Old National reports 1st quarter earnings of $86.8 million, or $0.52 per share

Old National Bancorp
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EVANSVILLE, Ind., April 19, 2021 (GLOBE NEWSWIRE) --

Old National Bancorp (NASDAQ: ONB) reports 1Q21 net income of $86.8 million, diluted EPS of $0.52.

Adjusted1 net income of $86.4 million, or $0.52 per diluted share.

CEO COMMENTARY:

"Old National's positive first quarter results were driven by record first-quarter commercial loan production, strong mortgage revenue and excellent credit quality," said Chairman and CEO Jim Ryan. "We also continue to work with our small business and non-profit clients who are affected by the pandemic to help them gain access to Paycheck Protection Program funds and also to complete the loan forgiveness process."

FIRST QUARTER HIGHLIGHTS2:

Net income

  • Net income of $86.8 million

  • Earnings per diluted share of $0.52

Net interest
income/NIM

  • Net interest income on a fully taxable equivalent basis of $151.6 million compared to $164.6 million

  • Net interest margin on a fully taxable equivalent basis of 2.94% compared to 3.26%






Operating
Performance









  • Pre-provision net revenue1 (“PPNR”) of $90.6 million

  • Adjusted PPNR1 of $91.3 million, up 17.9% over first quarter of 2020

  • Noninterest expense of $117.7 million

  • Adjusted noninterest expense1 of $115.0 million

  • Efficiency ratio1 of 55.57%

  • Adjusted efficiency ratio1 of 54.25%




Loans and
Credit
Quality













  • End-of-period total loans3 of $13,975.5 million compared to $13,849.7 million

º Total commercial loans increased $59.0 million, excluding the $181.1 million increase in PPP loans

  • First-quarter total commercial production of $718.0 million

  • Provision for credit losses was a recapture of $17.4 million

  • March 31 pipeline of $2.6 billion

  • Net recoveries of $5 thousand compared to net recoveries of $1.1 million

  • Non-performing loans of 1.13% of total loans compared to 1.20%



Return Profile
& Capital





  • Return on average common equity of 11.69%

  • Return on average tangible common equity1 of 18.88%

  • Adjusted return on average tangible common equity1 of 18.79%

  • No shares of common stock were repurchased during the current quarter


Notable Items

  • $1.5 million in ONB Way charges

  • $1.2 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 2021 net income of $86.8 million, or $0.52 per diluted share.

Included in the first quarter were pre-tax charges of $1.5 million for the ONB Way. Excluding these charges from the current quarter and netting out debt securities gains, adjusted net income was $86.4 million, or $0.52 per diluted share.

LOANS
Strong commercial production continues.

  • Period-end total loans were $13,975.5 million at March 31, 2021, an increase of $125.8 million, or 3.6% annualized, when compared to the $13,849.7 million at December 31, 2020.

  • Paycheck Protection Program (PPP) loans totaled $1,124.1 million at March 31, 2021, compared to $943.0 million at December 31, 2020.

  • Excluding the $181.1 million increase in PPP loans during the quarter, total loans decreased $55.3 million, or 1.7% annualized.

  • Excluding PPP loans, total commercial and industrial loans increased $59.0 million, or 2.6% annualized.

  • Total commercial loan production in the first quarter was $718.0 million; period-end pipeline totaled $2.6 billion.

  • Consumer loans decreased $56.2 million to $1,579.0 million and residential mortgage loans decreased $45.1 million to $2,203.3 million.

  • Average total loans in the first quarter were $13,832.2 million, a decrease of $95.6 million from the fourth quarter of 2020.

  • Excluding PPP loans, average total loans in the first quarter increased $117.6 million from the fourth quarter of 2020.

DEPOSITS
Government stimulus actions continue to bolster deposit balances.

  • Period-end total deposits were $17,849.8 million at March 31, 2021, an increase of $812.3 million, or 19.1% annualized, when compared to the $17,037.5 million at December 31, 2020.

