4 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
(dollars in thousands, except per share amounts)
15 unchanged sentences
Bank-owned life insurance
−Removed: Investment securities (losses) gains, net
+Added: Investment securities gains (losses), net
Total noninterest income
17 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
(dollars in thousands)
−Removed: Other comprehensive income, net of tax:
+Added: Other comprehensive (loss) income, net of tax:
Net change in pensions and other benefits
Net change in investment securities
−Removed: Other comprehensive income
+Added: Other comprehensive (loss) income
Total comprehensive income
3 unchanged sentences
CONSOLIDATED BALANCE SHEETS
+Added: September 30,
(dollars in thousands, except share amount)
2 unchanged sentences
Investment securities, at fair value (amortized cost:
−Removed: $ 5,025,433 as of June 30, 2020 and $ 4,080,663 as of December 31, 2019)
+Added: $ 5,584,556 as of September 30, 2020 and $ 4,080,663 as of December 31, 2019)
Loans held for sale
21 unchanged sentences
issued/outstanding:
−Removed: 140,140,542 / 129,866,898 as of June 30, 2020;
+Added: 140,190,428 / 129,911,789 as of September 30, 2020;
issued/outstanding:
3 unchanged sentences
Accumulated other comprehensive income (loss), net
−Removed: Treasury stock ( 10,273,644 shares as of June 30, 2020 and 9,988,671 shares as of December 31, 2019)
+Added: Treasury stock ( 10,278,639 shares as of September 30, 2020 and 9,988,671 shares as of December 31, 2019)
Total stockholders' equity
4 unchanged sentences
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
−Removed: Three Months Ended June 30, 2020
+Added: Three Months Ended September 30, 2020
Comprehensive
(dollars in thousands, except share amounts)
−Removed: Balance as of March 31, 2020
+Added: Balance as of June 30, 2020
Cash dividends declared ($ 0.26 per share)
Equity-based awards
−Removed: Other comprehensive income, net of tax
−Removed: Balance as of June 30, 2020
−Removed: Six Months Ended June 30, 2020
+Added: Other comprehensive loss, net of tax
+Added: Balance as of September 30, 2020
+Added: Nine Months Ended September 30, 2020
Comprehensive
8 unchanged sentences
Other comprehensive income, net of tax
−Removed: Balance as of June 30, 2020
+Added: Balance as of September 30, 2020
FIRST HAWAIIAN, INC.
1 unchanged sentence
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)
−Removed: Three Months Ended June 30, 2019
+Added: Three Months Ended September 30, 2019
Comprehensive
(dollars in thousands, except share amounts)
−Removed: Balance as of March 31, 2019
+Added: Balance as of June 30, 2019
Cash dividends declared ($ 0.26 per share)
3 unchanged sentences
Other comprehensive income, net of tax
−Removed: Balance as of June 30, 2019
−Removed: Six Months Ended June 30, 2019
+Added: Balance as of September 30, 2019
+Added: Nine Months Ended September 30, 2019
Comprehensive
6 unchanged sentences
Other comprehensive income, net of tax
−Removed: Balance as of June 30, 2019
+Added: Balance as of September 30, 2019
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
2 unchanged sentences
CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
(dollars in thousands)
3 unchanged sentences
Depreciation, amortization and accretion, net
−Removed: Deferred (benefits) income taxes
+Added: Deferred income tax (benefits) provision
Stock-based compensation
+Added: Other (gains) losses
Originations of loans held for sale
Proceeds from sales of loans held for sale
−Removed: Net gains on sales of loans originated for investment and held for sale
+Added: Net (gains) losses on sales of loans originated for investment and held for sale
Net losses on investment securities
Change in assets and liabilities:
−Removed: Net decrease in other assets
+Added: Net increase in other assets
Net decrease in other liabilities
18 unchanged sentences
Repayment of short-term borrowings
+Added: Repayment of long-term borrowings
Dividends paid
2 unchanged sentences
Net cash provided by (used in) financing activities
−Removed: Net increase (decrease) in cash and cash equivalents
+Added: Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
4 unchanged sentences
Noncash investing and financing activities:
+Added: Transfers from loans and leases to other real estate owned
Operating lease right-of-use assets obtained in exchange for new lease obligations
21 unchanged sentences
Investment Securities
−Removed: As of June 30, 2020 and December 31, 2019, investment securities were comprised of debt, mortgage-backed securities and collateralized mortgage obligations issued by the U.S.
+Added: As of September 30, 2020 and December 31, 2019, investment securities were comprised of debt, mortgage-backed securities and collateralized mortgage obligations issued by the U.S.
Government, its agencies and government-sponsored enterprises.
2 unchanged sentences
All investment securities transactions are recorded on a trade-date basis.
−Removed: All of the Company’s investment securities were categorized as available-for-sale as of June 30, 2020 and December 31, 2019.
+Added: All of the Company’s investment securities were categorized as available-for-sale as of September 30, 2020 and December 31, 2019.
Available-for-sale investment securities are reported at fair value, with unrealized gains and losses reported in accumulated other comprehensive income.
9 unchanged sentences
Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale investment security is confirmed or when either of the criteria regarding intent or requirement to sell is met.
−Removed: As noted above, as of June 30, 2020, the Company’s available-for-sale investment securities were comprised entirely of debt, mortgage-backed securities and collateralized mortgage obligations issued by the U.S.
+Added: As noted above, as of September 30, 2020, the Company’s available-for-sale investment securities were comprised entirely of debt, mortgage-backed securities and collateralized mortgage obligations issued by the U.S.
Government, its agencies and government-sponsored enterprises.
3 unchanged sentences
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.
−Removed: Thus, the Company has not recorded an allowance for credit losses for its available-for-sale debt securities as of June 30, 2020.
−Removed: Accrued interest receivable related to available-for-sale investment securities was $ 9.7 million as of June 30, 2020 and is recorded separately from the amortized cost basis of investment securities on the Company’s interim consolidated balance sheet.
+Added: Thus, the Company has not recorded an allowance for credit losses for its available-for-sale debt securities as of September 30, 2020.
+Added: Accrued interest receivable related to available-for-sale investment securities was $ 10.1 million as of September 30, 2020 and is recorded separately from the amortized cost basis of investment securities on the Company’s interim consolidated balance sheet.
Loans and Leases
6 unchanged sentences
Residual values on leased assets are periodically reviewed for impairment.
−Removed: Accrued interest receivable related to loans and leases was $ 48.7 million as of June 30, 2020 and is recorded separately from the amortized cost basis of loans and leases on the Company’s interim consolidated balance sheet.
+Added: Accrued interest receivable related to loans and leases was $ 55.9 million as of September 30, 2020 and is recorded separately from the amortized cost basis of loans and leases on the Company’s interim consolidated balance sheet.
Nonaccrual Loans and Leases
116 unchanged sentences
2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022.
−Removed: As of June 30, 2020, the Company did not elect any of the optional expedients provided for by this guidance.
+Added: As of September 30, 2020, the Company did not elect any of the optional expedients provided for by this guidance.
The Company is in the process of evaluating the optional expedients and the impact that this new guidance may have on the Company’s consolidated financial statements.
Investment Securities
−Removed: As of June 30, 2020 and December 31, 2019, investment securities consisted predominantly of the following investment categories:
+Added: As of September 30, 2020 and December 31, 2019, investment securities consisted predominantly of the following investment categories:
Treasury and debt securities – includes U.S.
2 unchanged sentences
Collateralized mortgage obligations – includes securities backed by a pool of mortgages with cash flows distributed based on certain rules rather than pass through payments.
−Removed: As of June 30, 2020 and December 31, 2019, all of the Company’s investment securities were classified as available-for-sale.
−Removed: Amortized cost and fair value of securities as of June 30, 2020 and December 31, 2019 were as follows:
−Removed: June 30, 2020
+Added: As of September 30, 2020 and December 31, 2019, all of the Company’s investment securities were classified as available-for-sale.
+Added: Amortized cost and fair value of securities as of September 30, 2020 and December 31, 2019 were as follows:
+Added: September 30, 2020
December 31, 2019
11 unchanged sentences
Total available-for-sale securities
−Removed: Proceeds from calls and sales of investment securities were $ 26.7 million and $ 539.5 million, respectively, for the three months ended June 30, 2020, and $ 101.7 million and $ 543.0 million, respectively, for the six months ended June 30, 2020.
