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CST: 09/12/2019 16:58:50   

Old National’s record 1st quarter net income increases 17% from a year ago to $56.3 million, or $0.32 per share

231 Days ago

EVANSVILLE, Ind., April 22, 2019 (GLOBE NEWSWIRE) --

Old National Bancorp (NASDAQ: ONB) reports 1Q19 net income of $56.3 million, diluted EPS of $0.32.
Adjusted1 net income of $57.3 million, or $0.33 per diluted share.

CEO COMMENTARY:

“This was another quarter of extremely positive earnings, well controlled expenses and strong credit metrics as we continue to execute on our growth strategy,” said incoming CEO Jim Ryan. Chairman and current CEO Bob Jones added: “These strong results reflect the positive momentum that Old National enjoys as we transition to Jim Ryan as CEO. The transition is progressing extraordinarily well, and I’m incredibly confident in the future of the organization under Jim’s leadership.”

FIRST-QUARTER HIGHLIGHTS2:

Net Income

  • Net income of $56.3 million, an increase of 17.3% from first quarter of 2018
  • Earnings per share of $0.32, an increase of 3.2% from first quarter of 2018

Net Interest Income/NIM

  • Net interest income on a fully taxable equivalent basis was $150.2 million, up 0.07%
  • Net interest margin on a fully taxable equivalent basis was 3.51% compared to 3.64%

Operating Performance

  • Pre-provision net revenue1 (“PPNR”) was $73.6 million
  • Adjusted PPNR1 was $75.2 million, up 23.1% over first quarter of 2018
  • Noninterest expense was $123.0 million
  • Adjusted noninterest expense1 was $121.5 million
  • Efficiency ratio1 was 60.26%
  • Adjusted efficiency ratio1 was 59.51%, a 299 basis point improvement from first quarter of 2018

Loans and Credit Quality

  • End-of-period total loans3 were $12,083.1 million compared to $12,258.8 million
  • March 31 pipeline was a record high of $2.0 billion; first-quarter total commercial production was $424.1 million
  • Provision for loan losses was $1.0 million compared to $3.4 million
  • Net charge-offs were $0.9 million, or 0.03% annualized, compared to net charge-offs of $0.6 million
  • Non-performing loans were 1.41% of total loans compared to 1.43%

Capital Returns

  • Return on average common equity was 8.29%
  • Return on average tangible common equity1 was 14.88%
  • Adjusted return on average tangible common equity1 was 15.13%
  • Repurchased 1.5 million shares of common stock during the quarter

Notable Items

  • $1.2 million in merger and integration charges
  • $0.3 million in tax credit amortization

1 Non-GAAP financial measure that Management believes is useful in evaluating the financial results of the Company – please refer to the Non-GAAP reconciliations contained in this release      2 Comparisons are on a linked-quarter basis, unless otherwise noted    3 Includes loans held for sale

RESULTS OF OPERATIONS

Old National Bancorp reported first-quarter 2019 net income of $56.3 million, or $0.32 per diluted share. 

Included in the first quarter were pre-tax charges of $1.2 million for merger and integration activity.  Excluding these charges from the current quarter and netting out debt securities losses, Old National would have reported net income of $57.3 million, or $0.33 per share.

LOANS
Record high pipeline though paydowns continued to impact outstandings.

  • Period-end total loans decreased to $12,083.1 million at March 31, 2019 from $12,258.8 million at December 31, 2018.
  • Commercial and industrial loans decreased to $3,042.8 million; commercial real estate loans increased to $5,023.6 million; consumer loans decreased to $1,758.7 million.
  • Period-end pipeline totaled a Company record of $2.0 billion; first-quarter commercial loan production was $424.1 million.
  • On average, total loans in the first quarter were $12,152.1 million, up from $11,972.6 million in the fourth quarter of 2018.

DEPOSITS
A low-cost core deposit franchise continues to be one of Old National’s strengths.

  • Period-end total deposits increased to $14,429.3 million at March 31, 2019, from $14,349.9 million at December 31, 2018.
  • On average, total deposits in the first quarter were $14,211.0 million, compared to $13,620.6 million in the fourth quarter of 2018.            