  • Interest-bearing checking deposits increased $56.7 million to $4,933.8 million at March 31, 2021.

  • Noninterest-bearing deposits increased $457.4 million to $6,091.1 million at March 31, 2021 from $5,633.7 million at December 31, 2020.

  • On average, total deposits in the first quarter were $17,341.8 million, compared to $16,810.6 million in the fourth quarter of 2020.

NET INTEREST INCOME AND MARGIN
Decrease in PPP fees negatively impact net interest income and margin; deposit and funding costs continue to decline.

  • Net interest income decreased to $148.1 million in the first quarter of 2021 compared to $161.1 million in the fourth quarter of 2020.

  • The net interest margin on a fully taxable equivalent basis decreased 32 basis points to 2.94% compared to 3.26% in the fourth quarter of 2020.

  • PPP interest and net fees combined were $12.6 million, or 10 basis points of net interest margin, in the first quarter of 2021 compared to $22.6 million, or 26 basis points of net interest margin, in the fourth quarter of 2020.

  • Accretion income was $4.7 million, or 9 basis points of net interest margin, in the first quarter of 2021 compared to $5.4 million, or 10 basis points of net interest margin, in the fourth quarter of 2020. In the first quarter of 2021, accretion income was 2.3% of adjusted total revenue.

  • Interest collected on nonaccrual loans was $0.6 million, or 1 basis point of net interest margin, in the first quarter of 2021 compared to $0.9 million, or 2 basis points of net interest margin, in the fourth quarter of 2020.

  • The cost of total deposits declined 2 basis points to 0.07% in the first quarter of 2021 while the cost of total interest-bearing deposits decreased 2 basis points to 0.11%.

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

  • Old National recorded a provision recapture in the first quarter of 2021 of $17.4 million, compared to $1.1 million in provision recapture recorded in the fourth quarter of 2020.

  • Net recoveries in the first quarter were $5 thousand, compared to net recoveries of $1.1 million in the fourth quarter of 2020.

  • 30-89 day delinquencies were 0.12% at the end of the first quarter.

  • Non-performing loans decreased as a percentage of total loans to 1.13%.

  • Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. As of March 31, 2021, the remaining discount on these acquired loans was $45.9 million.

  • The allowance for credit losses stood at $114.0 million, or 0.82% of total loans at March 31, 2021.

NONINTEREST INCOME
Noninterest income decreased due to lower capital markets income.

  • Total noninterest income for the first quarter of 2021 was $56.7 million, a decrease of $1.8 million from the fourth quarter of 2020.

  • Capital markets income decreased $2.8 million when compared to the fourth quarter of 2020.

  • Gains on sales of debt securities increased $1.8 million when compared to the fourth quarter of 2020.

NONINTEREST EXPENSE
First quarter expense discipline helped drive positive operating leverage1.

  • Noninterest expense for the first quarter of 2021 was $117.7 million and included $1.5 million in ONB Way charges and $1.2 million in tax credit amortization.

  • Excluding these items, adjusted noninterest expense for the first quarter was $115.0 million, compared to the $128.8 million in adjusted noninterest expense in the fourth quarter of 2020.

  • The first quarter efficiency ratio was 55.57%, while the adjusted efficiency ratio was 54.25%.

  • Adjusted operating leverage1 was +919 basis points for the first quarter of 2021 as compared to the first quarter of 2020.

INCOME TAXES

  • On a fully taxable-equivalent basis, income tax expense in the first quarter was $21.2 million, resulting in a 19.6% FTE tax rate.

  • Income tax expense included $1.7 million in tax credit benefit.

CAPITAL AND LIQUIDITY
Capital ratios remain strong.

  • At the end of the first quarter, preliminary total risk-based capital was 12.84% and preliminary regulatory tier 1 capital was 12.01%.

  • Tangible common equity to tangible assets was 8.38% at the end of the first quarter compared to 8.64% in the fourth quarter of 2020.

