Loading, Please Wait...

CST: 21/08/2019 23:38:42   

Old National’s record 2nd quarter net income increases 43% from a year ago to $63.0 million, or $0.36 per share

30 Days ago

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

Old National Bancorp (NASDAQ: ONB) reports 2Q19 net income of $63.0 million, diluted EPS of $0.36.  Adjusted1 net income of $64.5 million, or $0.37 per diluted share.

CEO COMMENTARY:

“This was a quarter that saw Old National report record net income, strong loan production, good fee income and excellent credit metrics, all of which allowed us to continue to generate positive operating leverage,” said CEO Jim Ryan. “While loan prepayments and planned exits impacted overall balance sheet growth, activity levels were robust, and we successfully converted our KleinBank-Minnesota branches during the quarter.  Our granular loan portfolio and low-risk profile again resulted in very low credit costs, and Old National remains on a high-performance path.”

SECOND QUARTER HIGHLIGHTS2:

Net Income

  • Net income of $63.0 million, an increase of 43.1% from second quarter of 2018
  • Earnings per share of $0.36, an increase of 24.1% from second quarter of 2018

Net Interest Income/NIM

  • Net interest income on a fully taxable equivalent basis was $158.5 million, up 5.5%
  • Net interest margin on a fully taxable equivalent basis was 3.66% compared to 3.51%

Operating Performance

  • Pre-provision net revenue1 (“PPNR”) was $81.6 million
  • Adjusted PPNR1 was $84.2 million, up 28.4% over second quarter of 2018
  • Noninterest expense was $128.1 million
  • Adjusted noninterest expense1 was $124.3 million
  • Efficiency ratio1 was 59.35%
  • Adjusted efficiency ratio1 was 57.52%, a 416 basis point improvement from second quarter of 2018

Loans and Credit Quality

  • End-of-period total loans3 were $12,084.5 million compared to $12,083.1 million
  • Second-quarter total commercial production was a record $628.0 million; June 30 pipeline was $1.7 billion
  • Provision for loan losses was $1.0 million
  • Net charge-offs were $0.3 million, or 0.01% annualized, compared to net charge-offs of $0.9 million
  • Non-performing loans were 1.34% of total loans compared to 1.41%

Return Profile & Capital

  • Return on average common equity was 9.13%
  • Return on average tangible common equity1 was 16.04%
  • Adjusted return on average tangible common equity1 was 16.41%
  • Repurchased 1.8 million shares of common stock during the quarter

Notable Items

  • $3.2 million in merger and integration charges
  • $0.6 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 second-quarter 2019 net income of $63.0 million, or $0.36 per diluted share. 

Included in the second quarter were pre-tax charges of $3.2 million for merger and integration activity.  Excluding these charges from the current quarter and netting out debt securities gains, adjusted net income was $64.5 million, or $0.37 per diluted share.

LOANS
Record high commercial loan production; paydowns continued to impact outstandings.

  • Period-end total loans were $12,084.5 million at June 30, 2019, compared to $12,083.1 million at March 31, 2019.
  • Commercial and industrial loans increased to $3,074.8 million; commercial real estate loans decreased to $4,993.7 million; consumer loans decreased to $1,755.8 million.
  • Record commercial loan production in the second quarter of $628.0 million; period-end pipeline totaled $1.7 billion.
  • On average, total loans in the second quarter were $12,091.0 million, down from $12,152.1 million in the first quarter of 2019.

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

  • Period-end total deposits were $14,363.1 million at June 30, 2019, relatively flat despite normal seasonal patterns.
  • On average, total deposits in the second quarter were $14,369.5 million, compared to $14,211.0 million in the first quarter of 2019. 

NET INTEREST INCOME AND MARGIN
Net interest income and margin benefit from higher accretion and interest collected on nonaccrual loans as well as higher day count.

  • Net interest income increased to $155.2 million in the second quarter of 2019 from $147.0 million in the first quarter of 2019.
  • The net interest margin on a fully taxable equivalent basis increased 15 basis points to 3.66% compared to 3.51% in the first quarter of 2019, with 3 basis points of the increase due to more days offset by a 5 basis points decline from mix change.
  • Accretion income was $11.8 million, or 27 basis points of net interest margin, in the second quarter of 2019 compared to $8.9 million, or 21 basis points of net interest margin, in the first quarter of 2019.  In the second quarter of 2019, accretion income was 5.6% of adjusted total revenue.
  • Interest collected on nonaccrual loans was $5.7 million, or 13 basis points of net interest margin, in the second quarter of 2019 compared to $1.0 million, or 2 basis points of net interest margin, in the first quarter of 2019.
  • Loan yields, excluding accretion income and interest collected on nonaccrual loans, increased 3 basis points to 4.48%.
  • The cost of total deposits rose 6 basis points to 0.52% in the second quarter of 2019 while the cost of total interest-bearing deposits rose 6 basis points to 0.70%.

