- Commercial and industrial loan growth over 21% annualized
EVANSVILLE, Ind., July 23, 2018 (GLOBE NEWSWIRE) —
Old National Bancorp (NASDAQ:ONB) reports 2Q18 net income of $44.0 million, diluted EPS of $0.29. Adjusted1 net income of $44.1 million, or $0.29 per share.
CEO COMMENTARY:
“Disciplined expense management and a measured increase in deposit costs, together with the benefit of increased rates, resulted in a very successful second quarter for Old National highlighted by positive operating leverage and an almost 20% increase in year-over-year adjusted pre-provision net revenue,” stated Chairman and CEO Bob Jones. “Moreover, we set a new company record for total commercial production while experiencing very strong commercial and industrial loan growth and maintaining a strong period-end pipeline. Coupled with our recently announced KleinBank partnership – which effectively doubles our presence in Minnesota’s Twin Cities – these results illustrate that Old National is well-positioned for continued growth and success in the vibrant markets that now define our franchise.”
SECOND-QUARTER HIGHLIGHTS2:
Net Income
- Net income of $44.0 million, an increase of 13.2% from second quarter of 2017
- Earnings per share of $0.29, an increase of 3.6% from second quarter of 2017
Net Interest Income/NIM
- Net interest income was $132.0 million, up 2.6%
- Net interest margin on a fully taxable equivalent basis was 3.55% compared to 3.45%
Operating Performance
- Pre-provision net revenue1 (“PPNR”) was $53.6 million
- Adjusted PPNR1 was $65.6 million, up 7.4%
- Noninterest expense was $130.5 million
- Adjusted noninterest expense1 was $114.5 million, compared to $111.3 million
- Efficiency ratio1 was 69.58%
- Adjusted efficiency ratio1 was 61.68%, a 134 basis point improvement from second quarter of 2017
Loans and Credit Quality
- End-of-period total loans3 were $11,321.8 million compared to $11,256.3 million
— Excluding $64.9 million in student loans sold during the quarter, organic total loan growth was 4.6% annualized - End-of-period commercial and industrial loans were $2,962.9 million compared to $2,811.6 million; 21.5% annualized growth
- Second quarter record level total commercial production of $598.2 million and June 30 pipeline of $1.7 billion
- Provision for loan losses was $2.4 million compared to $0.4 million
- Net recoveries were $0.8 million, or (0.03%) annualized, compared to net charge-offs of 0.01%
- Non-performing loans were 1.38% of total loans compared to 1.28%
Capital Returns
- Return on average equity was 8.06%
- Return on average tangible common equity1 was 14.28%
- Adjusted return on average tangible common equity1 was 14.32%
Notable Items
- $2.5 million in merger/integration charges and $1.3 million in branch action charges (net of $0.3 million gain)
- $2.2 million gain on the sale of student loans
- $11.9 million in tax credit amortization
- Footprint rationalization continues with 9 branch consolidations in the second quarter, 1 pending in the third quarter and the pending sale of 10 branches
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 2018 net income of $44.0 million, or $0.29 per diluted share.
Included in the second quarter was a pre-tax gain of $2.2 million for the sale of a student loan portfolio. Also included in the second quarter were pre-tax charges of $2.5 million for merger and integration and $1.3 million (net of $0.3 million gain) for branch actions. Excluding these items from the current quarter and netting out securities gains, Old National would have reported net income of $44.1 million, or $0.29 per share.
With a continued focus on expense management, 9 branches located throughout the footprint were consolidated in the second quarter with 1 pending consolidation that will take place in the third quarter. In addition, and as previously disclosed, Old National entered into a branch purchase and assumption agreement for the sale of 10 Old National branches in Wisconsin to Marine Credit Union of La Crosse, Wisconsin. The branch sale includes the assumption of approximately $261 million in deposits and no loans.
1Q18 amounts reflect the reclassification of $0.5 million of agency costs from data processing expense to investment product fee revenue as a result of the implementation of the revenue recognition accounting standard.
LOANS
The strong commercial loan growth that has defined Old National’s overall growth market strategy over the past several quarters continued in the second quarter.
- Period-end total loans increased to $11,321.8 million at June 30, 2018, up from $11,256.3 million at March 31, 2018.
- Student loans totaling $64.9 million were sold during the second quarter of 2018, resulting in a $2.2 million gain.
- End-of-period total loan growth in the second quarter was $65.5 million.
- Excluding the sale of the student loan portfolio, total end-of-period organic loan growth was $130.5 million, or 4.6% on an annualized basis.
- End-of-period growth in total commercial and industrial loans was $151.2 million, or 21.5% on an annualized basis.
- Second quarter commercial loan production of $598.2 million was a Company record. Period-end pipeline totaled $1.7 billion.
- On average, total loans in the second quarter were $11,262.0 million, up from $11,179.3 million in the first quarter of 2018.
- Average total loans increased $124.1 million, or 4.5% annualized, net of the student loans sold.
- Average total commercial and industrial loan growth was $114.1 million, or 16.5% on an annualized basis.
DEPOSITS
A low-cost core deposit franchise continues to be one of Old National’s strengths; average balances increased while end-of-period balances experienced seasonal declines.
- Period-end total deposits decreased to $12,596.4 million at June 30, 2018, from $12,788.6 million at March 31, 2018.
- On average, total deposits in the second quarter were $12,650.8 million, increasing from the $12,579.2 million in the first quarter of 2018.
- Average total deposits increased $71.6 million, or 2.3% annualized.
NET INTEREST INCOME AND MARGIN
Well-controlled deposit costs and higher asset yields boosted both net interest income and margin in the second quarter.
- Net interest income increased to $132.0 million in the second quarter of 2018 from $128.5 million in the first quarter of 2018.