  • The Company did not repurchase any shares of common stock during the first quarter.

  • A low loan to deposit ratio of 78.3%, combined with existing funding sources plus available unencumbered, high-quality collateral, provides strong liquidity.

NON-GAAP RECONCILIATIONS

($ in millions, except EPS, shares in 000s)

1Q21

Adjustments4

Adjusted 1Q21

Total Revenues (FTE)

$

208.3

$

(2.0

)

$

206.3

Less: Provision for Credit Losses

17.4

—

17.4

Less: Noninterest Expenses

(117.7

)

1.5

(116.2

)

Income before Income Taxes (FTE)

$

108.0

$

(0.5

)

$

107.5

Income Taxes

(21.2

)

0.1

(21.1

)

Net Income

$

86.8

$

(0.4

)

$

86.4

Average Shares Outstanding

165,707

—

165,707

Earnings Per Share - Diluted

$

0.52

$

—

$

0.52

4 Tax-effect calculations use the current statutory FTE tax rates (federal + state)

($ in millions)

1Q21

4Q20

Net Interest Income

$

148.1

$

161.1

Add: FTE Adjustment

3.5

3.5

Net Interest Income (FTE)

$

151.6

$

164.6

Average Earning Assets

$

20,601.7

$

20,182.0

Net Interest Margin (FTE)

2.94

%

3.26

%


($ in millions)

1Q21

1Q20

Net Interest Income

$

148.1

$

143.8

Add: FTE Adjustment

3.5

3.3

Net Interest Income (FTE)

$

151.6

$

147.1

Add: Total Noninterest Income

56.7

57.5

Less: Noninterest Expense

117.7

158.7

Pre-Provision Net Revenue

$

90.6

$

45.9

Less: Debt Securities Gains/Losses

(2.0

)

(5.2

)

Add: ONB Way Charges

1.5

31.2

Add: Amortization of Tax Credit Investments

1.2

5.5

Adjusted Pre-Provision Net Revenue

$

91.3

$

77.4


($ in millions)

1Q21

4Q20

1Q20

Noninterest Expense

$

117.7

$

142.3

$

158.7

Less: ONB Way Charges

(1.5

)

(3.6

)

(31.2

)

Noninterest Expense less Charges

$

116.2

$

138.7

$

127.5

Less: Amortization of Tax Credit Investments

(1.2

)

(9.9

)

(5.5

)

Adjusted Noninterest Expense

$

115.0

$

128.8

$

122.0

Less: Intangible Amortization

(3.1

)

(3.3

)

(3.8

)

Adjusted Noninterest Expense Less Intangible Amortization

$

111.9

$

125.5

$

118.2

Net Interest Income

$

148.1

$

161.1

$

143.8

FTE Adjustment

3.5

3.5

3.3

Net Interest Income (FTE)

$

151.6

$

164.6

$

147.1

Total Noninterest Income

56.7

58.5

57.5

Total Revenue (FTE)

$

208.3

$

223.1

$

204.6

Less: Debt Securities Gains/Losses

(2.0

)

(0.2

)

(5.2

)

Less: Gain on Branch Actions

—

(0.1

)

—

Adjusted Total Revenue (FTE)

$

206.3

$

222.8

$

199.4

Efficiency Ratio

55.57

%

62.37

%

77.71

%

Adjusted Efficiency Ratio

54.25

%

56.35

%

59.31

%

Operating Leverage5 (basis points)

2,762

Adjusted Operating Leverage6 (basis points)

919

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)

1Q21

4Q20

Net Income

$

86.8

$

74.1

Add: Intangible Amortization (net of tax7)

2.3

2.4

Tangible Net Income

$

89.1

$

76.5

Less: Securities Gains/Losses (net of tax7)

(1.5

)

(0.2

)

Add: Gains/Losses on Branch Actions (net of tax7)

—

(0.1

)

Add: ONB Way Charges (net of tax7)