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

  • Asset quality remained strong with net charge-offs in the second quarter of $0.3 million, or 0.01% of total average loans, and 30-89 day delinquencies of 0.34%.
  • Provision expense was $1.0 million in both the second quarter and first quarter of 2019.
  • Non-performing loans decreased as a percentage of total loans to 1.34%.
  • 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 June 30, 2019, the remaining discount on these acquired loans was $100.5 million.
  • The allowance for loan losses was $56.3 million, or 0.47% of total loans at June 30, 2019.

NONINTEREST INCOME
Noninterest income increased due to wealth management tax preparation fees and increases in mortgage banking revenue and capital markets fees.

  • Total noninterest income for the second quarter of 2019 was $51.2 million, an increase of $4.8 million from the first quarter of 2019.
  • Wealth management fees benefitted from seasonal tax preparation fees of $1.0 million.
  • Mortgage banking revenue increased $2.1 million, service charges on deposit accounts increased $0.7 million, while capital markets income increased $0.6 million.

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

  • Noninterest expense for the second quarter of 2019 was $128.1 million and included $3.2 million in merger & integration charges and $0.6 million in tax credit amortization.
  • Excluding these items, adjusted noninterest expense for the second quarter was $124.3 million, compared to the $121.5 million in adjusted noninterest expense in the first quarter of 2019. 
  • The second quarter efficiency ratio was 59.35%, while the adjusted efficiency ratio was 57.52%.

INCOME TAXES

  • On a fully taxable-equivalent basis, income tax expense in the second quarter was $17.6 million, resulting in a 21.9% FTE tax rate.
  • Income tax expense included the benefit of a $1.0 million state tax refund as well as $0.7 million in tax credit benefit.

CAPITAL
Strong quarterly earnings drove capital ratios higher.

  • At the end of the second quarter, total risk-based capital was 12.8% and regulatory tier 1 capital was 11.9%.
  • Tangible common equity to tangible assets was 8.92% at the end of the second quarter compared to 8.66% in the first quarter of 2019.
  • The Company repurchased 1.8 million shares of common stock during the second quarter with a weighted average price of $16.37 per share, excluding commissions.

NON-GAAP RECONCILIATIONS

($ in millions, except EPS, shares in 000s) 2Q19 Adjustments 4 Adjusted 2Q19
Total Revenues (FTE) $209.7   ($1.2)   $208.5  
Less: Provision for Loan Losses   (1.0)     -     (1.0)  
Less: Noninterest Expenses   (128.1)     3.2     (124.9)  
Income before Income Taxes (FTE) $80.6   $2.0   $82.6  
Income Taxes   17.6     0.5     18.1  
Net Income $63.0   $1.5   $64.5  
Average Shares Outstanding   173,675     -     173,675  
Earnings Per Share - Diluted $0.36   $0.01   $0.37  
4 Tax-effect calculations use the current statutory FTE tax rates (federal + state)


($ in millions) 2Q19 1Q19
Net Interest Income $155.2   $147.0  
Add: FTE Adjustment   3.3     3.2  
Net Interest Income (FTE) $158.5   $150.2  
Average Earning Assets $17,302.7   $17,143.6  
Net Interest Margin (FTE)   3.66%     3.51%  


($ in millions) 2Q19 1Q19
Net Interest Income $155.2   $147.0
Add: FTE Adjustment   3.3     3.2
Net Interest Income (FTE) $158.5   $150.2
Add: Total Noninterest Income   51.2     46.4
Less: Noninterest Expense   128.1     123.0
Pre-Provision Net Revenue $81.6   $73.6
Less: Debt Securities Gains/Losses   (1.2 )   0.1
Add: Merger and Integration Charges   3.2     1.2
Add: Amortization of Tax Credit Investments   0.6     0.3
Adjusted Pre-Provision Net Revenue $84.2   $75.2


($ in millions) 2Q19 1Q19 2Q18
Noninterest Expense $128.1   $123.0   $130.5  
Less: Merger and Integration Charges   (3.2)     (1.2)     (2.5)  
Less: Branch Action Charges & Severance   -     -     (1.6)  
Noninterest Expense less Charges $124.9   $121.8   $126.4  
Less: Amortization of Tax Credit Investments   (0.6)     (0.3)     (11.9)  
Adjusted Noninterest Expense $124.3   $121.5   $114.5  
Less: Intangible Amortization   (4.3)     (4.5)     (3.4)  
Adjusted Noninterest Expense Less Intangible Amortization $120.0   $117.0   $111.1  
Net Interest Income $155.2   $147.0   $132.0  
FTE Adjustment   3.3     3.2     2.8  
Net Interest Income (FTE) $158.5   $150.2   $134.8  
Total Noninterest Income   51.2     46.4     49.3  
Total Revenue (FTE) $209.7   $196.6   $184.1  
Less: Debt Securities Gains/Losses   (1.2)     0.1     (1.5)  
Less: Gain on Student Loan Sale   -     -     (2.2)  
Less: Gain on Branch Actions   -     -     (0.3)  
Adjusted Total Revenue (FTE) $208.5   $196.7   $180.1  
Efficiency Ratio   59.35%     60.26%     69.58%  
Adjusted Efficiency Ratio   57.52%     59.51%     61.68%  
       