- The net interest margin (on a fully taxable equivalent basis) increased 10 basis points to 3.55% compared to 3.45% in the first quarter of 2018.
- The increase in short term rates, strong loan production and accretion income benefitted net interest income and net interest margin during the quarter.
- Accretion income increased to $11.5 million, or 30 basis points of net interest margin, in the second quarter of 2018 from $11.0 million, or 28 basis points of net interest margin, in the first quarter of 2018. In the second quarter of 2018, accretion income was just 6.4% of adjusted total revenue.
- The cost of total deposits rose 6 basis points to 0.29% in the second quarter of 2018 while the cost of total interest-bearing deposits rose 8 basis points to 0.41%.
CREDIT QUALITY
Exceptional credit quality remains a hallmark of the Old National franchise.
- Asset quality remained strong with net recoveries in the second quarter of $0.8 million, or (0.03%) of total average loans, and 30-89 day delinquencies of 0.34%.
- Provision expense for the second quarter was $2.4 million.
- Non-performing loans as a percentage of total loans was 1.38%.
- 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, 2018, the remaining discount on these acquired loans was $110.7 million.
- The allowance for loan losses was $53.7 million, or 0.48% of total loans at June 30, 2018.
NONINTEREST INCOME
Noninterest income increased due to seasonal factors in several fee income businesses and a gain on the sale of student loans.
- Total noninterest income for the second quarter of 2018 was $49.3 million, or an increase of $7.4 million from the first quarter of 2018.
- Included in noninterest income in the second quarter was a gain of $2.2 million from the sale of Old National’s student loan portfolio.
- Higher mortgage banking revenue (up $1.0 million), seasonal Wealth Management tax preparation fees (up $1.0 million), higher capital markets income (up $0.4 million) and various items included in Other Income were the main drivers of the quarterly increase.
- Securities gains were $1.5 million, up $0.7 million from the first quarter of 2018.
NONINTEREST EXPENSE
Our second quarter results included disciplined expense management, which helped drive positive operating leverage1.
- Noninterest expense for the second quarter of 2018 was $130.5 million and included $2.5 million in merger and integration charges, $1.2 million in branch action charges, $0.4 million in severance and $11.9 million in tax credit amortization.
- Excluding these items, adjusted noninterest expense for the second quarter was $114.5 million, compared to the $111.3 million in adjusted noninterest expense in the first quarter of 2018.
- Second quarter included higher salary and benefits expense due to annual merit increases and a year-to-date 401k benefit enhancement as well as higher data processing expense related to tax preparation clients.
- Adjusted operating leverage1 was +224 basis points in the second quarter compared to a year ago.
- The second quarter efficiency ratio was 69.58% while the adjusted efficiency ratio was 61.68%.
INCOME TAXES
- On a fully taxable-equivalent basis, income tax expense in the second quarter was $7.2 million, resulting in a 14.0% FTE tax rate.
CAPITAL
Strong quarterly earnings drove capital ratios higher.
- At the end of the second quarter, total risk-based capital was 11.9% and regulatory tier 1 capital was 10.9%.
- Tangible common equity to tangible assets was 8.00% at the end of the second quarter compared to 7.83% in the first quarter of 2018.
NON-GAAP RECONCILIATIONS
| ($ in millions, except EPS, shares in 000s) | 2Q18 | Adjustments4 | Adjusted 2Q18 |
| Total Revenues (FTE) | $184.1 | ($4.0) | $180.1 |
| Less: Provision for Loan Losses | (2.4) | – | (2.4) |
| Less: Noninterest Expenses | (130.5) | 4.1 | (126.4) |
| Income before Income Taxes (FTE) | $51.2 | $0.1 | $51.3 |
| Income Taxes | (7.2) | – | (7.2) |
| Net Income | $44.0 | $0.1 | $44.1 |
| Average Shares Outstanding | 152,568 | – | 152,568 |
| Earnings Per Share | $0.29 | $0.0 | $0.29 |
4 Tax-effect calculations use the 2018 statutory FTE tax rates (federal + state)
| ($ in millions) | 2Q18 | 1Q18 |
| Net Interest Income | $132.0 | $128.5 |
| FTE Adjustment | 2.8 | 2.8 |
| Net Interest Income (FTE) | $134.8 | $131.3 |
| Average Earning Assets | $15,176.7 | $15,205.9 |
| Net Interest Margin (FTE) | 3.55% | 3.45% |
| ($ in millions) | 2Q18 | 1Q18 |
| Net Interest Income | $132.0 | $128.5 |
| FTE Adjustment | 2.8 | 2.8 |
| Net Interest Income (FTE) | $134.8 | $131.3 |
| Total Noninterest Income | $49.3 | $41.9 |
| Noninterest Expense | 130.5 | 117.1 |