−Removed: Proceeds from calls and sales of investment securities were nil and $ 42.6 million, respectively, for the three months ended June 30, 2019 and nil and $ 905.6 million, respectively, for the six months ended June 30, 2019.
−Removed: The Company recorded gross realized gains of $ 0.5 million and gross realized losses of $ 0.8 million for the three months ended June 30, 2020 and gross realized gains of $ 0.6 million and gross realized losses of $ 0.8 million for the six months ended June 30, 2020.
−Removed: The Company recorded gross realized gains of $ 0.1 million and gross realized losses of $ 0.1 million for the three months ended June 30, 2019 and gross realized gains of $ 0.1 million and gross realized losses of $ 2.7 million for the six months ended June 30, 2019.
−Removed: The income tax benefit related to the Company’s net realized loss on the sale of investment securities was $ 0.1 million and nil , respectively, during the three and six months ended June 30, 2020.
−Removed: The income tax expense related to the net realized gains on the sale of investment securities was nil for the three months ended June 30, 2019.
−Removed: The income tax benefit related to the Company's net realized loss on the sale of investment securities was $ 0.7 million for the six months ended June 30, 2019.
+Added: Proceeds from both calls and sales of investment securities were nil for the three months ended September 30, 2020, and $ 101.7 million and $ 543.0 million, respectively, for the nine months ended September 30, 2020.
+Added: Proceeds from calls and sales of investment securities were $ 38.0 million and nil , respectively, for the three months ended September 30, 2019 and $ 38.0 million and $ 905.6 million, respectively, for the nine months ended September 30, 2019.
+Added: The Company recorded gross realized gains of nil and gross realized losses of nil for the three months ended September 30, 2020 and gross realized gains of $ 0.6 million and gross realized losses of $ 0.7 million for the nine months ended September 30, 2020.
+Added: The Company recorded no gross realized gains and no gross realized losses for the three months ended September 30, 2019 and gross realized gains of $ 0.1 million and gross realized losses of $ 2.7 million for the nine months ended September 30, 2019.
+Added: The income tax benefit related to the Company’s net realized loss on the sale of investment securities was nil during both the three and nine months ended September 30, 2020.
+Added: The income tax expense related to the net realized gains on the sale of investment securities was nil for the three months ended September 30, 2019.
+Added: The income tax benefit related to the Company's net realized loss on the sale of investment securities was $ 0.7 million for the nine months ended September 30, 2019.
Gains and losses realized on sales of securities are determined using the specific identification method.
−Removed: Interest income from taxable investment securities was $ 17.5 million and $ 24.8 million, respectively, for the three months ended June 30, 2020 and 2019, and $ 38.7 million and $ 49.3 million, respectively, for the six months ended June 30, 2020 and 2019.
−Removed: Interest income from non-taxable investment securities was nil during both the three and six months ended June 30, 2020 and 2019.
+Added: Interest income from taxable investment securities was $ 20.2 million and $ 22.3 million, respectively, for the three months ended September 30, 2020 and 2019, and $ 59.0 million and $ 71.5 million, respectively, for the nine months ended September 30, 2020 and 2019.
+Added: Interest income from non-taxable investment securities was $ 0.1 million and nil , respectively, during the three months ended September 30, 2020 and 2019, and $ 0.1 million and nil , respectively, for the nine months ended September 30, 2020 and 2019.
The amortized cost and fair value of debt securities issued by the U.S.
−Removed: Treasury and government agencies as of June 30, 2020, by contractual maturity, are shown below.
+Added: Treasury and government agencies as of September 30, 2020, by contractual maturity, are shown below.
Mortgage-backed securities and collateralized mortgage obligations are disclosed separately in the table below as remaining expected maturities will differ from contractual maturities as borrowers have the right to prepay obligations.
−Removed: June 30, 2020
+Added: September 30, 2020
(dollars in thousands)
14 unchanged sentences
Total available-for-sale securities
−Removed: At June 30, 2020, pledged securities totaled $ 3.2 billion, of which $ 3.0 billion was pledged to secure public deposits and $ 237.2 million was pledged to secure other financial transactions.
+Added: At September 30, 2020, pledged securities totaled $ 2.4 billion, of which $ 2.2 billion was pledged to secure public deposits and $ 201.4 million was pledged to secure other financial transactions.
At December 31, 2019, pledged securities totaled $ 1.8 billion, of which $ 1.5 billion was pledged to secure public deposits and $ 242.3 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.
−Removed: government, government agencies and government-sponsored enterprises, taken in the aggregate, which were in excess of 10% of stockholders’ equity as of June 30, 2020 or December 31, 2019.
−Removed: The following table presents the unrealized gross losses and fair values of securities in the available-for-sale portfolio by length of time that the 16 and 118 individual securities in each category have been in a continuous loss position as of June 30, 2020 and December 31, 2019, respectively.
+Added: government, government agencies and government-sponsored enterprises, taken in the aggregate, which were in excess of 10% of stockholders’ equity as of September 30, 2020 or December 31, 2019.
+Added: The following table presents the unrealized gross losses and fair values of securities in the available-for-sale portfolio by length of time that the 24 and 118 individual securities in each category have been in a continuous loss position as of September 30, 2020 and December 31, 2019, respectively.
The unrealized losses on investment securities were attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.
−Removed: At June 30, 2020, the Company did not have any 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.
−Removed: Time in Continuous Loss as of June 30, 2020
+Added: At September 30, 2020, the Company did not have any 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.
+Added: Time in Continuous Loss as of September 30, 2020
Less Than 12 Months
1 unchanged sentence
(dollars in thousands)
+Added: Treasury and government agency debt securities
Mortgage-backed securities:
+Added: Residential - Government-sponsored enterprises
Commercial - Government agency
+Added: Commercial - Government-sponsored enterprises
Collateralized mortgage obligations:
29 unchanged sentences
Derivative Financial Instruments” for more information.
−Removed: The Company held approximately 120,000 Visa Class B restricted shares as of both June 30, 2020 and December 31, 2019.
−Removed: These shares continued to be carried at $ 0 cost basis as of both June 30, 2020 and December 31, 2019.
+Added: The Company held approximately 120,000 Visa Class B restricted shares as of both September 30, 2020 and December 31, 2019.
+Added: These shares continued to be carried at $ 0 cost basis as of both September 30, 2020 and December 31, 2019.
Loans and Leases
−Removed: As of June 30, 2020 and December 31, 2019, loans and leases were comprised of the following:
+Added: As of September 30, 2020 and December 31, 2019, loans and leases were comprised of the following:
+Added: September 30,
(dollars in thousands)
6 unchanged sentences
Total loans and leases
−Removed: Outstanding loan balances are reported net of deferred loan costs and fees of $ 15.5 million and $ 41.0 million at June 30, 2020 and December 31, 2019, respectively.
−Removed: As of June 30, 2020, residential real estate loans totaling $ 2.9 billion were pledged to collateralize the Company’s borrowing capacity at the Federal Home Loan Bank of Des Moines (“FHLB”), and consumer, commercial and industrial and commercial real estate loans totaling $ 1.8 billion were pledged to collateralize the Company’s borrowing capacity at the Federal Reserve Bank of San Francisco (“FRB”).
+Added: Outstanding loan balances are reported net of deferred loan costs and fees of $ 19.0 million and $ 41.0 million at September 30, 2020 and December 31, 2019, respectively.
+Added: As of September 30, 2020, residential real estate loans totaling $ 3.0 billion were pledged to collateralize the Company’s borrowing capacity at the Federal Home Loan Bank of Des Moines (“FHLB”), and consumer, commercial and industrial, commercial real estate and residential mortgage loans totaling $ 1.8 billion were pledged to collateralize the Company’s borrowing capacity at the Federal Reserve Bank of San Francisco (“FRB”).
As of December 31, 2019, residential real estate loans totaling $ 2.9 billion were pledged to collateralize the Company’s borrowing capacity at the FHLB, and consumer, commercial and industrial and commercial real estate loans totaling $ 953.2 million were pledged to collateralize the Company’s borrowing capacity at the FRB.
