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

| Source: Old National Bancorp Old National Bancorp

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)1Q19Adjustments4Adjusted 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)1Q194Q18
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)1Q194Q18
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)1Q194Q18
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  
 AverageIncome (1)/Yield/ AverageIncome (1)/Yield/ AverageIncome (1)/Yield/  
Earning Assets:BalanceExpenseRate BalanceExpenseRate BalanceExpenseRate  
Money market and other interest-earning investments$58,701 $2781.92% $39,207 $2052.07% $66,536 $900.55%  
Investments:             
Treasury and government-sponsored agencies 705,417  3,9022.21%  694,409  3,8742.23%  663,096  3,4242.07%  
Mortgage-backed securities 2,497,368  17,6032.82%  2,011,275  13,6882.72%  1,632,610  9,5202.33%  
States and political subdivisions 1,232,355  11,4533.72%  1,187,404  11,1473.76%  1,204,855  10,4783.48%  
Other securities 497,604  4,4403.57%  493,426  4,0173.26%  459,458  3,6693.19%  
Total investments 4,932,744  37,3983.03%  4,386,514  32,7262.98%  3,960,019  27,0912.74%  
Loans: (2)             
Commercial 3,122,402  36,0354.62%  3,133,153  37,3584.67%  2,759,688  28,2054.09%  
Commercial and agriculture real estate 4,989,622  65,0765.22%  4,834,589  65,4615.30%  4,394,002  55,7875.08%  
Consumer:             
Home equity 588,366  7,5965.24%  562,801  7,1595.05%  502,902  5,6884.59%  
Other consumer loans 1,192,496  11,8024.01%  1,203,436  11,7023.86%  1,346,331  12,1403.66%  
Subtotal commercial and consumer loans 9,892,886  120,5094.94%  9,733,979  121,6804.96%  9,002,923  101,8204.59%  
Residential real estate loans 2,259,243  23,9314.24%  2,238,588  23,6724.23%  2,176,413  21,4723.95%  
              
Total loans 12,152,129  144,4404.76%  11,972,567  145,3524.78%  11,179,336  123,2924.42%  
              
Total earning assets$17,143,574 $182,1164.26% $16,398,288 $178,2834.30% $15,205,891 $150,4733.97%  
              
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 $3,1420.34% $3,391,630 $2,0040.23% $3,067,437 $8190.11%  
Savings accounts 2,935,710  2,2830.32%  2,919,900  2,2250.30%  3,052,646  1,3430.18%  
Money market accounts 1,702,655  2,8260.67%  1,482,022  1,9220.51%  1,159,010  5460.19%  
Other time deposits 1,840,514  7,1021.56%  1,769,243  6,5191.46%  1,561,945  3,9001.01%  
Total interest-bearing deposits 10,172,765  15,3530.61%  9,562,795  12,6700.53%  8,841,038  6,6080.30%  
Brokered CD's 191,443  1,0912.31%  193,455  1,0242.10%  175,039  6471.50%  
Total interest-bearing deposits and CD's 10,364,208  16,4440.64%  9,756,250  13,6940.56%  9,016,077  7,2550.33%  
              
Federal funds purchased and interbank borrowings 316,998  1,9182.45%  312,730  1,9382.46%  261,353  1,0171.58%  
Securities sold under agreements to repurchase 361,261  6620.74%  351,392  6340.72%  342,682  3590.42%  
Federal Home Loan Bank advances 1,672,376  9,9312.41%  1,649,304  9,4412.27%  1,675,700  7,7801.88%  
Other borrowings 249,794  2,9154.67%  250,926  3,3025.26%  248,828  2,7234.38%  
Total borrowed funds 2,600,429  15,4262.41%  2,564,352  15,3152.37%  2,528,563  11,8791.91%  
              
Total interest-bearing liabilities$12,964,637 $31,8701.00% $12,320,602 $29,0090.93% $11,544,640 $19,1340.67%  
              
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