NET INTEREST INCOME AND MARGIN
Net interest income up on a full quarter of Klein; lower accretion, fewer days and change in mix contributed to lower margin

  • Net interest income increased to $147.0 million in the first quarter of 2019 from $146.2 million in the fourth quarter of 2018.
  • The net interest margin on a fully taxable equivalent basis decreased 13 basis points to 3.51% compared to 3.64% in the fourth quarter of 2018, with 4 basis points of the decrease due to fewer days and 2 basis points of the decrease from mix change.
  • Accretion income was $8.9 million, or 21 basis points of net interest margin, in the first quarter of 2019 compared to $11.3 million, or 27 basis points of net interest margin, in the fourth quarter of 2018.  In the first quarter of 2019, accretion income was 4.5% of adjusted total revenue.
  • Loan yields, excluding accretion income, increased 6 basis points to 4.48%.
  • The cost of total deposits rose 6 basis points to 0.46% in the first quarter of 2019 while the cost of total interest-bearing deposits rose 8 basis points to 0.64%.

CREDIT QUALITY
Strong credit quality remains a hallmark of the Old National franchise.

  • Asset quality remained strong with net charge-offs in the first quarter of $0.9 million, or 0.03% of total average loans, and 30-89 day delinquencies of 0.33%.
  • Provision expense for the first quarter was $1.0 million, compared to $3.4 million in the fourth quarter of 2018.
  • Non-performing loans decreased as a percentage of total loans to 1.41%.
  • In accordance with current accounting practices, the loans acquired from recent acquisitions were recorded at fair value with no allowance recorded at the acquisition date.  As of March 31, 2019, the remaining discount on these acquired loans was $112.5 million.
  • The allowance for loan losses was $55.6 million, or 0.46% of total loans at March 31, 2019.

NONINTEREST INCOME
Noninterest income decreased due to fourth quarter’s branch gain - mortgage banking revenue and capital markets fees increased from prior quarter.

  • Total noninterest income for the first quarter of 2019 was $46.4 million, a decrease of $11.7 million from the fourth quarter of 2018.
  • Included in noninterest income in the fourth quarter of 2018 was a net gain of $14.0 million from the sale of 10 Wisconsin branches.
  • Capital markets income increased $1.7 million while mortgage banking revenue increased $1.1 million.

NONINTEREST EXPENSE
First quarter results demonstrated continued discipline with respect to expense management, helping to drive positive operating leverage1.

  • Noninterest expense for the first quarter of 2019 was $123.0 million and included $1.2 million in merger & integration charges and $0.3 million in tax credit amortization.
  • Excluding these items, adjusted noninterest expense for the first quarter was $121.5 million, compared to the $126.9 million in adjusted noninterest expense in the fourth quarter of 2018. 
  • The first quarter efficiency ratio was 60.26%, while the adjusted efficiency ratio was 59.51%.

INCOME TAXES

  • On a fully taxable-equivalent basis, income tax expense in the first quarter was $16.3 million, resulting in a 22.5% FTE tax rate.

CAPITAL
Strong quarterly earnings drove capital ratios higher.

  • At the end of the first quarter, total risk-based capital was 12.7% and regulatory tier 1 capital was 11.8%.
  • Tangible common equity to tangible assets was 8.66% at the end of the first quarter compared to 8.47% in the fourth quarter of 2018.
  • The Company repurchased 1.5 million shares of common stock during the first quarter with a weighted average price of $16.45 per share.

NON-GAAP RECONCILIATIONS

($ in millions, except EPS, shares in 000s) 1Q19 Adjustments 4 Adjusted 1Q19
Total Revenues (FTE) $ 196.6   $ 0.1 $ 196.7  
Less: Provision for Loan Losses   (1.0 )   -   (1.0 )
Less: Noninterest Expenses   (123.0 )   1.2   (121.8 )
Income before Income Taxes (FTE) $ 72.6   $ 1.3 $ 73.9  
Income Taxes   16.3     0.3   16.6  
Net Income $ 56.3   $ 1.0 $ 57.3  
Average Shares Outstanding   175,368     -   175,368  
Earnings Per Share $ 0.32   $ 0.01 $ 0.33  
4 Tax-effect calculations use the current statutory FTE tax rates (federal + state)                


($ in millions) 1Q19 4Q18
Net Interest Income $ 147.0   $ 146.2  
Add: FTE Adjustment   3.2     3.1  
Net Interest Income (FTE) $ 150.2   $ 149.3  
Average Earning Assets $ 17,143.6   $ 16,398.3  
Net Interest Margin (FTE)   3.51 %   3.64 %