−Removed: Residential real estate loans collateralized by properties that were in the process of foreclosure totaled $ 3.1 million and $ 4.1 million as of June 30, 2020 and December 31, 2019, respectively.
+Added: Residential real estate loans collateralized by properties that were in the process of foreclosure totaled $ 2.8 million and $ 4.1 million as of September 30, 2020 and December 31, 2019, respectively.
In the course of evaluating the credit risk presented by a customer and the pricing that will adequately compensate the Company for assuming that risk, management may require a certain amount of collateral support.
20 unchanged sentences
Rollforward of the Allowance for Credit Losses
−Removed: The following presents the activity in the ACL by class of loans and leases for the three and six months ended June 30, 2020:
−Removed: Three Months Ended June 30, 2020
+Added: The following presents the activity in the ACL by class of loans and leases for the three and nine months ended September 30, 2020:
+Added: Three Months Ended September 30, 2020
Commercial Lending
5 unchanged sentences
Balance at end of period
−Removed: Six Months Ended June 30, 2020
+Added: Nine Months Ended September 30, 2020
Commercial Lending
6 unchanged sentences
Balance at end of period
−Removed: The following presents the activity in the ACL by class of loans and leases for the three and six months ended June 30, 2019, presented in accordance with Topic 310, Receivables :
−Removed: Three Months Ended June 30, 2019
+Added: The following presents the activity in the ACL by class of loans and leases for the three and nine months ended September 30, 2019, presented in accordance with Topic 310, Receivables :
+Added: Three Months Ended September 30, 2019
Commercial Lending
4 unchanged sentences
Balance at end of period
−Removed: Six Months Ended June 30, 2019
+Added: Nine Months Ended September 30, 2019
Commercial Lending
17 unchanged sentences
Rollforward of the Reserve for Unfunded Commitments
−Removed: The following presents the activity in the Reserve for Unfunded Commitments for the three and six months ended June 30, 2020:
−Removed: Three Months Ended June 30, 2020
+Added: The following presents the activity in the Reserve for Unfunded Commitments for the three and nine months ended September 30, 2020:
+Added: Three Months Ended September 30, 2020
Commercial Lending
3 unchanged sentences
Balance at beginning of period
−Removed: Increase in Provision
+Added: Increase (decrease) in Provision
Balance at end of period
−Removed: Six Months Ended June 30, 2020
+Added: Nine Months Ended September 30, 2020
Commercial Lending
29 unchanged sentences
Loans that are primarily monitored for credit quality using FICO scores include:
−Removed: residential real estate loans, home equity lines and consumer loans.
+Added: 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.
−Removed: The amortized cost basis by year of origination and credit quality indicator of the Company's loans and leases as of June 30, 2020 was as follows:
+Added: The amortized cost basis by year of origination and credit quality indicator of the Company's loans and leases as of September 30, 2020 was as follows:
Amortized Cost Basis by Origination Year
31 unchanged sentences
(1) Other credit quality indicators used for monitoring purposes are primarily FICO scores.
+Added: 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.
+Added: 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.
−Removed: There were no loans and leases graded as Loss as of June 30, 2020.
−Removed: The amortized cost basis of revolving loans that were converted to term loans during the three and six months ended June 30, 2020 was as follows:
+Added: There were no loans and leases graded as Loss as of September 30, 2020.
+Added: The amortized cost basis of revolving loans that were converted to term loans during the three and nine months ended September 30, 2020 was as follows:
Three Months Ended
(dollars in thousands)
−Removed: June 30, 2020
+Added: September 30, 2020
Commercial and industrial
1 unchanged sentence
Total Revolving Loans Converted to Term Loans During the Period
−Removed: Six Months Ended
+Added: Nine Months Ended
(dollars in thousands)
−Removed: June 30, 2020
+Added: September 30, 2020
Commercial and industrial
17 unchanged sentences
The Company considers loans and leases that are delinquent for 30 days or more to be past due.
−Removed: As of June 30, 2020, the aging analysis of the amortized cost basis of the Company’s past due loans and leases was as follows:
−Removed: June 30, 2020
+Added: As of September 30, 2020, the aging analysis of the amortized cost basis of the Company’s past due loans and leases was as follows:
+Added: September 30, 2020
Still Accruing
17 unchanged sentences
The Company charges off a loan or lease when facts indicate that the loan or lease is considered uncollectible.
−Removed: The amortized cost basis of loans and leases on nonaccrual status as of June 30, 2020 and January 1, 2020 and the amortized cost basis of loans and leases on nonaccrual status with no allowance for credit losses as of June 30, 2020 were as follows:
−Removed: June 30, 2020
+Added: The amortized cost basis of loans and leases on nonaccrual status as of September 30, 2020 and January 1, 2020 and the amortized cost basis of loans and leases on nonaccrual status with no allowance for credit losses as of September 30, 2020 were as follows:
+Added: September 30, 2020
January 1, 2020
5 unchanged sentences
Total Nonaccrual Loans and Leases
−Removed: For both the three and six months ended June 30, 2020, the Company recognized interest income of $ 0.1 million on nonaccrual loans and leases.
−Removed: Furthermore, for the three and six months ended June 30, 2020, the amount of accrued interest receivables written off by reversing interest income was $ 0.5 million and $ 0.9 million, respectively.
+Added: For the three and nine months ended September 30, 2020, the Company recognized interest income of $ 0.1 million and $ 0.2 million, respectively, on nonaccrual loans and leases.
+Added: Furthermore, for the three and nine months ended September 30, 2020, the amount of accrued interest receivables written off by reversing interest income was $ 0.2 million and $ 1.1 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.
−Removed: As of June 30, 2020, the amortized cost basis of collateral-dependent loans was $ 55.9 million.
+Added: As of September 30, 2020, the amortized cost basis of collateral-dependent loans was $ 33.3 million.
These loans were primarily collateralized by commercial and residential real estate property and borrower assets.
−Removed: As of June 30, 2020, the fair value of collateral on substantially all collateral-dependent loans were significantly in excess of their amortized cost basis.
+Added: As of September 30, 2020, the fair value of collateral on substantially all collateral-dependent loans were significantly in excess of their amortized cost basis.
Impaired Loans
14 unchanged sentences
Residential mortgage
−Removed: The following table provides information with respect to the Company’s average balances, and of interest income recognized from, impaired loans for the three and six months ended June 30, 2019, presented in accordance with Topic 310, Receivables :
+Added: The following table provides information with respect to the Company’s average balances, and of interest income recognized from, impaired loans for the three and nine months ended September 30, 2019, presented in accordance with Topic 310, Receivables :
Three Months Ended
−Removed: Six Months Ended
−Removed: June 30, 2019
−Removed: June 30, 2019
+Added: Nine Months Ended
+Added: September 30, 2019
+Added: September 30, 2019
(dollars in thousands)
18 unchanged sentences
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, normally two years .
−Removed: Generally, consumer loans
−Removed: are not classified as a TDR as they are normally charged off upon reaching a predetermined delinquency status that ranges from 120 to 180 days and varies by product type.
+Added: Generally, consumer loans are not classified as a TDR as they are normally charged off upon reaching a predetermined delinquency status that ranges from 120 to 180 days and varies by product type.
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.
4 unchanged sentences
Management exercises significant judgment in developing these estimates.
−Removed: The following presents, by class, information related to loans modified in a TDR during the three and six months ended June 30, 2020 and 2019:
+Added: The following presents, by class, information related to loans modified in a TDR during the three and nine months ended September 30, 2020 and 2019:
Three Months Ended
−Removed: Six Months Ended
−Removed: June 30, 2020
−Removed: June 30, 2020
+Added: Nine Months Ended
+Added: September 30, 2020
+Added: September 30, 2020
(dollars in thousands)
4 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
−Removed: June 30, 2019
−Removed: June 30, 2019
+Added: Nine Months Ended
+Added: September 30, 2019
+Added: September 30, 2019
(dollars in thousands)
5 unchanged sentences
The above loans were modified in a TDR through an extension of maturity dates, temporary interest-only payments, reduced payments, or below-market interest rates.
−Removed: The Company had commitments to extend credit, standby letters of credit, and commercial letters of credit totaling $ 6.3 billion and $ 6.1 billion as of June 30, 2020 and December 31, 2019, respectively.