Operating Leverage5 (basis points)   1,574      
Adjusted Operating Leverage6 (basis points)   724      
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) 2Q19 1Q19
Net Income $63.0   $56.3  
Add: Intangible Amortization (net of tax7)   3.2     3.4  
Tangible Net Income $66.2   $59.7  
Less: Securities Gains/Losses (net of tax7)    (0.9)      0.1  
Add: Merger & Integration Charges (net of tax7)   2.4     0.9  
Adjusted Tangible Net Income $67.7   $60.7  
Average Total Shareholders’ Equity $2,758.3   $2,714.2  
Less: Average Goodwill   (1,036.3)     (1,036.3)  
Less: Average Intangibles   (70.3)     (74.8)  
Average Tangible Shareholders’ Equity $1,651.7   $1,603.1  
Return on Average Tangible Common Equity   16.04%     14.88%  
Adjusted Return on Average Tangible Common Equity   16.41%     15.13%  
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, July 22, 2019, to review second 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 July 22 through August 5.  To access the replay, dial 1-855-859-2056, Conference ID Code 4869447.

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.

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


               
Financial Highlights (unaudited)  
($ and shares in thousands, except per share data)  
               
  Three Months Ended   Six Months Ended
  June 30, March 31, June 30,   June 30, June 30,  
    2019     2019     2018       2019     2018    
Income Statement              
Net interest income $ 155,230   $ 147,048   $ 131,963     $ 302,278   $ 260,535    
Provision for loan losses   1,003     1,043     2,446       2,046     2,826    
Noninterest income   51,214     46,416     49,289       97,630     91,194    
Noninterest expense   128,118     123,041     130,460       251,159     247,617    
Net income   62,964     56,276     44,001       119,240     91,984    
               
               
Per Common Share Data              
Net income (diluted) $ 0.36   $ 0.32   $ 0.29     $ 0.68   $ 0.60    
Average diluted shares outstanding   173,675     175,368     152,568       174,531     152,483    
Book value   16.28     15.82     14.44       16.28     14.44    
Stock price   16.59     16.40     18.60       16.59     18.60    
Dividend payout ratio   35 %   41 %   45 %     38 %   43 %  
Tangible common book value (1)   9.86     9.44     8.70       9.86     8.70    
               
               
Performance Ratios              
Return on average assets   1.26 %   1.14 %   1.01 %     1.20 %   1.06 %  
Return on average common equity   9.13 %   8.29 %   8.06 %     8.72 %   8.46 %  
Return on average tangible common equity (1)   16.04 %   14.88 %   14.28 %     15.47 %   15.04 %  
Net interest margin (FTE)   3.66 %   3.51 %   3.55 %     3.59 %   3.50 %  
Efficiency ratio (2)   59.35 %   60.26 %   69.58 %     59.79 %   67.76 %  
Net charge-offs (recoveries) to average loans   0.01 %   0.03 %   -0.03 %     0.02 %   -0.01 %  
Allowance for loan losses to ending loans   0.47 %   0.46 %   0.48 %     0.47 %   0.48 %  
Non-performing loans to ending loans   1.34 %   1.41 %   1.38 %     1.34 %   1.38 %  
               
               
Balance Sheet              
Total loans $ 12,046,578   $ 12,068,977   $ 11,295,629     $ 12,046,578   $ 11,295,629    
Total assets   20,145,285     20,084,420     17,482,990       20,145,285     17,482,990    
Total deposits   14,363,101     14,429,270     12,596,376       14,363,101     12,596,376    
Total borrowed funds   2,726,481     2,639,038     2,530,104       2,726,481     2,530,104    
Total shareholders' equity   2,803,139     2,751,872     2,200,215       2,803,139     2,200,215    
               
               
Capital Ratios (1)              
Risk-based capital ratios (EOP):              
Tier 1 common equity   11.9 %   11.8 %   10.9 %     11.9 %   10.9 %  
Tier 1   11.9 %   11.8 %   10.9 %     11.9 %   10.9 %  
Total   12.8 %   12.7 %   11.9 %     12.8 %   11.9 %  
Leverage ratio (to average assets)   8.8 %   8.8 %   8.3 %     8.8 %   8.3 %  
               