($ in millions) 1Q19 4Q18
Net Interest Income $ 147.0 $ 146.2  
Add: FTE Adjustment   3.2   3.1  
Net Interest Income (FTE) $ 150.2 $ 149.3  
Total Noninterest Income   46.4 $ 58.2  
Noninterest Expense   123.0   150.3  
Pre-Provision Net Revenue $ 73.6 $ 57.2  
Less: Debt Securities Gains/Losses   0.1   0.4  
Less: Gain on Branch Actions   -   (14.0 )
Add: Merger and Integration Charges   1.2   14.8  
Add: ONB Foundation Funding   -   7.5  
Add: Amortization of Tax Credit Investments   0.3   1.1  
Adjusted Pre-Provision Net Revenue $ 75.2 $ 67.0  


($ in millions) 1Q19
  4Q18
  1Q18
 
Noninterest Expense $ 123.0   $ 150.3   $ 117.1  
Less: Merger and Integration Charges   (1.2 )   (14.8 )   (2.3 )
Less: Branch Action Charges, Severance, ONB Foundation Funding and Client Experience Initiative Charges   -     (7.5 )   (2.8 )
Noninterest Expense less Charges $ 121.8   $ 128.0   $ 112.0  
Less: Amortization of Tax Credit Investments   (0.3 )   (1.1 )   (0.7 )
Adjusted Noninterest Expense $ 121.5   $ 126.9   $ 111.3  
Less: Intangible Amortization   (4.5 )   (4.1 )   (3.6 )
Adjusted Noninterest Expense Less Intangible Amortization $ 117.0   $ 122.8   $ 107.7  
Net Interest Income $ 147.0   $ 146.2   $ 128.5  
FTE Adjustment   3.2     3.1     2.8  
Net Interest Income (FTE) $ 150.2   $ 149.3   $ 131.3  
Total Noninterest Income   46.4     58.2     41.9  
Total Revenue (FTE)   196.6   $ 207.5   $ 173.2  
Less: Debt Securities Gains/Losses   0.1     0.4     (0.8 )
Less: Gain on Branch Actions   -     (14.0 )   -  
Adjusted Total Revenue (FTE) $ 196.7   $ 193.9   $ 172.4  
Efficiency Ratio   60.26 %   70.33 %   65.84 %
Adjusted Efficiency Ratio   59.51 %   63.31 %   62.50 %
                   
Operating Leverage5 (basis points)   848              
Adjusted Operating Leverage6 (basis points)   491              
5 Year-over-year basis point change in noninterest expenses plus change in total revenue
6 Year-over-year basis point change in adjusted noninterest expense plus change in adjusted total revenue


($ in millions) 1Q19 4Q18
Net Income $ 56.3   $ 47.5  
Add: Intangible Amortization (net of tax7)   3.4     3.3  
Tangible Net Income $ 59.7   $ 50.8  
Less: Securities Gains/Losses (net of tax7)    0.1     0.3  
Less: Gain on Branch Sale (net of tax7)   -     (10.6 )
Add: Merger & Integration Charges (net of tax7)   0.9     11.2  
Add: ONB Foundation Funding (net of tax7)   -     5.7  
Adjusted Tangible Net Income $ 60.7   $ 57.4  
Average Total Shareholders’ Equity $ 2,714.2   $ 2,503.8  
Less: Average Goodwill   (1,036.3 )   (969.4 )
Less: Average Intangibles   (74.8 )   (66.9 )
Average Tangible Shareholders’ Equity $ 1,603.1   $ 1,467.5  
Return on Average Tangible Common Equity   14.88 %   13.84 %
Adjusted Return on Average Tangible Common Equity   15.13 %   15.62 %
7  Tax-effect calculations use the current statutory FTE tax rates (federal + state)
 

CONFERENCE CALL AND WEBCAST
Old National will host a conference call and live webcast at 7:00 a.m. Central Time on Monday, April 22, 2019, to review first quarter 2019 financial results.  The live audio web cast of the call, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at oldnational.com and will be archived there for 12 months.  A replay of the call will also be available from 10:00 a.m. Central Time on April 22 through May 6.  To access the replay, dial 1-855-859-2056, Conference ID Code 2358708.

ABOUT OLD NATIONAL
Old National Bancorp (NASDAQ: ONB) is the holding company of Old National Bank. Headquartered in Evansville with $20.1 billion in assets, it is a top 100 U.S. bank, the largest Indiana-based bank and has been recognized as a World’s Most Ethical Company by the Ethisphere Institute for eight consecutive years. For 185 years, Old National has been a community bank committed to building long-term, highly valued relationships with clients. With locations in Indiana, Kentucky, Michigan, Minnesota and Wisconsin, Old National provides retail and commercial banking services along with comprehensive wealth management, investment and capital markets services. For information and financial data, please visit Investor Relations at oldnational.com.