−Removed: Of the $ 6.3 billion at June 30, 2020, there were no commitments related to borrowers who had loan terms modified in a TDR.
+Added: The Company had commitments to extend credit, standby letters of credit, and commercial letters of credit totaling $ 6.2 billion and $ 6.1 billion as of September 30, 2020 and December 31, 2019, respectively.
+Added: Of the $ 6.2 billion at September 30, 2020, there were no commitments related to borrowers who had loan terms modified in a TDR.
Of the $ 6.1 billion at December 31, 2019, there were commitments of $ 4.5 million related to borrowers who had loan terms modified in a TDR.
2 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
Three Months Ended
−Removed: Six Months Ended
−Removed: June 30, 2020
−Removed: June 30, 2020
−Removed: June 30, 2019
−Removed: June 30, 2019
+Added: Nine Months Ended
+Added: September 30, 2020
+Added: September 30, 2020
+Added: September 30, 2019
+Added: September 30, 2019
(dollars in thousands)
6 unchanged sentences
(1) 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 period.
−Removed: (2) For the three and six months ended June 30, 2020, the maturity date for the commercial and industrial loan that subsequently defaulted was extended.
−Removed: For the three and six months ended June 30, 2019, the commercial and industrial loans that subsequently defaulted were temporarily modified to interest-only payments.
−Removed: (3) For the three and six months ended June 30, 2019, the maturity date for the residential mortgage loan that subsequently defaulted was extended.
+Added: (2) For the three and nine months ended September 30, 2020, the maturity date for the commercial and industrial loan that subsequently defaulted was extended.
+Added: For the three and nine months ended September 30, 2019, the commercial and industrial loans that subsequently defaulted were temporarily modified to interest-only payments.
+Added: (3) For the nine months ended September 30, 2019, the maturity date for the residential mortgage loan that subsequently defaulted was extended.
Foreclosure Proceedings
−Removed: As of June 30, 2020, there were no residential mortgage loans collateralized by real estate property that was modified in a TDR that was in process of foreclosure.
+Added: As of September 30, 2020, there were no residential mortgage loans collateralized by real estate property that was modified in a TDR that was in process of foreclosure.
As of December 31, 2019, there was one residential mortgage loan collateralized by real estate property of $ 0.3 million that was modified in a TDR that was in process of foreclosure.
Foreclosed Property
−Removed: As of June 30, 2020, residential real estate property held from one foreclosed residential real estate loan was held and included in other real estate owned and repossessed personal property with a carrying value of $ 0.4 million on the unaudited interim consolidated balance sheets.
+Added: As of September 30, 2020, there were no residential real estate properties held from foreclosed residential real estate loans.
As of December 31, 2019, residential real estate properties from two foreclosed residential real estate loans were held and included in other real estate owned and repossessed personal property with a carrying value of $ 0.3 million on the unaudited interim consolidated balance sheets.
3 unchanged sentences
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.
−Removed: The unpaid principal amount of residential real estate loans serviced for others was $ 2.4 billion and $ 2.3 billion as of June 30, 2020 and December 31, 2019, respectively.
−Removed: Servicing fees include contractually specified fees, late charges, and ancillary fees, and were $ 1.4 million and $ 1.6 million for the three months ended June 30, 2020 and 2019, respectively, and $ 2.9 million and $ 3.2 million for the six months ended June 30, 2020 and 2019, respectively.
−Removed: Amortization of mortgage servicing rights (“MSRs”) was $ 1.3 million and $ 0.8 million for the three months ended June 30, 2020 and 2019, respectively, and $ 3.3 million and $ 1.6 million for the six months ended June 30, 2020 and 2019, respectively.
+Added: The unpaid principal amount of residential real estate loans serviced for others was $ 2.3 billion as of both September 30, 2020 and December 31, 2019.
+Added: Servicing fees include contractually specified fees, late charges, and ancillary fees, and were $ 1.4 million and $ 1.6 million for the three months ended September 30, 2020 and 2019, respectively, and $ 4.4 million and $ 4.8 million for the nine months ended September 30, 2020 and 2019, respectively.
+Added: Amortization of mortgage servicing rights (“MSRs”) was $ 1.4 million and $ 1.0 million for the three months ended September 30, 2020 and 2019, respectively, and $ 4.7 million and $ 2.6 million for the nine months ended September 30, 2020 and 2019, respectively.
The estimated future amortization expenses for MSRs over the next five years are as follows:
6 unchanged sentences
The details of the Company’s MSRs are presented below:
+Added: September 30,
(dollars in thousands)
2 unchanged sentences
Net carrying value
−Removed: The following table presents changes in amortized MSRs for the three and six months ended June 30, 2020 and 2019:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: The following table presents changes in amortized MSRs for the three and nine months ended September 30, 2020 and 2019:
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(dollars in thousands)
4 unchanged sentences
MSRs are evaluated for impairment if events and circumstances indicate a possible impairment.
−Removed: No impairment of MSRs was recorded for the three and six months ended June 30, 2020 and 2019.
−Removed: The quantitative assumptions used in determining the lower of cost or fair value of the Company’s MSRs as of June 30, 2020 and December 31, 2019 were as follows:
−Removed: June 30, 2020
+Added: No impairment of MSRs was recorded for the three and nine months ended September 30, 2020 and 2019.
+Added: The quantitative assumptions used in determining the lower of cost or fair value of the Company’s MSRs as of September 30, 2020 and December 31, 2019 were as follows:
+Added: September 30, 2020
December 31, 2019
15 unchanged sentences
Counterparties to ACH transactions, certain interest rate swaps, the FHLB and the FRB do not have the right to sell or repledge the collateral.
−Removed: The carrying amounts of the assets pledged as collateral to secure public deposits, borrowing arrangements and other transactions as of June 30, 2020 and December 31, 2019 were as follows:
+Added: The carrying amounts of the assets pledged as collateral to secure public deposits, borrowing arrangements and other transactions as of September 30, 2020 and December 31, 2019 were as follows:
(dollars in thousands)
−Removed: June 30, 2020
+Added: September 30, 2020
December 31, 2019
4 unchanged sentences
Interest rate swaps
−Removed: As the Company did not enter into reverse repurchase agreements or repurchase agreements, no collateral was accepted or pledged as of June 30, 2020 and December 31, 2019.
+Added: As the Company did not enter into reverse repurchase agreements or repurchase agreements, no collateral was accepted or pledged as of September 30, 2020 and December 31, 2019.
In addition, no debt was extinguished by in-substance defeasance.
−Removed: As of June 30, 2020 and December 31, 2019, deposits were categorized as interest-bearing or noninterest-bearing as follows:
+Added: As of September 30, 2020 and December 31, 2019, deposits were categorized as interest-bearing or noninterest-bearing as follows:
(dollars in thousands)
−Removed: June 30, 2020
+Added: September 30, 2020
December 31, 2019
4 unchanged sentences
Total deposits
−Removed: The following table presents the maturity distribution of time certificates of deposit as of June 30, 2020:
+Added: The following table presents the maturity distribution of time certificates of deposit as of September 30, 2020:
(dollars in thousands)
6 unchanged sentences
Four to five years
−Removed: Time certificates of deposit in denominations of $250,000 or more, in the aggregate, were $ 2.4 billion and $ 1.4 billion as of June 30, 2020 and December 31, 2019, respectively.
−Removed: Overdrawn deposit accounts are classified as loans and totaled $ 2.1 million and $ 3.6 million as of June 30, 2020 and December 31, 2019, respectively.
+Added: Time certificates of deposit in denominations of $250,000 or more, in the aggregate, were $ 1.5 billion and $ 1.4 billion as of September 30, 2020 and December 31, 2019, respectively.
+Added: Overdrawn deposit accounts are classified as loans and totaled $ 2.9 million and $ 3.6 million as of September 30, 2020 and December 31, 2019, respectively.
Short-Term Borrowings
−Removed: At June 30, 2020 and December 31, 2019, short-term borrowings were comprised of the following:
+Added: At September 30, 2020 and December 31, 2019, short-term borrowings were comprised of the following:
(dollars in thousands)
−Removed: June 30, 2020
+Added: September 30, 2020
December 31, 2019
2 unchanged sentences
(1) Interest is payable monthly.