Total equity to assets (averages)   13.82 %   13.70 %   12.54 %     13.76 %   12.48 %  
Tangible common equity to tangible assets   8.92 %   8.66 %   7.98 %     8.92 %   7.98 %  
               
               
Nonfinancial Data              
Full-time equivalent employees   2,829     2,908     2,683       2,829     2,683    
Number of branches   192     193     183       192     183    
               
(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 debt securities transactions.  This presentation excludes amortization of intangibles and net debt 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   Six Months Ended  
  June 30, March 31, June 30,   June 30, June 30,  
    2019     2019     2018     2019     2018  
Interest income $ 189,063   $ 178,918   $ 153,736   $ 367,981   $ 301,442  
Less:  interest expense   33,833     31,870     21,773     65,703     40,907  
Net interest income   155,230     147,048     131,963     302,278     260,535  
Provision for loan losses   1,003     1,043     2,446     2,046     2,826  
Net interest income after provision for loan losses   154,227     146,005     129,517     300,232     257,709  
               
Wealth management fees   9,909     8,535     9,746     18,444     18,772  
Service charges on deposit accounts   11,515     10,826     10,765     22,341     21,524  
Debit card and ATM fees   5,419     5,503     5,080     10,922     9,945  
Mortgage banking revenue   7,135     5,011     5,189     12,146     9,381  
Investment product fees   5,591     5,271     5,066     10,862     10,097  
Capital markets income   3,150     2,517     896     5,667     1,394  
Company-owned life insurance   2,711     3,188     2,430     5,899     5,035  
Other income   4,716     5,702     8,586     10,418     12,716  
Gains (losses) on sales of debt securities   1,165     (103 )   1,494     1,062     2,282  
Gains (losses) on derivatives   (97 )   (34 )   37     (131 )   48  
Total noninterest income   51,214     46,416     49,289     97,630     91,194  
               
Salaries and employee benefits   71,566     71,183     66,592     142,749     130,771  
Occupancy   14,559     14,578     12,873     29,137     26,153  
Equipment   4,517     4,474     3,728     8,991     7,293  
Marketing   4,439     3,723     3,962     8,162     7,659  
Data processing   10,207     9,341     9,724     19,548     18,124  
Communication   2,849     3,054     2,772     5,903     5,836  
Professional fees   4,921     2,910     2,923     7,831     5,653  
Loan expenses   1,657     1,912     1,843     3,569     3,587  
FDIC assessment   1,454     2,087     3,161     3,541     5,806  
Amortization of intangibles   4,325     4,472     3,416     8,797     7,025  
Amortization of tax credit investments   568     260     11,858     828     12,574  
Other expense   7,056     5,047     7,608     12,103     17,136  
Total noninterest expense   128,118     123,041     130,460     251,159     247,617  
               
Income before income taxes   77,323     69,380     48,346     146,703     101,286  
Income tax expense   14,359     13,104     4,345     27,463     9,302  
Net income $ 62,964   $ 56,276   $ 44,001   $ 119,240   $ 91,984  
               
Diluted Earnings Per Share                
Net income $ 0.36   $ 0.32   $ 0.29   $ 0.68   $ 0.60  
               
Average Common Shares Outstanding              
Basic   172,985     174,734     151,878     173,855     151,800  
Diluted   173,675     175,368     152,568     174,531     152,483  
               
Common shares outstanding at end of period   172,231     173,979     152,351     172,231     152,351  
               
               

 

 
Balance Sheet (unaudited)
($ in thousands)
               
    June 30,   March 31,   June 30,  
      2019       2019       2018    
  Assets            
  Federal Reserve Bank account $ 40,945     $ 101,033     $ 43,889    
  Money market investments   20,210       10,909       10,359    
  Investments:            
  Treasury and government-sponsored agencies   725,327       782,486       647,058    
  Mortgage-backed securities   2,900,235       2,684,330       1,588,120    
  States and political subdivisions   1,186,311       1,252,448       1,110,087    
  Other securities   489,855       498,977       503,920    
  Total investments   5,301,728       5,218,241       3,849,185    
  Loans held for sale, at fair value   37,904       14,082       26,198    
  Loans:            
  Commercial   3,074,849       3,042,790       2,962,895    
  Commercial and agriculture real estate   4,993,693       5,023,620       4,451,772    
  Consumer:            
  Home equity   553,991       553,264       488,038    
  Other consumer loans   1,201,847       1,205,418       1,238,951    
  Subtotal of commercial and consumer loans   9,824,380       9,825,092       9,141,656    
  Residential real estate   2,222,198       2,243,885       2,153,973    
  Total loans   12,046,578       12,068,977       11,295,629    
  Total earning assets   17,447,365       17,413,242       15,225,260    
               