| Pre-Provision Net Revenue | $53.6 | $56.1 |
| Less: Securities Gains | (1.5) | (0.8) |
| Less: Gain on Student Loan Sale | (2.2) | – |
| Less: Gain on Branch Actions | (0.3) | – |
| Add: Merger and Integration Charges | 2.5 | 2.3 |
| Add: Branch Action Charges and Severance | 1.6 | 2.8 |
| Add: Amortization of Tax Credit Investments | 11.9 | 0.7 |
| Adjusted Pre-Provision Net Revenue | $65.6 | $61.1 |
| ($ in millions) | 2Q18 | 1Q18 | 4Q17 | 2Q17 |
| Noninterest Expense | $130.5 | $117.1 | $140.4 | $102.8 |
| Less: Merger and Integration Charges | (2.5) | (2.3) | (11.9) | – |
| Less: Branch Action Charges, Severance, Foundation Funding and Client Experience Initiative Charges | (1.6) | (2.8) | (6.6) | (1.7) |
| Noninterest Expense less Charges | $126.4 | $112.0 | $121.9 | $101.1 |
| Less: Amortization of Tax Credit Investments | (11.9) | (0.7) | (11.7) | – |
| Adjusted Noninterest Expense | $114.5 | $111.3 | $110.2 | $101.1 |
| Less: Intangible Amortization | (3.4) | (3.6) | (3.4) | (2.8) |
| Adjusted Noninterest Expense Less Intangible Amortization | $ 111.1 | $ 107.7 | $ 106.8 | $ 98.3 |
| Net Interest Income | $132.0 | $128.5 | $118.6 | $104.3 |
| FTE Adjustment | 2.8 | 2.8 | 6.1 | 5.7 |
| Net Interest Income (FTE) | $134.8 | $131.3 | $124.7 | $110.0 |
| Total Noninterest Income | $49.3 | $41.9 | $44.8 | $49.2 |
| Total Revenue (FTE) | $184.1 | $173.2 | $169.5 | $159.2 |
| Less: Securities Gains | (1.5) | (0.8) | (1.6) | (3.1) |
| Less: Gain on Student Loan Sale | (2.2) | – | – | – |
| Less: Gain on Branch Actions | (0.3) | – | – | (0.1) |
| Adjusted Total Revenue (FTE) | $180.1 | $172.4 | $167.9 | $156.0 |
| Efficiency Ratio | 69.58% | 65.84% | 81.60% | 64.05% |
| Adjusted Efficiency Ratio | 61.68% | 62.50% | 63.58% | 63.02% |
| Operating Leverage5 (basis points) | (1,125) | |||
| Adjusted Operating Leverage6 (basis points) | 224 |
5 Year-over-year basis point change in noninterest expenses plus change in total revenue
6 Year-over-year basis point change in adjusted noninterest expense plus change in adjusted total revenue
| ($ in millions) | 2Q18 | 1Q18 |
| Net Income (Loss) | $44.0 | $48.0 |
| Add: Intangible Amortization (net of tax7) | 2.7 | 2.8 |
| Tangible Net Income (Loss) | $46.7 | $50.8 |
| Less: Securities Gains (net of tax7) | (1.1) | (0.6) |
| Less: Gain on Sale of Student Loans (net of tax7) | (1.7) | – |
| Add: Merger & Integration Charges (net of tax7) | 1.9 | 1.8 |
| Add: Branch Action Charges (net of gains) and Severance (net of tax7) | 1.0 | 2.1 |
| Adjusted Tangible Net Income (Loss) | $46.8 | $54.1 |
| Average Total Shareholders’ Equity | $2,183.6 | $2,166.0 |
| Less: Average Goodwill | (828.8) | (828.1) |
| Less: Average Intangibles | (47.1) | (51.1) |
| Average Tangible Shareholders’ Equity | $1,307.7 | $1,286.8 |
| Return on Average Tangible Common Equity | 14.28% | 15.80% |
| Adjusted Return on Average Tangible Common Equity | 14.32% | 16.81% |
7Tax-effect calculations use the 2018 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 23, 2018, to review second-quarter 2018 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 6:00 a.m. Central Time on July 24 through August 7. To access the replay, dial 1-855-859-2056, Conference ID Code 6293046.
ABOUT OLD NATIONAL
Old National Bancorp (NASDAQ:ONB) is the holding company of Old National Bank. Headquartered in Evansville with $17.5 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 seven consecutive years. For nearly 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 Anchor-Minnesota 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.
ADDITIONAL INFORMATION ABOUT THE OLD NATIONAL BANCORP/KLEIN FINANCIAL, INC. TRANSACTION
Communications in this press release do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed merger, Old National will file with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement of Klein and a Prospectus of Old National, as well as other relevant documents concerning the proposed transaction. Shareholders are urged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Old National and Klein, may be obtained at the SEC’s Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from Old National at www.oldnational.com under the tab “Investor Relations” and then under the heading “Financial Information.” Old National and Klein and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Klein in connection with the proposed merger. Information about the directors and executive officers of Old National is set forth in the proxy statement for Old National’s 2018 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 5, 2018. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.