−Removed: As of June 30, 2020 and December 31, 2019, the Company’s short-term borrowings included $ 200.0 million and $ 400.0 million, respectively, in short-term FHLB fixed-rate advances with a weighted average interest rate of 2.88 % and 2.84 %, respectively.
−Removed: The short-term FHLB fixed-rate advances require monthly interest-only payments with the principal amount due on the maturity date.
−Removed: The remaining short-term FHLB fixed-rate advance (as of June 30, 2020) matured in July 2020.
−Removed: As of June 30, 2020 and December 31, 2019, the available remaining borrowing capacity with the FHLB was $ 1.9 billion and $ 1.7 billion, respectively.
−Removed: The FHLB fixed-rate advances and remaining borrowing capacity were secured by residential real estate loan collateral as of June 30, 2020 and December 31, 2019.
−Removed: As of June 30, 2020 and December 31, 2019, the Company had an undrawn line of credit of $ 982.0 million and $ 596.8 million from the FRB, respectively.
−Removed: The borrowing capacity with the FRB was secured by consumer, commercial and industrial and commercial real estate loans as of June 30, 2020 and December 31, 2019.
+Added: As of December 31, 2019, the Company’s short-term borrowings included $ 400.0 million in short-term FHLB fixed-rate advances with a weighted average interest rate of 2.84 %.
+Added: The short-term FHLB fixed-rate advances required monthly interest-only payments with the principal amount due on the maturity date.
+Added: As of September 30, 2020, the Company had no short-term borrowings as the remaining short-term FHLB fixed-rate advance (as of June 30, 2020) matured in July 2020.
+Added: As of September 30, 2020 and December 31, 2019, the available remaining borrowing capacity with the FHLB was $ 2.0 billion and $ 1.7 billion, respectively.
+Added: The FHLB fixed-rate advances and remaining borrowing capacity were secured by residential real estate loan collateral as of September 30, 2020 and December 31, 2019.
+Added: As of September 30, 2020 and December 31, 2019, the Company had an undrawn line of credit of $ 1.0 billion and $ 596.8 million from the FRB, respectively.
+Added: The borrowing capacity with the FRB was secured by consumer, commercial and industrial, commercial real estate and residential mortgage loans as of September 30, 2020 and December 31, 2019.
Transfers of Financial Assets” for more information.
Long-Term Borrowings
−Removed: Long-term borrowings consisted of the following as of June 30, 2020 and December 31, 2019:
+Added: Long-term borrowings consisted of the following as of September 30, 2020 and December 31, 2019:
(dollars in thousands)
−Removed: June 30, 2020
+Added: September 30, 2020
December 31, 2019
3 unchanged sentences
(1) Interest is payable monthly.
−Removed: As of June 30, 2020 and December 31, 2019, the Company’s long-term borrowings included $ 200.0 million in FHLB fixed-rate advances with a weighted average interest rate of 2.73 % and maturity dates ranging from 2023 to 2024.
+Added: As of September 30, 2020 and December 31, 2019, the Company’s long-term borrowings included $ 200.0 million in FHLB fixed-rate advances with a weighted average interest rate of 2.73 % and maturity dates ranging from 2023 to 2024.
The FHLB fixed-rate advances require monthly interest-only payments with the principal amount due on the maturity date.
−Removed: As of June 30, 2020 and December 31, 2019, the Company’s long-term borrowings included a finance lease obligation with a 6.78 % annual interest rate that matures in 2022.
−Removed: As of June 30, 2020, future contractual principal payments and maturities of long-term borrowings were as follows:
+Added: As of September 30, 2020 and December 31, 2019, the Company’s long-term borrowings included a finance lease obligation with a 6.78 % annual interest rate that matures in 2022.
+Added: As of September 30, 2020, future contractual principal payments and maturities of long-term borrowings were as follows:
(dollars in thousands)
4 unchanged sentences
The Company’s significant items of accumulated other comprehensive loss are pension and other benefits and net unrealized gains or losses on investment securities.
−Removed: Changes in accumulated other comprehensive income (loss) for the three and six months ended June 30, 2020 and 2019 are presented below:
+Added: Changes in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2020 and 2019 are presented below:
(dollars in thousands)
−Removed: Accumulated other comprehensive income at March 31, 2020
−Removed: Three months ended June 30, 2020
+Added: Accumulated other comprehensive income at June 30, 2020
+Added: Three months ended September 30, 2020
Investment securities:
−Removed: Unrealized net gains arising during the period
+Added: Unrealized net losses arising during the period
Reclassification of net losses to net income:
−Removed: Investment securities losses, net
+Added: Investment securities gains, net
Net change in investment securities
−Removed: Other comprehensive income
−Removed: Accumulated other comprehensive income at June 30, 2020
+Added: Other comprehensive loss
+Added: Accumulated other comprehensive income at September 30, 2020
(dollars in thousands)
Accumulated other comprehensive loss at December 31, 2019
−Removed: Six months ended June 30, 2020
+Added: Nine months ended September 30, 2020
Change in Company tax rate
6 unchanged sentences
Other comprehensive income
−Removed: Accumulated other comprehensive income at June 30, 2020
+Added: Accumulated other comprehensive income at September 30, 2020
(dollars in thousands)
−Removed: Accumulated other comprehensive loss at March 31, 2019
−Removed: Three months ended June 30, 2019
−Removed: Pension and other benefits:
−Removed: Net actuarial losses arising during the period
−Removed: Net change in pension and other benefits
+Added: Accumulated other comprehensive loss at June 30, 2019
+Added: Three months ended September 30, 2019
Investment securities:
Unrealized net gains arising during the period
−Removed: Reclassification of net gains to net income:
−Removed: Investment securities gains, net
Net change in investment securities
Other comprehensive income
−Removed: Accumulated other comprehensive loss at June 30, 2019
+Added: Accumulated other comprehensive loss at September 30, 2019
(dollars in thousands)
Accumulated other comprehensive loss at December 31, 2018
−Removed: Six months ended June 30, 2019
+Added: Nine months ended September 30, 2019
Pension and other benefits:
7 unchanged sentences
Other comprehensive income
−Removed: Accumulated other comprehensive loss at June 30, 2019
+Added: Accumulated other comprehensive loss at September 30, 2019
The following table summarizes changes in accumulated other comprehensive income (loss), net of tax, for the periods indicated:
2 unchanged sentences
Income (Loss)
−Removed: Three Months Ended June 30, 2020
+Added: Three Months Ended September 30, 2020
Balance at beginning of period
−Removed: Other comprehensive income
+Added: Other comprehensive loss
Balance at end of period
−Removed: Six Months Ended June 30, 2020
+Added: Nine Months Ended September 30, 2020
Balance at beginning of period
−Removed: Other comprehensive income
+Added: Other comprehensive (loss) income
Balance at end of period
−Removed: Three Months Ended June 30, 2019
+Added: Three Months Ended September 30, 2019
Balance at beginning of period
1 unchanged sentence
Balance at end of period
−Removed: Six Months Ended June 30, 2019
+Added: Nine Months Ended September 30, 2019
Balance at beginning of period
−Removed: Other comprehensive income
+Added: Other comprehensive (loss) income
Balance at end of period
7 unchanged sentences
Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios of Common Equity Tier 1 (“CET1”) capital, Tier 1 capital and total capital to risk-weighted assets, as well as a minimum leverage ratio.
−Removed: The table below sets forth those ratios at June 30, 2020 and December 31, 2019:
+Added: The table below sets forth those ratios at September 30, 2020 and December 31, 2019:
First Hawaiian
1 unchanged sentence
(dollars in thousands)
−Removed: June 30, 2020:
+Added: September 30, 2020:
Common equity tier 1 capital to risk-weighted assets
10 unchanged sentences
The capital conservation buffer is composed entirely of CET1, on top of these minimum risk weighted asset ratios, 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.
−Removed: As of June 30, 2020, under the bank regulatory capital guidelines, the Company and Bank were both classified as well-capitalized.
−Removed: Management is not aware of any conditions or events that have occurred since June 30, 2020, to change the capital adequacy category of the Company or the Bank.
+Added: As of September 30, 2020, under the bank regulatory capital guidelines, the Company and Bank were both classified as well-capitalized.
+Added: Management is not aware of any conditions or events that have occurred since September 30, 2020, to change the capital adequacy category of the Company or the Bank.
