ 192,563 Mortgage-backed securities: Residential - Government agency (1) — 137,264 — 137,264 Residential - Government-sponsored enterprises (1) — 1,491,100 — 1,491,100 Commercial - Government agency — 387,663 — 387,663 Commercial - Government-sponsored enterprises — 1,369,443 — 1,369,443 Collateralized mortgage obligations: Government agency — 2,079,523 — 2,079,523 Government-sponsored enterprises — 2,621,044 — 2,621,044 Collateralized loan obligations — 105,247 — 105,247 Debt securities issued by states and political subdivisions — 44,185 — 44,185 Total available-for-sale securities — 8,428,032 — 8,428,032 Other assets (2) 7,382 50,925 — 58,307 Liabilities Other liabilities (3) — (1,238) (5,530) (6,768) Total $ 7,382 $ 8,477,719 $ (5,530) $ 8,479,571 (1) Backed by residential real estate. (2) Other assets classified as Level 1 include mutual funds and money market funds that have quoted prices in active markets and are related to the Company’s deferred compensation plans. Other assets classified as Level 2 include derivative assets. (3) Other liabilities include derivative liabilities. For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021, the significant unobservable inputs used in the fair value measurements were as follows: Quantitative Information about Level 3 Fair Value Measurements at December 31, 2022 Significant (dollars in thousands) Fair value Valuation Technique Unobservable Input Range Visa derivative $ (851) Discounted Cash Flow Expected Conversion Rate - 1.5991 (1) 1.5514 - 1.5991 Expected Term - 3 months (2) 0 - 6 months Growth Rate - 26% (3) 10% - 38% Quantitative Information about Level 3 Fair Value Measurements at December 31, 2021 Significant (dollars in thousands) Fair value Valuation Technique Unobservable Input Range Visa derivative $ (5,530) Discounted Cash Flow Expected Conversion Rate - 1.6181 (1) 1.5885-1.6181 Expected Term - 1 year (4) 0.5 to 1.5 years Growth Rate - 26% (3) 10% - 38% (1) Due to the uncertainty in the movement of the conversion rate, the current conversion rate as of the respective consolidated balance sheet dates was utilized in the fair value calculation. (2) The expected term of 3 months was based on the median of 0 to 6 months. (3) The growth rate was based on the arithmetic average of analyst price targets. (4) The expected term of 1 year was based on the median of 0.5 to 1.5 years. Changes in Fair Value Levels During the years ended December 31, 2022 and 2021, there were no transfers between fair value hierarchy levels. The changes in Level 3 liabilities measured at fair value on a recurring basis for the years ended December 31, 2022 and 2021 are summarized below: Visa Derivative (dollars in 2022 2021 Year Ended December 31, Balance as of January 1, $ (5,530) $ (4,554) Total net losses included in other noninterest income (707) (5,909) Settlements 5,386 4,933 Balance as of December 31, $ (851) $ (5,530) Total net losses included in net income attributable to the change in unrealized losses related to liabilities still held as of December 31, $ (707) $ (5,909) Assets and Liabilities Carried at Other Than Fair Value The following tables summarize for the years indicated the estimated fair value of the Company’s financial instruments that are not required to be carried at fair value on a recurring basis, excluding leases and deposit liabilities with no defined or contractual maturity: December 31, 2022 Fair Value Measurements Quoted Prices in Significant Significant Active Markets Other Unobservable for Identical Observable Inputs (dollars in thousands) Book Value Assets (Level 1) Inputs (Level 2) (Level 3) Total Financial assets: Cash and cash equivalents $ 526,624 $ 297,502 $ 229,122 $ — $ 526,624 Investment securities held-to-maturity 4,320,639 — 3,814,822 — 3,814,822 Loans (1) 13,793,922 — — 13,138,787 13,138,787 Financial liabilities: Time deposits (2) $ 2,476,050 $ — $ 2,423,231 $ — $ 2,423,231 Short-term borrowings 75,000 — 74,991 — 74,991 December 31, 2021 Fair Value Measurements Quoted Prices in Significant Significant Active Markets Other Unobservable for Identical Observable Inputs (dollars in thousands) Book Value Assets (Level 1) Inputs (Level 2) (Level 3) Total Financial assets: Cash and cash equivalents $ 1,258,469 $ 246,716 $ 1,011,753 $ — $ 1,258,469 Loans held for sale 538 — 542 — 542 Loans (1) 12,730,605 — — 12,791,811 12,791,811 Financial liabilities: Time deposits (2) $ 1,776,438 $ — $ 1,773,321 $ — $ 1,773,321 (1) Excludes financing leases of $298.1 million at December 31, 2022 and $231.4 million at December 31, 2021. (2) Excludes deposit liabilities with no defined or contractual maturity of $19.2 billion at December 31, 2022 and $20.0 billion at December 31, 2021. Unfunded loan and lease commitments and letters of credit are not included in the tables above. As of December 31, 2022 and 2021, the Company had $7.0 billion and $6.7 billion, respectively, of unfunded loan and lease commitments and letters of credit. A reasonable estimate of the fair value of these instruments is the carrying value of deferred fees plus the related reserve for unfunded commitments, which totaled $48.5 million and $44.3 million at December 31, 2022 and 2021, respectively. No active trading market exists for these instruments and the estimated fair value does not include value associated with the borrower relationship. The Company does not estimate the fair values of certain unfunded loan and lease commitments that can be canceled by providing notice to the borrower. As Company-level data is incorporated into the fair value measurement, unfunded loan and lease commitments and letters of credit are classified as Level 3. Valuation Techniques Used in the Fair Value Measurement of Assets and Liabilities Carried at the Lower of Cost or Fair Value The Company applies the following valuation techniques to assets measured at the lower of cost or fair value: Mortgage servicing rights MSRs are carried at the lower of cost or fair value and are therefore subject to fair value measurements on a nonrecurring basis. The fair value of MSRs is determined using models which use significant unobservable inputs, such as estimates of prepayment rates, the resultant weighted average lives of the MSRs and the option-adjusted spread levels. Accordingly, the Company classifies MSRs as Level 3. Collateral-dependent loans Collateral-dependent loans are those for which repayment is expected to be provided substantially through the operation or sale of the collateral. Other real estate owned The Company values these properties at fair value at the time the Company acquires them, which establishes their new cost basis. After acquisition, the Company carries such properties at the lower of cost or fair value less estimated selling costs on a nonrecurring basis. Fair value is measured on a nonrecurring basis using collateral values as a practical expedient. The fair values of collateral for other real estate owned are primarily based on real estate appraisal reports prepared by third-party appraisers less disposition costs and are classified as Level 3. Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis The Company may be required to record certain assets at fair value on a nonrecurring basis in accordance with GAAP. These assets are subject to fair value adjustments that result from the application of lower of cost or fair value accounting or write-downs of individual assets to fair value. There were no assets with nonrecurring fair value adjustments held as of December 31, 2022 and 2021. |
Reportable Operating Segments
Reportable Operating Segments | 12 Months Ended |
Dec. 31, 2022 | |
Reportable Operating Segments | |
Reportable Operating Segments | 22. Reportable Operating Segments The Company’s operations are organized into three business segments – Retail Banking, Commercial Banking and Treasury and Other. These segments reflect how discrete financial information is currently evaluated by the chief operating decision maker and how performance is assessed and resources allocated. The Company’s internal management process measures the performance of these business segments. This process, which is not necessarily comparable with similar information for any other financial institution, uses various techniques to assign balance sheet and income statement amounts to the business segments, including allocations of income, expense, the provision for credit losses and capital. This process is dynamic and requires certain allocations based on judgment and other subjective factors. Unlike financial accounting, there is no comprehensive authoritative guidance for management accounting that is equivalent to GAAP. The net interest income of the business segments reflects the results of a funds transfer pricing process that matches assets and liabilities with similar interest rate sensitivity and maturity characteristics and reflects the allocation of net interest income related to the Company’s overall asset and liability management activities on a proportionate basis. The basis for the allocation of net interest income is a function of the Company’s assumptions that are subject to change based on changes in current interest rates and market conditions. Funds transfer pricing also serves to transfer interest rate risk to Treasury. The Company allocates the provision for credit losses from the Treasury and Other business segment (which is comprised of many of the Company’s support units) to the Retail and Commercial business segments. These allocations are based on direct costs incurred by the Retail and Commercial business segments. Noninterest income and expense includes allocations from support units to the business segments. These allocations are based on actual usage where practicably calculated or by management’s estimate of such usage. Income tax expense is allocated to each business segment based on the consolidated effective income tax rate for the period shown. Business Segments Retail Banking Retail Banking offers a broad range of financial products and services to consumers and small businesses. Loan and lease products offered include residential and commercial mortgage loans, home equity lines of credit and loans, automobile loans and leases, secured and unsecured lines of credit, installment loans and small business loans and leases. Deposit products offered include checking, savings and time deposit accounts. Retail Banking also offers wealth management services. Products and services from Retail Banking are delivered to customers through 51 banking locations throughout the State of Hawaii, Guam and Saipan. Commercial Banking Commercial Banking offers products that include corporate banking related products, residential and commercial real estate loans, commercial lease financing, secured and unsecured lines of credit, automobile loans and auto dealer financing, business deposit products and credit cards. Commercial lending and deposit products are offered primarily to middle-market and large companies locally, nationally and internationally. Treasury and Other Treasury consists of corporate asset and liability management activities including interest rate risk management. The segment’s assets and liabilities (and related interest income and expense) consist of interest-bearing deposits, investment securities, federal funds sold and purchased, government deposits, short- and long-term borrowings and bank-owned properties. The primary sources of noninterest income are from bank-owned life insurance, net gains from the sale of investment securities, foreign exchange income related to customer driven cross-border wires for business and personal reasons and management of bank-owned properties. The net residual effect of the transfer pricing of assets and liabilities is included in Treasury, along with the elimination of intercompany transactions. Other organizational units (Technology, Operations, Credit and Risk Management, Human Resources, Finance, Administration, Marketing and Corporate and Regulatory Administration) provide a wide-range of support to the Company’s other income earning segments. Expenses incurred by these support units are charged to the business segments through an internal cost allocation process. The following tables present selected business segment financial information for the years indicated: Treasury Retail Commercial and (dollars in thousands) Banking Banking Other Total Year Ended December 31, 2022 Net interest income $ 436,228 $ 157,128 $ 20,193 $ 613,549 Benefit (provision) for credit losses 967 1,154 (3,513) (1,392) Net interest income after benefit for credit losses 437,195 158,282 16,680 612,157 Noninterest income 94,085 77,539 7,901 179,525 Noninterest expense (293,563) (109,906) (37,002) (440,471) Income (loss) before (provision) benefit for income taxes 237,717 125,915 (12,421) 351,211 (Provision) benefit for income taxes (58,077) (30,158) 2,709 (85,526) Net income (loss) $ 179,640 $ 95,757 $ (9,712) $ 265,685 Total assets as of December 31, 2022 $ 7,463,002 $ 6,850,638 $ 10,263,583 $ 24,577,223 Treasury Retail Commercial and (dollars in thousands) Banking Banking Other Total Year Ended December 31, 2021 Net interest income (expense) $ 385,656 $ 162,997 $ (18,094) $ 530,559 Benefit for credit losses 16,267 22,452 281 39,000 Net interest income (expense) after benefit for credit losses 401,923 185,449 (17,813) 569,559 Noninterest income 91,672 72,781 20,463 184,916 Noninterest expense (247,949) (100,932) (56,598) (405,479) Income (loss) before (provision) benefit for income taxes 245,646 157,298 (53,948) 348,996 (Provision) benefit for income taxes (58,710) (37,525) 12,974 (83,261) Net income (loss) $ 186,936 $ 119,773 $ (40,974) $ 265,735 Total assets as of December 31, 2021 $ 7,148,376 $ 5,972,567 $ 11,871,467 $ 24,992,410 Treasury Retail Commercial and (dollars in thousands) Banking Banking Other Total Year Ended December 31, 2020 Net interest income $ 375,145 $ 151,622 $ 8,967 $ 535,734 Provision for credit losses (52,719) (53,921) (15,078) (121,718) Net interest income after provision for credit losses 322,426 97,701 (6,111) 414,016 Noninterest income 98,026 78,202 21,152 197,380 Noninterest expense (232,976) (79,961) (54,735) (367,672) Income (loss) before (provision) benefit for income taxes 187,476 95,942 (39,694) 243,724 (Provision) benefit for income taxes (43,825) (21,951) 7,806 (57,970) Net income (loss) $ 143,651 $ 73,991 $ (31,888) $ 185,754 Total assets as of December 31, 2020 $ 6,894,602 $ 6,526,863 $ 9,241,366 $ 22,662,831 |
Parent Company
Parent Company | 12 Months Ended |
Dec. 31, 2022 | |
Parent Company | |
Parent Company | 23. Parent Company The following tables present Parent Company-only condensed financial statements: Condensed Statements of Comprehensive Income Year Ended December 31, (dollars in thousands) 2022 2021 2020 Income Dividends from FHB $ 157,000 $ 213,500 $ 142,000 Other income — — 1,169 Total income 157,000 213,500 143,169 Noninterest expense Salaries and employee benefits 4,098 3,732 3,660 Contracted services and professional fees 6,200 2,731 2,544 Equipment 78 — 31 Other 1,447 1,314 1,439 Total noninterest expense 11,823 7,777 7,674 Income before benefit for income taxes and equity in undistributed income of FHB 145,177 205,723 135,495 Benefit for income taxes 2,707 1,877 679 Equity in undistributed income of FHB 117,801 58,135 49,580 Net income $ 265,685 $ 265,735 $ 185,754 Comprehensive (loss) income $ (251,876) $ 112,438 $ 249,107 Condensed Statements of Condition December 31, (dollars in thousands) 2022 2021 Assets Cash and cash equivalents $ 18,024 $ 14,792 Investment in FHB 2,251,841 2,642,929 Other assets 27,638 26,869 Total assets $ 2,297,503 $ 2,684,590 Liabilities and Stockholders' Equity Retirement benefits payable $ 560 $ 582 Other liabilities 27,938 27,096 Total liabilities 28,498 27,678 Total stockholders' equity 2,269,005 2,656,912 Total liabilities and stockholders' equity $ 2,297,503 $ 2,684,590 Condensed Statements of Cash Flows Year Ended December 31, (dollars in thousands) 2022 2021 2020 Cash flows from operating activities Net income $ 265,685 $ 265,735 $ 185,754 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed income of FHB (117,801) (58,135) (49,580) Deferred income taxes 22 36 5 Stock-based compensation 554 492 713 Change in assets and liabilities: Net (increase) decrease in other assets (4) 242 (1,451) Net increase (decrease) in other liabilities 18 50 (294) Net cash provided by operating activities 148,474 208,420 135,147 Cash flows from financing activities Dividends paid (132,588) (134,133) (135,099) Stock tendered for payment of withholding taxes (3,555) (3,108) (1,749) Proceeds from employee stock purchase plan 379 547 312 Common stock repurchased (9,478) (75,000) (5,000) Net cash used in financing activities (145,242) (211,694) (141,536) Net increase (decrease) in cash and cash equivalents 3,232 (3,274) (6,389) Cash and cash equivalents at beginning of year 14,792 18,066 24,455 Cash and cash equivalents at end of year $ 18,024 $ 14,792 $ 18,066 |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation First Hawaiian, Inc. (“FHI” or the “Parent”), a bank holding company, owns 100% of the outstanding common stock of First Hawaiian Bank (“FHB” or the “Bank”). FHB is a state-chartered bank that is not a member of the Federal Reserve System. FHB, the oldest financial institution in Hawaii, was established as Bishop & Company in 1858. As of December 31, 2022, FHB was the largest bank in Hawaii in terms of total assets, loans and leases, deposits, and net income. FHB has 51 branches located throughout the State of Hawaii, Guam and Saipan, and offers a comprehensive suite of banking services to consumer and commercial customers including loans, deposit products, wealth management, insurance, trust, retirement planning, credit card and merchant processing services. The accounting and reporting principles of First Hawaiian, Inc. and Subsidiary (the “Company”) conform to U.S. generally accepted accounting principles (“GAAP”) and prevailing practices within the financial services industry. Intercompany accounts and transactions have been eliminated in consolidation. |
Transition to an Independent Public Company | Transition to an Independent Public Company Prior to FHI’s initial public offering in August 2016 (“IPO”), the Company was an indirect wholly owned subsidiary of BNP Paribas (“BNPP”), a global financial institution based in France. On April 1, 2016, BNPP effected a series of transactions (“Reorganization Transactions”) pursuant to which FHI, which was then known as BancWest Corporation (“BancWest”), contributed Bank of the West (“BOW”), its subsidiary at the time, to BancWest Holding Inc. (“BWHI”), a newly formed bank holding company and a wholly owned subsidiary of BancWest. Following the contribution of BOW to BWHI, BancWest distributed its interest in BWHI to BNPP, and BWHI became a wholly owned subsidiary of BNPP. As part of these transactions, the Company amended its certificate of incorporation to change its name to First Hawaiian, Inc., with First Hawaiian Bank remaining its only direct wholly owned subsidiary. On July 1, 2016, we became an indirect wholly owned subsidiary of BNP Paribas USA, Inc. (“BNP Paribas USA”), BNPP’s U.S. intermediate holding company. As part of that reorganization, the Company became a direct wholly owned subsidiary of BancWest Corporation (“BWC”), a direct wholly owned subsidiary of BNP Paribas USA. In August 2016, FHI completed its IPO and shares of FHI’s common stock began trading on the NASDAQ Global Select Market (“NASDAQ”) under the ticker symbol “FHB” on August 4, 2016. In 2017, 2018 and 2019, BNPP, acting through BWC, sold all of the shares of FHI common stock that it beneficially owned in underwritten public offerings and share repurchases by the Company. FHI did not receive any of the proceeds from the sales of shares of FHI common stock in any such offering or the IPO. As a result of the completion of the February 1, 2019 public offering, BNPP (through BWC, the selling stockholder) fully |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events, actual results may differ from these estimates. |
Variable Interest Entities | Variable Interest Entities A variable interest entity (“VIE”) is a legal entity that lacks the ability to financially support its activities or whose equity investors lack the ability to control its activities or absorb profits and losses proportionately with their investment in the entity. The primary beneficiary consolidates the VIE. The primary beneficiary is defined as the enterprise that has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE. The Company has a limited partnership interest or is a member in a limited liability company (“LLC”) in several low-income housing partnerships. These partnerships or LLCs provide funds for the construction and operation of apartment complexes that provide affordable housing to that segment of the population with lower family income. If these developments successfully attract a specified percentage of residents falling in that lower income range, state and/or federal income tax credits are made available to the partners or members. The tax credits are generally recognized over 5 or 10 years. In order to continue receiving the tax credits each year over the life of the partnership or LLC, the low-income residency targets must be maintained. The Company generally accounts for its interests in these low-income housing partnerships using the proportional amortization method. The Company’s investments in these partnership interests are included in other assets in the consolidated balance sheets. Unfunded commitments to fund these investments were $47.2 million and $62.6 million as of December 31, 2022 and 2021, respectively. These unfunded commitments are unconditional and legally binding and are recorded in other liabilities in the consolidated balance sheets. These low-income housing partnership and LLC entities meet the definition of a VIE; however, the Company is not the primary beneficiary of the entities, as the general partner or managing member has both the power to direct the activities that most significantly impact the economic performance of the entities and the obligation to absorb losses or the right to receive benefits that could be significant to the entities. While the partnership or LLC agreements allow the limited partners and members, through a majority vote, to remove the general partner or managing member, this right is not deemed to be substantive as the general partner or managing member can only be removed for cause. |
Cash and Due from Banks | Cash and Due from Banks Cash and due from banks include amounts due from other financial institutions as well as in-transit clearings. Because amounts due from other financial institutions often exceed the Federal Deposit Insurance Corporation (“FDIC”) deposit insurance limit, the Company evaluates the credit risk of these institutions through periodic review of their financial condition and regulatory capital position. Under the terms of the Depository Institutions Deregulation and Monetary Control Act, the Company is required to maintain reserves with the Federal Reserve Bank of San Francisco (“FRB”) based on the amount of deposits held. Reserve requirements for all depository institutions were eliminated in March 2020. Cash and cash equivalents include cash and due from banks and interest-bearing deposits in other banks. All amounts are readily convertible to cash and have maturities of less than 90 days. |
Interest-bearing Deposits in Other Banks | Interest-bearing Deposits in Other Banks Interest-bearing deposits in other banks include funds held in other financial institutions that are either fixed or variable rate instruments, including certificates of deposits. Interest income is recorded when earned and presented within other interest income in the Company’s consolidated statements of income. |
Investment Securities | Investment Securities As of December 31, 2022 and December 31, 2021, investment securities were comprised primarily of debt securities, mortgage-backed securities and collateralized mortgage obligations issued by the U.S. Government, its agencies and government-sponsored enterprises, with under 4% of the investment securities comprised of collateralized loan obligations rated AA or better and obligations issued by local state and political subdivisions rated AA or better. The Company amortizes premiums and accretes discounts using the interest method over the expected lives of the individual securities. Premiums on callable debt securities are amortized to their next call date. All investment securities transactions are recorded on a trade-date basis. As of December 31, 2022, the Company’s investment securities were categorized as either available-for-sale (investment securities that may be sold before maturity at the discretion of management) or held-to-maturity (investment securities that management has the positive intent and ability to hold to maturity). As of December 31, 2021, all of the Company’s investment securities were categorized as available-for-sale. Available-for-sale investment securities are reported at fair value, with unrealized gains and losses reported in accumulated other comprehensive income. Gains and losses realized on sales of available-for-sale investment securities are determined using the specific identification method. Held-to-maturity investment securities are reported at amortized cost and may have a realized gain or loss if the investment security is retired or redeemed before the original maturity date. Transfers of debt securities from the available-for-sale category to the held-to-maturity category are made at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer remains in accumulated other comprehensive income and in the carrying value of the held-to-maturity investment security. Premiums or discounts on investment securities are amortized or accreted as an adjustment of yield using the interest method over the expected life of the security. Unrealized holding gains or losses that remain in accumulated other comprehensive income are also amortized or accreted over the expected life of the security as an adjustment of yield, offsetting the related amortization of the premium or accretion of the discount. For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates at the individual security level whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. For held-to-maturity debt securities, the Company utilizes the Current Expected Credit Loss (“CECL”) approach to estimate lifetime expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of held-to-maturity debt securities to present the net amount expected to be collected from held-to-maturity debt securities. Changes in the allowance for credit losses, if any, are recorded as a provision for (or reversal of) credit losses. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale or held-to-maturity investment security is confirmed or when either of the criteria regarding intent or requirement to sell an available-for-sale investment security is met. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. As of December 31, 2022, the Company’s available-for-sale and held-to-maturity investment securities were comprised primarily of debt securities, mortgage-backed securities and collateralized mortgage obligations issued by the U.S. Government, its agencies and government-sponsored enterprises. Management has concluded that the long history with no credit losses from these issuers indicates an expectation that nonpayment of the amortized cost basis is zero, and these securities are explicitly or implicitly fully guaranteed by the U.S. government. The U.S. government can print its own currency and its currency is routinely held by central banks and other major financial institutions. The dollar is used in international commerce, and commonly is viewed as a reserve currency, all of which qualitatively indicates that historical credit loss information should be minimally affected by current conditions and reasonable and supportable forecasts. Under 4% of the investment securities were comprised of collateralized loan obligations rated AA or better and obligations issued by local state and political subdivisions rated AA or better. These securities are investment grade and highly rated and carry either sufficient credit enhancement or days cash on hand to support timely payments of principal and interest. As a result, the Company does not expect any future payment defaults and has not recorded an allowance for credit losses for its available-for-sale and held-to-maturity debt securities as of December 31, 2022. Similarly, for the same reasons noted above, the Company did not record an allowance for credit losses for its available-for-sale debt securities as of December 31, 2021. Accrued interest receivable related to available-for-sale and held-to-maturity investment securities are recorded separately from the amortized cost basis of investment securities on the Company's consolidated balance sheet. |
Loans Held for Sale | Loans Held for Sale The Company originates certain loans for individual sale or for sale as a pool of loans to government-sponsored enterprises. Loans held for sale are carried, on an aggregate basis, at the lower of cost or fair value. The fair value of loans held for sale is primarily determined based on quoted prices for similar loans in active markets. Net gains and losses on loan sales are recorded as a component of other noninterest income. Direct loan origination costs and fees are deferred at origination of the loan and are recognized in other noninterest income upon sale of the loan. |
Loans and Leases | Loans and Leases Loans are reported at amortized cost, which includes the principal amount outstanding net of unamortized and unaccreted deferred loan fees and costs, and cumulative net charge-offs. Interest income is recognized on an accrual basis. Loan origination fees, certain direct costs and unearned discounts and premiums, if any, are deferred and are generally accreted or amortized into interest income as yield adjustments using the interest method over the contractual life of the loan. Other credit-related fees are recognized as fee income, a component of noninterest income, when earned. Direct financing leases are carried at the aggregate of lease payments receivable plus the estimated residual value of leased property, less unearned income. Unearned income on direct financing leases is amortized over the lease term by methods that approximate the interest method. Residual values on leased assets are periodically reviewed for impairment. Accrued interest receivable related to loans and leases is recorded separately from the amortized cost basis of loans and leases on the Company’s consolidated balance sheet. |
Nonaccrual Loans and Leases | Nonaccrual Loans and Leases The Company generally places a loan or lease on nonaccrual status when management believes that collection of principal or interest has become doubtful or when a loan or lease becomes 90 days past due as to principal or interest, unless it is well secured and in the process of collection. A full or partial charge-off is recorded in the period in which the loan or lease is deemed uncollectible. When the Company places a loan or lease on nonaccrual status, previously accrued and uncollected interest is concurrently reversed against interest income. When the Company receives an interest payment on a nonaccrual loan or lease, the payment is applied as a reduction of the principal balance. Nonaccrual loans and leases are generally returned to accrual status when they become current as to principal and interest and future payments are reasonably assured. |
Troubled Debt Restructurings | Troubled Debt Restructurings A restructuring of debt constitutes a troubled debt restructuring (“TDR”) if the Company, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The Company offers various types of concessions when modifying a loan, including term extensions, temporary deferral of principal and temporary interest rate reductions. However, forgiveness of principal is rarely granted. Generally, a non-accrual loan that has been modified in a TDR remains on non-accrual status for at least six months to demonstrate that the borrower is able to meet the terms of the modified loan. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. However, if the borrower’s ability to meet the revised payment terms is uncertain, the loan remains on non-accrual status. |