| 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, | |||||||||||||
| 2018 | 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Income Statement | |||||||||||||||||
| Net interest income | $ | 131,963 | $ | 128,572 | $ | 104,333 | $ | 260,535 | $ | 210,134 | |||||||
| Provision for loan losses | 2,446 | 380 | 1,355 | 2,826 | 1,702 | ||||||||||||
| Noninterest income (1) | 49,289 | 41,905 | 49,271 | 91,194 | 92,191 | ||||||||||||
| Noninterest expense (1) | 130,460 | 117,157 | 102,811 | 247,617 | 204,702 | ||||||||||||
| Net income | 44,001 | 47,983 | 38,854 | 91,984 | 74,846 | ||||||||||||
| Per Common Share Data (Diluted) | |||||||||||||||||
| Net income available to common shareholders | $ | 0.29 | $ | 0.31 | $ | 0.28 | $ | 0.60 | $ | 0.55 | |||||||
| Average diluted shares outstanding | 152,568 | 152,370 | 135,697 | 152,483 | 135,641 | ||||||||||||
| Book value | 14.44 | 14.32 | 13.92 | 14.44 | 13.92 | ||||||||||||
| Stock price | 18.60 | 16.90 | 17.25 | 18.60 | 17.25 | ||||||||||||
| Dividend payout ratio | 45 | % | 41 | % | 46 | % | 43 | % | 47 | % | |||||||
| Tangible common book value (2) | 8.70 | 8.55 | 8.85 | 8.70 | 8.85 | ||||||||||||
| Performance Ratios | |||||||||||||||||
| Return on average assets | 1.01 | % | 1.10 | % | 1.05 | % | 1.06 | % | 1.01 | % | |||||||
| Return on average common equity | 8.06 | % | 8.86 | % | 8.33 | % | 8.46 | % | 8.11 | % | |||||||
| Return on average tangible common equity (2) | 14.28 | % | 15.80 | % | 13.82 | % | 15.04 | % | 13.60 | % | |||||||
| Net interest margin (FTE) | 3.55 | % | 3.45 | % | 3.42 | % | 3.50 | % | 3.46 | % | |||||||
| Efficiency ratio (1,3) | 69.58 | % | 65.84 | % | 64.05 | % | 67.76 | % | 64.35 | % | |||||||
| Net charge-offs (recoveries) to average loans | -0.03 | % | 0.01 | % | 0.01 | % | -0.01 | % | 0.01 | % | |||||||
| Allowance for loan losses to ending loans | 0.48 | % | 0.45 | % | 0.55 | % | 0.48 | % | 0.55 | % | |||||||
| Non-performing loans to ending loans | 1.38 | % | 1.28 | % | 1.51 | % | 1.38 | % | 1.51 | % | |||||||
| Balance Sheet | |||||||||||||||||
| Total loans | $ | 11,295,629 | $ | 11,238,682 | $ | 9,232,040 | $ | 11,295,629 | $ | 9,232,040 | |||||||
| Total assets | 17,482,990 | 17,496,287 | 14,957,281 | 17,482,990 | 14,957,281 | ||||||||||||
| Total deposits | 12,596,376 | 12,788,600 | 10,683,714 | 12,596,376 | 10,683,714 | ||||||||||||
| Total borrowed funds | 2,530,104 | 2,371,292 | 2,259,918 | 2,530,104 | 2,259,918 | ||||||||||||
| Total shareholders’ equity | 2,200,215 | 2,179,118 | 1,886,594 | 2,200,215 | 1,886,594 | ||||||||||||
| Capital Ratios (2) | |||||||||||||||||
| Risk-based capital ratios (EOP): | |||||||||||||||||
| Tier 1 common equity | 10.9 | % | 10.7 | % | 11.5 | % | 10.9 | % | 11.5 | % | |||||||
| Tier 1 | 10.9 | % | 10.7 | % | 11.8 | % | 10.9 | % | 11.8 | % | |||||||
| Total | 11.9 | % | 11.7 | % | 12.3 | % | 11.9 | % | 12.3 | % | |||||||
| Leverage ratio (to average assets) | 8.3 | % | 8.1 | % | 8.7 | % | 8.3 | % | 8.7 | % | |||||||
| Total equity to assets (averages) | 12.54 | % | 12.42 | % | 12.56 | % | 12.48 | % | 12.46 | % | |||||||
| Tangible common equity to tangible assets | 7.98 | % | 7.83 | % | 8.41 | % | 7.98 | % | 8.41 | % | |||||||
| Nonfinancial Data | |||||||||||||||||
| Full-time equivalent employees | 2,683 | 2,721 | 2,652 | 2,683 | 2,652 | ||||||||||||
| Number of branches | 183 | 191 | 188 | 183 | 188 | ||||||||||||
| (1) For the three months ended March 31, 2018, amounts reflect the reclassification of $0.5 million of agency costs from data processing expense to investment product fee revenue as a result of the implementation of the revenue recognition accounting standard. | |||||||||||||||||
| (2) See “Non-GAAP Measures” table. | |||||||||||||||||
| (3) Efficiency ratio is defined as noninterest expense before amortization of intangibles as a percent of FTE net interest income and noninterest revenues, excluding net gains from securities transactions. This presentation excludes amortization of intangibles and net securities gains, as is common in other company releases, and better aligns with true operating performance. | |||||||||||||||||
| FTE – Fully taxable equivalent basis EOP – End of period actual balances | |||||||||||||||||
| Income Statement (unaudited) | ||||||||||||
| ($ and shares in thousands, except per share data) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||
| 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||
| Interest income | $ | 153,736 | $ | 147,706 | $ | 118,209 | $ | 301,442 | $ | 236,677 | ||