1.1

2.7

Adjusted Tangible Net Income

$

88.7

$

78.9

Average Total Shareholders’ Equity

2,970.0

2,932.6

Less: Average Goodwill

(1,037.0

)

(1,037.0

)

Less: Average Intangibles

(44.4

)

(47.5

)

Average Tangible Shareholders’ Equity

$

1,888.6

$

1,848.1

Return on Average Tangible Common Equity

18.88

%

16.57

%

Adjusted Return on Average Tangible Common Equity

18.79

%

17.08

%

7Tax-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 9:00 a.m. Central Time on Monday, April 19, 2021, to review first-quarter 2021 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 Noon Central Time on April 19 through May 3. To access the replay, dial 1-855-859-2056, Conference ID Code 9135118.

ABOUT OLD NATIONAL
Old National Bancorp (NASDAQ: ONB), the holding company of Old National Bank, is the largest bank holding company headquartered in Indiana. With $23.7 billion in assets, it ranks among the top 100 banking companies in the U.S. and has been recognized as a World’s Most Ethical Company by the Ethisphere Institute for ten consecutive years. Since its founding in Evansville in 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships and keeping our clients at the center of all we do. This is an approach to business that we call The ONB Way. Today, Old National’s footprint includes Indiana, Kentucky, Michigan, Minnesota and Wisconsin. In addition to providing extensive services in retail and commercial banking, Old National offers comprehensive wealth management, investment and capital market services. For more 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, such as statements about the potential impacts of the COVID-19 pandemic. 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: the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on our operations and personnel, and on commercial activity and demand across our and our customers’ businesses; market, economic, operational, liquidity, credit and interest rate risks associated with Old National’s business (including developments and volatility arising from the COVID-19 pandemic); competition; heightened regulatory and governmental oversight and scrutiny of Old National's business practices; current, pending or future 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, including the anticipated impact from the ONB Way strategic plan that may differ from current estimates; 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, including the impact of the CECL standard as well as changes to address the impact of COVID-19; 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,

2021

2020

2020

Income Statement

Net interest income

$

148,120

$

161,079

$

143,771

Tax equivalent adjustment (1)

3,500

3,517

3,323

Net interest income - tax equivalent basis

151,620

164,596

147,094

Provision for credit losses

(17,356

)

(1,100

)

16,950

Noninterest income

56,712

58,552

57,502

Noninterest expense

117,740

142,318

158,744

Net income

86,818

74,120

22,640

Per Common Share Data

Weighted average diluted shares

165,707

165,631

168,404

Net income (diluted)

$

0.52

$

0.44

$

0.13

Cash dividends

0.14

0.14

0.14

Common dividend payout ratio (2)

26

%

31

%

108

%

Book value

$

17.98

$

17.98

$

17.10

Stock price

19.34

16.56

13.19

Tangible common book value (3)

11.47

11.43

10.48

Performance Ratios

Return on average assets

1.49

%

1.30

%

0.44

%

Return on average common equity

11.69

%

10.11

%

3.20

%

Return on tangible common equity (3)

18.77

%

16.20

%

5.89

%

Return on average tangible common equity (3)

18.88

%

16.57

%

5.86

%

Net interest margin (FTE)

2.94

%

3.26

%

3.31

%

Efficiency ratio (4)

55.57

%

62.37

%

77.71

%

Net charge-offs (recoveries) to average loans

0.00

%

(0.03

)

%

0.21

%

Allowance for credit losses to ending loans

0.82

%

0.95

%

0.86

%

Non-performing loans to ending loans

1.13

%

1.20

%

1.16

%

Balance Sheet (EOP)

Total loans

$

13,925,261

$

13,786,479

$

12,384,612

Total assets

23,744,451

22,960,622

20,741,141

Total deposits

17,849,755

17,037,453

14,305,362

Total borrowed funds

2,574,987

2,676,554

3,245,214

Total shareholders' equity

2,979,447

2,972,656

2,823,435

Capital Ratios (3)