Allowance for Credit Losses | Allowance for Credit Losses The allowance for credit losses for loans and leases (the “ACL”) is a valuation account that is deducted from the amortized cost basis of loans and leases to present the net amount expected to be collected from loans and leases. Loans and leases are charged-off against the ACL when management believes the uncollectibility of a loan or lease balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The Company’s ACL and the reserve for unfunded commitments under the Current Expected Credit Losses (“CECL”) approach utilizes both quantitative and qualitative components. The Company’s methodology utilizes a quantitative model based on a single forward-looking macroeconomic forecast. The quantitative estimation is overlaid with qualitative adjustments to account for current conditions and forward-looking events not captured in the quantitative model. Qualitative adjustments that are considered include adjustments for regulatory determinants, model limitations, model maturity, and other current or forecasted events that are not captured in the Company’s historical loss experience. The Company generally evaluates loans and leases on a collective or pool basis when similar risk characteristics exist. However, loans and leases that do not share similar risk characteristics are evaluated on an individual basis. Such loans and leases evaluated individually are excluded from the collective evaluation. Individually assessed loans are measured for estimated credit loss (“ECL”) based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral, less estimated selling costs, if the loan is collateral-dependent. Management reviews relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts about the future. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency levels, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. The Company utilizes a Probability of Default (“PD”)/Loss Given Default (“LGD”) framework to estimate the ACL and the reserve for unfunded commitments. The PD represents the percentage expectation to default, measured by assessing loans and leases that migrate to default status (i.e., nonaccrual status, troubled debt restructurings (“TDRs”), 90 days or more past due, partial or full charge-offs or bankruptcy). LGD is defined as the percentage of the exposure at default (“EAD”) lost at the time of default, net of any recoveries, and will be unique to each of the collateral types securing the Company’s loans. PD and LGD’s are based on past experience of the Company and management’s expectations of the future. The ECL on loans and leases is calculated by taking the product of the credit exposure, lifetime default probability (“LDP”) and the LGD. The ECL model is applied to current credit exposures at the account level, using assumptions calibrated at the portfolio segment level using internal historical loan and lease level data. The Company estimates the default risk of a credit exposure over the remaining life of each account using a transition probability matrix approach which captures both the average rate of up/down-grade and default transitions, as well as withdrawal rates which capture the historical rate of exposure decline due to loan and lease amortization and prepayment. To apply the transition matrices, each credit exposure’s remaining life is split into two time segments. The first time segment is for the reasonable and supportable forecast period over which the transition matrices which are applied have been adjusted to incorporate current and forecasted conditions over that period. Management has determined that using a one year time horizon for the reasonable and supportable forecast period for all classes of loans and leases is a reasonable forecast horizon given the difficulty in predicting future economic conditions with a high degree of certainty. The second time segment is the reversion period from the end of the reasonable and supportable forecast period to the maturity of the exposure, over which long-run average transition matrices are applied. Management elected to use an immediate reversion to the mean approach. Lifetime loss rates are applied against the amortized cost basis of loans and leases and unfunded commitments to estimate the ACL and the reserve for unfunded commitments, respectively. On at least a quarterly basis, management convenes the Bank’s forecasting team which is responsible for reviewing the economic forecast model inputs and outputs and approving the resulting economic adjustment. The model uses a one-variable econometric model to produce factors that modify the long-run default rate assumptions used in the CECL model. These factors are applied to calculate the economic adjustment over the Reasonable and Supportable Forecast Period. At the meeting, management is presented with the economic forecast model input and output as well as the resulting economic adjustment. Depending on the current economic conditions, a range of inputs and outputs may be presented, in which case, using judgment, management will select an input and output. The economic forecast framework also allows management to use judgment in selecting the economic model input in cases where management’s outlook diverges from the official forecasts, and to apply qualitative dollar overlays to account for other economic related conditions not captured in the economic forecast model but are expected to potentially impact losses. The team also reviews other relevant economic variables and economic factors at the time of the meeting that could potentially impact future losses. These materials are presented to the economic forecasting team as they are economic in nature. If determined to be relevant and needing to be considered in the ACL estimate, these risks will be included in the ACL estimate through a qualitative dollar overlay that is determined using either quantitative analysis or qualitative judgment, or a mix of both. These other factors could include inflation indicators, personal income, or visitor arrivals, for example. The Company has identified three portfolio segments in estimating the ACL: commercial, residential real estate and consumer lending. The Company’s commercial portfolio segment is comprised of four distinct classes: commercial and industrial loans, commercial real estate loans, construction loans and lease financing. The key risk drivers related to this portfolio segment include risk rating, collateral type, and remaining maturity. The Company’s residential real estate portfolio segment is comprised of two distinct classes: residential real estate loans and home equity lines of credit. Specific risk characteristics related to this portfolio include the value of the underlying collateral, credit score and remaining maturity. Finally, the Company’s consumer portfolio segment is not further segmented, but consists primarily of automobile loans, credit cards and other installment loans. Automobile loans constitute the majority of this segment and are monitored using credit scores, collateral values and remaining maturity. The remainder of the consumer portfolio is predominantly unsecured. Regarding accrued interest receivable, the Company made accounting policy elections to (1) not measure an ACL on accrued interest receivable, (2) write-off accrued interest receivable by reversing interest income and (3) present accrued interest receivable separately from the related financial asset on the balance sheet. Furthermore, regarding collateral-dependent financial assets, the Company elected the practical expedient to use the fair value of collateral at the reporting date when recording the net carrying amount of the asset and determining the ACL for a financial asset for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Company’s assessment as of the reporting date. |
Reserve for Unfunded Commitments | Reserve for Unfunded Commitments The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The reserve for unfunded commitments, which is a component of other liabilities in the consolidated balance sheets, is adjusted through the provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. |
Provision for Credit Losses | Provision for Credit Losses The provision for credit losses (the “Provision”) represents the amount charged against current period earnings to achieve an ACL and reserve for unfunded commitments that in management’s judgment is adequate to absorb expected credit losses related to the Company’s loan and lease portfolio and off-balance sheet credit exposures. Accordingly, the Provision will vary from period to period based on management’s ongoing assessment of the overall adequacy of the ACL and reserve for unfunded commitments. |
Premises and Equipment | Premises and Equipment Premises and equipment, including leasehold improvements, are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of 7 to 39 years for premises, 3 to 20 years for equipment and the shorter of the lease term or remaining useful life for leasehold improvements. On a periodic basis, long-lived assets are reviewed for impairment. An impairment loss is recognized if the carrying amount of a long-lived asset exceeds its fair value and is not recoverable. An impairment analysis is performed whenever events or changes in circumstances suggest that the carrying value of an asset or group of assets may not be recoverable. Operating lease rental income for leased assets, primarily premises, is recognized on a straight-line basis as an offset to rental expense. |
Other Real Estate Owned and Repossessed Personal Property | Other Real Estate Owned and Repossessed Personal Property Other real estate owned (“OREO”) and repossessed personal property are comprised primarily of properties that the Company acquires through foreclosure proceedings. The Company values these properties at fair value less estimated costs to sell the property upon acquisition, which establishes the new carrying value. The Company charges losses arising upon the acquisition of the property against the ACL. If the fair value of the property at the time of acquisition exceeds the carrying amount of the loan, the excess is recorded either as a recovery to the ACL if a charge-off had previously been recorded, or as a gain on initial transfer in other noninterest income. After acquisition, the Company carries such properties at the lower of cost or fair value less estimated selling costs on a nonrecurring basis. Any write-downs or losses from the subsequent disposition of such properties are included in other noninterest income. Gains recognized on the sale of such properties are included in other noninterest income. |
Goodwill | Goodwill Goodwill represents the cost of acquired businesses in excess of the fair value of the net assets acquired. The Company performs impairment testing of goodwill, an indefinite-lived intangible asset, as required under GAAP on an annual basis or when circumstances change that indicate that a potential impairment may have occurred. The Company has assigned goodwill to its operating segments for impairment testing purposes. The goodwill impairment guidance provides the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing further impairment tests is unnecessary. However, if an entity concludes otherwise, or does not elect this option, it is required to perform impairment testing. The quantitative impairment test identifies potential impairments at the reporting unit level by comparing the estimated fair value of each identified reporting unit to its carrying amount. If the estimated fair value of a reporting unit exceeds its carrying amount, there is no impairment of goodwill. However, if the carrying amount exceeds the estimated fair value, an impairment exists, and an impairment loss is recognized in an amount equal to that excess. Subsequent reversals of goodwill impairment are prohibited. |
Mortgage Servicing Rights | Mortgage Servicing Rights Mortgage servicing rights are recognized as assets when residential mortgage loans are sold and the rights to service those loans are retained. Mortgage servicing rights are initially recorded at fair value by using a discounted cash flow model to calculate the present value of estimated future net servicing income, incorporating assumptions that market participants would use in their estimates of fair value. The Company’s mortgage servicing rights are accounted for under the amortization method and periodically assessed for impairment. The Company amortizes the mortgage servicing rights over the period of estimated net servicing income, taking into account prepayment assumptions. Any such indicated impairment is recognized in earnings during the period in which the impairment occurs. Mortgage servicing income, net of the amortization of mortgage servicing rights, is recorded as a component of other noninterest income in the consolidated statements of income. |
Non Marketable Equity Securities | Non-Marketable Equity Securities The Company is required to own Federal Home Loan Bank (“FHLB”) of Des Moines stock as a condition of membership. These securities are accounted for under the cost method, which equals par value, and are included in other assets in the consolidated balance sheets. These securities do not have a readily determinable fair value as ownership is restricted and there is no market for these securities. The Company reviews these securities periodically for impairment. Management considers these securities to be long-term investments. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value. No impairment was recognized on non-marketable equity securities for the years ended December 31, 2022, 2021 and 2020. |
Internal-Use Software | Internal-Use Software Capitalized internal-use software, stated at cost less accumulated amortization, includes purchased software and capitalizable application development costs associated with internally developed software. Capitalized internal-use software is included as a component of other assets, net of accumulated amortization, on the consolidated balance sheets. Amortization expense is computed on a straight-line method over the estimated useful life of the software, generally up to five years. The Company also enters in the ordinary course of business into technology-related hosting arrangements that are service contracts. These arrangements can include capitalizable implementation costs that are amortized on a straight-line basis over the term of the hosting arrangement. Capitalized implementation costs associated with hosting arrangements that are service contracts are included as a component of other assets, net of accumulated amortization, on the consolidated balance sheets. |
Pension and Other Postretirement Benefit Plans | Pension and Other Postretirement Benefit Plans The Company has a qualified noncontributory defined benefit pension plan, an unfunded supplemental executive retirement plan, a directors’ retirement plan, a non-qualified pension plan for eligible directors and a postretirement benefit plan providing life insurance and healthcare benefits that is offered to directors and employees, as applicable. The qualified noncontributory defined benefit pension plan, the unfunded supplemental executive retirement plan and the directors’ retirement plan are all frozen plans to new participants. To calculate annual pension costs, management uses the following key variables: (1) size of the employee population, length of service and estimated compensation increases; (2) actuarial assumptions and estimates; (3) expected long-term rate of return on plan assets; and (4) discount rate. For all pension and postretirement benefit plan calculations, the Company uses a December 31 st The expected long-term rate of return was based on a calculated rate of return from average rates of return on various asset classes over a 20-year historical time horizon. Using long-term historical data allows the Company to capture multiple economic environments, which management believes is relevant when using historical returns. Net actuarial gains or losses that exceed a 5% corridor of the greater of the projected benefit obligation or the fair value of plan assets as of the beginning of the year are amortized from accumulated other comprehensive income into net periodic pension cost on a straight-line basis over five years. In estimating the projected benefit obligation, an independent actuary bases assumptions on factors such as mortality rate, turnover rate, retirement rate, disability rate and other assumptions related to the population of individuals in the pension plan. If significant actuarial gains or losses occur, the actuary reviews the demographic and economic assumptions with management, at which time the Company considers revising these assumptions based on actual results. The Company recognizes an asset on its consolidated balance sheets for a plan’s overfunded status or a liability for a plan’s underfunded status. The Company also measures the plans’ assets and obligations that determine its funded status as of the end of the year and recognizes those changes in other comprehensive income, net of tax. Periodic pension expense (or income) includes service costs, interest costs based on the assumed discount rate, the expected return on plan assets based on an actuarially derived market-related value and amortization of actuarial gains and losses. Service cost is included in salaries and employee benefits expense, while all other components of net periodic pension cost are included in other noninterest expense in the consolidated statements of income. |
Income Taxes | Income Taxes Current income tax expense is recognized for the amount of income taxes expected to be payable or refundable for the current period, and deferred income taxes are provided to reflect the tax effect of temporary differences between financial statement carrying amounts and the corresponding tax basis of assets and liabilities. Deferred income taxes are calculated by applying enacted statutory tax rates and tax laws to future years in which temporary differences are expected to reverse. The impact on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that the tax rate change is enacted. A deferred tax valuation allowance is established if it is more likely than not that a deferred tax asset will not be realized. Interest and penalties, if any, expected to be assessed or refunded by taxing authorities relating to an underpayment or overpayment of income taxes are accrued and recorded as part of income tax expense. Excise tax credits relating to premises and equipment are accounted for using the flow-through method, and the benefit is recognized in the year the asset is placed in service. General business and excise tax credits generated from the leasing portfolio, except for credits that are passed on to lessees, are recognized over the term of the lease for book purposes, but in the year placed in service for tax purposes. The Company maintains reserves for unrecognized tax benefits that arise in the normal course of business. As of December 31, 2022, these positions were evaluated based on an assessment of probabilities as to the likelihood of whether a liability had been incurred. Such assessments are reviewed as events occur and adjustments to the reserves are made as appropriate. In evaluating a tax position for recognition, the Company evaluates whether it is more likely than not that a tax position will be sustained upon examination, including resolution of related appeals or litigation processes, based on the technical merits of the position. If the tax position meets the more likely than not recognition threshold, the tax position is measured and recognized in the Company’s consolidated financial statements as the largest amount of tax benefit that, in management’s judgment, is greater than 50% likely of being realized upon ultimate settlement. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Derivatives are recognized on the consolidated balance sheets at fair value. On the date the Company enters into a derivative contract, the Company designates the derivative instrument as: (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”); (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”); or (3) held for trading, customer accommodation or not qualifying for hedge accounting (“free-standing derivative instrument”). For a fair value hedge, changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability or of an unrecognized firm commitment attributable to interest rate risk are recorded in current period earnings. For a cash flow hedge, to the extent that the hedge is considered highly effective, changes in the fair value of the derivative instrument are recorded in other comprehensive income and subsequently reclassified to net income in the same period that the hedged transaction impacts net income. For free-standing derivative instruments, changes in fair values are reported in current period earnings. The Company formally documents the relationship between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivative instruments that are designated as hedges to specific assets or liabilities, unrecognized firm commitments or forecasted transactions. The Company also formally assesses, both at the inception of a hedge and on a quarterly basis, whether the derivative instruments used are highly effective in offsetting changes in fair values of, or cash flows related to, hedged items. |
Fair Value Measurements | Fair Value Measurements Fair value measurements apply whenever GAAP requires or permits assets or liabilities to be measured at fair value either on a recurring or nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. Fair value is based on the assumptions that management believes market participants would use when pricing an asset or liability. Fair value measurement and disclosure guidance established a three-level fair value hierarchy that prioritizes the use of inputs used in valuation methodologies. Management maximizes the use of observable inputs and minimizes the use of unobservable inputs when determining fair value measurements. |
Stock-Based Compensation | Stock-Based Compensation The Company grants stock-based awards, including restricted stock, restricted shares, performance share units, performance shares and restricted stock units. These awards are issued at no cost to the recipient. The fair value of restricted stock, restricted shares and restricted stock unit awards was based on the closing price of FHI’s common stock on the date of grant. Such awards were recognized in the Company’s consolidated statements of income on a straight-line basis over the vesting period. Recipients of performance shares and performance share units are entitled to receive shares of FHI common stock at no cost, subject to the Company’s achievement of specified market or performance conditions. The grant date fair value of the performance share units subject to the Company’s achievement of specified market conditions was estimated using a Monte Carlo simulation model. For purposes of this modeling exercise, historical volatilities of FHI common stock and members of the peer group were used. The risk-free interest rate that was used in the valuation was that of a zero-coupon U.S. Treasury note that was commensurate with the performance period. The grant date fair value of the performance share units and performance shares subject to the Company’s achievement of performance conditions was based on the closing price of FHI’s common stock on the date of grant. Forfeitures of stock-based awards are recognized as they occur. As compensation cost is recognized, a deferred tax asset is established which represents an estimate of the future tax deduction from the release of restrictions or the achievement of performance targets. At the time that restrictions on the stock-based awards are released, the Company may be required to recognize an adjustment to income tax expense, depending on the market price of the Company’s common stock at that time. |
Treasury Stock | Treasury Stock Shares of the Parent’s common stock that were repurchased or that are used to satisfy payroll tax withholdings related to stock-based compensation are recorded in treasury stock at cost. On the date of subsequent reissuance, the treasury stock account will be reduced by the cost of such stock on a first-in, first-out basis. |
Earnings per Share | Earnings per Share Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share are computed by dividing net income by the weighted average number of common shares outstanding for the period, assuming conversion of potentially dilutive common stock equivalents. |
Advertising and Marketing Costs | Advertising and Marketing Costs Advertising and marketing costs are expensed as incurred. Advertising and marketing costs were $8.0 million, $6.1 million and $5.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Accounting Standards Adopted in 2022 | Accounting Standards Adopted in 2022 In July 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-05, Leases (Topic 842), Lessors – Certain Leases with Variable Lease Payments In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848 Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting Reference Rate Reform (Topic 848): Scope Under ASU No. 2020-04, if certain criteria are met, entities can elect to not apply certain modification accounting requirements to contracts affected by reference rate reform (e.g., an entity that makes this election would not be required to remeasure the contracts at the modification date or reassess a previous accounting determination), and entities can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform. As permitted by ASU No. 2020-04, and now ASU No. 2022-06, for all contract modifications that meet the stated criteria, the Company has elected the optional expedients to not apply certain modification accounting requirements to contracts affected by reference rate reform, and for all hedging relationships that meet the stated criteria, the Company has elected the optional expedients to continue applying hedge accounting for hedging relationships affected by reference rate reform, and will continue to do so until December 31, 2024. Further, under ASU No. 2021-01, the scope of Topic 848 is expanded to also include certain derivative instruments that do not reference LIBOR or a reference rate that is expected to be discontinued, but that are being modified as a result of the discounting transition. If certain criteria are met, similar to the relief described in ASU No. 2020-04, entities can elect to not apply certain contract modification accounting requirements to derivative instruments that are affected by the discounting transition. As permitted by ASU No. 2021-01, and now ASU No. 2022-06, for all contract modifications to derivative instruments that meet the stated criteria, the Company has elected the optional expedients to not apply certain modification accounting requirements to contracts affected by reference rate reform, and will continue to do so until December 31, 2024. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The following ASUs have been issued by the FASB and are applicable to the Company in future reporting periods. In March 2022, the FASB issued ASU No. 2022-01, Derivatives and Hedging (Topic 815), Fair Value Hedging – Portfolio Layer Method In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures Enactment of the Inflation Reduction Act of 2022 On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (IRA) which, among other changes, created a new corporate alternative minimum tax (AMT) based on adjusted financial statement income and imposes a 1% excise tax on corporate stock repurchases. The effective date of these provisions was January 1, 2023. The enactment of the IRA did not have a material impact on the Company’s consolidated financial statements. |
Transactions with Affiliates _2
Transactions with Affiliates and Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Transactions with Affiliates and Related Parties | |
Schedule of changes in loans to executive officers, directors and affiliates | Year Ended December 31, (dollars in thousands) 2022 2021 2020 Balance at beginning of year $ 86,035 $ 91,226 $ 85,280 New loans made 10,776 2,659 18,133 Repayments (39,564) (7,850) (12,187) Balance at end of year $ 57,247 $ 86,035 $ 91,226 |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investment Securities | |
Schedule of amortized cost and fair value of securities | 2022 2021 Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Cost Gains Losses Value U.S. Treasury and government agency debt securities $ 163,309 $ — $ (12,327) $ 150,982 $ 196,662 $ 125 $ (4,224) $ 192,563 Government-sponsored enterprises debt securities 45,000 — (699) 44,301 — — — — Mortgage-backed securities: Residential - Government agency 66,792 — (7,069) 59,723 135,764 1,791 (291) 137,264 Residential - Government-sponsored enterprises 1,317,718 — (157,263) 1,160,455 1,496,605 6,914 (12,419) 1,491,100 Commercial - Government agency 282,700 — (44,847) 237,853 392,443 1,741 (6,521) 387,663 Commercial - Government-sponsored enterprises 130,612 — (11,039) 119,573 1,415,511 2,646 (48,714) 1,369,443 Commercial - Non-agency 21,964 — (493) 21,471 — — — — Collateralized mortgage obligations: Government agency 738,524 — (85,202) 653,322 2,103,187 7,768 (31,432) 2,079,523 Government-sponsored enterprises 533,103 — (70,971) 462,132 2,671,131 3,608 (53,695) 2,621,044 Collateralized loan obligations 249,877 50 (8,606) 241,321 105,245 2 — 105,247 Debt securities issued by states and political subdivisions — — — — 44,185 — — 44,185 Total available-for-sale securities $ 3,549,599 $ 50 $ (398,516) $ 3,151,133 $ 8,560,733 $ 24,595 $ (157,296) $ 8,428,032 Government agency debt securities $ 54,318 $ — $ (5,674) $ 48,644 $ — $ — $ — $ — Mortgage-backed securities: Residential - Government agency 46,302 — (6,294) 40,008 — — — — Residential - Government-sponsored enterprises 106,534 — (12,978) 93,556 — — — — Commercial - Government agency 30,544 — (5,229) 25,315 — — — — Commercial - Government-sponsored enterprises 1,150,449 — (138,451) 1,011,998 — — — — Collateralized mortgage obligations: Government agency 1,080,492 — (122,378) 958,114 — — — — Government-sponsored enterprises 1,798,178 — (207,045) 1,591,133 — — — — Debt securities issued by states and political subdivisions 53,822 — (7,768) 46,054 — — — — Total held-to-maturity securities $ 4,320,639 $ — $ (505,817) $ 3,814,822 $ — $ — $ — $ — |
Schedule of amortized cost and fair value of debt securities by contractual maturity | December 31, 2022 Amortized Fair (dollars in thousands) Cost Value Available-for-sale securities Due in one year or less $ 55,021 $ 54,644 Due after one year through five years 80,163 76,492 Due after five years through ten years 180,105 170,568 Due after ten years 164,861 156,371 480,150 458,075 Mortgage-backed securities: Residential - Government agency 66,792 59,723 Residential - Government-sponsored enterprises 1,317,718 1,160,455 Commercial - Government agency 282,700 237,853 Commercial - Government-sponsored enterprises 130,612 119,573 Total mortgage-backed securities 1,797,822 1,577,604 Collateralized mortgage obligations: Government agency 738,524 653,322 Government-sponsored enterprises 533,103 462,132 Total collateralized mortgage obligations 1,271,627 1,115,454 Total available-for-sale securities $ 3,549,599 $ 3,151,133 Held-to-maturity securities Due in one year or less $ — $ — Due after one year through five years — — Due after five years through ten years 10,208 8,932 Due after ten years 97,932 85,766 108,140 94,698 Mortgage-backed securities: Residential - Government agency 46,302 40,008 Residential - Government-sponsored enterprises 106,534 93,556 Commercial - Government agency 30,544 25,315 Commercial - Government-sponsored enterprises 1,150,449 1,011,998 Total mortgage-backed securities 1,333,829 1,170,877 Collateralized mortgage obligations: Government agency 1,080,492 958,114 Government-sponsored enterprises 1,798,178 1,591,133 Total collateralized mortgage obligations 2,878,670 2,549,247 Total held-to-maturity securities $ 4,320,639 $ 3,814,822 |
Schedule of gross unrealized losses and fair values of securities in a continuous loss position | Time in Continuous Loss as of December 31, 2022 Less Than 12 Months 12 Months or More Total Unrealized Unrealized Unrealized (dollars in thousands) Losses Fair Value Losses Fair Value Losses Fair Value U.S. Treasury and government agency debt securities $ (2,962) $ 83,870 $ (9,365) $ 67,112 $ (12,327) $ 150,982 Government-sponsored enterprises debt securities (699) 44,301 — — (699) 44,301 Mortgage-backed securities: Residential - Government agency (7,069) 59,723 — — (7,069) 59,723 Residential - Government-sponsored enterprises (73,954) 645,338 (83,309) 515,117 (157,263) 1,160,455 Commercial - Government agency (15,852) 108,842 (28,995) 129,011 (44,847) 237,853 Commercial - Government-sponsored enterprises (7,348) 94,657 (3,691) 24,916 (11,039) 119,573 Commercial - Non-agency (493) 21,471 — — (493) 21,471 Collateralized mortgage obligations: Government agency (74,797) 596,907 (10,405) 56,415 (85,202) 653,322 Government-sponsored enterprises (21,916) 198,108 (49,055) 264,024 (70,971) 462,132 Collateralized loan obligations (8,606) 170,042 — — (8,606) 170,042 Total available-for-sale securities with unrealized losses $ (213,696) $ 2,023,259 $ (184,820) $ 1,056,595 $ (398,516) $ 3,079,854 Time in Continuous Loss as of December 31, 2021 Less Than 12 Months 12 Months or More Total Unrealized Unrealized Unrealized (dollars in thousands) Losses Fair Value Losses Fair Value Losses Fair Value U.S. Treasury and government agency debt securities $ (3,355) $ 134,468 $ (869) $ 16,642 $ (4,224) $ 151,110 Mortgage-backed securities: Residential - Government agency (291) 51,231 — — (291) 51,231 Residential - Government-sponsored enterprises (10,876) 1,230,104 (1,543) 32,415 (12,419) 1,262,519 Commercial - Government agency (5,239) 186,024 (1,282) 26,063 (6,521) 212,087 Commercial - Government-sponsored enterprises (22,179) 744,819 (26,535) 397,123 (48,714) 1,141,942 Collateralized mortgage obligations: Government agency (31,432) 1,441,848 — — (31,432) 1,441,848 Government-sponsored enterprises (52,551) 2,255,535 (1,144) 24,959 (53,695) 2,280,494 Total available-for-sale securities with unrealized losses $ (125,923) $ 6,044,029 $ (31,373) $ 497,202 $ (157,296) $ 6,541,231 |
Loans and Leases (Tables)
Loans and Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Loans and Leases. | |
Schedule of components of loans and leases | December 31, December 31, (dollars in thousands) 2022 2021 Commercial and industrial $ 2,235,897 $ 2,087,099 Commercial real estate 4,132,309 3,639,623 Construction 844,643 813,969 Residential: Residential mortgage 4,302,788 4,083,367 Home equity line 1,055,351 876,608 Total residential 5,358,139 4,959,975 Consumer 1,222,934 1,229,939 Lease financing 298,090 231,394 Total loans and leases $ 14,092,012 $ 12,961,999 |
Allowance for Credit Losses (Ta
Allowance for Credit Losses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Allowance for Credit Losses | |