USE OF NON-GAAP FINANCIAL MEASURES
This earnings release contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Old National’s results of operations or financial position.  Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables of this release.

FORWARD-LOOKING STATEMENT
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements include, but are not limited to, descriptions of Old National Bancorp’s (“Old National’s”) financial condition, results of operations, asset and credit quality trends and profitability.  Forward-looking statements can be identified by the use of the words “anticipate,” “believe,” “expect,” “intend,” “could” and “should,” and other words of similar meaning.  These forward-looking statements express management’s current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties. There are a number of factors that could cause actual results to differ materially from those in such statements.  Factors that might cause such a difference include, but are not limited to: expected cost savings, synergies and other financial benefits from the merger with Klein that might not be realized within the expected timeframes and costs or difficulties relating to integration matters might be greater than expected;  market, economic, operational, liquidity, credit and interest rate risks associated with Old National’s business; competition; government legislation and policies (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its related regulations); ability of Old National to execute its business plan; changes in the economy which could materially impact credit quality trends and the ability to generate loans and gather deposits; failure or circumvention of our internal controls; failure or disruption of our information systems; significant changes in accounting, tax or regulatory practices or requirements; new legal obligations or liabilities or unfavorable resolutions of litigations; disruptive technologies in payment systems and other services traditionally provided by banks; computer hacking and other cybersecurity threats; other matters discussed in this press release; and other factors identified in our Annual Report on Form 10-K and other periodic filings with the SEC.  These forward-looking statements are made only as of the date of this press release, and Old National does not undertake an obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this press release.


       
Financial Highlights (unaudited)
($ and shares in thousands, except per share data)
       
  Three Months Ended
  March 31, December 31, March 31,
    2019     2018     2018  
Income Statement                  
Net interest income $ 147,048   $ 146,225   $ 128,572  
Provision for loan losses   1,043     3,390     380  
Noninterest income   46,416     58,154     41,905  
Noninterest expense   123,041     150,268     117,157  
Net income   56,276     47,498     47,983  
                   
                   
Per Common Share Data (Diluted)                  
Net income available to common shareholders $ 0.32   $ 0.28   $ 0.31  
Average diluted shares outstanding   175,368     167,992     152,370  
Book value   15.82     15.36     14.32  
Stock price   16.40     15.40     16.90  
Dividend payout ratio   41 %   46 %   41 %
Tangible common book value (1)   9.44     9.00     8.55  
                   
                   
Performance Ratios                  
Return on average assets   1.14 %   1.01 %   1.10 %
Return on average common equity   8.29 %   7.59 %   8.86 %
Return on average tangible common equity (1)   14.88 %   13.84 %   15.80 %
Net interest margin (FTE)   3.51 %   3.64 %   3.45 %
Efficiency ratio (2)   60.26 %   70.33 %   65.84 %
Net charge-offs (recoveries) to average loans   0.03 %   0.02 %   0.01 %
Allowance for loan losses to ending loans   0.46 %   0.45 %   0.45 %
Non-performing loans to ending loans   1.41 %   1.43 %   1.28 %
                   
                   
Balance Sheet                  
Total loans $ 12,068,977   $ 12,243,892   $ 11,238,682  
Total assets   20,084,420     19,728,435     17,496,287  
Total deposits   14,429,270     14,349,949     12,788,600  
Total borrowed funds   2,639,038     2,493,793     2,371,292  
Total shareholders' equity   2,751,872     2,689,570     2,179,118  
                   
                   
Capital Ratios (1)                  
Risk-based capital ratios (EOP):                  
Tier 1 common equity   11.8 %   11.4 %   10.7 %
Tier 1   11.8 %   11.4 %   10.7 %
Total   12.7 %   12.3 %   11.7 %
Leverage ratio (to average assets)   8.8 %   9.2 %   8.1 %
                   
Total equity to assets (averages)   13.70 %   13.28 %   12.42 %
Tangible common equity to tangible assets   8.66 %   8.47 %   7.83 %
                   
                   
Nonfinancial Data                  
Full-time equivalent employees   2,908     2,892     2,721  
Number of branches   193     191     191  
                   
(1) See "Non-GAAP Measures" table.                  
(2) Efficiency ratio is defined as noninterest expense before amortization of intangibles as a percent of FTE net interest income and noninterest revenues, excluding net gains from securities transactions.  This presentation excludes amortization of intangibles and net securities gains, as is common in other company releases, and better aligns with true operating performance.
FTE - Fully taxable equivalent basis      EOP - End of period actual balances  
       