| Less: interest expense | 21,773 | 19,134 | 13,876 | 40,907 | 26,543 | |||||||
| Net interest income | 131,963 | 128,572 | 104,333 | 260,535 | 210,134 | |||||||
| Provision for loan losses | 2,446 | 380 | 1,355 | 2,826 | 1,702 | |||||||
| Net interest income after provision for loan losses | 129,517 | 128,192 | 102,978 | 257,709 | 208,432 | |||||||
| Wealth management fees | 9,746 | 9,026 | 9,679 | 18,772 | 18,678 | |||||||
| Service charges on deposit accounts | 10,765 | 10,759 | 10,040 | 21,524 | 19,883 | |||||||
| Debit card and ATM fees | 5,080 | 4,865 | 4,436 | 9,945 | 8,672 | |||||||
| Mortgage banking revenue | 5,189 | 4,192 | 5,186 | 9,381 | 9,412 | |||||||
| Investment product fees (1) | 5,066 | 5,031 | 5,004 | 10,097 | 9,993 | |||||||
| Capital markets income | 896 | 498 | 2,747 | 1,394 | 3,778 | |||||||
| Company-owned life insurance | 2,430 | 2,605 | 2,117 | 5,035 | 4,266 | |||||||
| Other income | 8,586 | 4,130 | 6,936 | 12,716 | 12,837 | |||||||
| Gains (losses) on sales of securities | 1,494 | 788 | 3,075 | 2,282 | 4,575 | |||||||
| Gains (losses) on derivatives | 37 | 11 | 51 | 48 | 97 | |||||||
| Total noninterest income (1) | 49,289 | 41,905 | 49,271 | 91,194 | 92,191 | |||||||
| Salaries and employee benefits | 66,592 | 64,179 | 57,606 | 130,771 | 114,170 | |||||||
| Occupancy | 12,873 | 13,280 | 10,539 | 26,153 | 22,673 | |||||||
| Equipment | 3,728 | 3,565 | 3,350 | 7,293 | 6,577 | |||||||
| Marketing | 3,962 | 3,697 | 3,673 | 7,659 | 6,723 | |||||||
| Data processing (1) | 9,724 | 8,400 | 8,226 | 18,124 | 15,834 | |||||||
| Communication | 2,772 | 3,064 | 2,288 | 5,836 | 4,702 | |||||||
| Professional fees | 2,923 | 2,730 | 4,077 | 5,653 | 6,728 | |||||||
| Loan expenses | 1,843 | 1,744 | 1,693 | 3,587 | 3,324 | |||||||
| Supplies | 903 | 722 | 594 | 1,625 | 1,173 | |||||||
| FDIC assessment | 3,161 | 2,645 | 2,130 | 5,806 | 4,617 | |||||||
| Other real estate owned expense | 196 | 349 | 1,009 | 545 | 2,124 | |||||||
| Amortization of intangibles | 3,416 | 3,609 | 2,781 | 7,025 | 5,801 | |||||||
| Amortization of tax credit investments | 11,858 | 716 | – | 12,574 | – | |||||||
| Other expense | 6,509 | 8,457 | 4,845 | 14,966 | 10,256 | |||||||
| Total noninterest expense (1) | 130,460 | 117,157 | 102,811 | 247,617 | 204,702 | |||||||
| Income before income taxes | 48,346 | 52,940 | 49,438 | 101,286 | 95,921 | |||||||
| Income tax expense | 4,345 | 4,957 | 10,584 | 9,302 | 21,075 | |||||||
| Net income | $ | 44,001 | $ | 47,983 | $ | 38,854 | $ | 91,984 | $ | 74,846 | ||
| Diluted Earnings Per Share | ||||||||||||
| Net income | $ | 0.29 | $ | 0.31 | $ | 0.28 | $ | 0.60 | $ | 0.55 | ||
| Average Common Shares Outstanding | ||||||||||||
| Basic | 151,878 | 151,721 | 135,085 | 151,800 | 134,999 | |||||||
| Diluted | 152,568 | 152,370 | 135,697 | 152,483 | 135,641 | |||||||
| Common shares outstanding at end of period | 152,351 | 152,172 | 135,516 | 152,351 | 135,516 | |||||||
| (1) For the three months ended March 31, 2018, amounts reflect the reclassification of $0.5 million of agency costs from data processing expense to investment product fee revenue as a result of the implementation of the revenue recognition accounting standard. | ||||||||||||
| Balance Sheet (unaudited) | ||||||||||||||
| ($ in thousands) | ||||||||||||||
| June 30, | March 31, | June 30, | ||||||||||||
| 2018 | 2018 | 2017 | ||||||||||||
| Assets | ||||||||||||||
| Federal Reserve Bank account | $ | 43,889 | $ | 73,657 | $ | 22,117 | ||||||||
| Money market investments | 10,359 | 12,562 | 9,815 | |||||||||||
| Investments: | ||||||||||||||
| Treasury and government-sponsored agencies | 647,058 | 655,353 | 586,258 | |||||||||||
| Mortgage-backed securities | 1,588,120 | 1,623,554 | 1,470,687 | |||||||||||
| States and political subdivisions | 1,110,087 | 1,159,614 | 1,118,437 | |||||||||||
| Other securities | 503,920 | 458,270 | 449,045 | |||||||||||
| Total investments | 3,849,185 | 3,896,791 | 3,624,427 | |||||||||||
| Loans held for sale, at fair value | 26,198 | 17,635 | 27,425 | |||||||||||
| Loans: | ||||||||||||||
| Commercial | 2,962,895 | 2,811,629 | 2,001,621 | |||||||||||
| Commercial and agriculture real estate | 4,451,772 | 4,449,980 | 3,259,998 | |||||||||||
| Consumer: | ||||||||||||||
| Home equity | 491,777 | 487,237 | 472,198 | |||||||||||
| Other consumer loans | 1,235,212 | 1,331,304 | 1,398,849 | |||||||||||
| Subtotal of commercial and consumer loans | 9,141,656 | 9,080,150 | 7,132,666 | |||||||||||