Schedule of activity in the allowance by class of loans and lease | Year Ended December 31, 2022 Commercial Lending Residential Lending Commercial Commercial Home and Real Lease Residential Equity (dollars in thousands) Industrial Estate Construction Financing Mortgage Line Consumer Total Allowance for credit losses: Balance at beginning of year $ 20,080 $ 42,951 $ 9,773 $ 1,659 $ 34,364 $ 5,642 $ 42,793 $ 157,262 Charge-offs (2,012) (750) — — (103) (1,175) (16,848) (20,888) Recoveries 897 14 — 60 418 713 7,545 9,647 Provision (4,401) 1,595 (3,930) (168) 496 3,116 1,171 (2,121) Balance at end of year $ 14,564 $ 43,810 $ 5,843 $ 1,551 $ 35,175 $ 8,296 $ 34,661 $ 143,900 Year Ended December 31, 2021 Commercial Lending Residential Lending Commercial Commercial Home and Real Lease Residential Equity (dollars in thousands) Industrial Estate Construction Financing Mortgage Line Consumer Total Allowance for credit losses: Balance at beginning of year $ 24,711 $ 58,123 $ 10,039 $ 3,298 $ 40,461 $ 7,163 $ 64,659 $ 208,454 Charge-offs (5,949) (66) — — (632) (342) (16,634) (23,623) Recoveries 867 39 266 — 261 117 9,600 11,150 Provision 451 (15,145) (532) (1,639) (5,726) (1,296) (14,832) (38,719) Balance at end of year $ 20,080 $ 42,951 $ 9,773 $ 1,659 $ 34,364 $ 5,642 $ 42,793 $ 157,262 Year Ended December 31, 2020 Commercial Lending Residential Lending Commercial Commercial Home and Real Lease Residential Equity (dollars in thousands) Industrial Estate Construction Financing Mortgage Line Consumer Unallocated Total Allowance for credit losses: Balance at beginning of year $ 28,975 $ 22,325 $ 4,844 $ 424 $ 29,303 $ 9,876 $ 34,644 $ 139 $ 130,530 Adoption of ASU No. 2016-13 (16,105) 10,559 (1,803) 207 (2,793) (4,731) 15,575 (139) 770 Charge-offs (15,572) (2,753) (379) — (14) (54) (28,791) — (47,563) Recoveries 5,005 615 200 — 216 167 10,499 — 16,702 Provision 22,408 27,377 7,177 2,667 13,749 1,905 32,732 — 108,015 Balance at end of year $ 24,711 $ 58,123 $ 10,039 $ 3,298 $ 40,461 $ 7,163 $ 64,659 $ — $ 208,454 |
Schedule of activity in the Liability for Credit Losses for Off-Balance-Sheet Financial Instruments | Year Ended December 31, 2022 Commercial Lending Residential Lending Commercial Commercial Home and Real Lease Residential Equity (dollars in thousands) Industrial Estate Construction Financing Mortgage Line Consumer Total Reserve for unfunded commitments: Balance at beginning of year $ 8,615 $ 2,114 $ 8,963 $ — $ 15 $ 10,546 $ 69 $ 30,322 Provision (804) (110) (1,493) — 15 5,937 (32) 3,513 Balance at end of year $ 7,811 $ 2,004 $ 7,470 $ — $ 30 $ 16,483 $ 37 $ 33,835 Year Ended December 31, 2021 Commercial Lending Residential Lending Commercial Commercial Home and Real Lease Residential Equity (dollars in thousands) Industrial Estate Construction Financing Mortgage Line Consumer Total Reserve for unfunded commitments: Balance at beginning of year $ 11,719 $ 1,328 $ 9,037 $ — $ 2 $ 8,452 $ 65 $ 30,603 Provision (3,104) 786 (74) — 13 2,094 4 (281) Balance at end of year $ 8,615 $ 2,114 $ 8,963 $ — $ 15 $ 10,546 $ 69 $ 30,322 Year Ended December 31, 2020 Commercial Lending Residential Lending Commercial Commercial Home and Real Lease Residential Equity (dollars in thousands) Industrial Estate Construction Financing Mortgage Line Consumer Total Reserve for unfunded commitments: Balance at beginning of year $ — $ — $ — $ — $ — $ — $ 600 $ 600 Adoption of ASU No. 2016-13 5,390 778 4,119 — 7 6,587 (581) 16,300 Provision 6,329 550 4,918 — (5) 1,865 46 13,703 Balance at end of year $ 11,719 $ 1,328 $ 9,037 $ — $ 2 $ 8,452 $ 65 $ 30,603 |
Schedule of amortized cost basis by year of origination and credit quality indicator | The amortized cost basis by year of origination and credit quality indicator of the Company's loans and leases as of December 31, 2022 was as follows: Revolving Loans Converted Term Loans Revolving to Term Amortized Cost Basis by Origination Year Loans Loans Amortized Amortized (dollars in thousands) 2022 2021 2020 2019 2018 Prior Cost Basis Cost Basis Total Commercial Lending Commercial and Industrial Risk rating: Pass $ 359,881 $ 422,567 $ 54,656 $ 170,222 $ 51,476 $ 137,257 $ 894,384 $ 15,715 $ 2,106,158 Special Mention 2,059 240 1,371 2,643 184 1,431 22,897 378 31,203 Substandard 625 289 1,117 1,092 668 885 14,733 65 19,474 Other (1) 17,679 7,721 4,329 3,965 1,881 1,167 42,320 — 79,062 Total Commercial and Industrial 380,244 430,817 61,473 177,922 54,209 140,740 974,334 16,158 2,235,897 Commercial Real Estate Risk rating: Pass 889,583 695,882 319,838 565,587 395,474 1,173,163 48,081 — 4,087,608 Special Mention 170 — 555 14,878 512 11,398 675 — 28,188 Substandard — — 173 — 1,704 14,485 — — 16,362 Other (1) — — — — — 151 — — 151 Total Commercial Real Estate 889,753 695,882 320,566 580,465 397,690 1,199,197 48,756 — 4,132,309 Construction Risk rating: Pass 124,464 261,536 96,423 97,000 88,973 84,704 25,957 — 779,057 Special Mention — — — 221 — — — — 221 Substandard — — — — 21 490 — — 511 Other (1) 29,694 21,339 4,686 2,201 3,784 2,196 954 — 64,854 Total Construction 154,158 282,875 101,109 99,422 92,778 87,390 26,911 — 844,643 Lease Financing Risk rating: Pass 113,563 24,052 43,497 37,502 6,004 67,687 — — 292,305 Special Mention — 411 2,498 1,299 — — — — 4,208 Substandard — — 197 12 11 1,357 — — 1,577 Total Lease Financing 113,563 24,463 46,192 38,813 6,015 69,044 — — 298,090 Total Commercial Lending $ 1,537,718 $ 1,434,037 $ 529,340 $ 896,622 $ 550,692 $ 1,496,371 $ 1,050,001 $ 16,158 $ 7,510,939 (continued) Revolving Loans Converted Term Loans Revolving to Term Amortized Cost Basis by Origination Year Loans Loans (continued) Amortized Amortized (dollars in thousands) 2022 2021 2020 2019 2018 Prior Cost Basis Cost Basis Total Residential Lending Residential Mortgage FICO: 740 and greater $ 557,636 $ 1,064,444 $ 560,463 $ 245,241 $ 165,258 $ 920,100 $ — $ — $ 3,513,142 680 - 739 73,929 112,672 82,416 40,355 22,126 130,508 — — 462,006 620 - 679 12,320 13,804 9,881 3,649 3,054 35,441 — — 78,149 550 - 619 2,455 2,246 1,791 263 601 6,955 — — 14,311 Less than 550 — 1,321 367 — 966 5,304 — — 7,958 No Score (3) 22,289 14,671 6,820 10,599 15,921 47,245 — — 117,545 Other (2) 18,970 18,211 15,287 9,201 9,124 29,128 9,202 554 109,677 Total Residential Mortgage 687,599 1,227,369 677,025 309,308 217,050 1,174,681 9,202 554 4,302,788 Home Equity Line FICO: 740 and greater — — — — — — 817,123 2,059 819,182 680 - 739 — — — — — — 171,117 2,714 173,831 620 - 679 — — — — — — 45,368 2,100 47,468 550 - 619 — — — — — — 7,485 1,029 8,514 Less than 550 — — — — — — 1,151 481 1,632 No Score (3) — — — — — — 4,724 — 4,724 Total Home Equity Line — — — — — — 1,046,968 8,383 1,055,351 Total Residential Lending 687,599 1,227,369 677,025 309,308 217,050 1,174,681 1,056,170 8,937 5,358,139 Consumer Lending FICO: 740 and greater 200,887 111,047 53,534 43,912 24,951 8,432 125,126 185 568,074 680 - 739 99,787 67,140 37,260 31,751 15,874 7,665 72,101 514 332,092 620 - 679 25,949 29,587 14,226 16,872 9,672 6,488 31,854 937 135,585 550 - 619 3,017 5,475 5,226 8,056 5,396 3,924 11,269 854 43,217 Less than 550 656 1,351 2,286 3,779 1,869 1,593 3,541 443 15,518 No Score (3) 3,205 258 — 51 24 29 38,805 227 42,599 Other (2) 1,615 4,082 353 1,368 — — 78,430 1 85,849 Total Consumer Lending 335,116 218,940 112,885 105,789 57,786 28,131 361,126 3,161 1,222,934 Total Loans and Leases $ 2,560,433 $ 2,880,346 $ 1,319,250 $ 1,311,719 $ 825,528 $ 2,699,183 $ 2,467,297 $ 28,256 $ 14,092,012 (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. The amortized cost basis by year of origination and credit quality indicator of the Company's loans and leases as of December 31, 2021 was as follows: 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 Estate 693,370 338,140 582,386 496,985 440,863 986,450 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. |
Schedule of revolving loans that were converted to term loans | Year Ended (dollars in thousands) December 31, 2022 Commercial and industrial $ 480 Home equity line 2,189 Consumer 1,323 Total Revolving Loans Converted to Term Loans During the Year $ 3,992 Year Ended (dollars in thousands) December 31, 2021 Commercial and industrial $ 1,153 Commercial real estate 14,891 Residential mortgage 577 Home equity line 3,656 Consumer 1,574 Total Revolving Loans Converted to Term Loans During the Year $ 21,851 |
Schedule of aging analyses of past due loans and leases | December 31, 2022 Past Due Loans and Greater Leases Past Than or Due 90 Days 30-59 60-89 Equal to or More and Days Days 90 Days Total Total Loans Still Accruing (dollars in thousands) Past Due Past Due Past Due Past Due Current and Leases Interest Commercial and industrial $ 2,682 $ 769 $ 1,441 $ 4,892 $ 2,231,005 $ 2,235,897 $ 291 Commercial real estate 4,505 — 727 5,232 4,127,077 4,132,309 — Construction 109 — — 109 844,534 844,643 — Lease financing — — — — 298,090 298,090 — Residential mortgage 3,681 1,983 2,572 8,236 4,294,552 4,302,788 58 Home equity line 5,161 1,381 2,072 8,614 1,046,737 1,055,351 — Consumer 29,927 6,801 2,886 39,614 1,183,320 1,222,934 2,885 Total $ 46,065 $ 10,934 $ 9,698 $ 66,697 $ 14,025,315 $ 14,092,012 $ 3,234 December 31, 2021 Past Due Loans and Greater Leases Past Than or Due 90 Days 30-59 60-89 Equal to or More and Days Days 90 Days Total Total Loans Still Accruing (dollars in thousands) Past Due Past Due Past Due Past Due Current and Leases Interest Commercial and industrial $ 1,195 $ 1,195 $ 1,318 $ 3,708 $ 2,083,391 $ 2,087,099 $ 740 Commercial real estate 631 — — 631 3,638,992 3,639,623 — Construction 162 — — 162 813,807 813,969 — Lease financing — — — — 231,394 231,394 — Residential mortgage 3,030 1,002 5,617 9,649 4,073,718 4,083,367 987 Home equity line 1,538 538 3,681 5,757 870,851 876,608 3,681 Consumer 16,534 3,366 1,800 21,700 1,208,239 1,229,939 1,800 Total $ 23,090 $ 6,101 $ 12,416 $ 41,607 $ 12,920,392 $ 12,961,999 $ 7,208 |
Schedule of amortized cost basis of loans and leases on nonaccrual status | December 31, 2022 Nonaccrual Loans and Leases With No Nonaccrual Allowance Loans (dollars in thousands) for Credit Losses and Leases Commercial and industrial $ 665 $ 1,215 Commercial real estate 727 727 Residential mortgage 1,560 6,166 Home equity line 596 3,797 Total Nonaccrual Loans and Leases $ 3,548 $ 11,905 December 31, 2021 Nonaccrual Loans and Leases With No Nonaccrual Allowance Loans (dollars in thousands) for Credit Losses and Leases Commercial and industrial $ — $ 718 Commercial real estate 727 727 Residential mortgage 1,192 5,637 Total Nonaccrual Loans and Leases $ 1,919 $ 7,082 |
Schedule of information related to loans modified in a TDR | Year Ended December 31, 2022 Number of Recorded Related (dollars in thousands) Contracts (1) Investment (2) ACL Commercial and industrial 5 $ 205 $ 17 Residential mortgage 1 247 31 Consumer 258 2,173 443 Total 264 $ 2,625 $ 491 Year Ended December 31, 2021 Number of Recorded Related (dollars in thousands) Contracts (1) Investment (2) ACL Commercial and industrial 11 $ 1,481 $ 124 Commercial real estate 1 346 78 Construction 12 689 69 Residential mortgage 13 5,539 207 Consumer 1,652 15,710 2,127 Total 1,689 $ 23,765 $ 2,605 Year Ended December 31, 2020 Number of Recorded Related (dollars in thousands) Contracts (1) Investment (2) ACL Commercial and industrial 1 $ 500 $ 30 Commercial real estate 3 6,470 470 Residential mortgage 1 825 90 Total 5 $ 7,795 $ 590 (1) The number of contracts does not include TDRs that have been fully paid off, charged off or foreclosed upon by the end of the year. (2) The recorded investment balances reflect all partial paydowns and charge-offs since the modification date and do not include TDRs that have been fully paid off, charged off or foreclosed upon by the end of the year. |
Schedule of TDRs that defaulted in period within 12 months of their permanent modification date | Year Ended December 31, 2022 2021 2020 Number of Recorded Number of Recorded Number of Recorded (dollars in Contracts (1) Investment (2) Contracts (1) Investment (2) Contracts (1) Investment (2) Commercial and industrial 2 $ 541 3 $ 569 1 $ 500 Construction — — 1 450 — — Commercial real estate — — 1 356 — — Residential mortgage — — 4 1,012 — — Consumer 213 2,623 405 5,272 — — Total 215 $ 3,164 414 $ 7,659 1 $ 500 (1) The number of contracts does not include TDRs that have been fully paid off, charged off or foreclosed upon by the end of the year. (2) The recorded investment balances reflect all partial paydowns and charge-offs since the modification date and do not include TDRs that have been fully paid off, charged off or foreclosed upon by the end of the year. |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Premises and Equipment | |
Schedule of premises and equipment | At December 31, 2022 and 2021, premises and equipment were comprised of the following: December 31, (dollars in thousands) 2022 2021 Buildings $ 294,051 $ 295,286 Furniture and equipment 92,276 95,824 Land 97,955 113,720 Leasehold improvements 53,216 66,772 Total premises and equipment 537,498 571,602 Less: Accumulated depreciation and amortization 257,143 253,154 Net book value $ 280,355 $ 318,448 Depreciation and amortization expenses included in occupancy and equipment expenses for 2022, 2021 and 2020 were as follows: Year Ended December 31, (dollars in thousands) 2022 2021 2020 Occupancy $ 9,192 $ 9,149 $ 9,231 Equipment 6,126 6,682 6,721 Total $ 15,318 $ 15,831 $ 15,952 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Assets. | |
Schedule of carrying amount of goodwill reported in reporting units | Retail Commercial (in thousands) Banking Banking Total December 31, 2022 $ 687,492 $ 308,000 $ 995,492 December 31, 2021 687,492 308,000 995,492 |
Schedule of estimated future amortization expense for MSRs | Estimated (dollars in thousands) Amortization Year ending December 31: 2023 $ 949 2024 843 2025 747 2026 660 2027 583 |
Schedule of details of the Company's MSRs | Year Ended December 31, (dollars in thousands) 2022 2021 Gross carrying amount $ 69,273 $ 69,103 Less: accumulated amortization 62,711 60,801 Net carrying value $ 6,562 $ 8,302 |
Schedule of changes in amortized MSRs | Year Ended December 31, (dollars in thousands) 2022 2021 Balance at beginning of year $ 8,302 $ 10,731 Originations 170 1,247 Amortization (1,910) (3,676) Balance at end of year $ 6,562 $ 8,302 Fair value of amortized MSRs at beginning of year $ 12,243 $ 14,029 Fair value of amortized MSRs at end of year $ 15,193 $ 12,243 Balance of loans serviced for others $ 1,441,202 $ 1,673,158 |
Schedule of quantitative assumptions used in determining lower of cost or fair value of MSRs | December 31, 2022 December 31, 2021 Weighted Weighted Range Average Range Average Conditional prepayment rate 7.02 % - 13.58 % 7.11 % 13.77 % - 25.19 % 14.61 % Life in years (of the MSR) 3.35 - 7.37 7.20 1.99 - 5.31 5.03 Weighted-average coupon rate 3.55 % - 6.24 % 3.68 % 3.58 % - 6.56 % 3.71 % Discount rate 10.41 % - 10.54 % 10.51 % 10.00 % - 10.01 % 10.00 % |
Transfers of Financial Assets (
Transfers of Financial Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Transfers of Financial Assets | |
Schedule of carrying amounts of assets pledged as collateral | (dollars in thousands) 2022 2021 Public deposits $ 2,977,693 $ 1,913,369 Federal Home Loan Bank 3,451,070 2,380,042 Federal Reserve Bank 1,704,803 1,724,279 ACH transactions 133,173 115,038 Interest rate swaps 31,091 48,430 Total $ 8,297,830 $ 6,181,158 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deposits | |
Schedule of deposits by category | December 31, (dollars in thousands) 2022 2021 U.S.: Interest-bearing $ 11,936,775 $ 11,553,298 Noninterest-bearing 7,978,046 8,498,187 Foreign: Interest-bearing 887,608 868,985 Noninterest-bearing 886,600 895,676 Total deposits $ 21,689,029 $ 21,816,146 |
Schedule of maturity distribution of time certificates of deposit | Under $250,000 (dollars in thousands) $250,000 or More Total Three months or less $ 207,766 $ 888,815 $ 1,096,581 Over three through six months 182,985 263,725 446,710 Over six through twelve months 260,583 273,106 533,689 2024 166,340 62,314 228,654 2025 59,458 26,550 86,008 2026 40,504 5,608 46,112 2027 29,216 8,620 37,836 Thereafter 460 — 460 Total $ 947,312 $ 1,528,738 $ 2,476,050 |
Short-Term Borrowings (Tables)
Short-Term Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Short-Term Borrowings | |
Schedule of short-term borrowings | December 31, (dollars in thousands) 2022 2021 Federal funds purchased $ 75,000 $ — Total short-term borrowings $ 75,000 $ — |
Schedule of selected information for short-term borrowings | Year Ended December 31, (dollars in thousands) 2022 2021 2020 Federal funds purchased: Weighted-average interest rate at December 31, 4.35 % — % — % Highest month-end balance $ 75,000 $ — $ — Average outstanding balance $ 11,521 $ — $ 1,366 Weighted-average interest rate paid 4.08 % — % 0.43 % Short-term FHLB fixed-rate advance: Weighted-average interest rate at December 31, — % — % — % Highest month-end balance $ — $ — $ 400,000 Average outstanding balance $ — $ — $ 208,197 Weighted-average interest rate paid — % — % 2.88 % |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) | |
Schedule of changes in accumulated other comprehensive income (loss) | Income Tax Pre-tax Benefit Net of (dollars in thousands) Amount (Expense) Tax Accumulated other comprehensive loss at December 31, 2021 $ (165,967) $ 44,274 $ (121,693) Year ended December 31, 2022 Pension and other benefits: Net actuarial gains arising during the year 20,710 (5,524) 15,186 Amortization of net loss included in net income 5,146 (1,373) 3,773 Net change in pension and other benefits 25,856 (6,897) 18,959 Investment securities: Unrealized net losses arising during the year (773,667) 206,376 (567,291) Reclassification of net losses to net income: Amortization of unrealized holding losses on held-to-maturity securities 48,378 (12,905) 35,473 Net change in investment securities (725,289) 193,471 (531,818) Cash flow derivative hedges: Unrealized net losses arising during the year (6,710) 1,790 (4,920) Reclassification of net losses included in net income 297 (79) 218 Net change in cash flow derivative hedges (6,413) 1,711 (4,702) Other comprehensive loss (705,846) 188,285 (517,561) Accumulated other comprehensive loss at December 31, 2022 $ (871,813) $ 232,559 $ (639,254) Income Tax Pre-tax Benefit Net of (dollars in thousands) Amount (Expense) Tax Accumulated other comprehensive income at December 31, 2020 $ 43,098 $ (11,494) $ 31,604 Year ended December 31, 2021 Pension and other benefits: Net actuarial gains arising during the year 3,107 (829) 2,278 Amortization of net loss included in net income 6,913 (1,844) 5,069 Net change in pension and other benefits 10,020 (2,673) 7,347 Investment securities: Unrealized net losses arising during the year (218,983) 58,414 (160,569) Reclassification of net gains to net income: Investment securities gains, net (102) 27 (75) Net change in investment securities (219,085) 58,441 (160,644) Other comprehensive loss (209,065) 55,768 (153,297) Accumulated other comprehensive loss at December 31, 2021 $ (165,967) $ 44,274 $ (121,693) Income Tax Pre-tax Benefit Net of (dollars in thousands) Amount (Expense) Tax Accumulated other comprehensive loss at December 31, 2019 $ (43,450) $ 11,701 $ (31,749) Year ended December 31, 2020 Pension and other benefits: Net actuarial losses arising during the year (10,399) 2,774 (7,625) Prior service credit (51) 14 (37) Amortization of net loss included in net income 5,595 (1,492) 4,103 Change in Company tax rate — (96) (96) Net change in pension and other benefits (4,855) 1,200 (3,655) Investment securities: Unrealized net gains arising during the year 91,289 (24,365) 66,924 Reclassification of net losses to net income: Investment securities losses, net 114 (30) 84 Net change in investment securities 91,403 (24,395) 67,008 Other comprehensive income 86,548 (23,195) 63,353 Accumulated other comprehensive income at December 31, 2020 $ 43,098 $ (11,494) $ 31,604 |
Summary of changes in accumulated other comprehensive income (loss), net of tax | Pensions Accumulated and Available-for-Sale Held-to-Maturity Cash Flow Other Other Investment Investment Derivative Comprehensive (dollars in thousands) Benefits Securities Securities Hedges Income (Loss) Year Ended December 31, 2022 Balance at beginning of year $ (24,390) $ (97,303) $ — $ — $ (121,693) Unrealized net losses related to the transfer of securities from available-for-sale to held-to-maturity — 372,419 (372,419) — — Other comprehensive income (loss) 18,959 (567,291) 35,473 (4,702) (517,561) Balance at end of year $ (5,431) $ (292,175) $ (336,946) $ (4,702) $ (639,254) Year Ended December 31, 2021 Balance at beginning of year $ (31,737) $ 63,341 $ — $ — $ 31,604 Other comprehensive income (loss) 7,347 (160,644) — — (153,297) Balance at end of year $ (24,390) $ (97,303) $ — $ — $ (121,693) Year Ended December 31, 2020 Balance at beginning of year $ (28,082) $ (3,667) $ — $ — $ (31,749) Other comprehensive (loss) income (3,655) 67,008 — — 63,353 Balance at end of year $ (31,737) $ 63,341 $ — $ — $ 31,604 |
Regulatory Capital Requiremen_2
Regulatory Capital Requirements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Regulatory Capital Requirements | |
Schedule of regulatory capital ratios | First Hawaiian Minimum Well- First Hawaiian, Inc. Bank Capital Capitalized (dollars in thousands) Amount Ratio Amount Ratio Ratio (1) Ratio (1) December 31, 2022: Common equity tier 1 capital to risk-weighted assets $ 1,912,767 11.82 % $ 1,895,693 11.71 % 4.50 % 6.50 % Tier 1 capital to risk-weighted assets 1,912,767 11.82 % 1,895,693 11.71 % 6.00 % 8.00 % Total capital to risk-weighted assets 2,090,502 12.92 % 2,073,428 12.81 % 8.00 % 10.00 % Tier 1 capital to average assets (leverage ratio) 1,912,767 8.11 % 1,895,693 8.04 % 4.00 % 5.00 % December 31, 2021: Common equity tier 1 capital to risk-weighted assets $ 1,783,113 12.24 % $ 1,769,214 12.14 % 4.50 % 6.50 % Tier 1 capital to risk-weighted assets 1,783,113 12.24 % 1,769,214 12.14 % 6.00 % 8.00 % Total capital to risk-weighted assets 1,965,280 13.49 % 1,951,377 13.40 % 8.00 % 10.00 % Tier 1 capital to average assets (leverage ratio) 1,783,113 7.24 % 1,769,214 7.18 % 4.00 % 5.00 % (1) As defined by the regulations issued by the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the FDIC. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Summary of net lease expense | Year Ended December 31, (dollars in thousands) 2022 2021 2020 Operating lease expense $ 8,883 $ 9,432 $ 9,169 Short-term lease expense 26 246 397 Variable lease expense 2,135 2,204 2,353 Finance lease expense: Amortization of right-of-use assets 1 3 3 Interest on lease liabilities — — 1 Total finance lease expense 1 3 4 Less: Sublease income (637) (744) (1,222) Net lease expense $ 10,408 $ 11,141 $ 10,701 |
Summary of other information related to the Company's lease liabilities | Year Ended December 31, (dollars in thousands) 2022 2021 2020 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating leases $ 8,418 $ 7,981 $ 8,848 Financing cash flows paid for finance leases $ — $ 10 $ 10 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 4,676 $ 31,792 $ 3,796 Weighted Average Remaining Lease Term Operating leases (years) 22.2 22.8 16.1 Finance leases (years) — 0.5 1.5 Weighted Average Discount Rate Operating leases 2.98 % 3.01 % 3.17 % Finance leases — % 6.78 % 6.78 % |
Summary of future minimum rental payments under noncancellable leases | Net Operating Lease (dollars in thousands) Payments Year ending December 31: 2023 $ 6,198 2024 5,990 2025 5,369 2026 4,964 2027 4,322 Thereafter 65,249 Total future minimum lease payments 92,092 Less: Imputed interest (27,279) Total $ 64,813 |
Summary of future minimum rental income under noncancellable operating leases | The following table sets forth future minimum rental income under noncancelable operating leases with terms in excess of one year as of December 31, 2022: Minimum Rental (dollars in thousands) Income Year ending December 31: 2023 $ 5,249 2024 4,405 2025 3,751 2026 2,958 2027 1,360 Thereafter 3,492 Total $ 21,215 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Benefit Plans | |
Schedule of amounts recognized in other comprehensive income from benefit plans | Pension Benefits Other Benefits (dollars in thousands) 2022 2021 2020 2022 2021 2020 Amounts arising during the year: Net loss (gain) on pension assets $ 24,047 $ 3,581 $ (4,839) $ — $ — $ — Net (gain) loss on pension obligations (38,949) (4,614) 14,935 (5,808) (2,074) 303 Reclassification adjustments recognized as components of net periodic benefit cost during the year: Net (gain) loss (5,643) (6,961) (5,806) 497 48 211 Prior service credit — — — — — 51 Amount recognized in other comprehensive (loss) income $ (20,545) $ (7,994) $ 4,290 $ (5,311) $ (2,026) $ 565 |
Schedule of amounts within accumulated other comprehensive income not yet recognized in net periodic benefit cost | Pension Benefits Other Benefits (dollars in thousands) 2022 2021 2022 2021 Net actuarial loss (gain) $ 15,812 $ 36,357 $ (8,405) $ (3,094) Prior service credit — — — — Total, pretax effect 15,812 36,357 (8,405) (3,094) Tax impact (4,218) (9,698) 2,242 825 Ending balance in accumulated other comprehensive loss $ 11,594 $ 26,659 $ (6,163) $ (2,269) |
Summary of changes to projected or accumulated benefit obligation | Pension Benefits Other Benefits (dollars in thousands) 2022 2021 2022 2021 Benefit obligation at beginning of year $ 204,432 $ 219,392 $ 21,362 $ 22,538 Service cost — — 789 874 Interest cost 5,518 5,065 565 515 Actuarial gain (38,949) (4,614) (5,808) (2,074) Benefit payments (15,413) (15,411) (483) (491) Benefit obligation at end of year $ 155,588 $ 204,432 $ 16,425 $ 21,362 |
Summary of changes to fair value of plan assets | Pension Benefits Other Benefits (dollars in thousands) 2022 2021 2022 2021 Fair value of plan assets at beginning of year $ 106,648 $ 114,795 $ — $ — Actual return on plan assets (20,924) (536) — — Benefit payments from trust (7,575) (7,611) — — Fair value of plan assets at end of year $ 78,149 $ 106,648 $ — $ — |
Summary of funded status of plans | Pension Benefits Other Benefits (dollars in thousands) 2022 2021 2022 2021 Pension assets for overfunded plans $ 8,713 $ 15,345 $ — $ — Pension liabilities for underfunded plans (86,152) (113,129) (16,425) (21,362) Funded status $ (77,439) $ (97,784) $ (16,425) $ (21,362) |
Schedule of projected and accumulated benefit obligation and fair value of plan assets | Funded Pension Plan Unfunded Pension Plans Total Pension Plans (dollars in thousands) 2022 2021 2022 2021 2022 2021 Projected benefit obligation $ 69,436 $ 91,303 $ 86,152 $ 113,129 $ 155,588 $ 204,432 Accumulated benefit obligation 69,436 91,303 86,152 113,129 155,588 204,432 Fair value of plan assets 78,149 106,648 — — 78,149 106,648 Overfunded (underfunded) portion of PBO/ABO 8,713 15,345 (86,152) (113,129) (77,439) (97,784) |
Schedule of components of net periodic benefit cost | Income line item where recognized in Pension Benefits Other Benefits (dollars in the consolidated statements of income 2022 2021 2020 2022 2021 2020 Service cost Salaries and employee benefits $ — $ — $ — $ 789 $ 874 $ 768 Interest cost Other noninterest expense 5,518 5,065 6,519 565 515 640 Expected return on plan assets Other noninterest expense (3,124) (3,044) (4,800) — — — Prior service credit Other noninterest expense — — — — — (51) Recognized net actuarial loss (gain) Other noninterest expense 5,643 6,961 5,806 (497) (48) (211) Total net periodic benefit cost $ 8,037 $ 8,982 $ 7,525 $ 857 $ 1,341 $ 1,146 |
Schedule of funded pension benefit amounts included in pension benefits | Funded Pension Benefits (dollars in thousands) 2022 2021 2020 Interest cost $ 2,466 $ 2,261 $ 2,946 Expected return on plan assets (3,124) (3,044) (4,800) Recognized net actuarial loss 1,906 1,609 1,421 Total net periodic benefit cost $ 1,248 $ 826 $ (433) |
Schedule of assumptions used to determine benefit obligations and net periodic benefit cost | FHI ERP Pension Benefits SERP Pension Benefits Other Benefits 2022 2021 2020 2022 2021 2020 2022 2021 2020 Discount rate 2.77 % 2.37 % 3.16 % 2.77 % 2.37 % 3.16 % 2.77 % 2.37 % 3.16 % Expected long-term return on plan assets 3.05 % 2.75 % 4.40 % NA NA NA NA NA NA Rate of compensation increase NA NA NA NA NA NA NA NA NA |
Schedule of assumed healthcare cost trend rates | 2022 2021 2020 Healthcare cost trend rate assumed for next year 6.00 % 6.00 % 6.25 % Rate to which the cost trend is assumed to decline (the ultimate trend rate) 5.00 % 5.00 % 5.00 % Year that the rate reaches the ultimate trend rate 2028 2026 2026 |
Schedule of allocation of employee retirement plan assets | Asset Allocation 2022 2021 Equity securities 11 % 11 % Debt securities 87 % 85 % Other securities 2 % 4 % Total 100 % 100 % |
Schedule of target allocation of employee retirement plan assets | Target Allocation Equity securities 10 % Debt securities 88 % Other securities 2 % |
Schedule of expected future benefit payments | Pension Other (dollars in thousands) Benefits Benefits 2023 $ 15,453 $ 1,217 2024 15,115 1,345 2025 15,263 1,413 2026 15,350 1,468 2027 14,397 1,530 2028 to 2032 63,403 7,810 |
Schedule of fair value of employee retirement plan assets | December 31, 2022 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (dollars in thousands) (Level 1) (Level 2) (Level 3) Total Asset classes: Cash and cash equivalents $ 1,712 $ — $ — $ 1,712 Fixed income - U.S. Treasury securities — 6,593 — 6,593 Fixed income - U.S. government agency securities — 6,656 — 6,656 Fixed income - U.S. corporate securities — 53,051 — 53,051 Fixed income - municipal securities — 382 — 382 Fixed income - international securities 1,199 — — 1,199 Equity - large-cap exchange-traded funds 5,544 — — 5,544 Equity - mid-cap exchange-traded funds 1,001 — — 1,001 Equity - small-cap exchange-traded funds 461 — — 461 Equity - international funds 1,550 — — 1,550 Total $ 11,467 $ 66,682 $ — $ 78,149 December 31, 2021 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (dollars in thousands) (Level 1) (Level 2) (Level 3) Total Asset classes: Cash and cash equivalents $ 4,451 $ — $ — $ 4,451 Fixed income - U.S. Treasury securities — 8,343 — 8,343 Fixed income - U.S. government agency securities — 9,674 — 9,674 Fixed income - U.S. corporate securities — 69,926 — 69,926 Fixed income - municipal securities — 495 — 495 Fixed income - international securities 1,779 — — 1,779 Equity - large-cap exchange-traded funds 7,840 — — 7,840 Equity - mid-cap exchange-traded funds 1,360 — — 1,360 Equity - small-cap exchange-traded funds 654 — — 654 Equity - international funds 2,126 — — 2,126 Total $ 18,210 $ 88,438 $ — $ 106,648 |
Summary of change in net actuarial loss and amortization | Income Tax Pre-tax Benefit Net of (dollars in thousands) Amount (Expense) Tax Accumulated other comprehensive loss at December 31, 2021 $ (165,967) $ 44,274 $ (121,693) Year ended December 31, 2022 Pension and other benefits: Net actuarial gains arising during the year 20,710 (5,524) 15,186 Amortization of net loss included in net income 5,146 (1,373) 3,773 Net change in pension and other benefits 25,856 (6,897) 18,959 Investment securities: Unrealized net losses arising during the year (773,667) 206,376 (567,291) Reclassification of net losses to net income: Amortization of unrealized holding losses on held-to-maturity securities 48,378 (12,905) 35,473 Net change in investment securities (725,289) 193,471 (531,818) Cash flow derivative hedges: Unrealized net losses arising during the year (6,710) 1,790 (4,920) Reclassification of net losses included in net income 297 (79) 218 Net change in cash flow derivative hedges (6,413) 1,711 (4,702) Other comprehensive loss (705,846) 188,285 (517,561) Accumulated other comprehensive loss at December 31, 2022 $ (871,813) $ 232,559 $ (639,254) Income Tax Pre-tax Benefit Net of (dollars in thousands) Amount (Expense) Tax Accumulated other comprehensive income at December 31, 2020 $ 43,098 $ (11,494) $ 31,604 Year ended December 31, 2021 Pension and other benefits: Net actuarial gains arising during the year 3,107 (829) 2,278 Amortization of net loss included in net income 6,913 (1,844) 5,069 Net change in pension and other benefits 10,020 (2,673) 7,347 Investment securities: Unrealized net losses arising during the year (218,983) 58,414 (160,569) Reclassification of net gains to net income: Investment securities gains, net (102) 27 (75) Net change in investment securities (219,085) 58,441 (160,644) Other comprehensive loss (209,065) 55,768 (153,297) Accumulated other comprehensive loss at December 31, 2021 $ (165,967) $ 44,274 $ (121,693) Income Tax Pre-tax Benefit Net of (dollars in thousands) Amount (Expense) Tax Accumulated other comprehensive loss at December 31, 2019 $ (43,450) $ 11,701 $ (31,749) Year ended December 31, 2020 Pension and other benefits: Net actuarial losses arising during the year (10,399) 2,774 (7,625) Prior service credit (51) 14 (37) Amortization of net loss included in net income 5,595 (1,492) 4,103 Change in Company tax rate — (96) (96) Net change in pension and other benefits (4,855) 1,200 (3,655) Investment securities: Unrealized net gains arising during the year 91,289 (24,365) 66,924 Reclassification of net losses to net income: Investment securities losses, net 114 (30) 84 Net change in investment securities 91,403 (24,395) 67,008 Other comprehensive income 86,548 (23,195) 63,353 Accumulated other comprehensive income at December 31, 2020 $ 43,098 $ (11,494) $ 31,604 |
Pension and other benefits, net actuarial losses arising during the year | |
Benefit Plans | |