 

         
  Income Statement (unaudited)  
($ and shares in thousands, except per share data)
         
  Three Months Ended  
  March 31, December 31, March 31,  
    2019     2018     2018  
Interest income $ 178,918   $ 175,234   $ 147,706  
Less:  interest expense   31,870     29,009     19,134  
Net interest income   147,048     146,225     128,572  
Provision for loan losses   1,043     3,390     380  
Net interest income after provision for loan losses   146,005     142,835     128,192  
                   
Wealth management fees   8,535     9,069     9,026  
Service charges on deposit accounts   10,826     11,474     10,759  
Debit card and ATM fees   5,503     5,565     4,865  
Mortgage banking revenue   5,011     3,928     4,192  
Investment product fees   5,271     5,369     5,031  
Capital markets income   2,517     840     498  
Company-owned life insurance   3,188     2,591     2,605  
Other income   5,702     5,700     4,130  
Net gain on branch divestitures   -     13,989     -  
Gains (losses) on sales of debt securities   (103 )   (357 )   788  
Gains (losses) on derivatives   (34 )   (14 )   11  
Total noninterest income   46,416     58,154     41,905  
                   
Salaries and employee benefits   71,183     87,346     64,179  
Occupancy   14,578     13,210     13,280  
Equipment   4,474     3,916     3,565  
Marketing   3,723     4,782     3,697  
Data processing   9,341     9,418     8,400  
Communication   3,054     2,537     3,064  
Professional fees   2,910     5,615     2,730  
Loan expenses   1,912     1,877     1,744  
Supplies   755     705     722  
FDIC assessment   2,087     2,110     2,645  
Other real estate owned expense   36     176     349  
Amortization of intangibles   4,472     4,134     3,609  
Amortization of tax credit investments   260     1,142     716  
Other expense   4,256     13,300     8,457  
Total noninterest expense   123,041     150,268     117,157  
                   
Income before income taxes   69,380     50,721     52,940  
Income tax expense   13,104     3,223     4,957  
Net income $ 56,276   $ 47,498   $ 47,983  
                   
Diluted Earnings Per Share                    
Net income $ 0.32   $ 0.28   $ 0.31  
                   
Average Common Shares Outstanding                  
Basic   174,734     167,044     151,721  
Diluted   175,368     167,992     152,370  
                   
Common shares outstanding at end of period   173,979     175,141     152,172  
                   
                   

 

 
Balance Sheet (unaudited)
($ in thousands)
               
    March 31,   December 31,   March 31,  
      2019       2018       2018    
  Assets                        
  Federal Reserve Bank account $ 101,033     $ 26,182     $ 73,657    
  Money market investments   10,909       6,980       12,562    
  Investments:                        
  Treasury and government-sponsored agencies   782,486       707,438       655,353    
  Mortgage-backed securities   2,684,330       2,336,415       1,623,554    
  States and political subdivisions   1,252,448       1,245,657       1,159,614    
  Other securities   498,977       488,802       458,270    
  Total investments   5,218,241       4,778,312       3,896,791    
  Loans held for sale, at fair value   14,082       14,911       17,635    
  Loans:                        
  Commercial   3,042,790       3,232,970       2,811,629    
  Commercial and agriculture real estate   5,023,620       4,958,851       4,449,980    
  Consumer:                        
  Home equity   553,264       589,322       487,237    
  Other consumer loans   1,205,418       1,214,345       1,331,304    
  Subtotal of commercial and consumer loans   9,825,092       9,995,488       9,080,150    
  Residential real estate   2,243,885       2,248,404       2,158,532    
  Total loans   12,068,977       12,243,892       11,238,682    
  Total earning assets   17,413,242       17,070,277       15,239,327    
                           
  Allowance for loan losses   (55,559 )     (55,461 )     (50,381 )  
  Non-earning Assets:                        
  Cash and due from banks   211,174       284,003       192,022    
  Premises and equipment, net   490,216       485,912       453,603    
  Operating lease right-of-use assets   109,916       -       -    
  Goodwill and other intangible assets   1,108,802       1,113,274       877,637    
  Company-owned life insurance   444,551       444,224       404,561    
  Net deferred tax assets   59,430       87,048       88,773    
  Loan servicing rights   24,254       24,497       24,380    
  Other real estate owned and repossessed personal property   3,279       3,232       6,735    
  Other assets   275,115       271,429       259,630    
  Total non-earning assets   2,726,737       2,713,619       2,307,341    
  Total assets $ 20,084,420     $ 19,728,435     $ 17,496,287    
               