  Allowance for loan losses   (56,292 )     (55,559 )     (53,660 )  
  Non-earning Assets:            
  Cash and due from banks   239,831       211,174       219,626    
  Premises and equipment, net   493,481       490,216       449,304    
  Operating lease right-of-use assets   106,222       109,916       -    
  Goodwill and other intangible assets   1,104,478       1,108,802       874,221    
  Company-owned life insurance   445,749       444,551       405,492    
  Net deferred tax assets   36,002       59,430       90,187    
  Loan servicing rights   24,332       24,254       24,303    
  Other assets   304,117       278,394       248,257    
  Total non-earning assets   2,754,212       2,726,737       2,311,390    
  Total assets $ 20,145,285     $ 20,084,420     $ 17,482,990    
               
  Liabilities and Equity            
  Noninterest-bearing demand deposits $ 3,771,888     $ 3,903,314     $ 3,600,793    
  Interest-bearing:            
  Checking and NOW accounts   3,950,161       3,742,241       3,054,302    
  Savings accounts   2,877,673       2,941,361       3,026,110    
  Money market accounts   1,819,716       1,780,756       1,090,621    
  Other time deposits   1,756,814       1,835,110       1,648,390    
  Total core deposits   14,176,252       14,202,782       12,420,216    
  Brokered CD's   186,849       226,488       176,160    
  Total deposits   14,363,101       14,429,270       12,596,376    
               
  Federal funds purchased and interbank borrowings   410,036       325,030       175,044    
  Securities sold under agreements to repurchase   334,540       342,480       347,511    
  Federal Home Loan Bank advances   1,730,065       1,719,944       1,757,308    
  Other borrowings   251,840       251,584       250,241    
  Total borrowed funds   2,726,481       2,639,038       2,530,104    
  Operating lease liabilities   110,596       114,040       -    
  Accrued expenses and other liabilities   141,968       150,200       156,295    
  Total liabilities   17,342,146       17,332,548       15,282,775    
               
  Common stock, surplus, and retained earnings   2,761,102       2,749,252       2,266,918    
  Accumulated other comprehensive income (loss), net of tax   42,037       2,620       (66,703 )  
  Total shareholders' equity   2,803,139       2,751,872       2,200,215    
  Total liabilities and shareholders' equity $ 20,145,285     $ 20,084,420     $ 17,482,990    
                           
             

 

                           
Average Balance Sheet and Interest Rates (unaudited)  
($ in thousands)  
                           
                           
    Three Months Ended   Three Months Ended   Three Months Ended  
    June 30, 2019   March 31, 2019   June 30, 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   $ 58,321   $ 334 2.29 %   $ 58,701   $ 278 1.92 %   $ 51,724   $ 117 0.91 %  
Investments:                          
Treasury and government-sponsored agencies   695,775     4,301 2.47 %     705,417     3,902 2.21 %     648,778     3,387 2.09 %  
Mortgage-backed securities   2,767,791     18,799 2.72 %     2,497,368     17,603 2.82 %     1,588,140     8,904 2.24 %  
States and political subdivisions   1,193,176     11,235 3.77 %     1,232,355     11,453 3.72 %     1,118,395     10,591 3.79 %  
Other securities     496,631     4,063 3.27 %     497,604     4,440 3.57 %     507,646     3,909 3.08 %  
Total investments     5,153,373     38,398 2.98 %     4,932,744     37,398 3.03 %     3,862,959     26,791 2.77 %  
Loans: (2)                          
Commercial     3,063,590     37,828 4.88 %     3,122,402     36,035 4.62 %     2,873,781     32,527 4.48 %  
Commercial and agriculture real estate   5,019,859     72,214 5.69 %     4,989,622     65,076 5.22 %     4,449,839     57,251 5.09 %  
Consumer:                          
Home equity     558,223     7,390 5.31 %     588,366     7,596 5.24 %     492,151     6,076 4.95 %  
Other consumer loans   1,201,752     12,408 4.14 %     1,192,496     11,802 4.01 %     1,268,670     11,591 3.66 %  
Subtotal commercial and consumer loans   9,843,424     129,840 5.29 %     9,892,886     120,509 4.94 %     9,084,441     107,445 4.74 %  
Residential real estate loans   2,247,570     23,780 4.23 %     2,259,243     23,931 4.24 %     2,177,587     22,208 4.08 %  
                           
Total loans     12,090,994     153,620 5.05 %     12,152,129     144,440 4.76 %     11,262,028     129,653 4.57 %  
                           
Total earning assets   $ 17,302,688   $ 192,352 4.43 %   $ 17,143,574   $ 182,116 4.26 %   $ 15,176,711   $ 156,561 4.11 %  
                           
Less: Allowance for loan losses   (56,632 )         (55,789 )         (51,493 )      
                           
Non-earning Assets:                          
Cash and due from banks $ 234,337         $ 229,957         $ 205,617        
Other assets     2,473,255           2,490,524           2,086,822        
                           