Derivative Financial Instruments
5 unchanged sentences
however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes.
−Removed: The following table summarizes notional amounts and fair values of derivatives held by the Company as of June 30, 2020 and December 31, 2019:
−Removed: June 30, 2020
+Added: The following table summarizes notional amounts and fair values of derivatives held by the Company as of September 30, 2020 and December 31, 2019:
+Added: September 30, 2020
December 31, 2019
14 unchanged sentences
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.
−Removed: The amount of initial margin cash collateral posted by the Company was $ 12.6 million and $ 8.7 million as of June 30, 2020 and December 31, 2019, respectively.
−Removed: As of June 30, 2020 and December 31, 2019, the variation margin was $ 170.6 million and $ 63.5 million, respectively.
−Removed: As of June 30, 2020, the Company pledged $ 30.9 million in financial instruments and $ 26.1 million in cash as collateral for interest rate swaps.
+Added: The amount of initial margin cash collateral posted by the Company was $ 10.1 million and $ 8.7 million as of September 30, 2020 and December 31, 2019, respectively.
+Added: As of September 30, 2020 and December 31, 2019, the variation margin was $ 159.9 million and $ 63.5 million, respectively.
+Added: As of September 30, 2020, the Company pledged $ 30.9 million in financial instruments and $ 23.5 million in cash as collateral for interest rate swaps.
As of December 31, 2019, the Company pledged $ 29.9 million in financial instruments and $ 13.4 million in cash as collateral for interest rate swaps.
−Removed: As of June 30, 2020 and December 31, 2019, 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.
+Added: As of September 30, 2020 and December 31, 2019, 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
2 unchanged sentences
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.
−Removed: At June 30, 2020, the Company carried one interest rate swap with a notional amount of $ 22.8 million with a negative fair value of $ 1.6 million that was categorized as a fair value hedge for a commercial and industrial loan.
+Added: At September 30, 2020 and December 31, 2019, the Company carried one interest rate swap with a notional amount of $ 22.8 million and $ 23.2 million, respectively, with a negative fair value of $ 1.4 million and $ 0.7 million, respectively, that was categorized as a fair value hedge for a commercial and industrial loan.
The Company received a USD Prime floating rate and paid a fixed rate of 2.90 % .
The swap matures in 2023.
−Removed: At December 31, 2019, the Company carried one interest rate swap with a notional amount of $ 23.2 million with a negative fair value of $ 0.7 million that was categorized as a fair value hedge for a commercial and industrial loan.
−Removed: The following table shows the gains and losses recognized in income related to derivatives in fair value hedging relationships for the three and six months ended June 30, 2020 and 2019:
+Added: The following table shows the gains and losses recognized in income related to derivatives in fair value hedging relationships for the three and nine months ended September 30, 2020 and 2019:
Gains (losses) recognized in
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
the consolidated statements
+Added: September 30,
+Added: September 30,
(dollars in thousands)
5 unchanged sentences
Loans and lease financing
−Removed: As of June 30, 2020 and December 31, 2019, the following amounts were recorded in the unaudited interim consolidated balance sheets related to the cumulative basis adjustments for fair value hedges:
+Added: As of September 30, 2020 and December 31, 2019, the following amounts were recorded in the unaudited interim consolidated balance sheets related to the cumulative basis adjustments for fair value hedges:
Cumulative Amount of Fair Value
3 unchanged sentences
(dollars in thousands)
−Removed: June 30, 2020
+Added: September 30, 2020
December 31, 2019
−Removed: June 30, 2020
+Added: September 30, 2020
December 31, 2019
3 unchanged sentences
For the derivatives that are not designated as hedges, changes in fair value are reported in current period earnings.
−Removed: The following table summarizes the impact on pretax earnings of derivatives not designated as hedges, as reported on the unaudited interim consolidated statements of income for the three and six months ended June 30, 2020 and 2019:
+Added: The following table summarizes the impact on pretax earnings of derivatives not designated as hedges, as reported on the unaudited interim consolidated statements of income for the three and nine months ended September 30, 2020 and 2019:
Net gains (losses) recognized
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
in the consolidated statements
+Added: September 30,
+Added: September 30,
(dollars in thousands)
6 unchanged sentences
Other noninterest income
−Removed: As of June 30, 2020, the Company carried multiple interest rate swaps with notional amounts totaling $ 3.0 billion, all of which were related to the Company’s customer swap program, with a positive fair value of $ 170.6 million and a negative fair value of nil .
+Added: As of September 30, 2020, the Company carried multiple interest rate swaps with notional amounts totaling $ 3.0 billion, all of which were related to the Company’s customer swap program, with a positive fair value of $ 159.9 million and a negative fair value of nil .
The Company received floating rates ranging from 0.15 % to 3.16 % and paid fixed rates ranging from 2.02 % to 5.78 %.
2 unchanged sentences
The Company received 1-month LIBOR and paid fixed rates ranging from 1.71 % to 8.73 %.
−Removed: These swaps resulted in net interest expense of nil during both the three and six months ended June 30, 2020 and 2019.
+Added: These swaps resulted in net interest expense of nil during both the three and nine months ended September 30, 2020 and 2019.
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.
−Removed: Upfront fees on the dealer swap are recorded in other noninterest income and totaled $ 4.6 million and $ 1.1 million for the three months ended June 30, 2020 and 2019, respectively, and $ 6.5 million and $ 2.0 million for the six months ended June 30, 2020 and 2019, respectively.
+Added: Upfront fees on the dealer swap are recorded in other noninterest income and totaled $ 0.5 million and $ 1.9 million for the three months ended September 30, 2020 and 2019, respectively, and $ 7.0 million and $ 3.8 million for the nine months ended September 30, 2020 and 2019, respectively.
In conjunction with the 2016 sale of Class B restricted shares of common stock issued by Visa, 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.
6 unchanged sentences
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.
−Removed: A derivative liability (“Visa derivative”) of $ 2.1 million and $ 4.2 million was included in the unaudited interim consolidated balance sheets at June 30, 2020 and December 31, 2019, respectively, to provide for the fair value of this liability.
+Added: A derivative liability (“Visa derivative”) of $ 0.9 million and $ 4.2 million was included in the unaudited interim consolidated balance sheets at September 30, 2020 and December 31, 2019, respectively, to provide for the fair value of this liability.
There were no sales of these shares prior to 2016.
8 unchanged sentences
For each counterparty, the Company reviews the interest rate swap collateral daily.
−Removed: Collateral for customer interest rate swap agreements, calculated as the pledged asset less loan balance, requires
−Removed: valuation of the pledged asset.
−Removed: Counterparty credit risk adjustments of $ 0.1 million and nil were recognized during the three months ended June 30, 2020 and 2019, respectively, and $ 0.3 million and $ 0.1 million were recognized during the six months ended June 30, 2020 and 2019, respectively.
+Added: Collateral for customer interest rate swap agreements, calculated as the pledged asset less loan balance, requires valuation of the pledged asset.
+Added: Counterparty credit risk adjustments of negative $ 0.1 million and nil were recognized during the three months ended September 30, 2020 and 2019, respectively, and $0.2 million and $0.1 million were recognized during the nine months ended September 30, 2020 and 2019, respectively.
Credit-Risk Related Contingent Features
Certain of our derivative contracts contain provisions whereby if the Company’s 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 in a net liability position.
−Removed: The aggregate fair value of all derivative instruments with such credit-risk related contingent features that are in a net liability position was $ 13.4 million and $ 4.0 million at June 30, 2020 and December 31, 2019, respectively, for which we posted $ 13.5 million and $ 4.7 million, respectively, in collateral in the normal course of business.
−Removed: If the Company’s credit rating had been downgraded as of June 30, 2020 and December 31, 2019, we may have been required to settle the contracts in an amount equal to their fair value.
+Added: The aggregate fair value of all derivative instruments with such credit-risk related contingent features that are in a net liability position was $ 12.8 million and $ 4.0 million at September 30, 2020 and December 31, 2019, respectively, for which we posted $ 13.5 million and $ 4.7 million, respectively, in collateral in the normal course of business.
+Added: If the Company’s credit rating had been downgraded as of September 30, 2020 and December 31, 2019, we may have been required to settle the contracts in an amount equal to their fair value.