  Liabilities and Equity            
  Noninterest-bearing demand deposits $ 3,903,314     $ 3,965,380     $ 3,655,732    
  Interest-bearing:            
  Checking and NOW accounts   3,742,241       3,788,339       3,135,778    
  Savings accounts   2,941,361       2,944,092       3,091,101    
  Money market accounts   1,780,756       1,627,882       1,130,258    
  Other time deposits   1,835,110       1,845,149       1,573,874    
  Total core deposits   14,202,782       14,170,842       12,586,743    
  Brokered CD's   226,488       179,107       201,857    
  Total deposits   14,429,270       14,349,949       12,788,600    
               
  Federal funds purchased and interbank borrowings   325,030       270,135       150,026    
  Securities sold under agreements to repurchase   342,480       362,294       308,189    
  Federal Home Loan Bank advances   1,719,944       1,613,481       1,664,179    
  Other borrowings   251,584       247,883       248,898    
  Total borrowed funds   2,639,038       2,493,793       2,371,292    
  Operating lease liabilities   114,040       -       -    
  Accrued expenses and other liabilities   150,200       195,123       157,277    
  Total liabilities   17,332,548       17,038,865       15,317,169    
               
  Common stock, surplus, and retained earnings   2,749,252       2,734,520       2,240,644    
  Accumulated other comprehensive income (loss), net of tax   2,620       (44,950 )     (61,526 )  
  Total shareholders' equity   2,751,872       2,689,570       2,179,118    
  Total liabilities and shareholders' equity $ 20,084,420     $ 19,728,435     $ 17,496,287    
                   

 

                           
Average Balance Sheet and Interest Rates (unaudited)    
($ in thousands)    
                           
                           
  Three Months Ended   Three Months Ended   Three Months Ended    
  March 31, 2019   December 31, 2018   March 31, 2018    
  Average Income (1)/ Yield/   Average Income (1)/ Yield/   Average Income (1)/ Yield/    
Earning Assets: Balance Expense Rate   Balance Expense Rate   Balance Expense Rate    
Money market and other interest-earning investments $ 58,701   $ 278 1.92 %   $ 39,207   $ 205 2.07 %   $ 66,536   $ 90 0.55 %    
Investments:                          
Treasury and government-sponsored agencies   705,417     3,902 2.21 %     694,409     3,874 2.23 %     663,096     3,424 2.07 %    
Mortgage-backed securities   2,497,368     17,603 2.82 %     2,011,275     13,688 2.72 %     1,632,610     9,520 2.33 %    
States and political subdivisions   1,232,355     11,453 3.72 %     1,187,404     11,147 3.76 %     1,204,855     10,478 3.48 %    
Other securities   497,604     4,440 3.57 %     493,426     4,017 3.26 %     459,458     3,669 3.19 %    
Total investments   4,932,744     37,398 3.03 %     4,386,514     32,726 2.98 %     3,960,019     27,091 2.74 %    
Loans: (2)                          
Commercial   3,122,402     36,035 4.62 %     3,133,153     37,358 4.67 %     2,759,688     28,205 4.09 %    
Commercial and agriculture real estate   4,989,622     65,076 5.22 %     4,834,589     65,461 5.30 %     4,394,002     55,787 5.08 %    
Consumer:                          
Home equity   588,366     7,596 5.24 %     562,801     7,159 5.05 %     502,902     5,688 4.59 %    
Other consumer loans   1,192,496     11,802 4.01 %     1,203,436     11,702 3.86 %     1,346,331     12,140 3.66 %    
Subtotal commercial and consumer loans   9,892,886     120,509 4.94 %     9,733,979     121,680 4.96 %     9,002,923     101,820 4.59 %    
Residential real estate loans   2,259,243     23,931 4.24 %     2,238,588     23,672 4.23 %     2,176,413     21,472 3.95 %    
                           
Total loans   12,152,129     144,440 4.76 %     11,972,567     145,352 4.78 %     11,179,336     123,292 4.42 %    
                           
Total earning assets $ 17,143,574   $ 182,116 4.26 %   $ 16,398,288   $ 178,283 4.30 %   $ 15,205,891   $ 150,473 3.97 %    
                           
Less: Allowance for loan losses   (55,789 )         (53,045 )         (50,953 )        
                           