Total assets   $ 19,953,648         $ 19,808,266         $ 17,417,657        
                           
Interest-Bearing Liabilities:                        
Checking and NOW accounts $ 3,895,881   $ 4,196 0.43 %   $ 3,693,886   $ 3,142 0.34 %   $ 3,097,635   $ 969 0.13 %  
Savings accounts     2,879,704     2,145 0.30 %     2,935,710     2,283 0.32 %     3,036,936     1,777 0.23 %  
Money market accounts   1,789,777     3,729 0.84 %     1,702,655     2,826 0.67 %     1,103,177     702 0.26 %  
Other time deposits     1,779,770     7,181 1.62 %     1,840,514     7,102 1.56 %     1,615,527     4,813 1.20 %  
Total interest-bearing deposits   10,345,132     17,251 0.67 %     10,172,765     15,353 0.61 %     8,853,275     8,261 0.37 %  
Brokered CD's     212,198     1,268 2.40 %     191,443     1,091 2.31 %     194,801     878 1.81 %  
Total interest-bearing deposits and CD's   10,557,330     18,519 0.70 %     10,364,208     16,444 0.64 %     9,048,076     9,139 0.41 %  
                           
Federal funds purchased and interbank borrowings   300,810     1,817 2.42 %     316,998     1,918 2.45 %     140,471     647 1.85 %  
Securities sold under agreements to repurchase   331,695     671 0.81 %     361,261     662 0.74 %     332,599     434 0.52 %  
Federal Home Loan Bank advances   1,695,681     10,039 2.37 %     1,672,376     9,931 2.41 %     1,713,832     8,824 2.07 %  
Other borrowings     251,577     2,787 4.43 %     249,794     2,915 4.67 %     249,291     2,729 4.38 %  
Total borrowed funds   2,579,763     15,314 2.38 %     2,600,429     15,426 2.41 %     2,436,193     12,634 2.08 %  
                           
Total interest-bearing liabilities $ 13,137,093   $ 33,833 1.03 %   $ 12,964,637   $ 31,870 1.00 %   $ 11,484,269   $ 21,773 0.76 %  
                           
Noninterest-Bearing Liabilities and Shareholders' Equity                        
Demand deposits   $ 3,812,175         $ 3,846,828         $ 3,602,732        
Other liabilities     246,134           282,615           147,052        
Shareholders' equity     2,758,246           2,714,186           2,183,604        
Total liabilities and shareholders' equity $ 19,953,648         $ 19,808,266         $ 17,417,657        
                           
Net interest rate spread     3.40 %       3.26 %       3.35 %  
                           
Net interest margin (FTE)     3.66 %       3.51 %       3.55 %  
                           
FTE adjustment     $ 3,289       $ 3,198       $ 2,825    
                           
(1) Interest income is reflected on a fully taxable equivalent basis (FTE).  
(2) Includes loans held for sale.  
                           

 

                   
Average Balance Sheet and Interest Rates (unaudited)  
($ in thousands)  
                   
                   
    Six Months Ended   Six Months Ended  
    June 30, 2019   June 30, 2018  
    Average Income (1)/ Yield/   Average Income (1)/ Yield/  
Earning Assets:   Balance Expense Rate   Balance Expense Rate  
Money market and other interest-earning                
investments   $ 58,510   $ 612 2.11 %   $ 59,089   $ 207 0.71 %  
Investments:                  
Treasury and government-sponsored agencies   700,569     8,203 2.34 %     655,897     6,811 2.08 %  
Mortgage-backed securities   2,633,326     36,402 2.76 %     1,610,252     18,424 2.29 %  
States and political subdivisions   1,212,658     22,688 3.74 %     1,161,386     21,069 3.63 %  
Other securities     497,115     8,503 3.42 %     483,685     7,578 3.13 %  
Total investments     5,043,668     75,796 3.01 %     3,911,220     53,882 2.76 %  
Loans: (2)                  
Commercial     3,092,833     73,863 4.75 %     2,817,050     60,733 4.29 %  
Commercial and agriculture real estate   5,004,824     137,290 5.46 %     4,422,075     113,037 5.08 %  
Consumer:                  
Home equity     573,211     14,987 5.27 %     496,978     11,765 4.77 %  
Other consumer loans   1,197,150     24,208 4.08 %     1,307,805     23,730 3.66 %  
Subtotal commercial and consumer loans   9,868,018     250,348 5.12 %     9,043,908     209,265 4.67 %  
Residential real estate loans   2,253,375     47,712 4.23 %     2,177,003     43,680 4.01 %  
                   
Total loans     12,121,393     298,060 4.91 %     11,220,911     252,945 4.50 %  
                   
Total earning assets   $ 17,223,571   $ 374,468 4.34 %   $ 15,191,220   $ 307,034 4.04 %  
                   