Summary of change in net actuarial loss and amortization | Pension Benefits Other Benefits (dollars in thousands) 2022 2021 2022 2021 Net actuarial loss (gain) at beginning of year $ 36,357 $ 44,351 $ (3,094) $ (1,068) Amortization cost (5,643) (6,961) 497 48 Liability gain (38,949) (4,614) (5,808) (2,074) Asset loss 24,047 3,581 — — Net actuarial loss (gain) at end of year $ 15,812 $ 36,357 $ (8,405) $ (3,094) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of components of provision for income taxes | Year Ended December 31, (dollars in thousands) 2022 2021 2020 Current: Federal $ 50,895 $ 53,534 $ 55,535 State and local 12,493 15,607 21,831 Total current 63,388 69,141 77,366 Deferred: Federal 13,639 8,837 (10,638) State and local 8,499 5,283 (8,758) Total deferred 22,138 14,120 (19,396) Total provision for income taxes $ 85,526 $ 83,261 $ 57,970 |
Schedule of components of net deferred income tax assets and liabilities | December 31, (dollars in thousands) 2022 2021 Assets: Deferred compensation expense $ 51,064 $ 58,497 Allowance for credit losses and nonperforming assets 47,517 50,161 Lease liabilities 17,284 17,534 Investment securities 233,859 40,108 State income taxes 2,619 3,440 Total deferred income tax assets before valuation allowance 352,343 169,740 Valuation allowance (983) (1,082) Total deferred income tax assets after valuation allowance 351,360 168,658 Liabilities: Leases (15,739) (15,785) Deferred income (20,893) (14,213) Lease right-of-use assets (16,763) (17,132) Intangible assets (736) (577) Other (34,910) (24,779) Total deferred income tax liabilities (89,041) (72,486) Net deferred income tax assets $ 262,319 $ 96,172 |
Schedule of reconciliation of Federal statutory to effective income tax rate | Year Ended December 31, 2022 2021 2020 (dollars in thousands) Amount Percent Amount Percent Amount Percent Federal statutory income tax expense and rate $ 73,754 21.00 % $ 73,289 21.00 % $ 51,182 21.00 % State and local taxes, net of federal income tax benefit 16,584 4.72 16,503 4.73 10,327 4.24 Tax credits (3,963) (1.13) (2,745) (0.79) (3,914) (1.60) Nontaxable income (1,133) (0.32) (3,274) (0.94) (3,678) (1.51) Other 284 0.08 (512) (0.14) 4,053 1.66 Income tax expense and effective income tax rate $ 85,526 24.35 % $ 83,261 23.86 % $ 57,970 23.79 % |
Schedule of reconciliation of unrecognized tax benefits | Year Ended December 31, 2022 2021 2020 Interest Interest Interest and and and (dollars in thousands) Tax Penalties Total Tax Penalties Total Tax Penalties Total Balance at beginning of year $ 183,311 $ 20,743 $ 204,054 $ 135,595 $ 18,926 $ 154,521 $ 134,312 $ 14,701 $ 149,013 Additions for current year tax positions 1,289 — 1,289 1,366 — 1,366 1,426 — 1,426 Additions for Reorganization Transactions — 974 974 47,282 941 48,223 — 1,479 1,479 Additions for prior years' tax positions: Accrual of interest and penalties — 860 860 — 1,264 1,264 — 2,812 2,812 Reductions for prior years' tax positions: Expiration of statute of limitations (849) (103) (952) (932) (388) (1,320) (143) (66) (209) Balance at December 31, $ 183,751 $ 22,474 $ 206,225 $ 183,311 $ 20,743 $ 204,054 $ 135,595 $ 18,926 $ 154,521 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Financial Instruments | |
Summary of notional amounts and fair values of derivatives held | December 31, 2022 December 31, 2021 Fair Value Fair Value Notional Asset Liability Notional Asset Liability (dollars in thousands) Amount Derivatives (1) Derivatives (2) Amount Derivatives (1) Derivatives (2) Derivatives designated as hedging instruments: Interest rate swaps $ 267,500 $ 7,276 $ (6,840) $ 67,500 $ — $ (1,211) Interest rate collars 200,000 491 (63) — — — Derivatives not designated as hedging instruments: Interest rate swaps 2,849,776 3,178 (42,365) 2,827,582 50,898 — Visa derivative 121,013 — (851) 105,916 — (5,530) Interest rate caps and floors — — — 148,800 27 (27) Foreign exchange contracts 210 — — 217 — — |
Schedule of net gains and losses recognized in income related to derivatives in fair value hedging relationships | Gains (losses) recognized in Year Ended the consolidated statements December 31, (dollars in of income line item 2022 2021 2020 Gains (losses) on fair value hedging relationships recognized in interest income: Recognized on interest rate swap Loans and lease financing $ 8,487 $ (605) $ (594) Recognized on hedged item Loans and lease financing (8,880) 383 470 |
Schedule of amounts related to cumulative basis adjustments for fair value hedges | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset Carrying Amount of the Hedged Asset (dollars in December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Line item in the consolidated balance sheets in which the hedged item is included Loans and leases $ 60,189 $ 68,707 $ (7,311) $ 1,207 |
Summary of effect of cash flow hedging relationships | Year Ended (dollars in December 31, 2022 Pretax net losses recognized in other comprehensive income on cash flow derivative hedges $ (6,710) Pretax net losses reclassified from accumulated other comprehensive income to interest income from loans and lease financing 297 |
Summary of impact on pretax earnings of derivatives not designated as hedges | Net gains (losses) recognized Year Ended in the consolidated statements December 31, (dollars in of income line item 2022 2021 2020 Derivatives Not Designated As Hedging Instruments: Visa derivative Other noninterest income (707) (5,909) (4,641) |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingent Liabilities | |
Schedule of financial instruments with off-balance sheet risk | December 31, (dollars in 2022 2021 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 6,760,395 $ 6,490,301 Standby letters of credit 244,275 182,447 Commercial letters of credit 7,299 3,307 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contracts with Customers | |
Summary of revenues disaggregated by type of service and business segments | Year Ended December 31, 2022 Treasury Retail Commercial and (dollars in thousands) Banking Banking Other Total Net interest income (1) $ 436,228 $ 157,128 $ 20,193 $ 613,549 Service charges on deposit accounts 25,871 1,972 966 28,809 Credit and debit card fees — 58,659 4,974 63,633 Other service charges and fees 25,062 2,243 1,888 29,193 Trust and investment services income 36,465 — — 36,465 Other 488 7,956 1,288 9,732 Not in scope of Topic 606 (1) 6,199 6,709 (1,215) 11,693 Total noninterest income 94,085 77,539 7,901 179,525 Total revenue $ 530,313 $ 234,667 $ 28,094 $ 793,074 Year Ended December 31, 2021 Treasury Retail Commercial and (dollars in thousands) Banking Banking Other Total Net interest income (1) $ 385,656 $ 162,997 $ (18,094) $ 530,559 Service charges on deposit accounts 24,413 1,225 1,872 27,510 Credit and debit card fees — 55,728 5,415 61,143 Other service charges and fees 23,917 3,547 1,594 29,058 Trust and investment services income 34,719 — — 34,719 Other 353 5,790 1,194 7,337 Not in scope of Topic 606 (1) 8,270 6,491 10,388 25,149 Total noninterest income 91,672 72,781 20,463 184,916 Total revenue $ 477,328 $ 235,778 $ 2,369 $ 715,475 Year Ended December 31, 2020 Treasury Retail Commercial and (dollars in thousands) Banking Banking Other Total Net interest income (1) $ 375,145 $ 151,622 $ 8,967 $ 535,734 Service charges on deposit accounts 25,326 1,305 1,538 28,169 Credit and debit card fees — 48,999 4,373 53,372 Other service charges and fees 20,084 1,550 1,533 23,167 Trust and investment services income 35,652 — — 35,652 Other 700 6,403 1,811 8,914 Not in scope of Topic 606 (1) 16,264 19,945 11,897 48,106 Total noninterest income 98,026 78,202 21,152 197,380 Total revenue $ 473,171 $ 229,824 $ 30,119 $ 733,114 (1) Most of the Company’s revenue is not within the scope of Topic 606. The guidance explicitly excludes net interest income from financial assets and liabilities as well as other noninterest income from loans, leases, investment securities and derivative financial instruments. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings per Share | |
Schedule of computations of basic and diluted earnings per share | Year Ended December 31, (dollars in 2022 2021 2020 Numerator: Net income $ 265,685 $ 265,735 $ 185,754 Denominator: Basic: weighted-average shares outstanding 127,489,889 128,963,131 129,890,225 Add: weighted-average equity-based awards 491,810 574,791 329,852 Diluted: weighted-average shares outstanding 127,981,699 129,537,922 130,220,077 Basic earnings per share $ 2.08 $ 2.06 $ 1.43 Diluted earnings per share $ 2.08 $ 2.05 $ 1.43 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation | |
Schedule of restricted stock activity | Weighted Number Average Grant of Shares Date Fair Value Unvested as of December 31, 2019 139,718 $ 27.04 Granted 172,046 25.96 Vested (48,340) 27.03 Forfeited (1,047) 25.96 Unvested as of December 31, 2020 262,377 $ 26.35 Granted — — Vested (105,330) 26.46 Forfeited (7,172) 26.15 Unvested as of December 31, 2021 149,875 $ 26.28 Granted — — Vested (87,490) 26.44 Forfeited (15,528) 26.28 Unvested as of December 31, 2022 46,857 $ 25.96 |
Schedule of PSU activity | Weighted Number Average Grant of Shares Date Fair Value Unvested as of December 31, 2019 695,316 $ 26.46 Granted 340,758 25.96 Vested (172,167) 29.95 Forfeited (6,625) 26.13 Unvested as of December 31, 2020 857,282 $ 25.43 Granted 376,810 27.07 Vested (214,163) 22.57 Forfeited (77,423) 24.62 Unvested as of December 31, 2021 942,506 $ 26.70 Granted 350,922 28.57 Vested (203,855) 27.02 Forfeited (135,439) 26.63 Unvested as of December 31, 2022 954,134 $ 27.36 |
Schedule of RSU activity | Weighted Number Average Grant of Shares Date Fair Value Unvested as of December 31, 2019 44,783 $ 27.82 Granted 28,783 15.86 Vested (30,016) 27.47 Forfeited — — Unvested as of December 31, 2020 43,550 $ 21.93 Granted 198,771 27.13 Vested (49,519) 23.08 Forfeited (7,473) 26.37 Unvested as of December 31, 2021 185,329 $ 27.09 Granted 169,497 28.35 Vested (74,178) 27.18 Forfeited (17,488) 26.80 Unvested as of December 31, 2022 263,160 $ 27.91 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements as of December 31, 2022 Quoted Prices in Significant Active Markets for Other Significant Identical Assets Observable Unobservable (dollars in (Level 1) Inputs (Level 2) Inputs (Level 3) Total Assets U.S. Treasury and government agency debt securities $ — $ 150,982 $ — $ 150,982 Government-sponsored enterprises debt securities — 44,301 — 44,301 Mortgage-backed securities: Residential - Government agency (1) — 59,723 — 59,723 Residential - Government-sponsored enterprises (1) — 1,160,455 — 1,160,455 Commercial - Government agency — 237,853 — 237,853 Commercial - Government-sponsored enterprises — 119,573 — 119,573 Commercial - Non-agency — 21,471 — 21,471 Collateralized mortgage obligations: Government agency — 653,322 — 653,322 Government-sponsored enterprises — 462,132 — 462,132 Collateralized loan obligations — 241,321 — 241,321 Total available-for-sale securities — 3,151,133 — 3,151,133 Other assets (2) 5,376 10,945 — 16,321 Liabilities Other liabilities (3) — (49,268) (851) (50,119) Total $ 5,376 $ 3,112,810 $ (851) $ 3,117,335 Fair Value Measurements as of December 31, 2021 Quoted Prices in Significant Active Markets for Other Significant Identical Assets Observable Unobservable (dollars in thousands) (Level 1) Inputs (Level 2) Inputs (Level 3) Total Assets U.S. Treasury and government agency debt securities $ — $ 192,563 $ — $ 192,563 Mortgage-backed securities: Residential - Government agency (1) — 137,264 — 137,264 Residential - Government-sponsored enterprises (1) — 1,491,100 — 1,491,100 Commercial - Government agency — 387,663 — 387,663 Commercial - Government-sponsored enterprises — 1,369,443 — 1,369,443 Collateralized mortgage obligations: Government agency — 2,079,523 — 2,079,523 Government-sponsored enterprises — 2,621,044 — 2,621,044 Collateralized loan obligations — 105,247 — 105,247 Debt securities issued by states and political subdivisions — 44,185 — 44,185 Total available-for-sale securities — 8,428,032 — 8,428,032 Other assets (2) 7,382 50,925 — 58,307 Liabilities Other liabilities (3) — (1,238) (5,530) (6,768) Total $ 7,382 $ 8,477,719 $ (5,530) $ 8,479,571 (1) Backed by residential real estate. (2) Other assets classified as Level 1 include mutual funds and money market funds that have quoted prices in active markets and are related to the Company’s deferred compensation plans. Other assets classified as Level 2 include derivative assets. (3) Other liabilities include derivative liabilities. |
Summary of changes in Level 3 liabilities measured at fair value on a recurring basis | Visa Derivative (dollars in 2022 2021 Year Ended December 31, Balance as of January 1, $ (5,530) $ (4,554) Total net losses included in other noninterest income (707) (5,909) Settlements 5,386 4,933 Balance as of December 31, $ (851) $ (5,530) Total net losses included in net income attributable to the change in unrealized losses related to liabilities still held as of December 31, $ (707) $ (5,909) |
Summary of estimated fair value of financial instruments not required to be carried at fair value on a recurring basis | December 31, 2022 Fair Value Measurements Quoted Prices in Significant Significant Active Markets Other Unobservable for Identical Observable Inputs (dollars in thousands) Book Value Assets (Level 1) Inputs (Level 2) (Level 3) Total Financial assets: Cash and cash equivalents $ 526,624 $ 297,502 $ 229,122 $ — $ 526,624 Investment securities held-to-maturity 4,320,639 — 3,814,822 — 3,814,822 Loans (1) 13,793,922 — — 13,138,787 13,138,787 Financial liabilities: Time deposits (2) $ 2,476,050 $ — $ 2,423,231 $ — $ 2,423,231 Short-term borrowings 75,000 — 74,991 — 74,991 December 31, 2021 Fair Value Measurements Quoted Prices in Significant Significant Active Markets Other Unobservable for Identical Observable Inputs (dollars in thousands) Book Value Assets (Level 1) Inputs (Level 2) (Level 3) Total Financial assets: Cash and cash equivalents $ 1,258,469 $ 246,716 $ 1,011,753 $ — $ 1,258,469 Loans held for sale 538 — 542 — 542 Loans (1) 12,730,605 — — 12,791,811 12,791,811 Financial liabilities: Time deposits (2) $ 1,776,438 $ — $ 1,773,321 $ — $ 1,773,321 (1) Excludes financing leases of $298.1 million at December 31, 2022 and $231.4 million at December 31, 2021. (2) Excludes deposit liabilities with no defined or contractual maturity of $19.2 billion at December 31, 2022 and $20.0 billion at December 31, 2021. |
Significant unobservable inputs used in fair value measurements for Level 3 assets and liabilities measured at fair value on a recurring basis | Quantitative Information about Level 3 Fair Value Measurements at December 31, 2022 Significant (dollars in thousands) Fair value Valuation Technique Unobservable Input Range Visa derivative $ (851) Discounted Cash Flow Expected Conversion Rate - 1.5991 (1) 1.5514 - 1.5991 Expected Term - 3 months (2) 0 - 6 months Growth Rate - 26% (3) 10% - 38% Quantitative Information about Level 3 Fair Value Measurements at December 31, 2021 Significant (dollars in thousands) Fair value Valuation Technique Unobservable Input Range Visa derivative $ (5,530) Discounted Cash Flow Expected Conversion Rate - 1.6181 (1) 1.5885-1.6181 Expected Term - 1 year (4) 0.5 to 1.5 years Growth Rate - 26% (3) 10% - 38% (1) Due to the uncertainty in the movement of the conversion rate, the current conversion rate as of the respective consolidated balance sheet dates was utilized in the fair value calculation. (2) The expected term of 3 months was based on the median of 0 to 6 months. (3) The growth rate was based on the arithmetic average of analyst price targets. (4) The expected term of 1 year was based on the median of 0.5 to 1.5 years. |
Reportable Operating Segments (
Reportable Operating Segments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Reportable Operating Segments | |
Schedule of selected business segment financial information | Treasury Retail Commercial and (dollars in thousands) Banking Banking Other Total Year Ended December 31, 2022 Net interest income $ 436,228 $ 157,128 $ 20,193 $ 613,549 Benefit (provision) for credit losses 967 1,154 (3,513) (1,392) Net interest income after benefit for credit losses 437,195 158,282 16,680 612,157 Noninterest income 94,085 77,539 7,901 179,525 Noninterest expense (293,563) (109,906) (37,002) (440,471) Income (loss) before (provision) benefit for income taxes 237,717 125,915 (12,421) 351,211 (Provision) benefit for income taxes (58,077) (30,158) 2,709 (85,526) Net income (loss) $ 179,640 $ 95,757 $ (9,712) $ 265,685 Total assets as of December 31, 2022 $ 7,463,002 $ 6,850,638 $ 10,263,583 $ 24,577,223 Treasury Retail Commercial and (dollars in thousands) Banking Banking Other Total Year Ended December 31, 2021 Net interest income (expense) $ 385,656 $ 162,997 $ (18,094) $ 530,559 Benefit for credit losses 16,267 22,452 281 39,000 Net interest income (expense) after benefit for credit losses 401,923 185,449 (17,813) 569,559 Noninterest income 91,672 72,781 20,463 184,916 Noninterest expense (247,949) (100,932) (56,598) (405,479) Income (loss) before (provision) benefit for income taxes 245,646 157,298 (53,948) 348,996 (Provision) benefit for income taxes (58,710) (37,525) 12,974 (83,261) Net income (loss) $ 186,936 $ 119,773 $ (40,974) $ 265,735 Total assets as of December 31, 2021 $ 7,148,376 $ 5,972,567 $ 11,871,467 $ 24,992,410 Treasury Retail Commercial and (dollars in thousands) Banking Banking Other Total Year Ended December 31, 2020 Net interest income $ 375,145 $ 151,622 $ 8,967 $ 535,734 Provision for credit losses (52,719) (53,921) (15,078) (121,718) Net interest income after provision for credit losses 322,426 97,701 (6,111) 414,016 Noninterest income 98,026 78,202 21,152 197,380 Noninterest expense (232,976) (79,961) (54,735) (367,672) Income (loss) before (provision) benefit for income taxes 187,476 95,942 (39,694) 243,724 (Provision) benefit for income taxes (43,825) (21,951) 7,806 (57,970) Net income (loss) $ 143,651 $ 73,991 $ (31,888) $ 185,754 Total assets as of December 31, 2020 $ 6,894,602 $ 6,526,863 $ 9,241,366 $ 22,662,831 |
Parent Company (Tables)
Parent Company (Tables) - First Hawaiian, Inc. | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Statements of Comprehensive Income | Condensed Statements of Comprehensive Income Year Ended December 31, (dollars in thousands) 2022 2021 2020 Income Dividends from FHB $ 157,000 $ 213,500 $ 142,000 Other income — — 1,169 Total income 157,000 213,500 143,169 Noninterest expense Salaries and employee benefits 4,098 3,732 3,660 Contracted services and professional fees 6,200 2,731 2,544 Equipment 78 — 31 Other 1,447 1,314 1,439 Total noninterest expense 11,823 7,777 7,674 Income before benefit for income taxes and equity in undistributed income of FHB 145,177 205,723 135,495 Benefit for income taxes 2,707 1,877 679 Equity in undistributed income of FHB 117,801 58,135 49,580 Net income $ 265,685 $ 265,735 $ 185,754 Comprehensive (loss) income $ (251,876) $ 112,438 $ 249,107 |
Condensed Statements of Condition | Condensed Statements of Condition December 31, (dollars in thousands) 2022 2021 Assets Cash and cash equivalents $ 18,024 $ 14,792 Investment in FHB 2,251,841 2,642,929 Other assets 27,638 26,869 Total assets $ 2,297,503 $ 2,684,590 Liabilities and Stockholders' Equity Retirement benefits payable $ 560 $ 582 Other liabilities 27,938 27,096 Total liabilities 28,498 27,678 Total stockholders' equity 2,269,005 2,656,912 Total liabilities and stockholders' equity $ 2,297,503 $ 2,684,590 |
Condensed Statement of Cash Flows | Condensed Statements of Cash Flows Year Ended December 31, (dollars in thousands) 2022 2021 2020 Cash flows from operating activities Net income $ 265,685 $ 265,735 $ 185,754 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed income of FHB (117,801) (58,135) (49,580) Deferred income taxes 22 36 5 Stock-based compensation 554 492 713 Change in assets and liabilities: Net (increase) decrease in other assets (4) 242 (1,451) Net increase (decrease) in other liabilities 18 50 (294) Net cash provided by operating activities 148,474 208,420 135,147 Cash flows from financing activities Dividends paid (132,588) (134,133) (135,099) Stock tendered for payment of withholding taxes (3,555) (3,108) (1,749) Proceeds from employee stock purchase plan 379 547 312 Common stock repurchased (9,478) (75,000) (5,000) Net cash used in financing activities (145,242) (211,694) (141,536) Net increase (decrease) in cash and cash equivalents 3,232 (3,274) (6,389) Cash and cash equivalents at beginning of year 14,792 18,066 24,455 Cash and cash equivalents at end of year $ 18,024 $ 14,792 $ 18,066 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Details) $ in Thousands | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2022 location | Dec. 31, 2021 | Dec. 31, 2022 USD ($) | |
Capitalization | |||
Investment securities comprised of collateralized loan obligations rated AA or better and obligations issued by local state and political subdivisions rated AA or better | 4% | 4% | |
Credit losses recognized on securities | $ | $ 0 | ||
First Hawaiian, Inc. (FHI) | |||
Capitalization | |||
Outstanding common stock owned (as a percent) | 100% | 100% | |
First Hawaiian Bank (FHB) | |||
Capitalization | |||
Number of Branches | location | 51 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Transition to an Independent Public Company (Details) - First Hawaiian, Inc. (FHI) - USD ($) | 12 Months Ended | |||
Feb. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
BNP Paribas (BNPP) | ||||
Reorganization Transactions | ||||
Outstanding common stock owned after sales of shares (as a percent) | 0% | |||
Completion of public offering | ||||
Reorganization Transactions | ||||
Proceeds from the sales of shares | $ 0 | $ 0 | $ 0 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Variable Interest Entities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Included in other liabilities | VIEs, not primary beneficiary | ||
Variable Interest Entities | ||
Unfunded commitments to fund low-income housing partnerships | $ 47.2 | $ 62.6 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Investment Securities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Organization and Summary of Significant Accounting Policies | ||
Investment securities comprised of collateralized loan obligations rated AA or better and obligations issued by local state and political subdivisions rated AA or better | 4% | 4% |
Allowance for credit losses for its available-for-sale debt securities | $ 0 | $ 0 |
Allowance for credit losses for its held-to-maturity debt securities | $ 0 | $ 0 |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies - Allowance for Credit Losses (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Organization and Summary of Significant Accounting Policies | |
Estimated credit loss model, forecast horizon | 1 year |
Number of portfolio segments | 3 |
Organization and Summary of S_8
Organization and Summary of Significant Accounting Policies - Premises and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Buildings | Minimum | |
Premises and Equipment | |
Useful lives | 7 years |
Buildings | Maximum | |
Premises and Equipment | |
Useful lives | 39 years |
Furniture and equipment | Minimum | |
Premises and Equipment | |
Useful lives | 3 years |
Furniture and equipment | Maximum | |
Premises and Equipment | |
Useful lives | 20 years |
Organization and Summary of S_9
Organization and Summary of Significant Accounting Policies - Non Marketable Equity Securities Impairment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization and Summary of Significant Accounting Policies | |||
Impairment recognized on non marketable equity securities | $ 0 | $ 0 | $ 0 |
Organization and Summary of _10
Organization and Summary of Significant Accounting Policies - Internal-Use Software (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Maximum | |
Estimated useful life | 5 years |
Organization and Summary of _11
Organization and Summary of Significant Accounting Policies - Pension and Other Postretirement Benefit Plans and Advertising and Marketing Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Expected long term rate of return for defined benefit plans | |||
Time period for average rate of return | 20 years | ||
Percentage of greater of projected benefit obligation or fair value of plan assets for amortization of actuarial gains or losses | 5% | ||
Amortization period for actuarial gains and losses that exceed threshold | 5 years | ||
Advertising and marketing costs | |||
Advertising and marketing | $ 7,996 | $ 6,108 | $ 5,695 |
Transactions with Affiliates _3
Transactions with Affiliates and Related Parties - Loans to Executive Officers, Directors and Affiliates (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in loans executive officers, directors and affiliates | |||
Balance at beginning of year | $ 86,035 | $ 91,226 | $ 85,280 |
New loans made | 10,776 | 2,659 | 18,133 |
Repayments | (39,564) | (7,850) | (12,187) |
Balance at end of year | $ 57,247 | $ 86,035 | $ 91,226 |
Transactions with Affiliates _4
Transactions with Affiliates and Related Parties - Summary of Transactions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Transactions with Affiliates and Related Parties | |||
Noninterest income from affiliates | $ 0 | $ 0 | $ 0 |
Noninterest expense to affiliates | 0 | 0 | $ 0 |
Other liabilities | 0 | 0 | |
Off-balance sheet commitments with affiliates to purchase and sell foreign currencies | $ 0 | $ 0 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost and Fair Value of Securities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Available for sale debt securities | ||
Amortized Cost | $ 3,549,599,000 | $ 8,560,733,000 |
Unrealized Gains | 50,000 | 24,595,000 |
Unrealized Losses | (398,516,000) | (157,296,000) |
Total available-for-sale securities, Fair value, | 3,151,133,000 | 8,428,032,000 |
Held to maturity securities | ||
Amortized Cost | 4,320,639,000 | |
Unrealized Losses | (505,817,000) | |
Total held to maturity, Fair value, | 3,814,822,000 | 0 |
Available-for-sale investment securities | ||
Accrued interest receivable related to available-for-sale investment securities | $ 8,900,000 | $ 14,100,000 |
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Interest Receivable | Interest Receivable |
Accrued interest receivable related to held to maturity investment securities | $ 7,500,000 | $ 0 |
Debt Securities, Held-to-Maturity, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Interest Receivable | Interest Receivable |
Reclassification of available for sale securities to held to maturity | $ 4,600,000,000 | |
Other comprehensive income (loss), transfer of securities from available for sale to held to maturity | (372,400,000) | |
Gain (loss) recognized on reclassification, transfer of securities from available for sale to held to maturity | $ 0 | |
Securities held-to-maturity, weighted average life | 8 years 2 months 12 days | |
Collateralized Loan Obligations | ||
Available for sale debt securities | ||
Amortized Cost | $ 249,877,000 | $ 105,245,000 |
Unrealized Gains | 50,000 | 2,000 |
Unrealized Losses | (8,606,000) | |
Total available-for-sale securities, Fair value, | 241,321,000 | 105,247,000 |
U.S. Treasury and government agency debt securities | ||
Available for sale debt securities | ||
Amortized Cost | 163,309,000 | 196,662,000 |
Unrealized Gains | 125,000 | |
Unrealized Losses | (12,327,000) | (4,224,000) |
Total available-for-sale securities, Fair value, | 150,982,000 | 192,563,000 |
Government-sponsored enterprises debt securities | ||
Available for sale debt securities | ||
Amortized Cost | 45,000,000 | |
Unrealized Losses | (699,000) | |
Total available-for-sale securities, Fair value, | 44,301,000 | |
Government agency debt securities | ||
Held to maturity securities | ||
Amortized Cost | 54,318,000 | |
Unrealized Losses | (5,674,000) | |
Total held to maturity, Fair value, | 48,644,000 | |
Residential - Government agency | ||
Available for sale debt securities | ||
Amortized Cost | 66,792,000 | 135,764,000 |
Unrealized Gains | 1,791,000 | |
Unrealized Losses | (7,069,000) | (291,000) |
Total available-for-sale securities, Fair value, | 59,723,000 | 137,264,000 |
Held to maturity securities | ||
Amortized Cost | 46,302,000 | |
Unrealized Losses | (6,294,000) | |
Total held to maturity, Fair value, | 40,008,000 | |
Residential - Government-sponsored enterprises | ||
Available for sale debt securities | ||
Amortized Cost | 1,317,718,000 | 1,496,605,000 |
Unrealized Gains | 6,914,000 | |
Unrealized Losses | (157,263,000) | (12,419,000) |
Total available-for-sale securities, Fair value, | 1,160,455,000 | 1,491,100,000 |
Held to maturity securities | ||
Amortized Cost | 106,534,000 | |
Unrealized Losses | (12,978,000) | |
Total held to maturity, Fair value, | 93,556,000 | |
Commercial - Government agency | ||
Available for sale debt securities | ||
Amortized Cost | 282,700,000 | 392,443,000 |
Unrealized Gains | 1,741,000 | |
Unrealized Losses | (44,847,000) | (6,521,000) |
Total available-for-sale securities, Fair value, | 237,853,000 | 387,663,000 |
Held to maturity securities | ||
Amortized Cost | 30,544,000 | |
Unrealized Losses | (5,229,000) | |
Total held to maturity, Fair value, | 25,315,000 | |
Commercial - Government-sponsored enterprises | ||
Available for sale debt securities | ||
Amortized Cost | 130,612,000 | 1,415,511,000 |
Unrealized Gains | 2,646,000 | |
Unrealized Losses | (11,039,000) | (48,714,000) |
Total available-for-sale securities, Fair value, | 119,573,000 | 1,369,443,000 |
Held to maturity securities | ||
Amortized Cost | 1,150,449,000 | |
Unrealized Losses | (138,451,000) | |
Total held to maturity, Fair value, | 1,011,998,000 | |
Commercial - Non -agency | ||
Available for sale debt securities | ||
Amortized Cost | 21,964,000 | |
Unrealized Losses | (493,000) | |
Total available-for-sale securities, Fair value, | 21,471,000 | |
Government agency | ||
Available for sale debt securities | ||
Amortized Cost | 738,524,000 | 2,103,187,000 |
Unrealized Gains | 7,768,000 | |
Unrealized Losses | (85,202,000) | (31,432,000) |
Total available-for-sale securities, Fair value, | 653,322,000 | 2,079,523,000 |
Held to maturity securities | ||
Amortized Cost | 1,080,492,000 | |
Unrealized Losses | (122,378,000) | |
Total held to maturity, Fair value, | 958,114,000 | |
Government-sponsored enterprises | ||
Available for sale debt securities | ||
Amortized Cost | 533,103,000 | 2,671,131,000 |
Unrealized Gains | 3,608,000 | |
Unrealized Losses | (70,971,000) | (53,695,000) |
Total available-for-sale securities, Fair value, | 462,132,000 | 2,621,044,000 |
Held to maturity securities | ||
Amortized Cost | 1,798,178,000 | |
Unrealized Losses | (207,045,000) | |
Total held to maturity, Fair value, | 1,591,133,000 | |
Debt securities issued by states and political subdivisions | ||
Available for sale debt securities | ||
Amortized Cost | 44,185,000 | |
Total available-for-sale securities, Fair value, | $ 44,185,000 | |
Held to maturity securities | ||
Amortized Cost | 53,822,000 | |
Unrealized Losses | (7,768,000) | |
Total held to maturity, Fair value, | $ 46,054,000 |
Investment Securities - Proceed
Investment Securities - Proceeds from Calls and Sales, Realized Gains and Losses and Interest Income Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Proceeds from calls and sales of investment securities and other assets | |||
Proceeds from calls of investment securities | $ 1.7 | $ 8.6 | $ 102 |
Proceeds from sales of investment securities | 0 | 2.5 | 543 |
Debt Securities, Available-for-sale, Realized Gain (Loss) [Abstract] | |||
Gross realized gains on sales of investment securities | 0 | 0.1 | 0.6 |
Gross realized losses on sales of investment securities | 0 | 0 | 0.7 |
Income tax expense related to net realized gains on sale of investment securities | 0 | ||
Income tax expense related to net realized gains on sale of investment securities | 0 | 0 | |
Interest income from taxable and nontaxable investment securities | |||
Interest income from taxable investment securities | 128.7 | 93.3 | 80.9 |
Interest income from non-taxable investment securities | $ 13.8 | $ 8.1 | $ 0.9 |
Investment Securities - Amort_2
Investment Securities - Amortized Cost and Fair Value, by Contractual Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Due in one year or less | $ 55,021 | |
Due after one year through five years | 80,163 | |
Due after five years through ten years | 180,105 | |
Due after ten years | 164,861 | |
Total contractual maturities | 480,150 | |
Available-for-sale investment securities, amortized cost | 3,549,599 | $ 8,560,733 |
Fair Value | ||
Due in one year or less | 54,644 | |
Due after one year through five years | 76,492 | |
Due after five years through ten years | 170,568 | |
Due after ten years | 156,371 | |
Total contractual maturities | 458,075 | |
Total available-for-sale securities, Fair value, | 3,151,133 | 8,428,032 |
Amortized Cost | ||
Due after five years through ten years | 10,208 | |
Due after ten years | 97,932 | |
Total contractual maturities | 108,140 | |
Amortized cost | 4,320,639 | |
Fair Value | ||
Due after five years through ten years | 8,932 | |
Due after ten years | 85,766 | |
Total contractual maturities | 94,698 | |
Total held to maturity, Fair value, | 3,814,822 | 0 |
Mortgage-backed securities: | ||
Amortized Cost | ||
Mortgaged-backed securities and collateralized mortgage obligations | 1,797,822 | |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 1,577,604 | |
Amortized Cost | ||
Mortgaged-backed securities and collateralized mortgage obligations | 1,333,829 | |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 1,170,877 | |
Residential - Government agency | ||
Amortized Cost | ||
Mortgaged-backed securities and collateralized mortgage obligations | 66,792 | |
Available-for-sale investment securities, amortized cost | 66,792 | 135,764 |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 59,723 | |
Total available-for-sale securities, Fair value, | 59,723 | 137,264 |
Amortized Cost | ||
Amortized cost | 46,302 | |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 46,302 | |
Total held to maturity, Fair value, | 40,008 | |