Risk-based capital ratios (EOP):

Tier 1 common equity

12.01

%

11.75

%

11.40

%

Tier 1

12.01

%

11.75

%

11.40

%

Total

12.84

%

12.69

%

12.28

%

Leverage ratio (to average assets)

8.33

%

8.20

%

8.46

%

Total equity to assets (averages)

12.78

%

12.83

%

13.91

%

Tangible common equity to tangible assets

8.38

%

8.64

%

8.81

%

Nonfinancial Data

Full-time equivalent employees

2,451

2,445

2,736

Banking centers

162

162

192

(1) Calculated using the federal statutory tax rate in effect of 21% for all periods.

(2) Cash dividends per share divided by net income per share (basic).

(3) Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures.

March 31, 2021 capital ratios are preliminary.

(4) 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

March 31,

December 31,

March 31,

2021

2020

2020

Interest income

$

159,237

$

173,249

$

167,999

Less: interest expense

11,117

12,170

24,228

Net interest income

148,120

161,079

143,771

Provision for credit losses

(17,356

)

(1,100

)

16,950

Net interest income after provision for credit losses

165,476

162,179

126,821

Wealth management fees

9,708

9,259

8,884

Service charges on deposit accounts

8,124

8,724

10,077

Debit card and ATM fees

5,143

5,072

4,998

Mortgage banking revenue

16,525

16,233

11,119

Investment product fees

5,864

5,544

5,874

Capital markets income

3,715

6,545

4,328

Company-owned life insurance

2,714

3,153

3,080

Other income

2,926

3,861

3,968

Gains (losses) on sales of debt securities

1,993

161

5,174

Total noninterest income

56,712

58,552

57,502

Salaries and employee benefits

68,117

78,001

79,173

Occupancy

14,872

13,008

15,133

Equipment

3,969

3,778

5,305

Marketing

2,062

3,242

3,097

Data processing

12,353

12,362

9,467

Communication

2,878

2,396

2,798

Professional fees

2,724

4,834

4,293

FDIC assessment

1,607

1,780

1,609

Amortization of intangibles

3,075

3,244

3,776

Amortization of tax credit investments

1,202

9,871

5,515

Other expense

4,881

9,802

28,578

Total noninterest expense

117,740

142,318

158,744

Income before income taxes

104,448

78,413

25,579

Income tax expense

17,630

4,293

2,939

Net income

$

86,818

$

74,120

$

22,640

Diluted Earnings Per Share

Net income

$

0.52

$

0.44

$

0.13

Average Common Shares Outstanding

Basic

164,997

164,799

167,748

Diluted

165,707

165,631

168,404

Common shares outstanding at end of period

165,676

165,367

165,109


Balance Sheet (unaudited)

($ in thousands)

March 31,

December 31,

March 31,

2021

2020

2020

Assets

Federal Reserve Bank account

$

293,230

$

307,967

$

130,295

Money market investments

10,217

13,537

9,349

Investments:

Treasury and government-sponsored agencies

1,602,423

852,196

530,904

Mortgage-backed securities

3,385,339

3,339,098

3,210,000

States and political subdivisions

1,467,804

1,492,162

1,302,395

Other securities

440,810

458,639

497,709

Total investments

6,896,376

6,142,095

5,541,008

Loans held for sale, at fair value

50,281

63,250

54,209

Loans:

Commercial

4,068,896

3,956,422

3,046,579

Commercial and agriculture real estate

6,074,135

5,946,512

5,283,464

Consumer:

Home equity

541,149

556,414

561,789

Other consumer loans

1,037,804

1,078,709

1,164,929

Subtotal of commercial and consumer loans

11,721,984

11,538,057

10,056,761

Residential real estate

2,203,277

2,248,422

2,327,851

Total loans

13,925,261

13,786,479

12,384,612

Total earning assets

21,175,365

20,313,328

18,119,473

Allowance for credit losses

(114,037

)