| Residential real estate | 2,153,973 | 2,158,532 | 2,099,374 | |||||||||||
| Total loans | 11,295,629 | 11,238,682 | 9,232,040 | |||||||||||
| Total earning assets | 15,225,260 | 15,239,327 | 12,915,824 | |||||||||||
| Allowance for loan losses | (53,660 | ) | (50,381 | ) | (50,986 | ) | ||||||||
| Non-earning Assets: | ||||||||||||||
| Cash and due from banks | 219,626 | 192,022 | 230,809 | |||||||||||
| Premises and equipment | 449,304 | 453,603 | 413,933 | |||||||||||
| Goodwill and other intangible assets | 874,221 | 877,637 | 686,894 | |||||||||||
| Company-owned life insurance | 405,492 | 404,561 | 354,875 | |||||||||||
| Net deferred tax assets | 90,187 | 88,773 | 146,780 | |||||||||||
| Loan servicing rights | 24,303 | 24,380 | 25,023 | |||||||||||
| Other real estate owned | 3,729 | 6,735 | 11,071 | |||||||||||
| Other assets | 244,528 | 259,630 | 223,058 | |||||||||||
| Total non-earning assets | 2,311,390 | 2,307,341 | 2,092,443 | |||||||||||
| Total assets | $ | 17,482,990 | $ | 17,496,287 | $ | 14,957,281 | ||||||||
| Liabilities and Equity | ||||||||||||||
| Noninterest-bearing demand deposits | $ | 3,600,793 | $ | 3,655,732 | $ | 3,011,156 | ||||||||
| Interest-bearing: | ||||||||||||||
| Checking and NOW accounts | 3,054,302 | 3,135,778 | 2,639,813 | |||||||||||
| Savings accounts | 3,026,110 | 3,091,101 | 2,924,689 | |||||||||||
| Money market accounts | 1,090,621 | 1,130,258 | 672,391 | |||||||||||
| Other time deposits | 1,648,390 | 1,573,874 | 1,313,199 | |||||||||||
| Total core deposits | 12,420,216 | 12,586,743 | 10,561,248 | |||||||||||
| Brokered CD’s | 176,160 | 201,857 | 122,466 | |||||||||||
| Total deposits | 12,596,376 | 12,788,600 | 10,683,714 | |||||||||||
| Federal funds purchased and interbank borrowings | 175,044 | 150,026 | 227,029 | |||||||||||
| Securities sold under agreements to repurchase | 347,511 | 308,189 | 298,094 | |||||||||||
| Federal Home Loan Bank advances | 1,757,308 | 1,664,179 | 1,515,628 | |||||||||||
| Other borrowings | 250,241 | 248,898 | 219,167 | |||||||||||
| Total borrowed funds | 2,530,104 | 2,371,292 | 2,259,918 | |||||||||||
| Accrued expenses and other liabilities | 156,295 | 157,277 | 127,055 | |||||||||||
| Total liabilities | 15,282,775 | 15,317,169 | 13,070,687 | |||||||||||
| Common stock, surplus, and retained earnings | 2,266,918 | 2,240,644 | 1,917,714 | |||||||||||
| Accumulated other comprehensive income (loss) | (66,703 | ) | (61,526 | ) | (31,120 | ) | ||||||||
| Total shareholders’ equity | 2,200,215 | 2,179,118 | 1,886,594 | |||||||||||
| Total liabilities and shareholders’ equity | $ | 17,482,990 | $ | 17,496,287 | $ | 14,957,281 | ||||||||
| Average Balance Sheet and Interest Rates (unaudited) | ||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||
| June 30, 2018 | March 31, 2018 | June 30, 2017 | ||||||||||||||||||||||||
| 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 | $ | 51,724 | $ | 117 | 0.91 | % | $ | 66,536 | $ | 90 | 0.55 | % | $ | 27,222 | $ | 55 | 0.80 | % | ||||||||
| Investments: | ||||||||||||||||||||||||||
| Treasury and government-sponsored agencies | 648,778 | 3,387 | 2.09 | % | 663,096 | 3,424 | 2.07 | % | 575,940 | 2,798 | 1.94 | % | ||||||||||||||
| Mortgage-backed securities | 1,588,140 | 8,904 | 2.24 | % | 1,632,610 | 9,520 | 2.33 | % | 1,485,582 | 7,590 | 2.04 | % | ||||||||||||||
| States and political subdivisions | 1,118,395 | 10,591 | 3.79 | % | 1,204,855 | 10,478 | 3.48 | % | 1,122,769 | 13,375 | 4.76 | % | ||||||||||||||
| Other securities | 507,646 | 3,909 | 3.08 | % | 459,458 | 3,669 | 3.19 | % | 446,521 | 2,866 | 2.57 | % | ||||||||||||||
| Total investments | 3,862,959 | 26,791 | 2.77 | % | 3,960,019 | 27,091 | 2.74 | % | 3,630,812 | 26,629 | 2.93 | % | ||||||||||||||
| Loans: (2) | ||||||||||||||||||||||||||
| Commercial | 2,873,781 | 32,527 | 4.48 | % | 2,759,688 | 28,205 | 4.09 | % | 1,938,751 | 19,352 | 3.95 | % | ||||||||||||||
| Commercial and agriculture real estate | 4,449,839 | 57,251 | 5.09 | % | 4,394,002 | 55,787 | 5.08 | % | 3,240,318 | 39,830 | 4.86 | % | ||||||||||||||
| Consumer: | ||||||||||||||||||||||||||
| Home equity | 492,151 | 6,076 | 4.95 | % | 502,902 | 5,688 | 4.59 | % | 474,308 | 4,837 | 4.09 | % | ||||||||||||||
| Other consumer loans | 1,268,670 | 11,591 | 3.66 | % | 1,346,331 | 12,140 | 3.66 | % | 1,405,226 | 11,881 | 3.39 | % | ||||||||||||||
| Subtotal commercial and consumer loans | 9,084,441 | 107,445 | 4.74 | % | 9,002,923 | 101,820 | 4.59 | % | 7,058,603 | 75,900 | 4.31 | % | ||||||||||||||