Non-earning Assets:                          
Cash and due from banks $ 229,957         $ 232,360         $ 199,132          
Other assets   2,490,524           2,275,907           2,089,790          
                           
Total assets $ 19,808,266         $ 18,853,510         $ 17,443,860          
                           
Interest-Bearing Liabilities:                          
Checking and NOW accounts $ 3,693,886   $ 3,142 0.34 %   $ 3,391,630   $ 2,004 0.23 %   $ 3,067,437   $ 819 0.11 %    
Savings accounts   2,935,710     2,283 0.32 %     2,919,900     2,225 0.30 %     3,052,646     1,343 0.18 %    
Money market accounts   1,702,655     2,826 0.67 %     1,482,022     1,922 0.51 %     1,159,010     546 0.19 %    
Other time deposits   1,840,514     7,102 1.56 %     1,769,243     6,519 1.46 %     1,561,945     3,900 1.01 %    
Total interest-bearing deposits   10,172,765     15,353 0.61 %     9,562,795     12,670 0.53 %     8,841,038     6,608 0.30 %    
Brokered CD's   191,443     1,091 2.31 %     193,455     1,024 2.10 %     175,039     647 1.50 %    
Total interest-bearing deposits and CD's   10,364,208     16,444 0.64 %     9,756,250     13,694 0.56 %     9,016,077     7,255 0.33 %    
                           
Federal funds purchased and interbank borrowings   316,998     1,918 2.45 %     312,730     1,938 2.46 %     261,353     1,017 1.58 %    
Securities sold under agreements to repurchase   361,261     662 0.74 %     351,392     634 0.72 %     342,682     359 0.42 %    
Federal Home Loan Bank advances   1,672,376     9,931 2.41 %     1,649,304     9,441 2.27 %     1,675,700     7,780 1.88 %    
Other borrowings   249,794     2,915 4.67 %     250,926     3,302 5.26 %     248,828     2,723 4.38 %    
Total borrowed funds   2,600,429     15,426 2.41 %     2,564,352     15,315 2.37 %     2,528,563     11,879 1.91 %    
                           
Total interest-bearing liabilities $ 12,964,637   $ 31,870 1.00 %   $ 12,320,602   $ 29,009 0.93 %   $ 11,544,640   $ 19,134 0.67 %    
                           
Noninterest-Bearing Liabilities                          
Demand deposits $ 3,846,828         $ 3,864,302         $ 3,563,104          
Other liabilities   282,615           164,771           170,061          
Shareholders' equity   2,714,186           2,503,835           2,166,055          
Total liabilities and shareholders' equity $ 19,808,266         $ 18,853,510         $ 17,443,860          
                           
Net interest rate spread     3.26 %       3.37 %       3.30 %    
                           
Net interest margin (FTE)     3.51 %       3.64 %       3.45 %    
                           
FTE adjustment   $ 3,198       $ 3,049       $ 2,767      
                           
(1) Interest income is reflected on a fully taxable equivalent basis (FTE).    
(2) Includes loans held for sale.                          
                           

 

         
Asset Quality (EOP) (unaudited)  
($ in thousands)  
         
  Three Months Ended  
  March 31, December 31, March 31,  
    2019     2018     2018    
                     
Beginning allowance for loan losses $   55,461   $   52,713   $   50,381    
                     
Provision for loan losses     1,043       3,390       380    
                     
Gross charge-offs     (2,892 )     (2,969 )     (2,685 )  
Gross recoveries     1,947       2,327       2,305    
Net (charge-offs) recoveries     (945 )     (642 )     (380 )  
                     
Ending allowance for loan losses $   55,559   $   55,461   $   50,381    
                     
Net charge-offs (recoveries) / average loans (1)   0.03 %   0.02 %   0.01 %  
                     
Average loans outstanding (1) $   12,147,560   $   11,967,241   $   11,175,329    
                     
EOP loans outstanding (1)     12,068,977   $   12,243,892   $   11,238,682    
                     
Allowance for loan losses / EOP loans (1)   0.46 %   0.45 %   0.45 %  
                     
Underperforming Assets:                    
Loans 90 Days and over (still accruing) $   560   $   1,353   $   328    
                     
Non-performing loans:                    
Nonaccrual loans (2)     152,881       157,484       127,295    
Renegotiated loans     17,123       17,356       16,802    
Total non-performing loans     170,004       174,840       144,097    
                     