Residential - Government-sponsored enterprises | ||
Amortized Cost | ||
Mortgaged-backed securities and collateralized mortgage obligations | 1,317,718 | |
Available-for-sale investment securities, amortized cost | 1,317,718 | 1,496,605 |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 1,160,455 | |
Total available-for-sale securities, Fair value, | 1,160,455 | 1,491,100 |
Amortized Cost | ||
Amortized cost | 106,534 | |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 106,534 | |
Total held to maturity, Fair value, | 93,556 | |
Commercial - Government agency | ||
Amortized Cost | ||
Mortgaged-backed securities and collateralized mortgage obligations | 282,700 | |
Available-for-sale investment securities, amortized cost | 282,700 | 392,443 |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 237,853 | |
Total available-for-sale securities, Fair value, | 237,853 | 387,663 |
Amortized Cost | ||
Amortized cost | 30,544 | |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 30,544 | |
Total held to maturity, Fair value, | 25,315 | |
Commercial - Government-sponsored enterprises | ||
Amortized Cost | ||
Mortgaged-backed securities and collateralized mortgage obligations | 130,612 | |
Available-for-sale investment securities, amortized cost | 130,612 | 1,415,511 |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 119,573 | |
Total available-for-sale securities, Fair value, | 119,573 | 1,369,443 |
Amortized Cost | ||
Amortized cost | 1,150,449 | |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 1,150,449 | |
Total held to maturity, Fair value, | 1,011,998 | |
Collateralized mortgage obligations | ||
Amortized Cost | ||
Mortgaged-backed securities and collateralized mortgage obligations | 1,271,627 | |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 1,115,454 | |
Amortized Cost | ||
Mortgaged-backed securities and collateralized mortgage obligations | 2,878,670 | |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 2,549,247 | |
Government agency | ||
Amortized Cost | ||
Mortgaged-backed securities and collateralized mortgage obligations | 738,524 | |
Available-for-sale investment securities, amortized cost | 738,524 | 2,103,187 |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 653,322 | |
Total available-for-sale securities, Fair value, | 653,322 | 2,079,523 |
Amortized Cost | ||
Mortgaged-backed securities and collateralized mortgage obligations | 1,080,492 | |
Amortized cost | 1,080,492 | |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 958,114 | |
Total held to maturity, Fair value, | 958,114 | |
Government-sponsored enterprises | ||
Amortized Cost | ||
Mortgaged-backed securities and collateralized mortgage obligations | 533,103 | |
Available-for-sale investment securities, amortized cost | 533,103 | 2,671,131 |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 462,132 | |
Total available-for-sale securities, Fair value, | 462,132 | $ 2,621,044 |
Amortized Cost | ||
Mortgaged-backed securities and collateralized mortgage obligations | 1,798,178 | |
Amortized cost | 1,798,178 | |
Fair Value | ||
Mortgaged-backed securities and collateralized mortgage obligations | 1,591,133 | |
Total held to maturity, Fair value, | $ 1,591,133 |
Investment Securities - Pledged
Investment Securities - Pledged Securities and Concentration Narrative (Details) - USD ($) $ in Thousands | 24 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Concentration of risk | ||
Credit losses recognized on securities | $ 0 | |
Asset Pledged as Collateral | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Investment securities pledged as collateral | 3,200,000 | $ 2,100,000 |
Asset Pledged as Collateral | Deposits [Member] | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Investment securities pledged as collateral | 3,000,000 | 1,900,000 |
Asset Pledged as Collateral | Other financial transactions | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Investment securities pledged as collateral | 207,800 | 193,200 |
Non-government issuer | ||
Concentration of risk | ||
Securities of issuers in excess of 10% of stockholders' equity | $ 0 | $ 0 |
Investment Securities - Unreali
Investment Securities - Unrealized Gross Losses and Fair Values of Securities in a Continuous Loss Position (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) security shares | Dec. 31, 2021 USD ($) security shares | |
Securities in the available-for-sale portfolio in a continuous loss position | ||
Number of individual securities in a continuous loss position | security | 275 | 318 |
Time in Continuous Loss, Unrealized Losses | ||
Less Than 12 Months Unrealized Losses | $ (213,696,000) | $ (125,923,000) |
12 Months or More Unrealized Losses | (184,820,000) | (31,373,000) |
Total Unrealized Losses | (398,516,000) | (157,296,000) |
Time in Continuous Loss, Fair Value | ||
Less Than 12 Months, Fair Value | 2,023,259,000 | 6,044,029,000 |
12 Months or More Fair Value | 1,056,595,000 | 497,202,000 |
Total Fair Value | $ 3,079,854,000 | $ 6,541,231,000 |
Investment securities comprised of collateralized loan obligations rated AA or better and obligations issued by local state and political subdivisions rated AA or better | 4% | 4% |
Allowance for credit losses for its available-for-sale debt securities | $ 0 | $ 0 |
Allowance for credit losses for its held-to-maturity debt securities | $ 0 | $ 0 |
Class B restricted shares | Visa | ||
Time in Continuous Loss, Fair Value | ||
Shares held | shares | 120,000 | 120,000 |
Cost basis | $ 0 | $ 0 |
U.S. Treasury and government agency debt securities | ||
Time in Continuous Loss, Unrealized Losses | ||
Less Than 12 Months Unrealized Losses | (2,962,000) | (3,355,000) |
12 Months or More Unrealized Losses | (9,365,000) | (869,000) |
Total Unrealized Losses | (12,327,000) | (4,224,000) |
Time in Continuous Loss, Fair Value | ||
Less Than 12 Months, Fair Value | 83,870,000 | 134,468,000 |
12 Months or More Fair Value | 67,112,000 | 16,642,000 |
Total Fair Value | 150,982,000 | 151,110,000 |
Government-sponsored enterprises debt securities | ||
Time in Continuous Loss, Unrealized Losses | ||
Less Than 12 Months Unrealized Losses | (699,000) | |
Total Unrealized Losses | (699,000) | |
Time in Continuous Loss, Fair Value | ||
Less Than 12 Months, Fair Value | 44,301,000 | |
Total Fair Value | 44,301,000 | |
Residential - Government-sponsored enterprises | ||
Time in Continuous Loss, Unrealized Losses | ||
Less Than 12 Months Unrealized Losses | (73,954,000) | (10,876,000) |
12 Months or More Unrealized Losses | (83,309,000) | (1,543,000) |
Total Unrealized Losses | (157,263,000) | (12,419,000) |
Time in Continuous Loss, Fair Value | ||
Less Than 12 Months, Fair Value | 645,338,000 | 1,230,104,000 |
12 Months or More Fair Value | 515,117,000 | 32,415,000 |
Total Fair Value | 1,160,455,000 | 1,262,519,000 |
Residential - Government agency | ||
Time in Continuous Loss, Unrealized Losses | ||
Less Than 12 Months Unrealized Losses | (7,069,000) | (291,000) |
Total Unrealized Losses | (7,069,000) | (291,000) |
Time in Continuous Loss, Fair Value | ||
Less Than 12 Months, Fair Value | 59,723,000 | 51,231,000 |
Total Fair Value | 59,723,000 | 51,231,000 |
Commercial - Government agency | ||
Time in Continuous Loss, Unrealized Losses | ||
Less Than 12 Months Unrealized Losses | (15,852,000) | (5,239,000) |
12 Months or More Unrealized Losses | (28,995,000) | (1,282,000) |
Total Unrealized Losses | (44,847,000) | (6,521,000) |
Time in Continuous Loss, Fair Value | ||
Less Than 12 Months, Fair Value | 108,842,000 | 186,024,000 |
12 Months or More Fair Value | 129,011,000 | 26,063,000 |
Total Fair Value | 237,853,000 | 212,087,000 |
Commercial - Government-sponsored enterprises | ||
Time in Continuous Loss, Unrealized Losses | ||
Less Than 12 Months Unrealized Losses | (7,348,000) | (22,179,000) |
12 Months or More Unrealized Losses | (3,691,000) | (26,535,000) |
Total Unrealized Losses | (11,039,000) | (48,714,000) |
Time in Continuous Loss, Fair Value | ||
Less Than 12 Months, Fair Value | 94,657,000 | 744,819,000 |
12 Months or More Fair Value | 24,916,000 | 397,123,000 |
Total Fair Value | 119,573,000 | 1,141,942,000 |
Commercial - Non -agency | ||
Time in Continuous Loss, Unrealized Losses | ||
Less Than 12 Months Unrealized Losses | (493,000) | |
Total Unrealized Losses | (493,000) | |
Time in Continuous Loss, Fair Value | ||
Less Than 12 Months, Fair Value | 21,471,000 | |
Total Fair Value | 21,471,000 | |
Government agency | ||
Time in Continuous Loss, Unrealized Losses | ||
Less Than 12 Months Unrealized Losses | (74,797,000) | (31,432,000) |
12 Months or More Unrealized Losses | (10,405,000) | |
Total Unrealized Losses | (85,202,000) | (31,432,000) |
Time in Continuous Loss, Fair Value | ||
Less Than 12 Months, Fair Value | 596,907,000 | 1,441,848,000 |
12 Months or More Fair Value | 56,415,000 | |
Total Fair Value | 653,322,000 | 1,441,848,000 |
Government-sponsored enterprises | ||
Time in Continuous Loss, Unrealized Losses | ||
Less Than 12 Months Unrealized Losses | (21,916,000) | (52,551,000) |
12 Months or More Unrealized Losses | (49,055,000) | (1,144,000) |
Total Unrealized Losses | (70,971,000) | (53,695,000) |
Time in Continuous Loss, Fair Value | ||
Less Than 12 Months, Fair Value | 198,108,000 | 2,255,535,000 |
12 Months or More Fair Value | 264,024,000 | 24,959,000 |
Total Fair Value | 462,132,000 | $ 2,280,494,000 |
Collateralized Loan Obligations | ||
Time in Continuous Loss, Unrealized Losses | ||
Less Than 12 Months Unrealized Losses | (8,606,000) | |
Total Unrealized Losses | (8,606,000) | |
Time in Continuous Loss, Fair Value | ||
Less Than 12 Months, Fair Value | 170,042,000 | |
Total Fair Value | $ 170,042,000 |
Loans and Leases - Components (
Loans and Leases - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Loans and leases | ||
Loans and leases | $ 14,092,012 | $ 12,961,999 |
Outstanding loan balances, deferred loan costs and fees | 56,100 | 42,200 |
Accrued interest receivable related to loans and leases recorded separately | 61,600 | 49,000 |
Home equity line | ||
Loans and leases | ||
Loans and leases | 876,608 | |
Real estate | ||
Loans and leases | ||
Loans and leases | 5,358,139 | 4,959,975 |
Commercial and Industrial | ||
Loans and leases | ||
Loans and leases | 2,235,897 | 2,087,099 |
Commercial and Industrial | Real estate | ||
Loans and leases | ||
Loans and leases | 2,235,897 | 2,087,099 |
Commercial real estate | ||
Loans and leases | ||
Loans and leases | 4,132,309 | 3,639,623 |
Commercial real estate | Real estate | ||
Loans and leases | ||
Loans and leases | 4,132,309 | 3,639,623 |
Construction | ||
Loans and leases | ||
Loans and leases | 844,643 | 813,969 |
Construction | Real estate | ||
Loans and leases | ||
Loans and leases | 844,643 | 813,969 |
Residential mortgage | ||
Loans and leases | ||
Loans and leases | 4,302,788 | 4,083,367 |
Properties in the process of foreclosure | 2,800 | 4,700 |
Residential mortgage | Home equity line | ||
Loans and leases | ||
Loans and leases | 4,959,975 | |
Residential mortgage | Real estate | ||
Loans and leases | ||
Loans and leases | 4,302,788 | 4,083,367 |
Home equity Line | ||
Loans and leases | ||
Loans and leases | 1,055,351 | 876,608 |
Home equity Line | Real estate | ||
Loans and leases | ||
Loans and leases | 1,055,351 | 876,608 |
Consumer Portfolio Segment [Member] | ||
Loans and leases | ||
Loans and leases | 1,222,934 | 1,229,939 |
Consumer Portfolio Segment [Member] | Real estate | ||
Loans and leases | ||
Loans and leases | 1,222,934 | 1,229,939 |
Lease financing | ||
Loans and leases | ||
Loans and leases | 298,090 | 231,394 |
Home Equity Loans and Lines of Credit | ||
Loans and leases | ||
Loans and leases | 1,055,351 | |
Asset Pledged as Collateral | Federal Home Loan Bank | Residential mortgage | ||
Loans and leases | ||
Loans and leases | 3,500,000 | 2,400,000 |
Asset Pledged as Collateral | FRB | Consumer, commercial and industrial, commercial real estate and residential real estate loans | ||
Loans and leases | ||
Loans and leases | $ 1,700,000 | $ 1,700,000 |
Loans and Leases - Remaining Co
Loans and Leases - Remaining Commitments Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Loans and Leases. | |||
Net gain (loss) from sale of loans | $ 0 | $ 1.3 | $ 14.5 |
Allowance for Credit Losses - A
Allowance for Credit Losses - Activity in ACL by Class of Loans and Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | $ 157,262 | $ 208,454 | $ 130,530 |
Charge-offs | (20,888) | (23,623) | (47,563) |
Recoveries | 9,647 | 11,150 | 16,702 |
Provision | (2,121) | (38,719) | 108,015 |
Balance at end of year | 143,900 | 157,262 | 208,454 |
Commercial and Industrial | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | 20,080 | 24,711 | 28,975 |
Charge-offs | (2,012) | (5,949) | (15,572) |
Recoveries | 897 | 867 | 5,005 |
Provision | (4,401) | 451 | 22,408 |
Balance at end of year | 14,564 | 20,080 | 24,711 |
Commercial real estate | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | 42,951 | 58,123 | 22,325 |
Charge-offs | (750) | (66) | (2,753) |
Recoveries | 14 | 39 | 615 |
Provision | 1,595 | (15,145) | 27,377 |
Balance at end of year | 43,810 | 42,951 | 58,123 |
Construction | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | 9,773 | 10,039 | 4,844 |
Charge-offs | (379) | ||
Recoveries | 266 | 200 | |
Provision | (3,930) | (532) | 7,177 |
Balance at end of year | 5,843 | 9,773 | 10,039 |
Lease financing | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | 1,659 | 3,298 | 424 |
Recoveries | 60 | ||
Provision | (168) | (1,639) | 2,667 |
Balance at end of year | 1,551 | 1,659 | 3,298 |
Residential mortgage | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | 34,364 | 40,461 | 29,303 |
Charge-offs | (103) | (632) | (14) |
Recoveries | 418 | 261 | 216 |
Provision | 496 | (5,726) | 13,749 |
Balance at end of year | 35,175 | 34,364 | 40,461 |
Home equity line | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | 5,642 | 7,163 | 9,876 |
Charge-offs | (1,175) | (342) | (54) |
Recoveries | 713 | 117 | 167 |
Provision | 3,116 | (1,296) | 1,905 |
Balance at end of year | 8,296 | 5,642 | 7,163 |
Consumer Portfolio Segment [Member] | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | 42,793 | 64,659 | 34,644 |
Charge-offs | (16,848) | (16,634) | (28,791) |
Recoveries | 7,545 | 9,600 | 10,499 |
Provision | 1,171 | (14,832) | 32,732 |
Balance at end of year | $ 34,661 | $ 42,793 | 64,659 |
Unallocated | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | 139 | ||
ASU No. 2016-13 | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | 770 | ||
ASU No. 2016-13 | Commercial and Industrial | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | (16,105) | ||
ASU No. 2016-13 | Commercial real estate | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | 10,559 | ||
ASU No. 2016-13 | Construction | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | (1,803) | ||
ASU No. 2016-13 | Lease financing | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | 207 | ||
ASU No. 2016-13 | Residential mortgage | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | (2,793) | ||
ASU No. 2016-13 | Home equity line | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | (4,731) | ||
ASU No. 2016-13 | Consumer Portfolio Segment [Member] | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | 15,575 | ||
ASU No. 2016-13 | Unallocated | |||
Rollforward of the Allowance for Credit Losses | |||
Balance at beginning of year | $ (139) |
Allowance for Credit Losses - R
Allowance for Credit Losses - Rollforward of the Reserve for Unfunded Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | $ 30,603 | $ 600 | |
Provision | 13,703 | ||
Reserve for unfunded commitments, ending balance | 30,603 | ||
Commercial and Industrial | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 11,719 | ||
Provision | 6,329 | ||
Reserve for unfunded commitments, ending balance | 11,719 | ||
Commercial real estate | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 1,328 | ||
Provision | 550 | ||
Reserve for unfunded commitments, ending balance | 1,328 | ||
Construction | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 9,037 | ||
Provision | 4,918 | ||
Reserve for unfunded commitments, ending balance | 9,037 | ||
Residential Lending: Residential Mortgage | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 2 | ||
Provision | (5) | ||
Reserve for unfunded commitments, ending balance | 2 | ||
Home equity line | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 8,452 | ||
Provision | 1,865 | ||
Reserve for unfunded commitments, ending balance | 8,452 | ||
Consumer Portfolio Segment [Member] | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 65 | 600 | |
Provision | 46 | ||
Reserve for unfunded commitments, ending balance | 65 | ||
Reserve for unfunded commitments | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | $ 30,322 | 30,603 | |
Provision | 3,513 | (281) | |
Reserve for unfunded commitments, ending balance | 33,835 | 30,322 | 30,603 |
Reserve for unfunded commitments | Commercial and Industrial | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 8,615 | 11,719 | |
Provision | (804) | (3,104) | |
Reserve for unfunded commitments, ending balance | 7,811 | 8,615 | 11,719 |
Reserve for unfunded commitments | Commercial real estate | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 2,114 | 1,328 | |
Provision | (110) | 786 | |
Reserve for unfunded commitments, ending balance | 2,004 | 2,114 | 1,328 |
Reserve for unfunded commitments | Construction | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 8,963 | 9,037 | |
Provision | (1,493) | (74) | |
Reserve for unfunded commitments, ending balance | 7,470 | 8,963 | 9,037 |
Reserve for unfunded commitments | Residential Lending: Residential Mortgage | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 15 | 2 | |
Provision | 15 | 13 | |
Reserve for unfunded commitments, ending balance | 30 | 15 | 2 |
Reserve for unfunded commitments | Home equity line | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 10,546 | 8,452 | |
Provision | 5,937 | 2,094 | |
Reserve for unfunded commitments, ending balance | 16,483 | 10,546 | 8,452 |
Reserve for unfunded commitments | Consumer Portfolio Segment [Member] | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 69 | 65 | |
Provision | (32) | 4 | |
Reserve for unfunded commitments, ending balance | $ 37 | $ 69 | 65 |
ASU No. 2016-13 | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 16,300 | ||
ASU No. 2016-13 | Commercial and Industrial | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 5,390 | ||
ASU No. 2016-13 | Commercial real estate | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 778 | ||
ASU No. 2016-13 | Construction | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 4,119 | ||
ASU No. 2016-13 | Residential Lending: Residential Mortgage | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 7 | ||
ASU No. 2016-13 | Home equity line | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | 6,587 | ||
ASU No. 2016-13 | Consumer Portfolio Segment [Member] | |||
Reserve for unfunded commitments: | |||
Reserve for unfunded commitments, beginning balance | $ (581) |
Allowance for Credit Losses -_2
Allowance for Credit Losses - Amortized Cost Basis by Year of Origination and Credit Quality Indicator (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Credit quality | ||
Financing Receivable, before Allowance for Credit Loss, Total | $ 14,092,012 | $ 12,961,999 |
Loss | ||
Credit quality | ||
Financing Receivable, before Allowance for Credit Loss, Total | 0 | 0 |
Residential Lending: Residential Mortgage | ||
Credit quality | ||
2021/2022 | 687,599 | 1,304,978 |
2020/2021 | 1,227,369 | 753,668 |
2019/2020 | 677,025 | 363,415 |
2018/2019 | 309,308 | 266,368 |
2017/2018 | 217,050 | 332,041 |
Prior | 1,174,681 | 1,062,135 |
Revolving Loans Amortized Cost Basis | 9,202 | 44 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 554 | 718 |
Financing Receivable, before Allowance for Credit Loss, Total | 4,302,788 | 4,083,367 |
Residential Lending: Residential Mortgage | 740 and greater | ||
Credit quality | ||
2021/2022 | 557,636 | 1,101,958 |
2020/2021 | 1,064,444 | 635,061 |
2019/2020 | 560,463 | 286,993 |
2018/2019 | 245,241 | 198,622 |
2017/2018 | 165,258 | 251,906 |
Prior | 920,100 | 829,175 |
Financing Receivable, before Allowance for Credit Loss, Total | 3,513,142 | 3,303,715 |
Residential Lending: Residential Mortgage | 680 - 739 | ||
Credit quality | ||
2021/2022 | 73,929 | 140,997 |
2020/2021 | 112,672 | 81,590 |
2019/2020 | 82,416 | 45,163 |
2018/2019 | 40,355 | 27,315 |
2017/2018 | 22,126 | 32,855 |
Prior | 130,508 | 125,906 |
Financing Receivable, before Allowance for Credit Loss, Total | 462,006 | 453,826 |
Residential Lending: Residential Mortgage | 620 - 679 | ||
Credit quality | ||
2021/2022 | 12,320 | 15,781 |
2020/2021 | 13,804 | 11,943 |
2019/2020 | 9,881 | 5,268 |
2018/2019 | 3,649 | 10,149 |
2017/2018 | 3,054 | 9,069 |
Prior | 35,441 | 37,404 |
Financing Receivable, before Allowance for Credit Loss, Total | 78,149 | 89,614 |
Residential Lending: Residential Mortgage | 550 - 619 | ||
Credit quality | ||
2021/2022 | 2,455 | 1,735 |
2020/2021 | 2,246 | 873 |
2019/2020 | 1,791 | 698 |
2018/2019 | 263 | 533 |
2017/2018 | 601 | 2,033 |
Prior | 6,955 | 7,475 |
Financing Receivable, before Allowance for Credit Loss, Total | 14,311 | 13,347 |
Residential Lending: Residential Mortgage | Less than 550 | ||
Credit quality | ||
2020/2021 | 1,321 | |
2019/2020 | 367 | |
2018/2019 | 345 | |
2017/2018 | 966 | 2,603 |
Prior | 5,304 | 2,838 |
Financing Receivable, before Allowance for Credit Loss, Total | 7,958 | 5,786 |
Residential Lending: Residential Mortgage | No Score | ||
Credit quality | ||
2021/2022 | 22,289 | 18,882 |
2020/2021 | 14,671 | 7,938 |
2019/2020 | 6,820 | 15,051 |
2018/2019 | 10,599 | 18,107 |
2017/2018 | 15,921 | 17,333 |
Prior | 47,245 | 42,185 |
Financing Receivable, before Allowance for Credit Loss, Total | 117,545 | 119,496 |
Residential Lending: Residential Mortgage | Fico Other | ||
Credit quality | ||
2021/2022 | 18,970 | 25,625 |
2020/2021 | 18,211 | 16,263 |
2019/2020 | 15,287 | 10,242 |
2018/2019 | 9,201 | 11,297 |
2017/2018 | 9,124 | 16,242 |
Prior | 29,128 | 17,152 |
Revolving Loans Amortized Cost Basis | 9,202 | 44 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 554 | 718 |
Financing Receivable, before Allowance for Credit Loss, Total | 109,677 | 97,583 |
Home equity line | ||
Credit quality | ||
Revolving Loans Amortized Cost Basis | 867,251 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 9,357 | |
Financing Receivable, before Allowance for Credit Loss, Total | 876,608 | |
Home equity line | 740 and greater | ||
Credit quality | ||
Revolving Loans Amortized Cost Basis | 817,123 | 671,566 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 2,059 | 1,873 |
Financing Receivable, before Allowance for Credit Loss, Total | 819,182 | 673,439 |
Home equity line | 680 - 739 | ||
Credit quality | ||
Revolving Loans Amortized Cost Basis | 171,117 | 141,889 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 2,714 | 3,968 |
Financing Receivable, before Allowance for Credit Loss, Total | 173,831 | 145,857 |
Home equity line | 620 - 679 | ||
Credit quality | ||
Revolving Loans Amortized Cost Basis | 45,368 | 37,815 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 2,100 | 2,500 |
Financing Receivable, before Allowance for Credit Loss, Total | 47,468 | 40,315 |
Home equity line | 550 - 619 | ||
Credit quality | ||
Revolving Loans Amortized Cost Basis | 7,485 | 9,090 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 1,029 | 948 |
Financing Receivable, before Allowance for Credit Loss, Total | 8,514 | 10,038 |
Home equity line | Less than 550 | ||
Credit quality | ||
Revolving Loans Amortized Cost Basis | 1,151 | 2,574 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 481 | 68 |
Financing Receivable, before Allowance for Credit Loss, Total | 1,632 | 2,642 |
Home equity line | No Score | ||
Credit quality | ||
Revolving Loans Amortized Cost Basis | 4,724 | 4,317 |
Financing Receivable, before Allowance for Credit Loss, Total | 4,724 | 4,317 |
Total loans | ||
Credit quality | ||
2021/2022 | 2,560,433 | 3,157,488 |
2020/2021 | 2,880,346 | 1,588,735 |
2019/2020 | 1,319,250 | 1,632,764 |
2018/2019 | 1,311,719 | 1,164,714 |
2017/2018 | 825,528 | 954,259 |
Prior | 2,699,183 | 2,359,432 |
Revolving Loans Amortized Cost Basis | 2,467,297 | 2,033,383 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 28,256 | 71,224 |
Financing Receivable, before Allowance for Credit Loss, Total | 14,092,012 | 12,961,999 |
Residential Portfolio Segment [Member] | ||
Credit quality | ||
Financing Receivable, before Allowance for Credit Loss, Total | 4,302,788 | 4,083,367 |
Residential Portfolio Segment [Member] | Home equity line | ||
Credit quality | ||
2021/2022 | 1,304,978 | |
2020/2021 | 753,668 | |
2019/2020 | 363,415 | |
2018/2019 | 266,368 | |
2017/2018 | 332,041 | |
Prior | 1,062,135 | |
Revolving Loans Amortized Cost Basis | 867,295 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 10,075 | |
Financing Receivable, before Allowance for Credit Loss, Total | 4,959,975 | |
Home equity Line | ||
Credit quality | ||
Financing Receivable, before Allowance for Credit Loss, Total | 1,055,351 | 876,608 |
Consumer Portfolio Segment [Member] | ||
Credit quality | ||
2021/2022 | 335,116 | 306,140 |
2020/2021 | 218,940 | 174,166 |
2019/2020 | 112,885 | 184,913 |
2018/2019 | 105,789 | 124,197 |
2017/2018 | 57,786 | 67,459 |
Prior | 28,131 | 24,158 |
Revolving Loans Amortized Cost Basis | 361,126 | 344,870 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 3,161 | 4,036 |
Financing Receivable, before Allowance for Credit Loss, Total | 1,222,934 | 1,229,939 |
Consumer Portfolio Segment [Member] | 740 and greater | ||
Credit quality | ||
2021/2022 | 200,887 | 155,929 |
2020/2021 | 111,047 | 83,337 |
2019/2020 | 53,534 | 79,617 |
2018/2019 | 43,912 | 56,707 |
2017/2018 | 24,951 | 24,525 |
Prior | 8,432 | 8,067 |
Revolving Loans Amortized Cost Basis | 125,126 | 117,843 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 185 | 209 |
Financing Receivable, before Allowance for Credit Loss, Total | 568,074 | 526,234 |
Consumer Portfolio Segment [Member] | 680 - 739 | ||
Credit quality | ||
2021/2022 | 99,787 | 93,214 |
2020/2021 | 67,140 | 56,327 |
2019/2020 | 37,260 | 55,126 |
2018/2019 | 31,751 | 34,049 |
2017/2018 | 15,874 | 17,527 |
Prior | 7,665 | 6,315 |
Revolving Loans Amortized Cost Basis | 72,101 | 69,366 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 514 | 707 |
Financing Receivable, before Allowance for Credit Loss, Total | 332,092 | 332,631 |
Consumer Portfolio Segment [Member] | 620 - 679 | ||
Credit quality | ||
2021/2022 | 25,949 | 41,671 |
2020/2021 | 29,587 | 21,986 |
2019/2020 | 14,226 | 28,491 |
2018/2019 | 16,872 | 19,403 |
2017/2018 | 9,672 | 12,952 |
Prior | 6,488 | 5,324 |
Revolving Loans Amortized Cost Basis | 31,854 | 31,165 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 937 | 1,175 |
Financing Receivable, before Allowance for Credit Loss, Total | 135,585 | 162,167 |
Consumer Portfolio Segment [Member] | 550 - 619 | ||
Credit quality | ||
2021/2022 | 3,017 | 7,836 |
2020/2021 | 5,475 | 8,265 |
2019/2020 | 5,226 | 13,265 |
2018/2019 | 8,056 | 10,497 |
2017/2018 | 5,396 | 7,469 |
Prior | 3,924 | 3,244 |
Revolving Loans Amortized Cost Basis | 11,269 | 10,359 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 854 | 1,089 |
Financing Receivable, before Allowance for Credit Loss, Total | 43,217 | 62,024 |
Consumer Portfolio Segment [Member] | Less than 550 | ||
Credit quality | ||
2021/2022 | 656 | 2,272 |
2020/2021 | 1,351 | 3,867 |
2019/2020 | 2,286 | 6,646 |
2018/2019 | 3,779 | 3,484 |
2017/2018 | 1,869 | 2,739 |
Prior | 1,593 | 1,175 |
Revolving Loans Amortized Cost Basis | 3,541 | 3,195 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 443 | 536 |
Financing Receivable, before Allowance for Credit Loss, Total | 15,518 | 23,914 |
Consumer Portfolio Segment [Member] | No Score | ||
Credit quality | ||
2021/2022 | 3,205 | 481 |
2020/2021 | 258 | 19 |
2019/2020 | 56 | |
2018/2019 | 51 | 40 |
2017/2018 | 24 | 65 |
Prior | 29 | 2 |
Revolving Loans Amortized Cost Basis | 38,805 | 35,414 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 227 | 320 |
Financing Receivable, before Allowance for Credit Loss, Total | 42,599 | 36,397 |
Consumer Portfolio Segment [Member] | Fico Other | ||
Credit quality | ||
2021/2022 | 1,615 | 4,737 |
2020/2021 | 4,082 | 365 |
2019/2020 | 353 | 1,712 |
2018/2019 | 1,368 | 17 |
2017/2018 | 2,182 | |
Prior | 31 | |
Revolving Loans Amortized Cost Basis | 78,430 | 77,528 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 1 | |
Financing Receivable, before Allowance for Credit Loss, Total | 85,849 | 86,572 |
Residential Mortgage loans | ||
Credit quality | ||
2021/2022 | 687,599 | |
2020/2021 | 1,227,369 | |
2019/2020 | 677,025 | |
2018/2019 | 309,308 | |
2017/2018 | 217,050 | |
Prior | 1,174,681 | |
Revolving Loans Amortized Cost Basis | 1,056,170 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 8,937 | |
Financing Receivable, before Allowance for Credit Loss, Total | 5,358,139 | |
Home Equity Loans and Lines of Credit | ||
Credit quality | ||
Revolving Loans Amortized Cost Basis | 1,046,968 | |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 8,383 | |
Financing Receivable, before Allowance for Credit Loss, Total | 1,055,351 | |
Commercial and Industrial | ||
Credit quality | ||
2021/2022 | 380,244 | 637,126 |
2020/2021 | 430,817 | 142,497 |
2019/2020 | 61,473 | 237,293 |
2018/2019 | 177,922 | 106,699 |
2017/2018 | 54,209 | 32,409 |
Prior | 140,740 | 177,825 |
Revolving Loans Amortized Cost Basis | 974,334 | 711,028 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 16,158 | 42,222 |
Financing Receivable, before Allowance for Credit Loss, Total | 2,235,897 | 2,087,099 |
Commercial and Industrial | Pass | ||
Credit quality | ||
2021/2022 | 359,881 | 623,098 |
2020/2021 | 422,567 | 129,665 |
2019/2020 | 54,656 | 223,388 |
2018/2019 | 170,222 | 88,409 |
2017/2018 | 51,476 | 29,380 |
Prior | 137,257 | 168,591 |
Revolving Loans Amortized Cost Basis | 894,384 | 644,947 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 15,715 | 40,193 |
Financing Receivable, before Allowance for Credit Loss, Total | 2,106,158 | 1,947,671 |
Commercial and Industrial | Special mention | ||
Credit quality | ||
2021/2022 | 2,059 | 397 |
2020/2021 | 240 | 4,382 |
2019/2020 | 1,371 | 4,213 |
2018/2019 | 2,643 | 12,552 |
2017/2018 | 184 | 974 |
Prior | 1,431 | 5,313 |
Revolving Loans Amortized Cost Basis | 22,897 | 4,804 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 378 | 986 |
Financing Receivable, before Allowance for Credit Loss, Total | 31,203 | 33,621 |
Commercial and Industrial | Substandard | ||
Credit quality | ||
2021/2022 | 625 | 354 |
2020/2021 | 289 | 1,380 |
2019/2020 | 1,117 | 1,951 |
2018/2019 | 1,092 | 1,285 |
2017/2018 | 668 | 60 |
Prior | 885 | 3,551 |
Revolving Loans Amortized Cost Basis | 14,733 | 17,893 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 65 | 1,043 |
Financing Receivable, before Allowance for Credit Loss, Total | 19,474 | 27,517 |
Commercial and Industrial | Other Indicator | ||
Credit quality | ||
2021/2022 | 17,679 | 13,277 |
2020/2021 | 7,721 | 7,070 |
2019/2020 | 4,329 | 7,741 |
2018/2019 | 3,965 | 4,453 |
2017/2018 | 1,881 | 1,995 |
Prior | 1,167 | 370 |
Revolving Loans Amortized Cost Basis | 42,320 | 43,384 |
Financing Receivable, before Allowance for Credit Loss, Total | 79,062 | 78,290 |
Commercial real estate | ||
Credit quality | ||
2021/2022 | 889,753 | 693,370 |
2020/2021 | 695,882 | 338,140 |
2019/2020 | 320,566 | 582,386 |
2018/2019 | 580,465 | 496,985 |
2017/2018 | 397,690 | 440,863 |
Prior | 1,199,197 | 986,450 |
Revolving Loans Amortized Cost Basis | 48,756 | 86,538 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 14,891 | |
Financing Receivable, before Allowance for Credit Loss, Total | 4,132,309 | 3,639,623 |
Commercial real estate | Pass | ||
Credit quality | ||
2021/2022 | 889,583 | 693,370 |
2020/2021 | 695,882 | 338,140 |
2019/2020 | 319,838 | 533,887 |
2018/2019 | 565,587 | 487,739 |
2017/2018 | 395,474 | 415,186 |
Prior | 1,173,163 | 940,732 |
Revolving Loans Amortized Cost Basis | 48,081 | 78,479 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 14,891 | |
Financing Receivable, before Allowance for Credit Loss, Total | 4,087,608 | 3,502,424 |
Commercial real estate | Special mention | ||
Credit quality | ||
2021/2022 | 170 | |
2019/2020 | 555 | 48,499 |
2018/2019 | 14,878 | 7,470 |
2017/2018 | 512 | 25,513 |
Prior | 11,398 | 30,255 |
Revolving Loans Amortized Cost Basis | 675 | 7,600 |
Financing Receivable, before Allowance for Credit Loss, Total | 28,188 | 119,337 |
Commercial real estate | Substandard | ||
Credit quality | ||
2019/2020 | 173 | |
2018/2019 | 1,776 | |
2017/2018 | 1,704 | 164 |
Prior | 14,485 | 15,303 |
Revolving Loans Amortized Cost Basis | 459 | |
Financing Receivable, before Allowance for Credit Loss, Total | 16,362 | 17,702 |
Commercial real estate | Other Indicator | ||
Credit quality | ||
Prior | 151 | 160 |
Financing Receivable, before Allowance for Credit Loss, Total | 151 | 160 |
Construction | ||
Credit quality | ||
2021/2022 | 154,158 | 181,393 |
2020/2021 | 282,875 | 116,642 |
2019/2020 | 101,109 | 214,875 |
2018/2019 | 99,422 | 160,689 |
2017/2018 | 92,778 | 65,454 |
Prior | 87,390 | 51,264 |
Revolving Loans Amortized Cost Basis | 26,911 | 23,652 |
Financing Receivable, before Allowance for Credit Loss, Total | 844,643 | 813,969 |
Construction | Pass | ||
Credit quality | ||
2021/2022 | 124,464 | 154,558 |
2020/2021 | 261,536 | 107,767 |
2019/2020 | 96,423 | 210,314 |
2018/2019 | 97,000 | 155,311 |
2017/2018 | 88,973 | 62,770 |
Prior | 84,704 | 48,021 |
Revolving Loans Amortized Cost Basis | 25,957 | 22,859 |
Financing Receivable, before Allowance for Credit Loss, Total | 779,057 | 761,600 |