(131,388

)

(106,380

)

Non-earning Assets:

Cash and due from banks

154,330

268,208

203,533

Premises and equipment, net

466,559

464,408

462,364

Operating lease right-of-use assets

74,611

76,197

86,819

Goodwill and other intangible assets

1,079,933

1,083,008

1,093,323

Company-owned life insurance

456,782

456,110

450,148

Other assets

450,908

430,751

431,861

Total non-earning assets

2,683,123

2,778,682

2,728,048

Total assets

$

23,744,451

$

22,960,622

$

20,741,141

Liabilities and Equity

Noninterest-bearing demand deposits

$

6,091,054

$

5,633,672

$

4,058,559

Interest-bearing:

Checking and NOW accounts

4,933,770

4,877,046

4,105,006

Savings accounts

3,631,145

3,395,747

2,853,305

Money market accounts

2,075,852

1,908,118

1,746,798

Other time deposits

1,042,903

1,103,313

1,469,185

Total core deposits

17,774,724

16,917,896

14,232,853

Brokered deposits

75,031

119,557

72,509

Total deposits

17,849,755

17,037,453

14,305,362

Federal funds purchased and interbank borrowings

922

1,166

560,770

Securities sold under agreements to repurchase

395,242

431,166

318,067

Federal Home Loan Bank advances

1,912,541

1,991,435

2,130,263

Other borrowings

266,282

252,787

236,114

Total borrowed funds

2,574,987

2,676,554

3,245,214

Operating lease liabilities

84,665

86,598

95,830

Accrued expenses and other liabilities

255,597

187,361

271,300

Total liabilities

20,765,004

19,987,966

17,917,706

Common stock, surplus, and retained earnings

2,887,538

2,824,885

2,685,278

Accumulated other comprehensive income (loss), net of tax

91,909

147,771

138,157

Total shareholders' equity

2,979,447

2,972,656

2,823,435

Total liabilities and shareholders' equity

$

23,744,451

$

22,960,622

$

20,741,141


Average Balance Sheet and Interest Rates (unaudited)

($ in thousands)

Three Months Ended

Three Months Ended

Three Months Ended

March 31, 2021

December 31, 2020

March 31, 2020

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

$

370,087

$

88

0.10

%

$

413,782

$

126

0.12

%

$

58,406

$

349

2.41

%

Investments:

Treasury and government-sponsored agencies

1,155,525

4,885

1.69

%

648,314

2,937

1.81

%

583,971

3,697

2.53

%

Mortgage-backed securities

3,312,311

15,833

1.91

%

3,291,436

16,137

1.96

%

3,171,650

19,065

2.40

%

States and political subdivisions

1,478,143

12,200

3.30

%

1,437,890

12,008

3.34

%

1,273,156

11,409

3.58

%

Other securities

453,411

2,743

2.42

%

462,836

2,629

2.27

%

494,500

3,216

2.60

%

Total investments

6,399,390

35,661

2.23

%

5,840,476

33,711

2.31

%

5,523,277

37,387

2.71

%

Loans: (2)

Commercial

3,974,762

35,568

3.58

%

4,132,831

46,468

4.40

%

2,907,297

29,053

3.95

%

Commercial and agriculture real estate

5,980,774

55,746

3.73

%

5,829,912

58,334

3.92

%

5,188,597

62,439

4.76

%

Consumer:

Home equity

544,049

4,152

3.10

%

550,548

4,380

3.17

%

558,356

5,631

4.06

%

Other consumer loans

1,058,731

10,175

3.90

%

1,099,504

11,276

4.08

%

1,167,802

12,219

4.21

%

Subtotal commercial and consumer loans

11,558,316

105,641

3.71

%

11,612,795

120,458

4.13

%

9,822,052

109,342

4.48

%

Residential real estate loans

2,273,859

21,347

3.76

%

2,314,938

22,471

3.88

%

2,370,295

24,244

4.09

%

Total loans

13,832,175

126,988

3.68

%

13,927,733

142,929

4.04

%

12,192,347

133,586

4.35

%

Total earning assets

$

20,601,652

$

162,737

3.16

%

$

20,181,991

$

176,766

3.46

%

$

17,774,030

$

171,322

3.84

%

Less: Allowance for credit losses

(133,869

)