| Residential real estate loans | 2,177,587 | 22,208 | 4.08 | % | 2,176,413 | 21,472 | 3.95 | % | 2,127,867 | 21,268 | 4.00 | % | ||||||||||||||
| Total loans | 11,262,028 | 129,653 | 4.57 | % | 11,179,336 | 123,292 | 4.42 | % | 9,186,470 | 97,168 | 4.21 | % | ||||||||||||||
| Total earning assets | $ | 15,176,711 | $ | 156,561 | 4.11 | % | $ | 15,205,891 | $ | 150,473 | 3.97 | % | $ | 12,844,504 | $ | 123,852 | 3.84 | % | ||||||||
| Less: Allowance for loan losses | (51,493 | ) | (50,953 | ) | (50,937 | ) | ||||||||||||||||||||
| Non-earning Assets: | ||||||||||||||||||||||||||
| Cash and due from banks | $ | 205,617 | $ | 199,132 | $ | 200,209 | ||||||||||||||||||||
| Other assets | 2,086,822 | 2,089,790 | 1,860,676 | |||||||||||||||||||||||
| Total assets | $ | 17,417,657 | $ | 17,443,860 | $ | 14,854,452 | ||||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||||||||||
| Checking and NOW accounts | $ | 3,097,635 | $ | 969 | 0.13 | % | $ | 3,067,437 | $ | 819 | 0.11 | % | $ | 2,643,123 | $ | 511 | 0.08 | % | ||||||||
| Savings accounts | 3,036,936 | 1,777 | 0.23 | % | 3,052,646 | 1,343 | 0.18 | % | 2,944,314 | 1,209 | 0.16 | % | ||||||||||||||
| Money market accounts | 1,103,177 | 702 | 0.26 | % | 1,159,010 | 546 | 0.19 | % | 684,911 | 146 | 0.09 | % | ||||||||||||||
| Other time deposits | 1,615,527 | 4,813 | 1.20 | % | 1,561,945 | 3,900 | 1.01 | % | 1,330,026 | 2,536 | 0.76 | % | ||||||||||||||
| Total interest-bearing deposits | 8,853,275 | 8,261 | 0.37 | % | 8,841,038 | 6,608 | 0.30 | % | 7,602,374 | 4,402 | 0.23 | % | ||||||||||||||
| Brokered CD’s | 194,801 | 878 | 1.81 | % | 175,039 | 647 | 1.50 | % | 111,972 | 322 | 1.15 | % | ||||||||||||||
| Total interest-bearing deposits and CD’s | 9,048,076 | 9,139 | 0.41 | % | 9,016,077 | 7,255 | 0.33 | % | 7,714,346 | 4,724 | 0.25 | % | ||||||||||||||
| Federal funds purchased and interbank borrowings | 140,471 | 647 | 1.85 | % | 261,353 | 1,017 | 1.58 | % | 166,690 | 422 | 1.02 | % | ||||||||||||||
| Securities sold under agreements to repurchase | 332,599 | 434 | 0.52 | % | 342,682 | 359 | 0.42 | % | 329,182 | 334 | 0.41 | % | ||||||||||||||
| Federal Home Loan Bank advances | 1,713,832 | 8,824 | 2.07 | % | 1,675,700 | 7,780 | 1.88 | % | 1,443,453 | 6,017 | 1.67 | % | ||||||||||||||
| Other borrowings | 249,291 | 2,729 | 4.38 | % | 248,828 | 2,723 | 4.38 | % | 219,085 | 2,379 | 4.34 | % | ||||||||||||||
| Total borrowed funds | 2,436,193 | 12,634 | 2.08 | % | 2,528,563 | 11,879 | 1.91 | % | 2,158,410 | 9,152 | 1.70 | % | ||||||||||||||
| Total interest-bearing liabilities | $ | 11,484,269 | $ | 21,773 | 0.76 | % | $ | 11,544,640 | $ | 19,134 | 0.67 | % | $ | 9,872,756 | $ | 13,876 | 0.56 | % | ||||||||
| Noninterest-Bearing Liabilities | ||||||||||||||||||||||||||
| Demand deposits | $ | 3,602,732 | $ | 3,563,104 | $ | 2,988,147 | ||||||||||||||||||||
| Other liabilities | 147,052 | 170,061 | 128,231 | |||||||||||||||||||||||
| Shareholders’ equity | 2,183,604 | 2,166,055 | 1,865,318 | |||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 17,417,657 | $ | 17,443,860 | $ | 14,854,452 | ||||||||||||||||||||
| Net interest rate spread | 3.35 | % | 3.30 | % | 3.28 | % | ||||||||||||||||||||
| Net interest margin (FTE) | 3.55 | % | 3.45 | % | 3.42 | % | ||||||||||||||||||||
| FTE adjustment | $ | 2,825 | $ | 2,767 | $ | 5,643 | ||||||||||||||||||||
| (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, 2018 | June 30, 2017 | |||||||||||||||||
| Average | Income (1)/ | Yield/ | Average | Income (1)/ | Yield/ | |||||||||||||
| Earning Assets: | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||
| Money market and other interest-earning | ||||||||||||||||||
| investments | $ | 59,089 | $ | 207 | 0.71 | % | $ | 27,352 | $ | 86 | 0.63 | % | ||||||
| Investments: | ||||||||||||||||||
| Treasury and government-sponsored agencies | 655,897 | 6,811 | 2.08 | % | 558,279 | 5,579 | 2.00 | % | ||||||||||
| Mortgage-backed securities | 1,610,252 | 18,424 | 2.29 | % | 1,498,414 | 15,408 | 2.06 | % | ||||||||||
| States and political subdivisions | 1,161,386 | 21,069 | 3.63 | % | 1,128,042 | 26,981 | 4.78 | % | ||||||||||
| Other securities | 483,685 | 7,578 | 3.13 | % | 445,881 | 5,694 | 2.55 | % | ||||||||||
| Total investments | 3,911,220 | 53,882 | 2.76 | % | 3,630,616 | 53,662 | 2.96 | % | ||||||||||
| Loans: (2) | ||||||||||||||||||
| Commercial | 2,817,050 | 60,733 | 4.29 | % | 1,913,480 | 38,440 | 4.00 | % | ||||||||||
| Commercial and agriculture real estate | 4,422,075 | 113,037 | 5.08 | % | 3,205,853 | 80,154 | 4.97 | % | ||||||||||