Construction | Special mention | ||
Credit quality | ||
2019/2020 | 244 | |
2018/2019 | 221 | 707 |
Prior | 356 | |
Financing Receivable, before Allowance for Credit Loss, Total | 221 | 1,307 |
Construction | Substandard | ||
Credit quality | ||
2018/2019 | 363 | |
2017/2018 | 21 | |
Prior | 490 | 839 |
Financing Receivable, before Allowance for Credit Loss, Total | 511 | 1,202 |
Construction | Other Indicator | ||
Credit quality | ||
2021/2022 | 29,694 | 26,835 |
2020/2021 | 21,339 | 8,875 |
2019/2020 | 4,686 | 4,317 |
2018/2019 | 2,201 | 4,308 |
2017/2018 | 3,784 | 2,684 |
Prior | 2,196 | 2,048 |
Revolving Loans Amortized Cost Basis | 954 | 793 |
Financing Receivable, before Allowance for Credit Loss, Total | 64,854 | 49,860 |
Lease financing | ||
Credit quality | ||
2021/2022 | 113,563 | 34,481 |
2020/2021 | 24,463 | 63,622 |
2019/2020 | 46,192 | 49,882 |
2018/2019 | 38,813 | 9,776 |
2017/2018 | 6,015 | 16,033 |
Prior | 69,044 | 57,600 |
Financing Receivable, before Allowance for Credit Loss, Total | 298,090 | 231,394 |
Lease financing | Pass | ||
Credit quality | ||
2021/2022 | 113,563 | 33,980 |
2020/2021 | 24,052 | 60,650 |
2019/2020 | 43,497 | 48,236 |
2018/2019 | 37,502 | 9,449 |
2017/2018 | 6,004 | 15,009 |
Prior | 67,687 | 57,130 |
Financing Receivable, before Allowance for Credit Loss, Total | 292,305 | 224,454 |
Lease financing | Special mention | ||
Credit quality | ||
2021/2022 | 501 | |
2020/2021 | 411 | 2,702 |
2019/2020 | 2,498 | 1,506 |
2018/2019 | 1,299 | 311 |
2017/2018 | 153 | |
Financing Receivable, before Allowance for Credit Loss, Total | 4,208 | 5,173 |
Lease financing | Substandard | ||
Credit quality | ||
2020/2021 | 270 | |
2019/2020 | 197 | 140 |
2018/2019 | 12 | 16 |
2017/2018 | 11 | 871 |
Prior | 1,357 | 470 |
Financing Receivable, before Allowance for Credit Loss, Total | 1,577 | 1,767 |
Commercial Lending | ||
Credit quality | ||
2021/2022 | 1,537,718 | 1,546,370 |
2020/2021 | 1,434,037 | 660,901 |
2019/2020 | 529,340 | 1,084,436 |
2018/2019 | 896,622 | 774,149 |
2017/2018 | 550,692 | 554,759 |
Prior | 1,496,371 | 1,273,139 |
Revolving Loans Amortized Cost Basis | 1,050,001 | 821,218 |
Revolving Loans Converted to Term Loans Amortized Cost Basis | 16,158 | 57,113 |
Financing Receivable, before Allowance for Credit Loss, Total | $ 7,510,939 | $ 6,772,085 |
Allowance for Credit Losses -_3
Allowance for Credit Losses - Amortized Cost Basis of Revolving Loans that Were Converted to Term Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Credit quality | ||
Total Revolving Loans Converted to Term Loans During the Year | $ 3,992 | $ 21,851 |
Commercial and Industrial | ||
Credit quality | ||
Total Revolving Loans Converted to Term Loans During the Year | 480 | 1,153 |
Commercial real estate | ||
Credit quality | ||
Total Revolving Loans Converted to Term Loans During the Year | 14,891 | |
Residential Mortgage loans | ||
Credit quality | ||
Total Revolving Loans Converted to Term Loans During the Year | 577 | |
Home equity Line | ||
Credit quality | ||
Total Revolving Loans Converted to Term Loans During the Year | 2,189 | 3,656 |
Consumer Portfolio Segment [Member] | ||
Credit quality | ||
Total Revolving Loans Converted to Term Loans During the Year | $ 1,323 | $ 1,574 |
Allowance for Credit Losses -_4
Allowance for Credit Losses - Aging of Analysis of Past Due Loans and Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | $ 14,092,012 | $ 12,961,999 |
Loans and Leases Past Due 90 Days or More and Still Accruing Interest | 3,234 | 7,208 |
30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 46,065 | 23,090 |
60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 10,934 | 6,101 |
90 Days or Greater Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 9,698 | 12,416 |
Total Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 66,697 | 41,607 |
Current | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 14,025,315 | 12,920,392 |
Commercial and Industrial | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 2,235,897 | 2,087,099 |
Loans and Leases Past Due 90 Days or More and Still Accruing Interest | 291 | 740 |
Commercial and Industrial | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 2,682 | 1,195 |
Commercial and Industrial | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 769 | 1,195 |
Commercial and Industrial | 90 Days or Greater Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 1,441 | 1,318 |
Commercial and Industrial | Total Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 4,892 | 3,708 |
Commercial and Industrial | Current | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 2,231,005 | 2,083,391 |
Commercial real estate | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 4,132,309 | 3,639,623 |
Commercial real estate | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 4,505 | 631 |
Commercial real estate | 90 Days or Greater Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 727 | |
Commercial real estate | Total Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 5,232 | 631 |
Commercial real estate | Current | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 4,127,077 | 3,638,992 |
Construction | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 844,643 | 813,969 |
Construction | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 109 | 162 |
Construction | Total Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 109 | 162 |
Construction | Current | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 844,534 | 813,807 |
Lease financing | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 298,090 | 231,394 |
Lease financing | Current | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 298,090 | 231,394 |
Residential mortgage | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 4,302,788 | 4,083,367 |
Loans and Leases Past Due 90 Days or More and Still Accruing Interest | 58 | 987 |
Residential mortgage | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 3,681 | 3,030 |
Residential mortgage | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 1,983 | 1,002 |
Residential mortgage | 90 Days or Greater Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 2,572 | 5,617 |
Residential mortgage | Total Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 8,236 | 9,649 |
Residential mortgage | Current | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 4,294,552 | 4,073,718 |
Home equity Line | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 1,055,351 | 876,608 |
Loans and Leases Past Due 90 Days or More and Still Accruing Interest | 3,681 | |
Home equity Line | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 5,161 | 1,538 |
Home equity Line | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 1,381 | 538 |
Home equity Line | 90 Days or Greater Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 2,072 | 3,681 |
Home equity Line | Total Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 8,614 | 5,757 |
Home equity Line | Current | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 1,046,737 | 870,851 |
Consumer Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 1,222,934 | 1,229,939 |
Loans and Leases Past Due 90 Days or More and Still Accruing Interest | 2,885 | 1,800 |
Consumer Portfolio Segment [Member] | 30 - 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 29,927 | 16,534 |
Consumer Portfolio Segment [Member] | 60 - 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 6,801 | 3,366 |
Consumer Portfolio Segment [Member] | 90 Days or Greater Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 2,886 | 1,800 |
Consumer Portfolio Segment [Member] | Total Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 39,614 | 21,700 |
Consumer Portfolio Segment [Member] | Current | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 1,183,320 | 1,208,239 |
Residential Lending: Residential Mortgage | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | $ 4,302,788 | 4,083,367 |
Home equity line | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | 876,608 | |
Home equity line | Residential mortgage | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and leases | $ 4,959,975 |
Allowance for Credit Losses -_5
Allowance for Credit Losses - Amortized Cost Basis of Loans and Leases on Nonaccrual Status (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Receivable, Nonaccrual [Line Items] | |||
Nonaccrual Loans and Leases With No Allowance for Credit Losses | $ 3,548 | $ 1,919 | |
Nonaccrual Loans and Leases | 11,905 | 7,082 | |
Interest income recognized on nonaccrual loans and leases | 400 | 400 | $ 200 |
Accrued interest receivables written off, Interest income reversed | 900 | 800 | $ 1,400 |
Commercial and Industrial | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Nonaccrual Loans and Leases With No Allowance for Credit Losses | 665 | ||
Nonaccrual Loans and Leases | 1,215 | 718 | |
Commercial real estate | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Nonaccrual Loans and Leases With No Allowance for Credit Losses | 727 | 727 | |
Nonaccrual Loans and Leases | 727 | 727 | |
Residential mortgage | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Nonaccrual Loans and Leases With No Allowance for Credit Losses | 1,560 | 1,192 | |
Nonaccrual Loans and Leases | 6,166 | $ 5,637 | |
Home equity Line | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Nonaccrual Loans and Leases With No Allowance for Credit Losses | 596 | ||
Nonaccrual Loans and Leases | $ 3,797 |
Allowance for Credit Losses - C
Allowance for Credit Losses - Collateral-Dependent Loans and Leases (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Residential Real Estate [Member] | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Amortized cost basis of collateral-dependent loans | $ 8.2 | $ 7.5 |
Allowance for Credit Losses - T
Allowance for Credit Losses - Troubled Debt Restructuring Modifications (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) loan contract | Dec. 31, 2021 USD ($) contract loan | Dec. 31, 2020 USD ($) contract | |
Troubled debt restructuring modifications | |||
Number of Contracts | contract | 264 | 1,689 | 5 |
Recorded Investment | $ 2,625 | $ 23,765 | $ 7,795 |
Related ACL | 491 | 2,605 | $ 590 |
Aggregate commitments to extend credit, standby letters of credit and commercial letters of credit | 7,000,000 | 6,700,000 | |
Commitments related to borrowers who had loan terms modified in a TDR | $ 100 | $ 200 | |
Loans modified in TDRs that experienced a payment default | |||
Number of Contracts, Defaulted TDRs | contract | 215 | 414 | 1 |
Recorded Investment, Defaulted TDRs | $ 3,164 | $ 7,659 | $ 500 |
Commercial and Industrial | |||
Troubled debt restructuring modifications | |||
Number of Contracts | contract | 5 | 11 | 1 |
Recorded Investment | $ 205 | $ 1,481 | $ 500 |
Related ACL | $ 17 | $ 124 | $ 30 |
Loans modified in TDRs that experienced a payment default | |||
Number of Contracts, Defaulted TDRs | contract | 2 | 3 | 1 |
Recorded Investment, Defaulted TDRs | $ 541 | $ 569 | $ 500 |
Commercial real estate | |||
Troubled debt restructuring modifications | |||
Number of Contracts | contract | 1 | 3 | |
Recorded Investment | $ 346 | $ 6,470 | |
Related ACL | $ 78 | $ 470 | |
Loans modified in TDRs that experienced a payment default | |||
Number of Contracts, Defaulted TDRs | contract | 1 | ||
Recorded Investment, Defaulted TDRs | $ 356 | ||
Construction | |||
Troubled debt restructuring modifications | |||
Number of Contracts | contract | 12 | ||
Recorded Investment | $ 689 | ||
Related ACL | $ 69 | ||
Loans modified in TDRs that experienced a payment default | |||
Number of Contracts, Defaulted TDRs | contract | 1 | ||
Recorded Investment, Defaulted TDRs | $ 450 | ||
Residential mortgage | |||
Troubled debt restructuring modifications | |||
Number of Contracts | contract | 13 | 1 | |
Recorded Investment | $ 5,539 | $ 825 | |
Related ACL | $ 207 | $ 90 | |
Loans modified in TDRs that experienced a payment default | |||
Number of Contracts, Defaulted TDRs | contract | 4 | ||
Recorded Investment, Defaulted TDRs | $ 1,012 | ||
Number of loans collateralized by real estate property modified in a TDR in the process of foreclosure | loan | 2 | 1 | |
Loans collateralized by real estate properties that were modified in a TDR that was in process of foreclosure | $ 600 | $ 300 | |
Consumer Portfolio Segment [Member] | |||
Troubled debt restructuring modifications | |||
Number of Contracts | contract | 258 | 1,652 | |
Recorded Investment | $ 2,173 | $ 15,710 | |
Related ACL | $ 443 | $ 2,127 | |
Loans modified in TDRs that experienced a payment default | |||
Number of Contracts, Defaulted TDRs | contract | 213 | 405 | |
Recorded Investment, Defaulted TDRs | $ 2,623 | $ 5,272 | |
Residential Mortgage loans | |||
Troubled debt restructuring modifications | |||
Number of Contracts | contract | 1 | ||
Recorded Investment | $ 247 | ||
Related ACL | $ 31 | ||
Other real estate owned and repossessed personal property | |||
Loans modified in TDRs that experienced a payment default | |||
Number of foreclosed properties | loan | 1 | 1 | |
Real estate property held from a foreclosed TDR | $ 100 | $ 200 | |
Commitments to extend credit | |||
Troubled debt restructuring modifications | |||
Aggregate commitments to extend credit, standby letters of credit and commercial letters of credit | 6,760,395 | 6,490,301 | |
Standby letters of credit | |||
Troubled debt restructuring modifications | |||
Aggregate commitments to extend credit, standby letters of credit and commercial letters of credit | 244,275 | 182,447 | |
Commercial letters of credit | |||
Troubled debt restructuring modifications | |||
Aggregate commitments to extend credit, standby letters of credit and commercial letters of credit | $ 7,299 | $ 3,307 |
Premises and Equipment - Compon
Premises and Equipment - Components and Depreciation and Amortization Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Components of premises and equipment | |||
Premises and equipment | $ 537,498 | $ 571,602 | |
Less: Accumulated depreciation and amortization | 257,143 | 253,154 | |
Net book value | 280,355 | 318,448 | |
Depreciation and amortization expenses | 15,318 | 15,831 | $ 15,952 |
Occupancy | |||
Components of premises and equipment | |||
Depreciation and amortization expenses | 9,192 | 9,149 | 9,231 |
Equipment expense | |||
Components of premises and equipment | |||
Depreciation and amortization expenses | 6,126 | 6,682 | $ 6,721 |
Buildings | |||
Components of premises and equipment | |||
Premises and equipment | 294,051 | 295,286 | |
Furniture and equipment | |||
Components of premises and equipment | |||
Premises and equipment | 92,276 | 95,824 | |
Land | |||
Components of premises and equipment | |||
Premises and equipment | 97,955 | 113,720 | |
Leasehold improvements | |||
Components of premises and equipment | |||
Premises and equipment | $ 53,216 | $ 66,772 |
Other Assets - Goodwill (Detail
Other Assets - Goodwill (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) segment | Dec. 31, 2020 USD ($) | |
Goodwill | |||
Number of reporting segments with goodwill | segment | 2 | 2 | |
Goodwill | $ 995,492 | $ 995,492 | |
Impairment of goodwill | 0 | 0 | $ 0 |
Retail Banking | |||
Goodwill | |||
Goodwill | 687,492 | 687,492 | |
Commercial Banking | |||
Goodwill | |||
Goodwill | $ 308,000 | $ 308,000 |
Other Assets - Estimated Future
Other Assets - Estimated Future Amortization Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other Intangible Assets | |||
Unpaid principal amount of consumer loans serviced for others | $ 1,441,202 | $ 1,673,158 | |
Contractually specified fees, late charges, and ancillary fees | 3,800 | 4,800 | $ 5,700 |
Amortization of mortgage servicing rights | 1,910 | 3,676 | $ 6,300 |
Mortgage servicing assets | |||
Estimated future amortization expenses for MSRs over the next five years | |||
2023 | 949 | ||
2024 | 843 | ||
2025 | 747 | ||
2026 | 660 | ||
2027 | 583 | ||
Details of MSRs | |||
Gross carrying amount | 69,273 | 69,103 | |
Less: accumulated amortization | 62,711 | 60,801 | |
Net carrying value | $ 6,562 | $ 8,302 |
Other Assets - Changes in Amort
Other Assets - Changes in Amortized MSRs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in amortized mortgage servicing rights | |||
Balance at beginning of year | $ 8,302 | $ 10,731 | |
Originations | 170 | 1,247 | |
Amortization | (1,910) | (3,676) | $ (6,300) |
Balance at end of year | 6,562 | 8,302 | 10,731 |
Fair value of amortized MSRs at beginning of year | 12,243 | 14,029 | |
Fair value of amortized MSRs at end of year | 15,193 | 12,243 | 14,029 |
Impairment of MSRs recorded | $ 0 | $ 0 | $ 0 |
Other Assets - Quantitative Ass
Other Assets - Quantitative Assumptions Used for MSRs (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Minimum | ||
Quantitative assumptions used in determining lower of cost or fair value of MSRs | ||
Conditional prepayment rate (as a percent) | 7.02% | 13.77% |
Life in years (of the MSR) | 3 years 4 months 6 days | 1 year 11 months 26 days |
Weighted-average coupon rate (as a percent) | 3.55% | 3.58% |
Discount rate (as a percent) | 10.41% | 10% |
Maximum | ||
Quantitative assumptions used in determining lower of cost or fair value of MSRs | ||
Conditional prepayment rate (as a percent) | 13.58% | 25.19% |
Life in years (of the MSR) | 7 years 4 months 13 days | 5 years 3 months 21 days |
Weighted-average coupon rate (as a percent) | 6.24% | 6.56% |
Discount rate (as a percent) | 10.54% | 10.01% |
Weighted Average | ||
Quantitative assumptions used in determining lower of cost or fair value of MSRs | ||
Conditional prepayment rate (as a percent) | 7.11% | 14.61% |
Life in years (of the MSR) | 7 years 2 months 12 days | 5 years 10 days |
Weighted-average coupon rate (as a percent) | 3.68% | 3.71% |
Discount rate (as a percent) | 10.51% | 10% |
Other Assets - Affordable Housi
Other Assets - Affordable Housing and Other Tax Credit Investment Partnerships (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Affordable housing and other tax credit investment partnership interests | |||
Affordable housing tax credits and other benefits recognized | $ 26.9 | $ 22.7 | $ 15.8 |
Provision for income taxes | |||
Affordable housing and other tax credit investment partnership interests | |||
Amortization | 24.4 | 21.7 | $ 10.5 |
Included in other assets | |||
Affordable housing and other tax credit investment partnership interests | |||
Investment partnership interest | $ 167.4 | $ 184.3 |
Other Assets - Federal Home Loa
Other Assets - Federal Home Loan Bank Stock (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Federal Home Loan Bank Stock redemption notice period | 5 years |
Included in other assets | |
Investment in Federal Home Loan Bank stock | $ 10.1 |
Other Assets - Software, Net (D
Other Assets - Software, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Capitalized internal-use software, accumulated amortization | $ 39.8 | $ 43.6 | |
Capitalized internal-use software, net book value | 15.1 | 13.3 | |
Hosting arrangements | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Capitalized internal-use software, accumulated amortization | 7.7 | 0.6 | |
Capitalized internal-use software, net book value | 110.5 | 77.7 | |
Other noninterest expense | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Amortization expense for all capitalized implementation costs | 5.4 | 8.6 | $ 6.4 |
Equipment expense | Hosting arrangements | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Amortization expense for all capitalized implementation costs | 7.2 | 0.5 | $ 0.1 |
Included in other assets | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Total capitalized internal-use software | 54.9 | 56.9 | |
Included in other assets | Hosting arrangements | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Total capitalized internal-use software | $ 118.2 | $ 78.3 |
Transfers of Financial Assets -
Transfers of Financial Assets - Carrying Amounts of Assets Pledged as Collateral, Borrowings and Other Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
In-substance debt defeasance | $ 0 | $ 0 |
Carrying amounts of the assets pledged as collateral | ||
Securities for reverse repurchase agreements | 0 | 0 |
Asset Pledged as Collateral | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Investment securities pledged as collateral | 3,200,000 | 2,100,000 |
Assets pledged as collateral | 8,297,830 | 6,181,158 |
Asset Pledged as Collateral | Public deposits | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Investment securities pledged as collateral | 3,000,000 | 1,900,000 |
Asset Pledged as Collateral | Federal Home Loan Bank | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Assets pledged as collateral | 3,451,070 | 2,380,042 |
Asset Pledged as Collateral | Federal Reserve Bank | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Assets pledged as collateral | 1,704,803 | 1,724,279 |
Asset Pledged as Collateral with Right [Member] | Public deposits | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Investment securities pledged as collateral | 2,977,693 | 1,913,369 |
Asset Pledged as Collateral without Right [Member] | ACH transactions | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Assets pledged as collateral | 133,173 | 115,038 |
Asset Pledged as Collateral without Right [Member] | Interest rate swaps | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Assets pledged as collateral | $ 31,091 | $ 48,430 |
Deposits - Interest-bearing or
Deposits - Interest-bearing or Noninterest-bearing (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
U.S.: | ||
Interest-bearing | $ 11,936,775 | $ 11,553,298 |
Noninterest-bearing | 7,978,046 | 8,498,187 |
Foreign: | ||
Interest-bearing | 887,608 | 868,985 |
Noninterest-bearing | 886,600 | 895,676 |
Total deposits | $ 21,689,029 | $ 21,816,146 |
Deposits - Maturity Distributio
Deposits - Maturity Distribution of Time Certificates of Deposits (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Maturity distribution of time certificates of deposit | |
Three months or less | $ 1,096,581 |
Over three through six months | 446,710 |
Over six through twelve months | 533,689 |
One to two years | 228,654 |
Two to three years | 86,008 |
Three to four years | 46,112 |
Four to five years | 37,836 |
Thereafter | 460 |
Total | 2,476,050 |
Under $250,000 | |
Maturity distribution of time certificates of deposit | |
Three months or less | 207,766 |
Over three through six months | 182,985 |
Over six through twelve months | 260,583 |
One to two years | 166,340 |
Two to three years | 59,458 |
Three to four years | 40,504 |
Four to five years | 29,216 |
Thereafter | 460 |
Total | 947,312 |
$250,000 or More | |
Maturity distribution of time certificates of deposit | |
Three months or less | 888,815 |
Over three through six months | 263,725 |
Over six through twelve months | 273,106 |
One to two years | 62,314 |
Two to three years | 26,550 |
Three to four years | 5,608 |
Four to five years | 8,620 |
Total | $ 1,528,738 |
Deposits - Time Certificate Den
Deposits - Time Certificate Denominations and Overdrawn Accounts (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Deposits | ||
Time certificates of deposit in denominations of $250,000 or more, in the aggregate | $ 1,500 | $ 800 |
Overdrawn deposit accounts classified as loans | $ 2.5 | $ 2.1 |
Short-Term Borrowings - Compone
Short-Term Borrowings - Components and Selected Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2021 | Nov. 30, 2021 | |
Short-term borrowings | ||||
Short-term borrowings | $ 75,000 | |||
Weighted-average interest rate paid (as a percent) | 2.88% | |||
Federal Home Loan Bank Advances [Member] | ||||
Short-term borrowings | ||||
Available remaining borrowing capacity | 2,500,000 | $ 1,800,000 | ||
Federal Reserve Bank Advances [Member] | ||||
Short-term borrowings | ||||
Available remaining borrowing capacity | 1,200,000 | $ 1,100,000 | ||
Federal Funds Purchased [Member] | ||||
Short-term borrowings | ||||
Short-term borrowings | $ 75,000 | |||
Weighted-average interest rate (as a percent) | 4.35% | |||
Highest month-end balance | $ 75,000 | |||
Average outstanding balance | $ 11,521 | $ 1,366 | ||
Weighted-average interest rate paid (as a percent) | 4.08% | 0.43% | ||
Federal Home Loan Bank Advances [Member] | ||||
Short-term borrowings | ||||
Long-term borrowings | $ 200,000 | |||
Incurred fees related to early termination | $ 9,000 | |||
Weighted-average interest rate (as a percent) | 2.73% | |||
Highest month-end balance | $ 400,000 | |||
Average outstanding balance | $ 208,197 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Changes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Pre-tax Amount | |||
Other comprehensive income (loss), Pre-tax Amount | $ (705,846) | $ (209,065) | $ 86,548 |
Income Tax Benefit (Expense) | |||
Other comprehensive income (loss), Income Tax Benefit (Expense) | 188,285 | 55,768 | (23,195) |
Net of tax | |||
Balance | 2,656,912 | 2,744,104 | 2,640,258 |
Other comprehensive (loss) income | (517,561) | (153,297) | 63,353 |
Balance | 2,269,005 | 2,656,912 | 2,744,104 |
Accumulated Other Comprehensive Income (Loss) | |||
Pre-tax Amount | |||
Accumulated other comprehensive income (loss), beginning balance, Pre-tax Amount | (165,967) | 43,098 | (43,450) |
Accumulated other comprehensive (loss) income, ending balance, Pre-tax Amount | (871,813) | (165,967) | 43,098 |
Income Tax Benefit (Expense) | |||
Accumulated other comprehensive income (loss), beginning balance, Income Tax Benefit (Expense) | 44,274 | (11,494) | 11,701 |
Accumulated other comprehensive loss, ending balance, Income Tax Benefit (Expense) | 232,559 | 44,274 | (11,494) |
Net of tax | |||
Balance | (121,693) | 31,604 | (31,749) |
Other comprehensive (loss) income | (517,561) | (153,297) | 63,353 |
Balance | (639,254) | (121,693) | 31,604 |
Pensions and Other Benefits | |||
Pre-tax Amount | |||
Unrealized net gains (losses) arising during the period, Pre-tax Amount | 25,856 | 10,020 | (4,855) |
Income Tax Benefit (Expense) | |||
Unrealized net losses (gains) arising during the period, Income Tax Benefit (Expense) | (6,897) | (2,673) | 1,200 |
Net of tax | |||
Balance | (24,390) | (31,737) | (28,082) |
Unrealized net (losses) gains arising during the period, Net of tax | 18,959 | 7,347 | (3,655) |
Other comprehensive (loss) income | 18,959 | 7,347 | (3,655) |
Balance | (5,431) | (24,390) | (31,737) |
Pension and other benefits, net actuarial losses arising during the year | |||
Pre-tax Amount | |||
Unrealized net gains (losses) arising during the period, Pre-tax Amount | 20,710 | 3,107 | (10,399) |
Income Tax Benefit (Expense) | |||
Unrealized net losses (gains) arising during the period, Income Tax Benefit (Expense) | (5,524) | (829) | 2,774 |
Net of tax | |||
Unrealized net (losses) gains arising during the period, Net of tax | 15,186 | 2,278 | (7,625) |
Pension and other benefits, prior service credit | |||
Pre-tax Amount | |||
Unrealized net gains (losses) arising during the period, Pre-tax Amount | (51) | ||
Income Tax Benefit (Expense) | |||
Unrealized net losses (gains) arising during the period, Income Tax Benefit (Expense) | 14 | ||
Net of tax | |||
Unrealized net (losses) gains arising during the period, Net of tax | (37) | ||
Pension and other benefits: Amortization of net loss included in net income | |||
Pre-tax Amount | |||
Unrealized net gains (losses) arising during the period, Pre-tax Amount | 5,146 | 6,913 | 5,595 |
Income Tax Benefit (Expense) | |||
Unrealized net losses (gains) arising during the period, Income Tax Benefit (Expense) | (1,373) | (1,844) | (1,492) |
Net of tax | |||
Unrealized net (losses) gains arising during the period, Net of tax | 3,773 | 5,069 | 4,103 |
Pension and other benefits, change in Company tax rate | |||
Income Tax Benefit (Expense) | |||
Unrealized net losses (gains) arising during the period, Income Tax Benefit (Expense) | (96) | ||
Net of tax | |||
Unrealized net (losses) gains arising during the period, Net of tax | (96) | ||
Investment Securities | |||
Pre-tax Amount | |||
Unrealized net gains (losses) arising during the period, Pre-tax Amount | 91,403 | ||
Reclassification of net losses (gains) to net income, Pre-tax Amount | (102) | 114 | |
Other comprehensive income (loss), Pre-tax Amount | (219,085) | ||
Income Tax Benefit (Expense) | |||
Unrealized net losses (gains) arising during the period, Income Tax Benefit (Expense) | (24,395) | ||
Reclassification of net gains (losses) to net income, Income Tax Benefit (Expense) | (27) | 30 | |
Other comprehensive income (loss), Income Tax Benefit (Expense) | 193,471 | 58,441 | |
Net of tax | |||
Balance | (97,303) | 63,341 | (3,667) |
Unrealized net (losses) gains arising during the period, Net of tax | 67,008 | ||
Reclassification of net (gains) losses to net income, Net of tax | (75) | 84 | |
Other comprehensive (loss) income | (567,291) | (160,644) | 67,008 |
Balance | (292,175) | (97,303) | 63,341 |
Investment securities: Unrealized net losses arising during the year | |||
Pre-tax Amount | |||
Unrealized net gains (losses) arising during the period, Pre-tax Amount | (773,667) | (218,983) | 91,289 |
Income Tax Benefit (Expense) | |||
Unrealized net losses (gains) arising during the period, Income Tax Benefit (Expense) | 206,376 | 58,414 | (24,365) |
Net of tax | |||
Unrealized net (losses) gains arising during the period, Net of tax | (567,291) | $ (160,569) | $ 66,924 |
Investment securities: Amortization of unrealized holding losses on held-to-maturity securities | |||
Pre-tax Amount | |||
Reclassification of net losses (gains) to net income, Pre-tax Amount | 48,378 | ||
Income Tax Benefit (Expense) | |||
Reclassification of net gains (losses) to net income, Income Tax Benefit (Expense) | (12,905) | ||
Net of tax | |||
Reclassification of net (gains) losses to net income, Net of tax | 35,473 | ||
Investment Securities (including reclassification of net losses to net income) | |||
Pre-tax Amount | |||
Other comprehensive income (loss), Pre-tax Amount | (725,289) | ||
Net of tax | |||
Other comprehensive (loss) income | (531,818) | ||
Cash Flow Derivative Hedges | |||
Pre-tax Amount | |||
Unrealized net gains (losses) arising during the period, Pre-tax Amount | (6,710) | ||
Reclassification of net losses (gains) to net income, Pre-tax Amount | 297 | ||
Other comprehensive income (loss), Pre-tax Amount | (6,413) | ||
Income Tax Benefit (Expense) | |||
Unrealized net losses (gains) arising during the period, Income Tax Benefit (Expense) | 1,790 | ||
Reclassification of net gains (losses) to net income, Income Tax Benefit (Expense) | (79) | ||
Other comprehensive income (loss), Income Tax Benefit (Expense) | 1,711 | ||
Net of tax | |||
Unrealized net (losses) gains arising during the period, Net of tax | (4,920) | ||
Reclassification of net (gains) losses to net income, Net of tax | 218 | ||
Other comprehensive (loss) income | (4,702) | ||
Balance | $ (4,702) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Changes, Net of Tax (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net of tax | |||
Balance | $ 2,656,912,000 | $ 2,744,104,000 | $ 2,640,258,000 |
Unrealized net losses related to the transfer of securities from available-for-sale to held-to-maturity | (372,400,000) | ||
Other comprehensive (loss) income | (517,561,000) | (153,297,000) | 63,353,000 |
Balance | 2,269,005,000 | 2,656,912,000 | 2,744,104,000 |
Incremental non-credit-related impairment loss recognized in earnings on securities | 0 | 0 | 0 |
Accumulated Other Comprehensive Income (Loss) | |||
Net of tax | |||
Balance | (121,693,000) | 31,604,000 | (31,749,000) |
Other comprehensive (loss) income | (517,561,000) | (153,297,000) | 63,353,000 |
Balance | (639,254,000) | (121,693,000) | 31,604,000 |
Pensions and Other Benefits | |||
Net of tax | |||
Balance | (24,390,000) | (31,737,000) | (28,082,000) |
Other comprehensive (loss) income | 18,959,000 | 7,347,000 | (3,655,000) |
Balance | (5,431,000) | (24,390,000) | (31,737,000) |
Available-for-sale Investment securities | |||
Net of tax | |||
Balance | (97,303,000) | 63,341,000 | (3,667,000) |
Unrealized net losses related to the transfer of securities from available-for-sale to held-to-maturity | 372,419,000 | ||
Other comprehensive (loss) income | (567,291,000) | (160,644,000) | 67,008,000 |
Balance | (292,175,000) | $ (97,303,000) | $ 63,341,000 |
Held-to-Maturity Investment Securities | |||
Net of tax | |||
Unrealized net losses related to the transfer of securities from available-for-sale to held-to-maturity | (372,419,000) | ||
Other comprehensive (loss) income | 35,473,000 | ||
Balance | (336,946,000) | ||
Cash Flow Derivative Hedges | |||
Net of tax | |||
Other comprehensive (loss) income | (4,702,000) | ||
Balance | $ (4,702,000) |
Regulatory Capital Requiremen_3
Regulatory Capital Requirements (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Regulatory capital requirements | ||
Limit on allowable reserve for credit losses for total risk-based capital ratio as a percentage of risk-weighted assets | 1.25% | 1.25% |
Common equity tier 1 capital to risk-weighted assets | ||
Amount | $ 1,912,767 | $ 1,783,113 |
Ratio (as a percent) | 0.1182 | 0.1224 |
Minimum Capital Ratio (as a percent) | 0.0450 | 0.0450 |
Well-Capitalized Ratio (as a percent) | 0.0650 | 0.0650 |
Tier 1 capital to risk-weighted assets | ||
Amount | $ 1,912,767 | $ 1,783,113 |
Ratio (as a percent) | 0.1182 | 0.1224 |
Minimum Capital Ratio (as a percent) | 0.0600 | 0.0600 |
Well-Capitalized Ratio (percent) | 0.0800 | 0.0800 |
Total capital to risk-weighted assets | ||
Amount | $ 2,090,502 | $ 1,965,280 |
Ratio (as a percent) | 0.1292 | 0.1349 |
Minimum Capital Ratio (as a percent) | 0.0800 | 0.0800 |
Well-Capitalized Ratio (as a percent) | 0.1000 | 0.1000 |
Tier 1 capital to average assets (leverage ratio) | ||
Amount | $ 1,912,767 | $ 1,783,113 |
Ratio | 0.0811 | 0.0724 |
Minimum Capital Ratio (as a percent) | 0.0400 | 0.0400 |
Well-Capitalized Ratio (percent) | 0.0500 | 0.0500 |