Commitments and Contingent Liabilities
14 unchanged sentences
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.
−Removed: Commitments to extend credit are reported net of participations sold to other institutions of $ 116.8 million and $ 94.1 million at June 30, 2020 and December 31, 2019, respectively.
+Added: Commitments to extend credit are reported net of participations sold to other institutions of $ 107.7 million and $ 94.1 million at September 30, 2020 and December 31, 2019, respectively.
Standby and Commercial Letters of Credit
2 unchanged sentences
The credit risk to the Company arises from its obligation to make payment in the event of a customer’s contractual default.
−Removed: Standby letters of credit are reported net of participations sold to other institutions of $ 11.0 million and $ 9.0 million at June 30, 2020 and December 31, 2019, respectively.
−Removed: The Company also had commitments for commercial and similar letters of credit.
+Added: Standby letters of credit are reported net of participations sold to other institutions of $ 11.0 million and $ 9.0 million at September 30, 2020 and December 31, 2019, respectively.
+Added: The Company also had
+Added: 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.
2 unchanged sentences
Collateral held supports those commitments for which collateral is deemed necessary.
−Removed: The commitments outstanding as of June 30, 2020 have maturities ranging from July 2020 to May 2022.
+Added: The commitments outstanding as of September 30, 2020 have maturities ranging from October 2020 to May 2022.
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.
−Removed: Financial instruments with off-balance sheet risk at June 30, 2020 and December 31, 2019 were as follows:
+Added: Financial instruments with off-balance sheet risk at September 30, 2020 and December 31, 2019 were as follows:
+Added: September 30,
(dollars in thousands)
30 unchanged sentences
The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.
−Removed: At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services that are promised within each contract and identifies those that contain performance obligations, and assesses whether each promised good or service is distinct.
+Added: At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services that are promised within each contract and identifies those that contain performance obligations, and assesses whether each promised good or service is
The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
1 unchanged sentence
In 2019, the Company made changes to the internal measurement of segment operating profits for the purpose of evaluating segment performance and resource allocation.
−Removed: The Company has restated the selected financial information for the three and six months ended June 30, 2019 in order to conform with the current presentation.
+Added: The Company has restated the selected financial information for the three and nine months ended September 30, 2019 in order to conform with the current presentation.
See “Note 18.
1 unchanged sentence
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 periods indicated:
−Removed: Three Months Ended June 30, 2020
+Added: Three Months Ended September 30, 2020
(dollars in thousands)
7 unchanged sentences
Total revenue
−Removed: Six Months Ended June 30, 2020
+Added: Nine Months Ended September 30, 2020
(dollars in thousands)
10 unchanged sentences
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.
−Removed: Three Months Ended June 30, 2019
+Added: Three Months Ended September 30, 2019
(dollars in thousands)
7 unchanged sentences
Total revenue
−Removed: Six Months Ended June 30, 2019
+Added: Nine Months Ended September 30, 2019
(dollars in thousands)
10 unchanged sentences
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.
−Removed: For the three and six months ended June 30, 2020 and 2019, substantially all of the Company’s revenues under the scope of Topic 606 were related to performance obligations satisfied at a point in time.
+Added: For the three and nine months ended September 30, 2020 and 2019, 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.
19 unchanged sentences
In prior years, the Company received signing bonuses from two vendors which are being amortized over the term of the respective contracts.
−Removed: As of June 30, 2020 and December 31, 2019, the Company had contract liabilities of $ 1.4 million and $ 1.8 million, respectively, which will be recognized over the remaining term of the respective contracts with the vendors.
−Removed: For the three and six months ended June 30, 2020, the Company’s recognized revenues and contract liabilities decreased by approximately $ 0.2 million and $ 0.4 million, respectively, due to the passage of time.
−Removed: For the three and six months ended June 30, 2019, the Company’s recognized revenues and contract liabilities decreased by approximately $ 0.2 million and $ 0.4 million, respectively, due to the passage of time.
+Added: As of September 30, 2020 and December 31, 2019, the Company had contract liabilities of $ 1.2 million and $ 1.8 million, respectively, which it expects to recognize over the remaining term of the respective contracts with the vendors.
+Added: For the three and nine months ended September 30, 2020, the Company’s recognized revenues and contract liabilities decreased by approximately $ 0.2 million and $ 0.6 million, respectively, due to the passage of time.
+Added: For the three and nine months ended September 30, 2019, the Company’s recognized revenues and contract liabilities decreased by approximately $ 0.2 million and $ 0.6 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.
−Removed: As of June 30, 2020 and December 31, 2019, there were no receivables from contracts with customers or contract assets recorded on the Company’s consolidated balance sheets.
−Removed: Except for the contract liabilities noted above, the Company did not have any significant performance obligations as of June 30, 2020 and December 31, 2019.
+Added: As of September 30, 2020 and December 31, 2019, there were no receivables from contracts with customers or contract assets recorded on the Company’s consolidated balance sheets.
+Added: Except for the contract liabilities noted above, the Company did not have any significant performance obligations as of September 30, 2020 and December 31, 2019.
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
−Removed: For the three and six months ended June 30, 2020, the Company made no adjustments to net income for the purpose of computing earnings per share and there were 537,000 and 513,000 antidilutive securities, respectively.
−Removed: For the three and six months ended June 30, 2019, the Company made no adjustments to net income for the purpose of computing earnings per share and there were no antidilutive securities.
−Removed: For the three and six months ended June 30, 2020 and 2019, the computations of basic and diluted earnings per share were as follows:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: For the three and nine months ended September 30, 2020, the Company made no adjustments to net income for the purpose of computing earnings per share and there were 353,000 and 352,000 antidilutive securities, respectively.
+Added: For the three and nine months ended September 30, 2019, the Company made no adjustments to net income for the purpose of computing earnings per share and there were no antidilutive securities.
+Added: For the three and nine months ended September 30, 2020 and 2019, the computations of basic and diluted earnings per share were as follows:
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(dollars in thousands, except shares and per share amounts)
10 unchanged sentences
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.
−Removed: The following table sets forth the components of net periodic benefit cost for the Company’s pension and postretirement benefit plans for the three and six months ended June 30, 2020 and 2019:
+Added: The following table sets forth the components of net periodic benefit cost for the Company’s pension and postretirement benefit plans for the three and nine months ended September 30, 2020 and 2019:
Income line item where recognized in
3 unchanged sentences
the consolidated statements of income
−Removed: Three Months Ended June 30,
+Added: Three Months Ended September 30,
Salaries and employee benefits
8 unchanged sentences
Total net periodic benefit cost
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Salaries and employee benefits
8 unchanged sentences
Total net periodic benefit cost
−Removed: The Company recognized operating lease income related to lease payments of $ 1.6 million and $ 1.5 million for the three months ended June 30, 2020 and 2019, respectively, and $ 3.1 million and $ 3.0 million for the six months ended June 30, 2020 and 2019, respectively.
−Removed: In addition, the Company recognized $ 1.4 million and $ 1.3 million of lease income related to variable lease payments for the three months ended June 30, 2020 and 2019, respectively, and $ 2.9 million and $ 2.6 million for the six months ended June 30, 2020 and 2019, respectively.
−Removed: Amortization of Software Expenses
−Removed: Amortization of software expenses recorded in other noninterest expense was $ 1.4 million and $ 1.0 million for the three months ended June 30, 2020 and 2019, respectively, and $ 2.6 million and $ 2.2 million for the six months ended June 30, 2020 and 2019, respectively.
+Added: The Company recognized operating lease income related to lease payments of $ 1.6 million and $ 1.5 million for the three months ended September 30, 2020 and 2019, respectively, and $ 4.7 million and $ 4.4 million for the nine months ended September 30, 2020 and 2019, respectively.
+Added: In addition, the Company recognized $ 1.4 million of lease income related to variable lease payments for both the three months ended September 30, 2020 and 2019, and $ 4.3 million and $ 4.0 million for the nine months ended September 30, 2020 and 2019, respectively.
The Company determines the fair values of its financial instruments based on the requirements established in Accounting Standards Codification Topic 820 (“Topic 820”), Fair Value Measurements , which provides a framework for measuring fair value under GAAP and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
13 unchanged sentences
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.