(137,539

)

(83,244

)

Non-earning Assets:

Cash and due from banks

$

288,623

$

341,154

$

287,601

Other assets

2,486,604

2,479,253

2,388,092

Total assets

$

23,243,010

$

22,864,859

$

20,366,479

Interest-Bearing Liabilities:

Checking and NOW accounts

$

4,863,819

$

612

0.05

%

$

4,708,568

$

629

0.05

%

$

4,104,778

$

2,860

0.28

%

Savings accounts

3,495,319

487

0.06

%

3,329,494

487

0.06

%

2,828,177

1,298

0.18

%

Money market accounts

1,987,348

423

0.09

%

1,932,594

445

0.09

%

1,784,169

2,507

0.57

%

Other time deposits

1,081,248

1,607

0.60

%

1,158,715

2,189

0.75

%

1,562,074

5,186

1.34

%

Total interest-bearing core deposits

11,427,734

3,129

0.11

%

11,129,371

3,750

0.13

%

10,279,198

11,851

0.46

%

Brokered deposits

157,780

30

0.08

%

37,176

26

0.28

%

84,099

447

2.14

%

Total interest-bearing deposits

11,585,514

3,159

0.11

%

11,166,547

3,776

0.13

%

10,363,297

12,298

0.48

%

Federal funds purchased and interbank borrowings

1,144

—

0.00

%

843

—

0.03

%

392,857

1,240

1.27

%

Securities sold under agreements to repurchase

398,662

120

0.12

%

438,272

125

0.11

%

329,091

384

0.47

%

Federal Home Loan Bank advances

1,925,352

5,409

1.14

%

2,089,519

5,953

1.13

%

1,965,130

7,768

1.59

%

Other borrowings

263,010

2,429

3.69

%

240,815

2,316

3.85

%

240,276

2,538

4.23

%

Total borrowed funds

2,588,168

7,958

1.25

%

2,769,449

8,394

1.21

%

2,927,354

11,930

1.64

%

Total interest-bearing liabilities

$

14,173,682

$

11,117

0.32

%

$

13,935,996

$

12,170

0.35

%

$

13,290,651

$

24,228

0.73

%

Noninterest-Bearing Liabilities and Shareholders' Equity

Demand deposits

$

5,756,277

$

5,644,017

$

3,964,493

Other liabilities

343,073

352,256

277,812

Shareholders' equity

2,969,978

2,932,590

2,833,523

Total liabilities and shareholders' equity

$

23,243,010

$

22,864,859

$

20,366,479

Net interest rate spread

2.84

%

3.11

%

3.11

%

Net interest margin (FTE)

2.94

%

3.26

%

3.31

%

FTE adjustment

$

3,500

$

3,517

$

3,323

(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,

2021

2020

2020

Beginning allowance for credit losses

$

131,388

$

131,388

$

54,619

Impact of adopting ASC 326 on 01/01/2020

—

—

41,347

Provision for credit losses

(17,356

)

(1,100

)

16,950

Gross charge-offs

(1,570

)

(707

)

(8,445

)

Gross recoveries

1,575

1,807

1,909

Net (charge-offs) recoveries

5

1,100

(6,536

)

Ending allowance for credit losses

$

114,037

$

131,388

$

106,380

Net charge-offs (recoveries) / average loans (1)

0.00

%

(0.03

)

%

0.21

%

Average loans outstanding (1)

$

13,815,515

$

13,910,145

$

12,182,704

EOP loans outstanding (1)