Less: Allowance for loan losses   (56,213 )         (51,225 )      
                   
Non-earning Assets:                  
Cash and due from banks $ 232,159         $ 202,392        
Other assets     2,481,842           2,088,299        
                   
Total assets   $ 19,881,359         $ 17,430,686        
                   
Interest-Bearing Liabilities:                
Checking and NOW accounts $ 3,795,441   $ 7,338 0.39 %   $ 3,082,619   $ 1,788 0.12 %  
Savings accounts     2,907,552     4,428 0.31 %     3,044,748     3,120 0.21 %  
Money market accounts   1,746,456     6,555 0.76 %     1,130,939     1,248 0.22 %  
Other time deposits     1,809,975     14,283 1.59 %     1,588,884     8,713 1.11 %  
Total interest-bearing deposits   10,259,424     32,604 0.64 %     8,847,190     14,869 0.34 %  
Brokered CD's     201,878     2,359 2.36 %     184,975     1,525 1.66 %  
Total interest-bearing deposits and CD's   10,461,302     34,963 0.67 %     9,032,165     16,394 0.37 %  
                   
Federal funds purchased and interbank borrowings   308,860     3,735 2.44 %     200,578     1,664 1.67 %  
Securities sold under agreements to repurchase   346,396     1,333 0.78 %     337,612     793 0.47 %  
Federal Home Loan Bank advances   1,684,093     19,970 2.39 %     1,694,871     16,604 1.98 %  
Other borrowings     250,690     5,702 4.55 %     249,062     5,452 4.38 %  
Total borrowed funds   2,590,039     30,740 2.39 %     2,482,123     24,513 1.99 %  
                   
Total interest-bearing liabilities $ 13,051,341   $ 65,703 1.02 %   $ 11,514,288   $ 40,907 0.72 %  
                   
Noninterest-Bearing Liabilities and Shareholders' Equity                
Demand deposits   $ 3,829,406         $ 3,583,027        
Other liabilities     264,274           158,493        
Shareholders' equity     2,736,338           2,174,878        
Total liabilities and shareholders' equity $ 19,881,359         $ 17,430,686        
                   
Net interest rate spread     3.32 %       3.32 %  
                   
Net interest margin (FTE)     3.59 %       3.50 %  
                   
FTE adjustment     $ 6,487       $ 5,592    
                   
(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   Six Months Ended  
  June 30, March 31, June 30,   June 30, June 30,  
    2019     2019     2018       2019     2018    
               
Beginning allowance for loan losses $ 55,559   $ 55,461   $ 50,381     $ 55,461   $ 50,381    
               
Provision for loan losses   1,003     1,043     2,446       2,046     2,826    
               
Gross charge-offs   (2,876 )   (2,892 )   (3,054 )     (5,769 )   (5,739 )  
Gross recoveries   2,606     1,947     3,887       4,554     6,192    
Net (charge-offs) recoveries   (270 )   (945 )   833       (1,215 )   453    
               
Ending allowance for loan losses $ 56,292   $ 55,559   $ 53,660     $ 56,292   $ 53,660    
               
Net charge-offs (recoveries) / average loans (1)   0.01 %   0.03 %   -0.03 %     0.02 %   -0.01 %  
               
Average loans outstanding (1) $ 12,083,609   $ 12,147,560   $ 11,257,585     $ 12,115,408   $ 11,216,684    
               
EOP loans outstanding (1)   12,046,578   $ 12,068,977   $ 11,295,629     $ 12,046,578   $ 11,295,629    
               
Allowance for loan losses / EOP loans (1)   0.47 %   0.46 %   0.48 %     0.47 %   0.48 %  
               
Underperforming Assets:              
Loans 90 Days and over (still accruing) $ 423   $ 560   $ 1,575     $ 423   $ 1,575    
               
Non-performing loans:              
Nonaccrual loans (2)   142,421     152,881     139,082       142,421     139,082    
Renegotiated loans   19,031     17,123     17,139       19,031     17,139    
Total non-performing loans   161,452     170,004     156,221       161,452     156,221    
               
Foreclosed properties   2,819     3,279     3,729       2,819     3,729    
               
Total underperforming assets $ 164,694   $ 173,843   $ 161,525     $ 164,694   $ 161,525    
               
Classified and Criticized Assets:              
Nonaccrual loans (2)   142,421     152,881     139,082       142,421     139,082    
Substandard accruing loans   174,728     210,680     109,051       174,728     109,051    
Loans 90 days and over (still accruing)   423     560     1,575       423     1,575    
Total classified loans - "problem loans" $ 317,572   $ 364,121   $ 249,708     $ 317,572   $ 249,708    
               
Other classified assets   2,550     2,715     3,149       2,550     3,149    
Criticized loans - "special mention loans"   220,455     268,836     154,891       220,455     154,891    
               