−Removed: The fair value measurements are reviewed to ensure they are reasonable and in line with market experience in similar asset and liability classes.
+Added: The fair value
+Added: 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.
11 unchanged sentences
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.
−Removed: As of June 30, 2020 and December 31, 2019, management did not make adjustments to prices provided by the third-party pricing services as a result of illiquid or inactive markets.
+Added: As of September 30, 2020 and December 31, 2019, 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.
11 unchanged sentences
Accordingly, on September 30, 2019, Visa announced a decrease in conversion rate from 1.6298 to 1.6228 effective September 27, 2019.
−Removed: The Visa derivative of $ 2.1 million and $ 4.2 million was included in the unaudited interim consolidated balance sheets at June 30, 2020 and
−Removed: December 31, 2019, respectively, to provide for the fair value of this liability.
+Added: The Visa derivative of $ 0.9 million and $ 4.2 million was included in the unaudited interim consolidated balance sheets at September 30, 2020 and December 31, 2019, 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.
−Removed: 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.
+Added: The significant unobservable inputs used in the fair value measurement of
+Added: 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
−Removed: Assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 are summarized below:
−Removed: Fair Value Measurements as of June 30, 2020
+Added: Assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 are summarized below:
+Added: Fair Value Measurements as of September 30, 2020
Quoted Prices in
42 unchanged sentences
Changes in Fair Value Levels
−Removed: For the three and six months ended June 30, 2020, there were no transfers between fair value hierarchy levels.
−Removed: The changes in Level 3 liabilities measured at fair value on a recurring basis for the three and six months ended June 30, 2020 and 2019 are summarized below.
+Added: For the three and nine months ended September 30, 2020 , there were no transfers between fair value hierarchy levels.
+Added: The changes in Level 3 liabilities measured at fair value on a recurring basis for the three and nine months ended September 30, 2020 and 2019 are summarized below.
Visa Derivative
(dollars in thousands)
−Removed: Three Months Ended June 30,
−Removed: Balance as of April 1,
+Added: Three Months Ended September 30,
+Added: Balance as of July 1,
Total net gains (losses) included in other noninterest income
−Removed: Balance as of June 30,
−Removed: Total net gains (losses) included in net income attributable to the change in unrealized gains or losses related to liabilities still held as of June 30,
−Removed: Six Months Ended June 30,
+Added: Balance as of September 30,
+Added: Total net gains (losses) included in net income attributable to the change in unrealized gains or losses related to liabilities still held as of September 30,
+Added: Nine Months Ended September 30,
Balance as of January 1,
Total net gains (losses) included in other noninterest income
−Removed: Balance as of June 30,
−Removed: Total net gains (losses) included in net income attributable to the change in unrealized gains or losses related to liabilities still held as of June 30,
+Added: Balance as of September 30,
+Added: Total net gains (losses) included in net income attributable to the change in unrealized gains or losses related to liabilities still held as of September 30,
Assets and Liabilities Carried at Other Than Fair Value
The following tables summarize for the periods 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.
−Removed: June 30, 2020
+Added: September 30, 2020
Fair Value Measurements
10 unchanged sentences
Time deposits (2)
−Removed: Short-term borrowings
Long-term borrowings (3)
14 unchanged sentences
Long-term borrowings (3)
−Removed: (1) Excludes financing leases of $ 238.3 million at June 30, 2020 and $ 202.5 million at December 31, 2019.
−Removed: (2) Excludes deposit liabilities with no defined or contractual maturity of $ 15.9 billion as of June 30, 2020 and $ 13.9 billion as of December 31, 2019.
−Removed: (3) Excludes capital lease obligations of $ 19 thousand as of both June 30, 2020 and December 31, 2019.
+Added: (1) Excludes financing leases of $ 246.0 million at September 30, 2020 and $ 202.5 million at December 31, 2019.
+Added: (2) Excludes deposit liabilities with no defined or contractual maturity of $ 16.3 billion as of September 30, 2020 and $ 13.9 billion as of December 31, 2019.
+Added: (3) Excludes capital lease obligations of $ 10 thousand and $ 19 thousand as of September 30, 2020 and December 31, 2019, respectively.
Unfunded loan and lease commitments and letters of credit are not included in the tables above.
−Removed: As of June 30, 2020 and December 31, 2019, the Company had $ 6.3 billion and $ 6.1 billion, respectively, of unfunded loan and lease commitments and letters of credit.
−Removed: 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 $ 36.3 million and $ 14.4 million at June 30, 2020 and December 31, 2019, respectively.
+Added: As of September 30, 2020 and December 31, 2019, the Company had $ 6.2 billion and $ 6.1 billion, respectively, of unfunded loan and lease commitments and letters of credit.
+Added: The Company believes that 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 $ 37.0 million and $ 14.4 million at September 30, 2020 and December 31, 2019, respectively.
No active trading market exists for these instruments, and the estimated fair value does not include value associated with the borrower relationship.
21 unchanged sentences
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.
−Removed: The following table provides the level of valuation inputs used to determine each fair value adjustment and the fair value of the related individual assets or portfolio of assets with fair value adjustments on a nonrecurring basis as of June 30, 2020 and December 31, 2019:
+Added: The following table provides the level of valuation inputs used to determine each fair value adjustment and the fair value of the related individual assets or portfolio of assets with fair value adjustments on a nonrecurring basis as of September 30, 2020 and December 31, 2019:
(dollars in thousands)
−Removed: June 30, 2020
+Added: September 30, 2020
Collateral-dependent loans
1 unchanged sentence
Collateral-dependent loans
−Removed: Total losses on collateral-dependent loans were nil and $ 0.4 million for the three and six months ended June 30, 2020, respectively.
−Removed: No losses were recognized on collateral-dependent loans for both the three and six months ended June 30, 2019.
−Removed: For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of June 30, 2020 and December 31, 2019, the significant unobservable inputs used in the fair value measurements were as follows:
−Removed: Quantitative Information about Level 3 Fair Value Measurements at June 30, 2020
+Added: Total losses on collateral-dependent loans were nil and $ 0.5 million for the three months ended September 30, 2020 and 2019, respectively, and $ 0.4 million and $ 0.5 million for the nine months ended September 30, 2020 and 2019, respectively.
+Added: For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of September 30, 2020 and December 31, 2019, the significant unobservable inputs used in the fair value measurements were as follows:
+Added: Quantitative Information about Level 3 Fair Value Measurements at September 30, 2020
(dollars in thousands)
46 unchanged sentences
The reallocation of select deposit balances affected net interest income, net interest income after provision for credit losses, noninterest income, provision for income taxes and net income.
−Removed: The Company has reported its selected financial information using the new deposit balance alignments for the three and six months ended June 30, 2020.
−Removed: The Company has restated the selected financial information for the three and six months ended June 30, 2019 in order to conform with the current presentation.
+Added: The Company has reported its selected financial information using the new deposit balance alignments for the three and nine months ended September 30, 2020.
+Added: The Company has restated the selected financial information for the three and nine months ended September 30, 2019 in order to conform with the current presentation.
Additionally, during the fourth quarter of 2019, the Company changed its assumptions embedded in allocating deposit costs to business segments.
19 unchanged sentences
(dollars in thousands)
−Removed: Three Months Ended June 30, 2020
+Added: Three Months Ended September 30, 2020
Net interest income (expense)
6 unchanged sentences
Net income (loss)
−Removed: Total assets as of June 30, 2020
+Added: Total assets as of September 30, 2020
(dollars in thousands)
−Removed: Six Months Ended June 30, 2020
+Added: Nine Months Ended September 30, 2020
Net interest income
6 unchanged sentences
Net income (loss)
−Removed: Total assets as of June 30, 2020
+Added: Total assets as of September 30, 2020
(dollars in thousands)
−Removed: Three Months Ended June 30, 2019
+Added: Three Months Ended September 30, 2019
Net interest income
6 unchanged sentences
Net income (loss)
−Removed: Total assets as of June 30, 2019
+Added: Total assets as of September 30, 2019
(dollars in thousands)
−Removed: Six Months Ended June 30, 2019
+Added: Nine Months Ended September 30, 2019
Net interest income
6 unchanged sentences
Net income (loss)
−Removed: Total assets as of June 30, 2019
+Added: Total assets as of September 30, 2019
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.