13,925,261

13,786,479

12,384,612

Allowance for credit losses / EOP loans (1)

0.82

%

0.95

%

0.86

%

Underperforming Assets:

Loans 90 Days and over (still accruing)

$

49

$

167

$

658

Non-performing loans:

Nonaccrual loans (2)

142,138

147,339

126,987

TDRs still accruing

15,226

17,749

17,040

Total non-performing loans

157,364

165,088

144,027

Foreclosed properties

751

1,324

2,163

Total underperforming assets

$

158,164

$

166,579

$

146,848

Classified and Criticized Assets:

Nonaccrual loans (2)

142,138

147,339

126,987

Substandard accruing loans

160,314

157,276

181,157

Loans 90 days and over (still accruing)

49

167

658

Total classified loans - "problem loans"

$

302,501

$

304,782

$

308,802

Other classified assets

3,791

3,706

2,616

Criticized loans - "special mention loans"

246,365

287,192

238,011

Total classified and criticized assets

$

552,657

$

595,680

$

549,429

Non-performing loans / EOP loans (1)

1.13

%

1.20

%

1.16

%

Allowance to non-performing loans

72

%

80

%

74

%

Under-performing assets / EOP loans (1)

1.14

%

1.21

%

1.19

%

EOP total assets

$

23,744,451

$

22,960,622

$

20,741,141

Under-performing assets / EOP assets

0.67

%

0.73

%

0.71

%

EOP - End of period actual balances

(1) Excludes loans held for sale.

(2) Includes non-accruing TDRs totaling $14.3 million at March 31, 2021, $14.9 million at December 31, 2020, and $11.8 million at March 31, 2020.


Non-GAAP Measures (unaudited)

($ in thousands)

Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Actual End of Period Balances

GAAP shareholders' equity

$

2,979,447

$

2,972,656

$

2,823,435

Deduct:

Goodwill

1,036,994

1,036,994

1,036,994

Intangibles

42,939

46,014

56,329

1,079,933

1,083,008

1,093,323

Tangible shareholders' equity

$

1,899,514

$

1,889,648

$

1,730,112

Average Balances

GAAP shareholders' equity

$

2,969,978

$

2,932,590

$

2,833,523

Deduct:

Goodwill

1,036,994

1,036,994

1,036,994

Intangibles

44,409

47,536

58,127

1,081,403

1,084,530

1,095,121

Average tangible shareholders' equity

$

1,888,575

$

1,848,060

$

1,738,402

Actual End of Period Balances

GAAP assets

$

23,744,451

$

22,960,622

$

20,741,141

Add:

Trust overdrafts

24

26

119

Deduct:

Goodwill

1,036,994

1,036,994

1,036,994

Intangibles

42,939

46,014

56,329

1,079,933

1,083,008

1,093,323

Tangible assets

$

22,664,542

$

21,877,640

$

19,647,937

Risk-weighted assets (2)

$

15,524,621

$

15,369,076

$

14,420,130

GAAP net income

$

86,818

$

74,120

$

22,640

Add:

Amortization of intangibles (net of tax)

2,306

2,433

2,849

Tangible net income

$

89,124

$

76,553

$

25,489

Tangible Ratios

Return on tangible common equity

18.77

%

16.20

%

5.89

%

Return on average tangible common equity

18.88

%

16.57

%

5.86

%

Return on tangible assets

1.57

%

1.40

%

0.52

%

Tangible common equity to tangible assets

8.38

%

8.64

%

8.81

%

Tangible common equity to risk-weighted assets (2)

12.24

%

12.30

%

12.00

%

Tangible common book value (1)

11.47

11.43

10.48

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 common equity (2)

$

1,865,220

$

1,805,194

$

1,643,249

Risk-weighted assets (2)

15,524,621

15,369,076

14,420,130

Tier 1 common equity to risk-weighted assets (2)

12.01

%

11.75

%

11.40

%

(2) March 31, 2021 figures are preliminary.

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


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