First Hawaiian Bank (FHB) | ||
Common equity tier 1 capital to risk-weighted assets | ||
Amount | $ 1,895,693 | $ 1,769,214 |
Ratio (as a percent) | 0.1171 | 0.1214 |
Tier 1 capital to risk-weighted assets | ||
Amount | $ 1,895,693 | $ 1,769,214 |
Ratio (as a percent) | 0.1171 | 0.1214 |
Total capital to risk-weighted assets | ||
Amount | $ 2,073,428 | $ 1,951,377 |
Ratio (as a percent) | 0.1281 | 0.1340 |
Tier 1 capital to average assets (leverage ratio) | ||
Amount | $ 1,895,693 | $ 1,769,214 |
Ratio | 0.0804 | 0.0718 |
Leases - Terms of Leases (Detai
Leases - Terms of Leases (Details) | 12 Months Ended |
Dec. 31, 2022 location | |
Lessee, Lease, Description [Line Items] | |
Lessee, renewal options included | true |
Number of branch properties where operating leases for space are connected | 3 |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of lease | 41 years |
Leases - Net Lease Expense (Det
Leases - Net Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net lease expense | |||
Operating lease expense | $ 8,883 | $ 9,432 | $ 9,169 |
Short-term lease expense | 26 | 246 | 397 |
Variable lease expense | 2,135 | 2,204 | 2,353 |
Finance lease expense: | |||
Amortization of right-of-use assets | 1 | 3 | 3 |
Interest on lease liabilities | 1 | ||
Total finance lease expense | 1 | 3 | 4 |
Less: Sublease income | (637) | (744) | (1,222) |
Net lease expense | $ 10,408 | $ 11,141 | $ 10,701 |
Leases - Lease Liabilities (Det
Leases - Lease Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows paid for operating leases | $ 8,418 | $ 7,981 | $ 8,848 |
Financing cash flows paid for finance leases | 10 | 10 | |
Right-of-use assets obtained in exchange for new lease obligations, Operating leases | $ 4,676 | $ 31,792 | $ 3,796 |
Weighted Average Remaining Lease Term, Operating leases (years) | 22 years 2 months 12 days | 22 years 9 months 18 days | 16 years 1 month 6 days |
Weighted Average Remaining Lease Term, Finance leases (years) | 0 years | 6 months | 1 year 6 months |
Weighted Average Discount Rate, Operating leases | 2.98% | 3.01% | 3.17% |
Weighted Average Discount Rate, Finance leases | 6.78% | 6.78% | |
Operating lease right-of-use assets | $ 62,800 | $ 64,200 | |
Other assets | Other assets | Other assets | |
Operating lease liabilities | $ 64,813 | $ 65,800 | |
Other liabilities | Other liabilities | Other liabilities |
Leases - Future Minimum Rental
Leases - Future Minimum Rental Payments under Noncancelable Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Future minimum rental payments under noncancelable operating leases | ||
2023 | $ 6,198 | |
2024 | 5,990 | |
2025 | 5,369 | |
2026 | 4,964 | |
2027 | 4,322 | |
Thereafter | 65,249 | |
Total future minimum lease payments | 92,092 | |
Less: Imputed interest | (27,279) | |
Operating Lease, Liability, Total | $ 64,813 | $ 65,800 |
Leases - Third Party Leases, Co
Leases - Third Party Leases, Cost and Accumulated Depreciation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases | |||
Lease payments to related parties | $ 0 | $ 0 | $ 0 |
Terms of such leases | |||
Lessor, Operating Lease, Option to Extend | Terms of such leases, including renewal options, may be extended for up to ten years, many of which provide for periodic adjustment of rent payments based on changes in consumer or other price indices. | ||
Lessor, Operating Lease, Renewal Term | 10 years | ||
Operating lease income related to lease payments | |||
Operating lease income related to lease payments | $ 6,100,000 | 6,400,000 | 6,300,000 |
Rental income paid by the related parties | 0 | 0 | 400,000 |
Lease income related to variable lease payments | 6,500,000 | 6,100,000 | 5,600,000 |
Future minimum rental income from related parties, amount | $ 0 | $ 0 | $ 0 |
Leases - Future Minimum Renta_2
Leases - Future Minimum Rental Income (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Future minimum rental income under noncancellable operating leases | |
2023 | $ 5,249 |
2024 | 4,405 |
2025 | 3,751 |
2026 | 2,958 |
2027 | 1,360 |
Thereafter | 3,492 |
Total | $ 21,215 |
Benefit Plans - Contributions t
Benefit Plans - Contributions to Pension and Other Postretirement Benefit Plans (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 01, 2019 |
Qualified Plan (ERP) | |||
Benefit Plans | |||
Benefit accruals for the company's employees | $ 0 | ||
Pension Plan | |||
Benefit Plans | |||
Benefit accruals for the company's employees | (77,439) | $ (97,784) | |
Pension Plan | Qualified Plan (ERP) | |||
Benefit Plans | |||
Expected contributions in 2023 | 0 | ||
Pension Plan | Nonqualified Plan | |||
Benefit Plans | |||
Expected contributions in 2023 | 200 | ||
SERP and Directors' Plan | |||
Benefit Plans | |||
Benefit accruals for the company's employees | $ 0 | ||
Expected contributions in 2023 | 0 | ||
Other Benefits | Nonqualified Plan | |||
Benefit Plans | |||
Expected contributions in 2023 | $ 1,200 |
Benefit Plans - 401(k) Savings
Benefit Plans - 401(k) Savings Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Salaries and employee benefits | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contributions | $ 9.2 | $ 9.1 | $ 8.6 |
First Hawaiian, Inc. 401(k) Savings Plan | Maximum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contributions, as percentage of employee's pay | 5% | 5% | 5% |
First Hawaiian, Inc. Future Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contributions, as percentage of employee's pay | 2.50% | 2.50% | 2.50% |
Benefit Plans - Incentive Plans
Benefit Plans - Incentive Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Incentive Plan for Key Executives | Salaries and employee benefits | |||
Incentive Plans | |||
Incentive plan expense | $ 15.5 | $ 13.5 | $ 15.2 |
Benefit Plans - Amounts Recogni
Benefit Plans - Amounts Recognized in Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Pension Plan | |||
Amounts arising during the year: | |||
Net (gain) loss on pension assets | $ 24,047 | $ 3,581 | $ (4,839) |
Net loss (gain) on pension obligations | (38,949) | (4,614) | 14,935 |
Reclassification adjustments recognized as components of net periodic benefit cost during the year: | |||
Net (gain) loss | (5,643) | (6,961) | (5,806) |
Amount recognized in other comprehensive (loss) income | (20,545) | (7,994) | 4,290 |
Other Benefits | |||
Amounts arising during the year: | |||
Net loss (gain) on pension obligations | (5,808) | (2,074) | 303 |
Reclassification adjustments recognized as components of net periodic benefit cost during the year: | |||
Net (gain) loss | 497 | 48 | 211 |
Prior service credit | 51 | ||
Amount recognized in other comprehensive (loss) income | $ (5,311) | $ (2,026) | $ 565 |
Benefit Plans - Accumulated Oth
Benefit Plans - Accumulated Other Comprehensive loss (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Pension Plan | |||
Amounts within accumulated other comprehensive loss that had not yet been recognized as components of net periodic benefit cost | |||
Net actuarial loss (gain) | $ 15,812 | $ 36,357 | |
Total, pretax effect | 15,812 | 36,357 | |
Tax impact | (4,218) | (9,698) | |
Ending balance in accumulated other comprehensive loss | 11,594 | 26,659 | |
Other Benefits | |||
Amounts within accumulated other comprehensive loss that had not yet been recognized as components of net periodic benefit cost | |||
Net actuarial loss (gain) | (8,405) | (3,094) | $ (1,068) |
Total, pretax effect | (8,405) | (3,094) | |
Tax impact | 2,242 | 825 | |
Ending balance in accumulated other comprehensive loss | $ (6,163) | $ (2,269) |
Benefit Plans - Changes to Bene
Benefit Plans - Changes to Benefit Obligations and Fair Value of Plan Assets and Funded Status (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Funded status and amounts recognized in balance sheets | |||
Pension liabilities for underfunded plans | $ (102,577) | $ (134,491) | |
Funded Plan | |||
Changes to PBO or APBO | |||
Benefit obligation at beginning of year | 91,303 | ||
Interest cost | 2,466 | 2,261 | $ 2,946 |
Benefit obligation at end of year | 69,436 | 91,303 | |
Changes to fair value of plan assets | |||
Fair value of plan assets at beginning of year | 106,648 | ||
Fair value of plan assets at end of year | 78,149 | 106,648 | |
PBO, ABO and fair value of plan assets | |||
Projected benefit obligation | 69,436 | 91,303 | |
Accumulated benefit obligation | 69,436 | 91,303 | |
Fair value of plan assets | 78,149 | 106,648 | |
Overfunded (underfunded) portion of PBO/ABO | 8,713 | 15,345 | |
Unfunded Plan | |||
Changes to PBO or APBO | |||
Benefit obligation at beginning of year | 113,129 | ||
Benefit obligation at end of year | 86,152 | 113,129 | |
PBO, ABO and fair value of plan assets | |||
Projected benefit obligation | 86,152 | 113,129 | |
Accumulated benefit obligation | 86,152 | 113,129 | |
Overfunded (underfunded) portion of PBO/ABO | (86,152) | (113,129) | |
Pension Plan | |||
Changes to PBO or APBO | |||
Benefit obligation at beginning of year | 204,432 | 219,392 | |
Interest cost | 5,518 | 5,065 | 6,519 |
Actuarial loss (gain) | (38,949) | (4,614) | |
Benefit payments | (15,413) | (15,411) | |
Benefit obligation at end of year | 155,588 | 204,432 | 219,392 |
Changes to fair value of plan assets | |||
Fair value of plan assets at beginning of year | 106,648 | 114,795 | |
Actual return on plan assets | (20,924) | (536) | |
Benefit payments from trust | (7,575) | (7,611) | |
Fair value of plan assets at end of year | 78,149 | 106,648 | 114,795 |
Funded status and amounts recognized in balance sheets | |||
Pension assets for overfunded plans | 8,713 | 15,345 | |
Pension liabilities for underfunded plans | (86,152) | (113,129) | |
Funded status | (77,439) | (97,784) | |
PBO, ABO and fair value of plan assets | |||
Projected benefit obligation | 155,588 | 204,432 | 219,392 |
Accumulated benefit obligation | 155,588 | 204,432 | |
Fair value of plan assets | 78,149 | 106,648 | 114,795 |
Overfunded (underfunded) portion of PBO/ABO | (77,439) | (97,784) | |
Other Benefits | |||
Changes to PBO or APBO | |||
Benefit obligation at beginning of year | 21,362 | 22,538 | |
Service cost | 789 | 874 | |
Interest cost | 565 | 515 | 640 |
Actuarial loss (gain) | (5,808) | (2,074) | |
Benefit payments | (483) | (491) | |
Benefit obligation at end of year | 16,425 | 21,362 | 22,538 |
Funded status and amounts recognized in balance sheets | |||
Pension liabilities for underfunded plans | (16,425) | (21,362) | |
Funded status | (16,425) | (21,362) | |
PBO, ABO and fair value of plan assets | |||
Projected benefit obligation | $ 16,425 | $ 21,362 | $ 22,538 |
Benefit Plans - Change in Net A
Benefit Plans - Change in Net Actuarial Loss (Gain) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Benefit Plans | |||
Percentage of greater of projected benefit obligation or fair value of plan assets for amortization of actuarial gains or losses | 5% | ||
Amortization period for actuarial gains and losses that exceed threshold | 5 years | ||
Pension Plan | |||
Change in net actuarial loss (gain) and amortization | |||
Net actuarial loss (gain) at beginning of year | $ 36,357 | ||
Amortization cost | (5,643) | $ (6,961) | $ (5,806) |
Liability gain | (38,949) | (4,614) | 14,935 |
Asset loss | 24,047 | 3,581 | (4,839) |
Net actuarial loss (gain) at end of year | 15,812 | 36,357 | |
Pension Benefits | |||
Change in net actuarial loss (gain) and amortization | |||
Net actuarial loss (gain) at beginning of year | 36,357 | 44,351 | |
Amortization cost | (5,643) | (6,961) | |
Liability gain | (38,949) | (4,614) | |
Asset loss | 24,047 | 3,581 | |
Net actuarial loss (gain) at end of year | 15,812 | 36,357 | 44,351 |
Other Benefits | |||
Change in net actuarial loss (gain) and amortization | |||
Net actuarial loss (gain) at beginning of year | (3,094) | (1,068) | |
Amortization cost | 497 | 48 | 211 |
Liability gain | (5,808) | (2,074) | 303 |
Net actuarial loss (gain) at end of year | $ (8,405) | $ (3,094) | $ (1,068) |
Benefit Plans - Net periodic be
Benefit Plans - Net periodic benefit cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Funded Plan | |||
Components of net periodic benefit cost | |||
Interest cost | $ 2,466 | $ 2,261 | $ 2,946 |
Expected return on plan assets | (3,124) | (3,044) | (4,800) |
Recognized net actuarial loss (gain) | 1,906 | 1,609 | 1,421 |
Total net periodic benefit cost | 1,248 | 826 | (433) |
Pension Plan | |||
Components of net periodic benefit cost | |||
Interest cost | $ 5,518 | $ 5,065 | $ 6,519 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Noninterest Expense | Other Noninterest Expense | Other Noninterest Expense |
Expected return on plan assets | $ (3,124) | $ (3,044) | $ (4,800) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Noninterest Expense | Other Noninterest Expense | Other Noninterest Expense |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Noninterest Expense | Other Noninterest Expense | Other Noninterest Expense |
Recognized net actuarial loss (gain) | $ 5,643 | $ 6,961 | $ 5,806 |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Noninterest Expense | Other Noninterest Expense | Other Noninterest Expense |
Total net periodic benefit cost | $ 8,037 | $ 8,982 | $ 7,525 |
Other Benefits | |||
Components of net periodic benefit cost | |||
Service cost | 789 | 874 | |
Interest cost | $ 565 | $ 515 | $ 640 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Noninterest Expense | Other Noninterest Expense | Other Noninterest Expense |
Prior service credit | $ (51) | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Noninterest Expense | Other Noninterest Expense | Other Noninterest Expense |
Recognized net actuarial loss (gain) | $ (497) | $ (48) | $ (211) |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Noninterest Expense | Other Noninterest Expense | Other Noninterest Expense |
Total net periodic benefit cost | $ 857 | $ 1,341 | $ 1,146 |
Other Benefits | Salaries and employee benefits | |||
Components of net periodic benefit cost | |||
Service cost | $ 789 | $ 874 | $ 768 |
Benefit Plans - Assumptions (De
Benefit Plans - Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Postretirement healthcare benefits | |||
Assumed healthcare cost trend rates (reaches ultimate trend rate in 2026) | |||
Healthcare cost trend rate assumed for next year (as a percent) | 6% | 6% | 6.25% |
Rate to which the cost trend is assumed to decline (the ultimate trend rate) (as a percent) | 5% | 5% | 5% |
Qualified Plan (ERP) | Pension Plan | |||
Weighted average assumptions were used to determine benefit obligations | |||
Discount rate (as a percent) | 5.57% | 2.77% | |
Weighted average assumptions used to determine net periodic benefit cost | |||
Discount rate (as a percent) | 2.77% | 2.37% | 3.16% |
Expected long term return on plan assets (as a percent) | 3.05% | 2.75% | 4.40% |
Nonqualified Plan | Pension Plan | |||
Weighted average assumptions were used to determine benefit obligations | |||
Discount rate (as a percent) | 5.57% | 2.77% | |
Weighted average assumptions used to determine net periodic benefit cost | |||
Discount rate (as a percent) | 2.77% | 2.37% | 3.16% |
Nonqualified Plan | Other Benefits | |||
Weighted average assumptions were used to determine benefit obligations | |||
Discount rate (as a percent) | 5.57% | 2.77% | |
Weighted average assumptions used to determine net periodic benefit cost | |||
Discount rate (as a percent) | 2.77% | 2.37% | 3.16% |
Benefit Plans - Plan Assets All
Benefit Plans - Plan Assets Allocation (Details) - Pension Plan | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Benefit Plans | |||
Asset Allocation (as a percent) | 100% | 100% | |
Equity securities | |||
Benefit Plans | |||
Asset Allocation (as a percent) | 11% | 11% | |
Target Allocation (as a percent) | 10% | ||
FHI stock | |||
Benefit Plans | |||
Asset Allocation (as a percent) | 0% | 0% | |
BNP Paribas stock | |||
Benefit Plans | |||
Asset Allocation (as a percent) | 0% | 0% | |
Debt securities | |||
Benefit Plans | |||
Asset Allocation (as a percent) | 87% | 85% | |
Target Allocation (as a percent) | 88% | ||
Other securities | |||
Benefit Plans | |||
Asset Allocation (as a percent) | 2% | 4% | |
Target Allocation (as a percent) | 2% | ||
Qualified Plan (ERP) | |||
Benefit Plans | |||
Expected long term return on plan assets (as a percent) | 3.05% | 2.75% | 4.40% |
Benefit Plans - Estimated Futur
Benefit Plans - Estimated Future Benefit Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Pension Plan | |
Benefit payments expected to be paid over the next ten years | |
2023 | $ 15,453 |
2024 | 15,115 |
2025 | 15,263 |
2026 | 15,350 |
2027 | 14,397 |
2028 to 2032 | 63,403 |
Other Benefits | |
Benefit payments expected to be paid over the next ten years | |
2023 | 1,217 |
2024 | 1,345 |
2025 | 1,413 |
2026 | 1,468 |
2027 | 1,530 |
2028 to 2032 | $ 7,810 |
Benefit Plans - Fair Value Meas
Benefit Plans - Fair Value Measurement of Plan Assets (Details) - Pension Plan - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Benefit Plans | |||
Fair value of plan assets | $ 78,149,000 | $ 106,648,000 | $ 114,795,000 |
Percentage of total | 100% | 100% | |
Cash and cash equivalents | |||
Benefit Plans | |||
Fair value of plan assets | $ 1,712,000 | $ 4,451,000 | |
Fixed income securities | |||
Benefit Plans | |||
Percentage of total | 86.90% | 84.60% | |
U.S. Treasury securities | |||
Benefit Plans | |||
Fair value of plan assets | $ 6,593,000 | $ 8,343,000 | |
US Government Agencies Debt Securities [Member] | |||
Benefit Plans | |||
Fair value of plan assets | 6,656,000 | 9,674,000 | |
Fixed income - U.S. corporate securities | |||
Benefit Plans | |||
Fair value of plan assets | 53,051,000 | 69,926,000 | |
Fixed income - municipal securities | |||
Benefit Plans | |||
Fair value of plan assets | 382,000 | 495,000 | |
Fixed income - international securities | |||
Benefit Plans | |||
Fair value of plan assets | 1,199,000 | 1,779,000 | |
Equity - large-cap exchange-traded fund | |||
Benefit Plans | |||
Fair value of plan assets | 5,544,000 | 7,840,000 | |
Equity - mid-cap exchange-traded funds | |||
Benefit Plans | |||
Fair value of plan assets | 1,001,000 | 1,360,000 | |
Equity - small-cap exchange-traded funds | |||
Benefit Plans | |||
Fair value of plan assets | 461,000 | 654,000 | |
Equity - international funds | |||
Benefit Plans | |||
Fair value of plan assets | 1,550,000 | 2,126,000 | |
Fair Value, Inputs, Level 1 [Member] | |||
Benefit Plans | |||
Fair value of plan assets | 11,467,000 | 18,210,000 | |
Fair Value, Inputs, Level 1 [Member] | Cash and cash equivalents | |||
Benefit Plans | |||
Fair value of plan assets | 1,712,000 | 4,451,000 | |
Fair Value, Inputs, Level 1 [Member] | Fixed income - international securities | |||
Benefit Plans | |||
Fair value of plan assets | 1,199,000 | 1,779,000 | |
Fair Value, Inputs, Level 1 [Member] | Equity - large-cap exchange-traded fund | |||
Benefit Plans | |||
Fair value of plan assets | 5,544,000 | 7,840,000 | |
Fair Value, Inputs, Level 1 [Member] | Equity - mid-cap exchange-traded funds | |||
Benefit Plans | |||
Fair value of plan assets | 1,001,000 | 1,360,000 | |
Fair Value, Inputs, Level 1 [Member] | Equity - small-cap exchange-traded funds | |||
Benefit Plans | |||
Fair value of plan assets | 461,000 | 654,000 | |
Fair Value, Inputs, Level 1 [Member] | Equity - international funds | |||
Benefit Plans | |||
Fair value of plan assets | 1,550,000 | 2,126,000 | |
Fair Value, Inputs, Level 2 [Member] | |||
Benefit Plans | |||
Fair value of plan assets | 66,682,000 | 88,438,000 | |
Fair Value, Inputs, Level 2 [Member] | U.S. Treasury securities | |||
Benefit Plans | |||
Fair value of plan assets | 6,593,000 | 8,343,000 | |
Fair Value, Inputs, Level 2 [Member] | US Government Agencies Debt Securities [Member] | |||
Benefit Plans | |||
Fair value of plan assets | 6,656,000 | 9,674,000 | |
Fair Value, Inputs, Level 2 [Member] | Fixed income - U.S. corporate securities | |||
Benefit Plans | |||
Fair value of plan assets | 53,051,000 | 69,926,000 | |
Fair Value, Inputs, Level 2 [Member] | Fixed income - municipal securities | |||
Benefit Plans | |||
Fair value of plan assets | 382,000 | 495,000 | |
Fair Value, Inputs, Level 3 [Member] | |||
Benefit Plans | |||
Fair value of plan assets | $ 0 | $ 0 |
Income Taxes - Components of Pr
Income Taxes - Components of Provision (Benefit) and Tax Returns in Other Jurisdictions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 50,895 | $ 53,534 | $ 55,535 |
State and local | 12,493 | 15,607 | 21,831 |
Total current | 63,388 | 69,141 | 77,366 |
Deferred: | |||
Federal | 13,639 | 8,837 | (10,638) |
State and local | 8,499 | 5,283 | (8,758) |
Total deferred | 22,138 | 14,120 | (19,396) |
Total provision for income taxes | 85,526 | 83,261 | $ 57,970 |
Income tax returns in other state jurisdictions | |||
Current income tax receivable due from various jurisdictions | $ 14,200 | $ 27,900 |
Income Taxes - Components of Ne
Income Taxes - Components of Net Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Deferred compensation expense | $ 51,064 | $ 58,497 |
Allowance for credit losses and nonperforming assets | 47,517 | 50,161 |
Lease liabilities | 17,284 | 17,534 |
Investment securities | 233,859 | 40,108 |
State income taxes | 2,619 | 3,440 |
Total deferred income tax assets before valuation allowance | 352,343 | 169,740 |
Valuation allowance | (983) | (1,082) |
Total deferred income tax assets after valuation allowance | 351,360 | 168,658 |
Liabilities: | ||
Leases | (15,739) | (15,785) |
Deferred income | (20,893) | (14,213) |
Lease right-of-use assets | (16,763) | (17,132) |
Intangible assets | (736) | (577) |
Other | (34,910) | (24,779) |
Total deferred income tax liabilities | (89,041) | (72,486) |
Net deferred income tax assets | $ 262,319 | $ 96,172 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of the Federal statutory income tax rate to the effective income tax rate, Amount | |||
Federal statutory income tax expense | $ 73,754 | $ 73,289 | $ 51,182 |
State and local taxes, net of federal income tax benefit | 16,584 | 16,503 | 10,327 |
Tax credits | (3,963) | (2,745) | (3,914) |
Nontaxable income | (1,133) | (3,274) | (3,678) |
Other | 284 | (512) | 4,053 |
Total provision for income taxes | $ 85,526 | $ 83,261 | $ 57,970 |
Reconciliation of the Federal statutory income tax rate to the effective income tax rate, Percent | |||
Federal statutory income tax rate, Percent | 21% | 21% | 21% |
State and local taxes, net of federal income tax benefit (as a percent) | 4.72% | 4.73% | 4.24% |
Tax credits (as a percent) | (1.13%) | (0.79%) | (1.60%) |
Nontaxable income (as a percent) | (0.32%) | (0.94%) | (1.51%) |
Other (as a percent) | 0.08% | (0.14%) | 1.66% |
Effective Income Tax Rate Reconciliation, Percent, Total | 24.35% | 23.86% | 23.79% |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits - (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2016 | |
Tax | ||||
Balance | $ 183,311 | $ 135,595 | $ 134,312 | |
Additions for current year tax positions | 1,289 | 1,366 | 1,426 | |
Additions for Reorganization Transactions | 47,282 | $ 121,400 | ||
Reductions for prior years' tax positions: Expiration of statute of limitations | (849) | (932) | (143) | |
Balance | 183,751 | 183,311 | 135,595 | |
Interest and Penalties | ||||
Balance | 20,743 | 18,926 | 14,701 | |
Additions for Reorganization Transactions | 974 | 941 | 1,479 | $ 7,000 |
Additions for prior years' tax positions: Accrual of interest and penalties | 860 | 1,264 | 2,812 | |
Reductions for prior years' tax positions: Expiration of statute of limitations | (103) | (388) | (66) | |
Balance | 22,474 | 20,743 | 18,926 | |
Total | ||||
Balance | 204,054 | 154,521 | 149,013 | |
Additions for current year tax positions | 1,289 | 1,366 | 1,426 | |
Additions for Reorganization Transactions | 974 | 48,223 | 1,479 | |
Additions for prior years' tax positions: Accrual of interest and penalties | 860 | 1,264 | 2,812 | |
Reductions for prior years' tax positions: Expiration of statute of limitations | (952) | (1,320) | (209) | |
Balance | 206,225 | 204,054 | 154,521 | |
Unrecognized tax benefits | ||||
Amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate | 24,200 | 23,100 | 22,200 | |
Unrecognized tax benefits attributable to tax refund claims in State of California | 141,200 | |||
Unrecognized tax benefits, reasonably possible to decrease within the next 12 months | 2,100 | |||
Unrecognized interest and penalties, reasonably possible to decrease within the next 12 months | 800 | |||
Net expense attributable to interest and penalties recorded | 800 | 800 | $ 4,400 | |
Accrued interest and penalties attributable to uncertain tax positions and undisputed tax adjustments | 24,100 | 22,300 | ||
Accrued interest and penalties attributable to unrecognized tax benefits | 22,500 | $ 20,700 | ||
Determination of taxes benefit is currently recognized | $ 0 |
Income Taxes - Reorganization T
Income Taxes - Reorganization Transactions - (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Apr. 01, 2016 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income taxes | ||||
Current tax receivables related to transactions prior to Reorganization Transactions | $ 130.5 | |||
Unrecognized tax positions | 158.1 | $ 157.4 | ||
Indemnification receivable | 27.6 | 26.9 | ||
Total state and local distribution taxes reported | 92.1 | |||
Net adjustments to pre-reorganization indemnification receivables or payables and unrecognized tax benefits | 0 | $ 0 | $ 1.2 | |
Reorganization Transactions on April 1, 2016 | ||||
Income taxes | ||||
Current tax receivables recorded | $ 72.8 | |||
Unrecognized tax positions | 116.6 | |||
Indemnification payable | 28.6 | |||
Certain tax related liabilities incurred | 95.4 | |||
Expected federal tax benefit on distribution taxes | $ 33.4 | |||
Capital Distributions | $ 2.1 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Notional Amounts and Fair Values (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Notional amounts and fair values of derivatives | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities | Other Liabilities |
Derivatives designated as hedging instruments | Interest rate swaps | ||
Notional amounts and fair values of derivatives | ||
Notional Amount | $ 267,500 | $ 67,500 |
Asset Derivatives | 7,276 | |
Liability Derivatives | (6,840) | (1,211) |
Derivatives designated as hedging instruments | Interest rate collars | ||
Notional amounts and fair values of derivatives | ||
Notional Amount | 200,000 | |
Asset Derivatives | 491 | |
Liability Derivatives | (63) | |
Derivatives Not Designated as Hedging Instruments | Interest rate swaps | ||
Notional amounts and fair values of derivatives | ||
Notional Amount | 2,849,776 | 2,827,582 |
Asset Derivatives | 3,178 | 50,898 |
Liability Derivatives | (42,365) | |
Derivatives Not Designated as Hedging Instruments | Visa Derivative | ||
Notional amounts and fair values of derivatives | ||
Notional Amount | 121,013 | 105,916 |
Liability Derivatives | (851) | (5,530) |
Derivatives Not Designated as Hedging Instruments | Interest rate caps and floors | ||
Notional amounts and fair values of derivatives | ||
Notional Amount | 148,800 | |
Asset Derivatives | 27 | |
Liability Derivatives | (27) | |
Derivatives Not Designated as Hedging Instruments | Foreign exchange contracts | ||
Notional amounts and fair values of derivatives | ||
Notional Amount | $ 210 | $ 217 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Clearinghouse Margin and Collateral (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Derivative contracts | ||
Initial margin collateral posted | $ 1.2 | $ 1.7 |
Interest rate swaps | ||
Derivative contracts | ||
Cash collateral posted | 48.1 | |
Financial instruments pledged as collateral | 29.9 | 30.3 |
Cash pledged as collateral | 1.2 | 18.1 |
Chicago Mercantile Exchange (CME) and London Clearing House (LCH) | ||
Derivative contracts | ||
Variation margin | $ 39.2 | $ 50.9 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Fair Value Hedges and Cash Flow Hedges (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) derivative | Dec. 31, 2021 USD ($) derivative | |
Other comprehensive income (loss) | ||
Fair hedges carried | ||
Accumulated other comprehensive income (loss) into earnings | $ 5,600 | |
Hedge term | 5 years | |
Fair value hedges | ||
Fair hedges carried | ||
Fixed interest rate (as a percent) | 2.07% | |
Interest rate swaps | Fair value hedges | ||
Fair hedges carried | ||
Number of interest rate swaps | derivative | 1 | 1 |
Derivatives designated as hedging instruments | Interest rate swaps | ||
Fair hedges carried | ||
Notional amounts | $ 267,500 | $ 67,500 |
Derivatives designated as hedging instruments | Interest rate swaps | Fair value hedges | ||
Fair hedges carried | ||
Notional amounts | 67,500 | 67,500 |
Positive fair value | $ 7,300 | |
Negative fair value | $ 1,000 | |
Derivatives designated as hedging instruments | Interest rate swaps | Cash Flow Hedges | ||
Fair hedges carried | ||
Number of derivatives carried | 2 | |
Notional amounts | $ 200,000 | |
Negative fair value | $ 6,800 | |
Derivatives designated as hedging instruments | Interest rate swaps | Cash Flow Hedges | Minimum | ||
Fair hedges carried | ||
Fixed interest rate (as a percent) | 1.70% | |
Derivatives designated as hedging instruments | Interest rate swaps | Cash Flow Hedges | Maximum | ||
Fair hedges carried | ||
Fixed interest rate (as a percent) | 2.08% | |
Derivatives designated as hedging instruments | Interest Rate Collar [Member] | ||
Fair hedges carried | ||
Notional amounts | $ 200,000 | |
Derivatives designated as hedging instruments | Interest Rate Collar [Member] | Cash Flow Hedges | ||
Fair hedges carried | ||
Number of derivatives carried | 2 | |
Notional amounts | $ 200,000 | |
Positive fair value | 500 | |
Negative fair value | $ 100 | |
Floor strike rates | 2% | |
Derivatives designated as hedging instruments | Interest Rate Collar [Member] | Cash Flow Hedges | Minimum | ||
Fair hedges carried | ||
Cap strike rates | 5.31% | |
Derivatives designated as hedging instruments | Interest Rate Collar [Member] | Cash Flow Hedges | Maximum | ||
Fair hedges carried | ||
Cap strike rates | 5.64% |
Derivative Financial Instrume_6
Derivative Financial Instruments - Gains and Losses Recognized in Income, Fair Value Hedges (Details) - Fair value hedges - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Interest rate swaps | |||
Gains and losses related to derivatives | |||
Gain recognized | $ 8,487 | ||
Derivative, Gain, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Fee Income, Loans and Leases | Interest and Fee Income, Loans and Leases | Interest and Fee Income, Loans and Leases |
Loss recognized | $ (605) | $ (594) | |
Derivative, Loss, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Fee Income, Loans and Leases | Interest and Fee Income, Loans and Leases | Interest and Fee Income, Loans and Leases |
Hedged item | |||
Gains and losses related to derivatives | |||
Gain recognized | $ 383 | $ 470 | |
Loss recognized | $ (8,880) |
Derivative Financial Instrume_7
Derivative Financial Instruments - Amounts Recorded in Balance Sheets Related to Cumulative Basis Adjustments (Details) - Fair value hedges - Loans and leases - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Amounts recorded in the balance Sheets | ||
Carrying amount of the Hedged Asset | $ 60,189 | $ 68,707 |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset | $ (7,311) | $ 1,207 |
Derivative Financial Instrume_8
Derivative Financial Instruments - Derivatives Not Designated as Hedges (Details) - Visa Derivative - Derivatives Not Designated as Hedging Instruments - USD ($) $ in Thousands | 12 Months Ended | 36 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | |
Impact on pretax earnings of derivatives not designated as hedges | ||||
Net Gains (Losses) on Derivatives | $ (707) | $ (5,909) | $ (4,641) | |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Noninterest Income, Other Operating Income |
Derivative Financial Instrume_9
Derivative Financial Instruments - Cash Flow Hedges (Details) - Derivatives designated as hedging instruments - Interest rate swaps and collars - Cash Flow Hedges $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Derivative financial instruments | |
Pretax net losses reclassified from accumulated other comprehensive income to interest income from loans and lease financing | $ 297 |
Other comprehensive income (loss) | |
Derivative financial instruments | |
Pretax net losses recognized in other comprehensive income on cash flow derivative hedges | $ (6,710) |
Derivative Financial Instrum_10
Derivative Financial Instruments - Free-Standing (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jun. 28, 2018 | |
Minimum | ||||
Derivative financial instruments | ||||
Derivative, Floating rate | 4.62% | 0% | ||
Maximum | ||||
Derivative financial instruments | ||||
Derivative, Floating rate | 7.12% | 3.55% | ||
Class B restricted shares | ||||
Derivative financial instruments | ||||
Conversion rate | 1.5991 | 1.6483 | ||
Interest rate swaps | Customer swap program | ||||
Derivative financial instruments | ||||
Notional Amount | $ 2,800,000 | |||
Derivatives Not Designated as Hedging Instruments | Interest rate swaps | ||||
Derivative financial instruments | ||||
Notional Amount | 2,849,776 | $ 2,827,582 | ||
Positive fair value, derivative asset | 3,178 | 50,898 | ||
Negative fair value, derivative liability | 42,365 | |||
Net interest expense | $ 0 | $ 0 | $ 0 | |
Derivatives Not Designated as Hedging Instruments | Interest rate swaps | Minimum | ||||
Derivative financial instruments | ||||
Fixed interest rate (as a percent) | 2.39% | 2.02% | ||
Derivatives Not Designated as Hedging Instruments | Interest rate swaps | Maximum | ||||
Derivative financial instruments | ||||
Fixed interest rate (as a percent) | 6.13% | 6.19% | ||
Derivatives Not Designated as Hedging Instruments | Interest rate swaps | Customer swap program | ||||