Foreclosed properties     3,279       3,232       6,735    
                     
Total underperforming assets $   173,843   $   179,425   $   151,160    
                     
Classified and Criticized Assets:                    
Nonaccrual loans (2)     152,881       157,484       127,295    
Substandard accruing loans     210,680       175,948       118,123    
Loans 90 days and over (still accruing)     560       1,353       328    
Total classified loans - "problem loans" $   364,121   $   334,785   $   245,746    
                     
Other classified assets     2,715       2,820       2,987    
Criticized loans - "special mention loans"     268,836       238,752       174,873    
                     
Total classified and criticized assets $   635,672   $   576,357   $   423,606    
                     
Non-performing loans / EOP loans (1)   1.41 %   1.43 %   1.28 %  
                     
Allowance to non-performing loans (3)   33 %   32 %   35 %  
                     
Under-performing assets / EOP loans (1)   1.44 %   1.47 %   1.35 %  
                     
EOP total assets $   20,084,420   $   19,728,435   $   17,496,287    
                     
Under-performing assets / EOP assets   0.87 %   0.91 %   0.86 %  
                     
 EOP - End of period actual balances                     
 (1) Excludes loans held for sale.                     
 (2) Includes renegotiated loans totaling $27.0 million at March 31, 2019, $26.3 million at December 31, 2018, and $36.9 million at March 31, 2018. 
 (3) Includes acquired loans that were recorded at fair value in accordance with ASC 805 at the date of acquisition. As such, the credit risk was incorporated in the fair value recorded and no allowance for loan losses was recorded on the acquisition date. 
         

 

           
Non-GAAP Measures (unaudited)  
($ in thousands)  
           
    Three Months Ended  
    March 31, December 31, March 31,  
      2019     2018     2018    
                       
  Actual End of Period Balances                    
  GAAP shareholders' equity $ 2,751,872   $ 2,689,570   $ 2,179,118    
                       
  Deduct:                    
  Goodwill   1,036,258     1,036,258     828,804    
  Intangibles   72,544     77,016     48,833    
      1,108,802     1,113,274     877,637    
                       
  Tangible shareholders' equity   $ 1,643,070   $ 1,576,296   $ 1,301,481    
                       
  Average Balances                    
  GAAP shareholders' equity $ 2,714,186   $ 2,503,835   $ 2,166,055    
                       
  Deduct:                    
  Goodwill      1,036,258       969,403       828,141    
  Intangibles      74,849       66,927       51,092    
        1,111,107       1,036,330       879,233    
                       
  Average tangible shareholders' equity   $   1,603,079   $   1,467,505   $   1,286,822    
                       
  Actual End of Period Balances                    
  GAAP assets  $   20,084,420   $   19,728,435   $   17,496,287    
                       
  Add:                    
  Trust overdrafts     28       11       50    
                       
  Deduct:                    
  Goodwill      1,036,258       1,036,258       828,804    
  Intangibles      72,544       77,016       48,833    
        1,108,802       1,113,274       877,637    
                       
  Tangible assets   $   18,975,646   $   18,615,172   $   16,618,700    
                       
  Risk-weighted assets $   13,966,569   $   14,248,562   $   12,523,432    
                       
  GAAP net income $   56,276   $   47,498   $   47,983    
                       
  Add:                    
  Amortization of intangibles (net of tax)     3,373       3,266       2,851    
                       
  Tangible net income $   59,649   $   50,764   $   50,834    
                       
  Tangible Ratios                      
  Return on tangible common equity   14.52 %   12.88 %   15.62 %  
  Return on average tangible common equity   14.88 %   13.84 %   15.80 %  
  Return on tangible assets    1.26 %   1.09 %   1.22 %  
  Tangible common equity to tangible assets    8.66 %   8.47 %   7.83 %  
  Tangible common equity to risk-weighted assets    11.76 %   11.06 %   10.39 %  
  Tangible common book value (1)     9.44       9.00       8.55    
                       
  Tangible common equity presentation includes other comprehensive income as is common in other company releases.  
  (1) Tangible common shareholders' equity divided by common shares issued and outstanding at period-end.    
           
  Tier 1 capital $   1,643,496   $   1,617,936   $   1,341,261    
           
  Deduct:        
  Tier 1 capital adjustments     -        -        -     
        -        -        -     
           
  Tier 1 common equity   $   1,643,496   $   1,617,936   $   1,341,261    
           
  Risk-weighted assets     13,966,569       14,248,562       12,523,432    
           
  Tier 1 common equity to risk-weighted assets     11.77 %   11.36 %   10.71 %  
           
           

Media: Kathy A. Schoettlin (812) 465-7269
Investors: Lynell J. Walton (812) 464-1366

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