Total classified and criticized assets $ 540,577   $ 635,672   $ 407,748     $ 540,577   $ 407,748    
               
Non-performing loans / EOP loans (1)   1.34 %   1.41 %   1.38 %     1.34 %   1.38 %  
               
Allowance to non-performing loans (3)   35 %   33 %   34 %     35 %   34 %  
               
Under-performing assets / EOP loans (1)   1.37 %   1.44 %   1.43 %     1.37 %   1.43 %  
               
EOP total assets $ 20,145,285   $ 20,084,420   $ 17,482,990     $ 20,145,285   $ 17,482,990    
               
Under-performing assets / EOP assets   0.82 %   0.87 %   0.92 %     0.82 %   0.92 %  
               
EOP - End of period actual balances              
(1) Excludes loans held for sale.  
(2) Includes renegotiated loans totaling $24.7 million at June 30, 2019, $27.0 million at March 31, 2019, and $34.0 million at June 30, 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   Six Months Ended  
    June 30, March 31, June 30,   June 30, June 30,  
      2019     2019     2018       2019     2018    
                 
  Actual End of Period Balances              
  GAAP shareholders' equity $ 2,803,139   $ 2,751,872   $ 2,200,215     $ 2,803,139   $ 2,200,215    
                 
  Deduct:              
  Goodwill   1,036,258     1,036,258     828,804       1,036,258     828,804    
  Intangibles   68,220     72,544     45,417       68,220     45,417    
      1,104,478     1,108,802     874,221       1,104,478     874,221    
                 
  Tangible shareholders' equity   $ 1,698,661   $ 1,643,070   $ 1,325,994     $ 1,698,661   $ 1,325,994    
                 
  Average Balances              
  GAAP shareholders' equity $ 2,758,246   $ 2,714,186   $ 2,183,604     $ 2,736,338   $ 2,174,878    
                 
  Deduct:              
  Goodwill   1,036,258     1,036,258     828,804       1,036,258     828,474    
  Intangibles   70,282     74,849     47,052       72,554     49,061    
      1,106,540     1,111,107     875,856       1,108,812     877,535    
                 
  Average tangible shareholders' equity   $ 1,651,706   $ 1,603,079   $ 1,307,748     $ 1,627,526   $ 1,297,343    
                 
  Actual End of Period Balances              
  GAAP assets $ 20,145,285   $ 20,084,420   $ 17,482,990     $ 20,145,285   $ 17,482,990    
                 
  Add:              
  Trust overdrafts   29     28     46       29     46    
                 
  Deduct:              
  Goodwill   1,036,258     1,036,258     828,804       1,036,258     828,804    
  Intangibles   68,220     72,544     45,417       68,220     45,417    
      1,104,478     1,108,802     874,221       1,104,478     874,221    
                 
  Tangible assets   $ 19,040,836   $ 18,975,646   $ 16,608,815     $ 19,040,836   $ 16,608,815    
                 
  Risk-weighted assets $ 13,996,770   $ 13,966,569   $ 12,648,732     $ 13,996,770   $ 12,648,732    
                 
  GAAP net income $ 62,964   $ 56,276   $ 44,001     $ 119,240   $ 91,984    
                 
  Add:              
  Amortization of intangibles (net of tax)   3,262     3,373     2,699       6,635     5,550    
                 
  Tangible net income $ 66,226   $ 59,649   $ 46,700     $ 125,875   $ 97,534    
                 
  Tangible Ratios                
  Return on tangible common equity   15.59 %   14.52 %   14.09 %     14.82 %   14.71 %  
  Return on average tangible common equity   16.04 %   14.88 %   14.28 %     15.47 %   15.04 %  
  Return on tangible assets   1.39 %   1.26 %   1.12 %     1.32 %   1.17 %  
  Tangible common equity to tangible assets   8.92 %   8.66 %   7.98 %     8.92 %   7.98 %  
  Tangible common equity to risk-weighted assets   12.14 %   11.76 %   10.48 %     12.14 %   10.48 %  
  Tangible common book value (1)   9.86     9.44     8.70       9.86     8.70    
                 
  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 $ 1,664,277   $ 1,643,496   $ 1,371,918     $ 1,664,277   $ 1,371,918    
                 
  Deduct:              
  Tier 1 capital adjustments   -     -     -       -     -    
      -     -     -       -     -    
                 
  Tier 1 common equity   $ 1,664,277   $ 1,643,496   $ 1,371,918     $ 1,664,277   $ 1,371,918    
                 
  Risk-weighted assets   13,996,770     13,966,569     12,648,732       13,996,770     12,648,732    
                 
  Tier 1 common equity to risk-weighted assets     11.89 %   11.77 %   10.85 %     11.89 %   10.85 %  
                 
                 

Is your business listed correctly on America’s largest city directory network of 1,000 portals?