Derivative financial instruments | ||||
Positive fair value, derivative asset | $ 3,200 | $ 50,900 | ||
Negative fair value, derivative liability | 42,400 | 0 | ||
Upfront fees on the dealer swap | $ 2,500 | $ 2,600 | $ 8,300 |
Derivative Financial Instrum_11
Derivative Financial Instruments - Counterparty Credit Risk and Credit-Risk Related Contingent Features (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative contracts | |||
Counterparty credit risk adjustments | $ 0.1 | $ 0.2 | $ 0.1 |
Credit-risk-related contingent features | |||
Aggregate fair value of derivative instruments in a net liability position | 0 | 26.9 | |
Collateral posted for derivatives in a net liability position | 0 | $ 19.8 | |
Interest rate swaps | |||
Derivative contracts | |||
Collateral thresholds for derivative agreements with credit risk related contingent features | $ 0.3 |
Derivative Financial Instrum_12
Derivative Financial Instruments - Visa Class B Restricted Shares (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2016 USD ($) shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 28, 2018 | Dec. 31, 2017 | |
Class B restricted shares | |||||
Visa Class B Restricted Shares | |||||
Conversion rate | 1.5991 | 1.6483 | |||
Visa | Class B restricted shares | |||||
Visa Class B Restricted Shares | |||||
Net realized gain related to the sale of stock | $ 22.7 | ||||
Number of shares sold | shares | 274,000 | ||||
Visa Derivative | |||||
Visa Class B Restricted Shares | |||||
Derivative liability value | $ 0.9 | $ 5.5 | |||
Visa Derivative | Class B restricted shares | |||||
Visa Class B Restricted Shares | |||||
Conversion rate | 1.5991 | 1.6483 |
Commitments and Contingent Li_3
Commitments and Contingent Liabilities - Commitments to Extend Credit, Participations Sold (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments to extend credit | ||
Commitments | ||
Participations sold to other institutions | $ 90.5 | $ 95.5 |
Standby letters of credit | ||
Commitments | ||
Participations sold to other institutions | $ 8.1 | $ 10.7 |
Commitments and Contingent Li_4
Commitments and Contingent Liabilities - Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financial instruments with off-balance sheet risk | ||
Contract amount | $ 7,000,000 | $ 6,700,000 |
Commitments to extend credit | ||
Financial instruments with off-balance sheet risk | ||
Contract amount | 6,760,395 | 6,490,301 |
Standby letters of credit | ||
Financial instruments with off-balance sheet risk | ||
Contract amount | 244,275 | 182,447 |
Commercial letters of credit | ||
Financial instruments with off-balance sheet risk | ||
Contract amount | $ 7,299 | $ 3,307 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue from Contracts with Customers | |||
Net interest income | $ 613,549 | $ 530,559 | $ 535,734 |
Not in scope of Topic 606 | 11,693 | 25,149 | 48,106 |
Total noninterest income | 179,525 | 184,916 | 197,380 |
Total revenue | 793,074 | 715,475 | 733,114 |
Retail Banking | |||
Revenue from Contracts with Customers | |||
Net interest income | 436,228 | 385,656 | 375,145 |
Not in scope of Topic 606 | 6,199 | 8,270 | 16,264 |
Total noninterest income | 94,085 | 91,672 | 98,026 |
Total revenue | 530,313 | 477,328 | 473,171 |
Commercial Banking | |||
Revenue from Contracts with Customers | |||
Net interest income | 157,128 | 162,997 | 151,622 |
Not in scope of Topic 606 | 6,709 | 6,491 | 19,945 |
Total noninterest income | 77,539 | 72,781 | 78,202 |
Total revenue | 234,667 | 235,778 | 229,824 |
Treasury and Other | |||
Revenue from Contracts with Customers | |||
Net interest income | 20,193 | (18,094) | 8,967 |
Not in scope of Topic 606 | (1,215) | 10,388 | 11,897 |
Total noninterest income | 7,901 | 20,463 | 21,152 |
Total revenue | 28,094 | 2,369 | 30,119 |
Service charges on deposit accounts. | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 28,809 | 27,510 | 28,169 |
Service charges on deposit accounts. | Retail Banking | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 25,871 | 24,413 | 25,326 |
Service charges on deposit accounts. | Commercial Banking | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 1,972 | 1,225 | 1,305 |
Service charges on deposit accounts. | Treasury and Other | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 966 | 1,872 | 1,538 |
Credit and debit card fees | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 63,633 | 61,143 | 53,372 |
Credit and debit card fees | Commercial Banking | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 58,659 | 55,728 | 48,999 |
Credit and debit card fees | Treasury and Other | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 4,974 | 5,415 | 4,373 |
Other service charges and fees. | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 29,193 | 29,058 | 23,167 |
Other service charges and fees. | Retail Banking | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 25,062 | 23,917 | 20,084 |
Other service charges and fees. | Commercial Banking | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 2,243 | 3,547 | 1,550 |
Other service charges and fees. | Treasury and Other | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 1,888 | 1,594 | 1,533 |
Trust and investment services income | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 36,465 | 34,719 | 35,652 |
Trust and investment services income | Retail Banking | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 36,465 | 34,719 | 35,652 |
Other. | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 9,732 | 7,337 | 8,914 |
Other. | Retail Banking | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 488 | 353 | 700 |
Other. | Commercial Banking | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | 7,956 | 5,790 | 6,403 |
Other. | Treasury and Other | |||
Revenue from Contracts with Customers | |||
Revenue by type of service | $ 1,288 | $ 1,194 | $ 1,811 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Contract Balances (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Revenue from Contracts with Customers | |||
Number of vendors the company received signing bonuses from in prior years | item | 3 | ||
Number of vendors the company received signing bonuses from in the current year | item | 2 | ||
Contract liabilities | $ 2,700,000 | $ 3,000,000 | |
Increase in recognized revenues and contract liabilities | 900,000 | 900,000 | $ 800,000 |
Change in contract liabilities due to changes in transaction price estimates | 0 | ||
Receivables from contracts with customers or contract assets | $ 0 | $ 0 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Other (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contracts with Customers | ||
Significant performance obligations | $ 0 | $ 0 |
Material contract acquisition costs | $ 0 | $ 0 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings per Share | |||
Adjustments to net income (in dollars) | $ 0 | $ 0 | $ 0 |
Antidilutive securities (in shares) | 1,000 | 410,000 | |
Numerator: | |||
Net income | $ 265,685 | $ 265,735 | $ 185,754 |
Denominator: | |||
Basic: weighted-average shares outstanding (in shares) | 127,489,889 | 128,963,131 | 129,890,225 |
Add: weighted-average equity-based awards (in shares) | 491,810 | 574,791 | 329,852 |
Diluted: weighted-average shares outstanding (in shares) | 127,981,699 | 129,537,922 | 130,220,077 |
Basic earnings per share (in dollars per share) | $ 2.08 | $ 2.06 | $ 1.43 |
Diluted earnings per share (in dollars per share) | $ 2.08 | $ 2.05 | $ 1.43 |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation | |||
Stock-based compensation expense | $ 10.3 | $ 13.1 | $ 10 |
Related income tax benefit of stock-based compensation | $ 2.5 | $ 3.1 | $ 2.4 |
Employee stock-based compensation plan | |||
Stock-based compensation | |||
Total shares authorized | 5,600,000 | ||
Shares available for future grants | 3,000,000 | ||
Non-employee director plan | |||
Stock-based compensation | |||
Total shares authorized | 268,941 | ||
Shares available for future grants | 158,138 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock and Restricted Share Awards (Details) - Restricted Stock - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||
Unvested as of beginning of period (in shares) | 149,875 | 262,377 | 139,718 |
Granted (in shares) | 0 | 0 | 172,046 |
Vested (in shares) | (87,490) | (105,330) | (48,340) |
Forfeited (in shares) | (15,528) | (7,172) | (1,047) |
Unvested as of end of period (in shares) | 46,857 | 149,875 | 262,377 |
Weighted Average Grant Date Fair Value | |||
Unvested as of beginning of period (in dollars per share) | $ 26.28 | $ 26.35 | $ 27.04 |
Granted (in dollars per share) | 25.96 | ||
Vested (in dollars per share) | 26.44 | 26.46 | 27.03 |
Forfeited (in dollars per share) | 26.28 | 26.15 | 25.96 |
Unvested as of end of period (in dollars per share) | $ 25.96 | $ 26.28 | $ 26.35 |
Stock-based compensation | |||
Total fair value of vested shares (in dollars) | $ 2,300,000 | $ 2,800,000 | $ 1,300,000 |
Period following vesting date for lapsing of transfer restrictions | 3 years | ||
Unrecognized compensation expense | $ 0 | $ 1,100,000 | $ 4,100,000 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Share Units and Performance Share Awards (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Jan. 01, 2021 $ / shares shares | Jan. 01, 2020 $ / shares shares | Jan. 01, 2019 | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | |
Stock-based compensation | ||||||
Stock-based compensation expense | $ | $ 10,300 | $ 13,100 | $ 10,000 | |||
Performance Share Units | ||||||
Stock-based compensation | ||||||
Ratio of common stock for each vested award | 1 | |||||
Number of Shares | ||||||
Unvested as of beginning of period (in shares) | 857,282 | 695,316 | 942,506 | 857,282 | 695,316 | |
Granted (in shares) | 350,922 | 376,810 | 340,758 | |||
Vested (in shares) | (203,855) | (214,163) | (172,167) | |||
Forfeited (in shares) | (135,439) | (77,423) | (6,625) | |||
Unvested as of end of period (in shares) | 954,134 | 942,506 | 857,282 | |||
Weighted Average Grant Date Fair Value | ||||||
Unvested as of beginning of period (in dollars per share) | $ / shares | $ 25.43 | $ 26.46 | $ 26.70 | $ 25.43 | $ 26.46 | |
Granted (in dollars per share) | $ / shares | 28.57 | 27.07 | 25.96 | |||
Vested (in dollars per share) | $ / shares | 27.02 | 22.57 | 29.95 | |||
Forfeited (in dollars per share) | $ / shares | 26.63 | 24.62 | 26.13 | |||
Unvested as of end of period (in dollars per share) | $ / shares | $ 27.36 | $ 26.70 | $ 25.43 | |||
Stock-based compensation | ||||||
Unrecognized compensation expense | $ | $ 7,300 | $ 6,100 | $ 6,200 | |||
Period for recognition of unrecognized compensation expense | 1 year 2 months 12 days | |||||
Total fair value of vested shares (in dollars) | $ | $ 5,500 | $ 4,800 | $ 5,200 | |||
Performance Share Units | Key employees | ||||||
Number of Shares | ||||||
Granted (in shares) | 350,922 | 376,810 | 340,758 | |||
Minimum | ||||||
Stock-based compensation | ||||||
Performance achieved, percentage of PSUs earned and vested | 0 | |||||
Performance achieved, percentage of PSAs earned and vested | 0 | |||||
Maximum | ||||||
Stock-based compensation | ||||||
Performance achieved, percentage of PSUs earned and vested | 200 | |||||
Performance achieved, percentage of PSAs earned and vested | 200 | |||||
LongTerm Incentive Plan | ||||||
Stock-based compensation | ||||||
Performance period | 3 years | 3 years | 3 years | 3 years |
Stock-Based Compensation - Re_2
Stock-Based Compensation - Restricted Stock Units (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | |
Stock-based compensation | |||
Stock-based compensation expense | $ | $ 10.3 | $ 13.1 | $ 10 |
Restricted Stock Units | |||
Stock-based compensation | |||
Ratio of common stock for each vested award | 1 | ||
Number of Shares | |||
Unvested as of beginning of period (in shares) | shares | 185,329 | 43,550 | 44,783 |
Granted (in shares) | shares | 169,497 | 198,771 | 28,783 |
Vested (in shares) | shares | (74,178) | (49,519) | (30,016) |
Forfeited (in shares) | shares | (17,488) | (7,473) | |
Unvested as of end of period (in shares) | shares | 263,160 | 185,329 | 43,550 |
Weighted Average Grant Date Fair Value | |||
Unvested as of beginning of period (in dollars per share) | $ / shares | $ 27.09 | $ 21.93 | $ 27.82 |
Granted (in dollars per share) | $ / shares | 28.35 | 27.13 | 15.86 |
Vested (in dollars per share) | $ / shares | 27.18 | 23.08 | 27.47 |
Forfeited (in dollars per share) | $ / shares | 26.80 | 26.37 | |
Unvested as of end of period (in dollars per share) | $ / shares | $ 27.91 | $ 27.09 | $ 21.93 |
Stock-based compensation | |||
Total fair value of vested shares (in dollars) | $ | $ 2 | $ 1 | $ 0.8 |
Unrecognized compensation expense | $ | $ 4.1 | $ 3.3 | $ 0.4 |
Period for recognition of unrecognized compensation expense | 10 months 24 days | ||
Restricted Stock Units | Non-employee directors | |||
Number of Shares | |||
Granted (in shares) | shares | 20,023 | 21,839 | 28,783 |
Weighted Average Grant Date Fair Value | |||
Granted (in dollars per share) | $ / shares | $ 27.66 | $ 27.36 | $ 15.86 |
Restricted Stock Units | Employees | |||
Number of Shares | |||
Granted (in shares) | shares | 149,474 | 176,932 | 0 |
Weighted Average Grant Date Fair Value | |||
Granted (in dollars per share) | $ / shares | $ 28.44 | $ 27.10 |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - shares | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2020 | Jan. 31, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
First Hawaiian Incorporated | |||||
Stock-based compensation | |||||
Total shares authorized | 600,000 | ||||
Shares available for future purchases | 514,879 | ||||
Employee Stock Purchase Plan | |||||
Stock-based compensation | |||||
Discount from the closing price on the exercise date (as a percent) | 5% | 5% | |||
Holding period for common stock purchased by plan participants | 2 years | ||||
Shares issued to employee participants | 16,680 | 21,070 | 19,069 |
Fair Value - Visa Derivative (D
Fair Value - Visa Derivative (Details) $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 28, 2018 | Dec. 31, 2017 |
Class B restricted shares | ||||
Fair value | ||||
Conversion rate | 1.5991 | 1.6483 | ||
Class B restricted shares | Visa Derivative | ||||
Fair value | ||||
Conversion rate | 1.5991 | 1.6483 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member] | Visa Derivative | ||||
Fair value | ||||
Derivative Liability | $ 900 | $ 5,500 | ||
Derivatives Not Designated as Hedging Instruments | Visa Derivative | ||||
Fair value | ||||
Derivative Liability | $ 851 | $ 5,530 |
Fair Value - Assets and Liabili
Fair Value - Assets and Liabilities Recorded at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Total available-for-sale securities, Fair value, | $ 3,151,133 | $ 8,428,032 |
Collateralized Loan Obligations | ||
Assets | ||
Total available-for-sale securities, Fair value, | 241,321 | 105,247 |
Fair Value, Measurements, Recurring | ||
Assets | ||
Total available-for-sale securities, Fair value, | 3,151,133 | 8,428,032 |
Other assets | 16,321 | 58,307 |
Liabilities | ||
Other liabilities | (50,119) | (6,768) |
Total | ||
Net Assets (Liabilities) | 3,117,335 | 8,479,571 |
Fair Value, Measurements, Recurring | Collateralized Loan Obligations | ||
Assets | ||
Total available-for-sale securities, Fair value, | 241,321 | |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Other assets | 5,376 | 7,382 |
Total | ||
Net Assets (Liabilities) | 5,376 | 7,382 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total available-for-sale securities, Fair value, | 3,151,133 | 8,428,032 |
Other assets | 10,945 | 50,925 |
Liabilities | ||
Other liabilities | (49,268) | (1,238) |
Total | ||
Net Assets (Liabilities) | 3,112,810 | 8,477,719 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Collateralized Loan Obligations | ||
Assets | ||
Total available-for-sale securities, Fair value, | 241,321 | |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Liabilities | ||
Other liabilities | (851) | (5,530) |
Total | ||
Net Assets (Liabilities) | (851) | (5,530) |
U.S. Treasury and government agency debt securities | ||
Assets | ||
Total available-for-sale securities, Fair value, | 150,982 | 192,563 |
U.S. Treasury and government agency debt securities | Fair Value, Measurements, Recurring | ||
Assets | ||
Total available-for-sale securities, Fair value, | 150,982 | 192,563 |
U.S. Treasury and government agency debt securities | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total available-for-sale securities, Fair value, | 150,982 | 192,563 |
Government-sponsored enterprises debt securities | ||
Assets | ||
Total available-for-sale securities, Fair value, | 44,301 | |
Government-sponsored enterprises debt securities | Fair Value, Measurements, Recurring | ||
Assets | ||
Total available-for-sale securities, Fair value, | 44,301 | |
Government-sponsored enterprises debt securities | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total available-for-sale securities, Fair value, | 44,301 | |
Residential - Government agency | ||
Assets | ||
Total available-for-sale securities, Fair value, | 59,723 | 137,264 |
Residential - Government agency | Fair Value, Measurements, Recurring | ||
Assets | ||
Total available-for-sale securities, Fair value, | 59,723 | 137,264 |
Residential - Government agency | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total available-for-sale securities, Fair value, | 59,723 | 137,264 |
Residential - Government-sponsored enterprises | ||
Assets | ||
Total available-for-sale securities, Fair value, | 1,160,455 | 1,491,100 |
Residential - Government-sponsored enterprises | Fair Value, Measurements, Recurring | ||
Assets | ||
Total available-for-sale securities, Fair value, | 1,160,455 | 1,491,100 |
Residential - Government-sponsored enterprises | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total available-for-sale securities, Fair value, | 1,160,455 | 1,491,100 |
Commercial - Government agency | ||
Assets | ||
Total available-for-sale securities, Fair value, | 237,853 | 387,663 |
Commercial - Government agency | Fair Value, Measurements, Recurring | ||
Assets | ||
Total available-for-sale securities, Fair value, | 237,853 | 387,663 |
Commercial - Government agency | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total available-for-sale securities, Fair value, | 237,853 | 387,663 |
Commercial - Government-sponsored enterprises | ||
Assets | ||
Total available-for-sale securities, Fair value, | 119,573 | 1,369,443 |
Commercial - Government-sponsored enterprises | Fair Value, Measurements, Recurring | ||
Assets | ||
Total available-for-sale securities, Fair value, | 119,573 | 1,369,443 |
Commercial - Government-sponsored enterprises | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total available-for-sale securities, Fair value, | 119,573 | 1,369,443 |
Commercial - Non-government mortgage | Fair Value, Measurements, Recurring | ||
Assets | ||
Total available-for-sale securities, Fair value, | 21,471 | |
Commercial - Non-government mortgage | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total available-for-sale securities, Fair value, | 21,471 | |
Government agency | ||
Assets | ||
Total available-for-sale securities, Fair value, | 653,322 | 2,079,523 |
Government agency | Fair Value, Measurements, Recurring | ||
Assets | ||
Total available-for-sale securities, Fair value, | 653,322 | 2,079,523 |
Government agency | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total available-for-sale securities, Fair value, | 653,322 | 2,079,523 |
Government-sponsored enterprises | ||
Assets | ||
Total available-for-sale securities, Fair value, | 462,132 | 2,621,044 |
Government-sponsored enterprises | Fair Value, Measurements, Recurring | ||
Assets | ||
Total available-for-sale securities, Fair value, | 462,132 | 2,621,044 |
Government-sponsored enterprises | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total available-for-sale securities, Fair value, | $ 462,132 | 2,621,044 |
Collateralized Loan Obligations | Fair Value, Measurements, Recurring | ||
Assets | ||
Total available-for-sale securities, Fair value, | 105,247 | |
Collateralized Loan Obligations | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total available-for-sale securities, Fair value, | 105,247 | |
Debt securities issued by states and political subdivisions | ||
Assets | ||
Total available-for-sale securities, Fair value, | 44,185 | |
Debt securities issued by states and political subdivisions | Fair Value, Measurements, Recurring | ||
Assets | ||
Total available-for-sale securities, Fair value, | 44,185 | |
Debt securities issued by states and political subdivisions | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Total available-for-sale securities, Fair value, | $ 44,185 |
Fair Value - Significant Unobse
Fair Value - Significant Unobservable Inputs Used in Fair Value Measurements (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Fair Value, Measurements, Nonrecurring | ||
Fair value | ||
Assets | $ 0 | $ 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member] | Visa derivative | ||
Fair value | ||
Liabilities | $ (851,000) | $ (5,530,000) |
Derivative Liability, Valuation Technique [Extensible Enumeration] | Discounted cash flow | Discounted cash flow |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member] | Visa derivative | Expected Conversation Rate | Discounted cash flow | Weighted Average | ||
Fair value | ||
Measurement input | 1.5991 | 1.6181 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member] | Visa derivative | Expected Conversation Rate | Discounted cash flow | Minimum | ||
Fair value | ||
Measurement input | 1.5514 | 1.5885 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member] | Visa derivative | Expected Conversation Rate | Discounted cash flow | Maximum | ||
Fair value | ||
Measurement input | 1.5991 | 1.6181 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member] | Visa derivative | Expected Term (in months or years) | Discounted cash flow | Weighted Average | ||
Fair value | ||
Measurement input | 3 | 1 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member] | Visa derivative | Expected Term (in months or years) | Discounted cash flow | Minimum | ||
Fair value | ||
Measurement input | 0 | 0.5 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member] | Visa derivative | Expected Term (in months or years) | Discounted cash flow | Maximum | ||
Fair value | ||
Measurement input | 6 | 1.5 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member] | Visa derivative | Growth Rate (percentage) | Discounted cash flow | Weighted Average | ||
Fair value | ||
Measurement input | 0.26 | 0.26 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member] | Visa derivative | Growth Rate (percentage) | Discounted cash flow | Minimum | ||
Fair value | ||
Growth Rate (as a percent) | 10% | 10% |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member] | Visa derivative | Growth Rate (percentage) | Discounted cash flow | Maximum | ||
Fair value | ||
Growth Rate (as a percent) | 38% | 38% |
Fair Value - Changes in Fair Va
Fair Value - Changes in Fair Value Levels and in Level 3 Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair value | ||
Amount of transfers between hierarchy levels | $ 0 | $ 0 |
Visa derivative | Visa Derivative | ||
Changes in Level 3 liabilities measured at fair value on a recurring basis | ||
Balance | (5,530) | (4,554) |
Total net (losses) gains included in other noninterest income | (707) | (5,909) |
Settlements | 5,386 | 4,933 |
Balance | (851) | (5,530) |
Total net (losses) gains included in net income attributable to the change in unrealized gains or losses related to liabilities still held | $ (707) | $ (5,909) |
Fair Value - Financial Instrume
Fair Value - Financial Instruments not Required to be Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financial assets: | ||
Held-to-maturity investment securities, fair value | $ 3,814,822 | $ 0 |
Lease and lease commitments excluded | ||
Financing leases | 298,100 | 231,400 |
Deposit liabilities with no defined or contractual maturity | 19,200,000 | 20,000,000 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 526,624 | 1,258,469 |
Held-to-maturity investment securities, fair value | 4,320,639 | |
Loans held for sale | 538 | |
Loans | 13,793,922 | 12,730,605 |
Financial liabilities: | ||
Time deposits | 2,476,050 | 1,776,438 |
Short-term borrowings | 75,000 | |
Estimated Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 526,624 | 1,258,469 |
Held-to-maturity investment securities, fair value | 3,814,822 | |
Loans held for sale | 542 | |
Loans | 13,138,787 | 12,791,811 |
Financial liabilities: | ||
Time deposits | 2,423,231 | 1,773,321 |
Short-term borrowings | 74,991 | |
Estimated Fair Value | Fair Value, Inputs, Level 1 [Member] | ||
Financial assets: | ||
Cash and cash equivalents | 297,502 | 246,716 |
Estimated Fair Value | Fair Value, Inputs, Level 2 [Member] | ||
Financial assets: | ||
Cash and cash equivalents | 229,122 | 1,011,753 |
Held-to-maturity investment securities, fair value | 3,814,822 | |
Loans held for sale | 542 | |
Financial liabilities: | ||
Time deposits | 2,423,231 | 1,773,321 |
Short-term borrowings | 74,991 | |
Estimated Fair Value | Fair Value, Inputs, Level 3 [Member] | ||
Financial assets: | ||
Loans | $ 13,138,787 | $ 12,791,811 |
Fair Value - Unfunded Loan and
Fair Value - Unfunded Loan and Lease Commitments and Letters of Credit (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Unfunded loan and lease commitments and letters of credit | ||
Aggregate commitments to extend credit, standby letters of credit and commercial letters of credit | $ 7,000 | $ 6,700 |
Fair Value, Inputs, Level 3 [Member] | ||
Unfunded loan and lease commitments and letters of credit | ||
Estimated fair value of unfunded loan and lease commitments and letters of credit | $ 48.5 | $ 44.3 |
Fair Value - Assets and Liabi_2
Fair Value - Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Measurements, Nonrecurring | |||
Assets with fair value adjustments on a nonrecurring basis | |||
Fair value | $ 0 | $ 0 | |
Assets, Fair Value Adjustment | $ 0 | $ 0 | |
Collateral-dependent loans | |||
Assets with fair value adjustments on a nonrecurring basis | |||
Total impairment losses | $ 400,000 |
Reportable Operating Segments -
Reportable Operating Segments - Business Segments (Details) | 12 Months Ended |
Dec. 31, 2022 location segment | |
Reportable operating segments | |
Number of business segments | segment | 3 |
Retail Banking | |
Reportable operating segments | |
Number of Branches | location | 51 |
Reportable Operating Segments_2
Reportable Operating Segments - Selected Business Segment Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Selected business segment financial information | |||
Net interest income (expense) | $ 613,549 | $ 530,559 | $ 535,734 |
Benefit (Provision) for credit losses | (1,392) | 39,000 | (121,718) |
Net interest income after provision for credit losses | 612,157 | 569,559 | 414,016 |
Noninterest income | 179,525 | 184,916 | 197,380 |
Noninterest expense | (440,471) | (405,479) | (367,672) |
Income before provision for income taxes | 351,211 | 348,996 | 243,724 |
(Provision) benefit for income taxes | (85,526) | (83,261) | (57,970) |
Net income | 265,685 | 265,735 | 185,754 |
Total assets | 24,577,223 | 24,992,410 | 22,662,831 |
Retail Banking | |||
Selected business segment financial information | |||
Net interest income (expense) | 436,228 | 385,656 | 375,145 |
Benefit (Provision) for credit losses | 967 | 16,267 | (52,719) |
Net interest income after provision for credit losses | 437,195 | 401,923 | 322,426 |
Noninterest income | 94,085 | 91,672 | 98,026 |
Noninterest expense | (293,563) | (247,949) | (232,976) |
Income before provision for income taxes | 237,717 | 245,646 | 187,476 |
(Provision) benefit for income taxes | (58,077) | (58,710) | (43,825) |
Net income | 179,640 | 186,936 | 143,651 |
Total assets | 7,463,002 | 7,148,376 | 6,894,602 |
Commercial Banking | |||
Selected business segment financial information | |||
Net interest income (expense) | 157,128 | 162,997 | 151,622 |
Benefit (Provision) for credit losses | 1,154 | 22,452 | (53,921) |
Net interest income after provision for credit losses | 158,282 | 185,449 | 97,701 |
Noninterest income | 77,539 | 72,781 | 78,202 |
Noninterest expense | (109,906) | (100,932) | (79,961) |
Income before provision for income taxes | 125,915 | 157,298 | 95,942 |
(Provision) benefit for income taxes | (30,158) | (37,525) | (21,951) |
Net income | 95,757 | 119,773 | 73,991 |
Total assets | 6,850,638 | 5,972,567 | 6,526,863 |
Treasury and Other | |||
Selected business segment financial information | |||
Net interest income (expense) | 20,193 | (18,094) | 8,967 |
Benefit (Provision) for credit losses | (3,513) | 281 | (15,078) |
Net interest income after provision for credit losses | 16,680 | (17,813) | (6,111) |
Noninterest income | 7,901 | 20,463 | 21,152 |
Noninterest expense | (37,002) | (56,598) | (54,735) |
Income before provision for income taxes | (12,421) | (53,948) | (39,694) |
(Provision) benefit for income taxes | 2,709 | 12,974 | 7,806 |
Net income | (9,712) | (40,974) | (31,888) |
Total assets | $ 10,263,583 | $ 11,871,467 | $ 9,241,366 |
Parent Company - Condensed Stat
Parent Company - Condensed Statements of Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income | |||
Total revenue | $ 793,074 | $ 715,475 | $ 733,114 |
Noninterest expense | |||
Salaries and employee benefits | 199,129 | 182,384 | 174,221 |
Contracted services and professional fees | 70,027 | 63,349 | 60,546 |
Equipment | 34,506 | 24,719 | 20,277 |
Other | 57,186 | 66,082 | 47,339 |
Total noninterest expense | 440,471 | 405,479 | 367,672 |
Benefit for income taxes | (85,526) | (83,261) | (57,970) |
Net income | 265,685 | 265,735 | 185,754 |
Comprehensive (loss) income | (251,876) | 112,438 | 249,107 |
First Hawaiian, Inc. | |||
Income | |||
Dividends from FHB | 157,000 | 213,500 | 142,000 |
Other income | 1,169 | ||
Total revenue | 157,000 | 213,500 | 143,169 |
Noninterest expense | |||
Salaries and employee benefits | 4,098 | 3,732 | 3,660 |
Contracted services and professional fees | 6,200 | 2,731 | 2,544 |
Equipment | 78 | 31 | |
Other | 1,447 | 1,314 | 1,439 |
Total noninterest expense | 11,823 | 7,777 | 7,674 |
Income before benefit for income taxes and equity in undistributed income of FHB | 145,177 | 205,723 | 135,495 |
Benefit for income taxes | 2,707 | 1,877 | 679 |
Equity in undistributed income of FHB | $ 117,801 | $ 58,135 | $ 49,580 |
Parent Company - Condensed Bala
Parent Company - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||||
Cash and due from banks | $ 297,502 | $ 246,716 | ||
Other assets | 796,954 | 643,240 | ||
Total assets | 24,577,223 | 24,992,410 | $ 22,662,831 | |
Liabilities and Stockholders' Equity | ||||
Retirement benefits payable | 102,577 | 134,491 | ||
Other liabilities | 441,612 | 384,861 | ||
Total liabilities | 22,308,218 | 22,335,498 | ||
Stockholders' equity | ||||
Stockholders' equity | 2,269,005 | 2,656,912 | $ 2,744,104 | $ 2,640,258 |
Total liabilities and stockholders' equity | 24,577,223 | 24,992,410 | ||
First Hawaiian, Inc. | ||||
Assets | ||||
Cash and due from banks | 18,024 | 14,792 | ||
Investment in FHB | 2,251,841 | 2,642,929 | ||
Other assets | 27,638 | 26,869 | ||
Total assets | 2,297,503 | 2,684,590 | ||
Liabilities and Stockholders' Equity | ||||
Retirement benefits payable | 560 | 582 | ||
Other liabilities | 27,938 | 27,096 | ||
Total liabilities | 28,498 | 27,678 | ||
Stockholders' equity | ||||
Total liabilities and stockholders' equity | $ 2,297,503 | $ 2,684,590 |
Parent Company - Condensed St_2
Parent Company - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net income | $ 265,685 | $ 265,735 | $ 185,754 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Deferred income taxes | 22,138 | 14,120 | (19,396) |
Stock-based compensation | 10,298 | 13,106 | 10,028 |
Change in assets and liabilities: | |||
Net (increase) decrease in other assets | 18,469 | (8,211) | (17,880) |
Net increase (decrease) in other liabilities | 53,523 | 110,613 | (114,613) |
Net cash provided by operating activities | 430,614 | 417,125 | 209,506 |
Cash flows from financing activities | |||
Dividends paid | (132,588) | (134,133) | (135,099) |
Stock tendered for payment of withholding taxes | (3,555) | (3,108) | (1,749) |
Proceeds from employee stock purchase plan | 379 | 547 | 312 |
Common stock repurchased | (9,478) | (75,000) | (5,000) |
Net cash provided by (used in) financing activities | (197,359) | 2,176,719 | 2,241,184 |
Net (decrease) increase in cash and cash equivalents | (731,845) | 217,525 | 346,927 |
Cash and cash equivalents at beginning of year | 1,258,469 | 1,040,944 | 694,017 |
Cash and cash equivalents at end of year | 526,624 | 1,258,469 | 1,040,944 |
First Hawaiian, Inc. | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in undistributed income of FHB | (117,801) | (58,135) | (49,580) |
Deferred income taxes | 22 | 36 | 5 |
Stock-based compensation | 554 | 492 | 713 |
Change in assets and liabilities: | |||
Net (increase) decrease in other assets | (4) | 242 | (1,451) |
Net increase (decrease) in other liabilities | 18 | 50 | (294) |
Net cash provided by operating activities | 148,474 | 208,420 | 135,147 |
Cash flows from financing activities | |||
Dividends paid | (132,588) | (134,133) | (135,099) |
Stock tendered for payment of withholding taxes | (3,555) | (3,108) | (1,749) |
Proceeds from employee stock purchase plan | 379 | 547 | 312 |
Common stock repurchased | (9,478) | (75,000) | (5,000) |
Net cash provided by (used in) financing activities | (145,242) | (211,694) | (141,536) |
Net (decrease) increase in cash and cash equivalents | 3,232 | (3,274) | (6,389) |
Cash and cash equivalents at beginning of year | 14,792 | 18,066 | 24,455 |
Cash and cash equivalents at end of year | $ 18,024 | $ 14,792 | $ 18,066 |