| Consumer: | ||||||||||||||||||
| Home equity | 496,978 | 11,765 | 4.77 | % | 475,325 | 9,496 | 4.03 | % | ||||||||||
| Other consumer loans | 1,307,805 | 23,730 | 3.66 | % | 1,406,655 | 23,648 | 3.39 | % | ||||||||||
| Subtotal commercial and consumer loans | 9,043,908 | 209,265 | 4.67 | % | 7,001,313 | 151,738 | 4.37 | % | ||||||||||
| Residential real estate loans | 2,177,003 | 43,680 | 4.01 | % | 2,134,681 | 42,522 | 3.98 | % | ||||||||||
| Total loans | 11,220,911 | 252,945 | 4.50 | % | 9,135,994 | 194,260 | 4.25 | % | ||||||||||
| Total earning assets | $ | 15,191,220 | $ | 307,034 | 4.04 | % | $ | 12,793,962 | $ | 248,008 | 3.87 | % | ||||||
| Less: Allowance for loan losses | (51,225 | ) | (50,824 | ) | ||||||||||||||
| Non-earning Assets: | ||||||||||||||||||
| Cash and due from banks | $ | 202,392 | $ | 197,927 | ||||||||||||||
| Other assets | 2,088,299 | 1,869,215 | ||||||||||||||||
| Total assets | $ | 17,430,686 | $ | 14,810,280 | ||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||
| Checking and NOW accounts | $ | 3,082,619 | $ | 1,788 | 0.12 | % | $ | 2,614,627 | $ | 967 | 0.07 | % | ||||||
| Savings accounts | 3,044,748 | 3,120 | 0.21 | % | 2,957,020 | 2,367 | 0.16 | % | ||||||||||
| Money market accounts | 1,130,939 | 1,248 | 0.22 | % | 695,890 | 295 | 0.09 | % | ||||||||||
| Other time deposits | 1,588,884 | 8,713 | 1.11 | % | 1,331,460 | 4,903 | 0.74 | % | ||||||||||
| Total interest-bearing deposits | 8,847,190 | 14,869 | 0.34 | % | 7,598,997 | 8,532 | 0.23 | % | ||||||||||
| Brokered CD’s | 184,975 | 1,525 | 1.66 | % | 109,758 | 575 | 1.06 | % | ||||||||||
| Total interest-bearing deposits and CD’s | 9,032,165 | 16,394 | 0.37 | % | 7,708,755 | 9,107 | 0.24 | % | ||||||||||
| Federal funds purchased and interbank borrowings | 200,578 | 1,664 | 1.67 | % | 177,818 | 778 | 0.88 | % | ||||||||||
| Securities sold under agreements to repurchase | 337,612 | 793 | 0.47 | % | 330,285 | 590 | 0.36 | % | ||||||||||
| Federal Home Loan Bank advances | 1,694,871 | 16,604 | 1.98 | % | 1,436,752 | 11,329 | 1.59 | % | ||||||||||
| Other borrowings | 249,062 | 5,452 | 4.38 | % | 219,025 | 4,739 | 4.33 | % | ||||||||||
| Total borrowed funds | 2,482,123 | 24,513 | 1.99 | % | 2,163,880 | 17,436 | 1.62 | % | ||||||||||
| Total interest-bearing liabilities | $ | 11,514,288 | $ | 40,907 | 0.72 | % | $ | 9,872,635 | $ | 26,543 | 0.54 | % | ||||||
| Noninterest-Bearing Liabilities | ||||||||||||||||||
| Demand deposits | $ | 3,583,027 | $ | 2,952,797 | ||||||||||||||
| Other liabilities | 158,493 | 139,250 | ||||||||||||||||
| Shareholders’ equity | 2,174,878 | 1,845,598 | ||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 17,430,686 | $ | 14,810,280 | ||||||||||||||
| Net interest rate spread | 3.32 | % | 3.33 | % | ||||||||||||||
| Net interest margin (FTE) | 3.50 | % | 3.46 | % | ||||||||||||||
| FTE adjustment | $ | 5,592 | $ | 11,331 | ||||||||||||||
| (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, | |||||||||||||
| 2018 | 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Beginning allowance for loan losses | $ | 50,381 | $ | 50,381 | $ | 49,834 | $ | 50,381 | $ | 49,808 | |||||||
| Provision for loan losses | 2,446 | 380 | 1,355 | 2,826 | 1,702 | ||||||||||||
| Gross charge-offs | (3,054 | ) | (2,685 | ) | (3,380 | ) | (5,739 | ) | (6,619 | ) | |||||||
| Gross recoveries | 3,887 | 2,305 | 3,177 | 6,192 | 6,095 | ||||||||||||
| Net (charge-offs) recoveries | 833 | (380 | ) | (203 | ) | 453 | (524 | ) | |||||||||
| Ending allowance for loan losses | $ | 53,660 | $ | 50,381 | $ | 50,986 | $ | 53,660 | $ | 50,986 | |||||||
| Net charge-offs (recoveries) / average loans (1) | -0.03 | % | 0.01 | % | 0.01 | % | -0.01 | % | 0.01 | % | |||||||
| Average loans outstanding (1) | $ | 11,257,585 | $ | 11,175,329 | $ | 9,180,987 | $ | 11,216,684 | $ | 9,130,112 | |||||||
| EOP loans outstanding (1) | 11,295,629 | $ | 11,238,682 | $ | 9,232,040 | $ | 11,295,629 | $ | 9,232,040 | ||||||||
| Allowance for loan losses / EOP loans (1) | 0.48 | % | 0.45 | % | 0.55 | % | 0.48 | % | 0.55 | % | |||||||
| Underperforming Assets: | |||||||||||||||||
| Loans 90 Days and over (still accruing) | $ | 1,575 | $ | 328 | $ | 201 | $ | 1,575 | $ | 201 | |||||||
| Non-performing loans: | |||||||||||||||||
| Nonaccrual loans (2) | 139,082 | 127,295 | 125,519 | 139,082 | 125,519 | ||||||||||||
| Renegotiated loans | 17,139 | 16,802 | 14,123 | 17,139 | 14,123 | ||||||||||||
| Total non-performing loans | 156,221 | 144,097 | 139,642 | 156,221 | 139,642 | ||||||||||||
| Foreclosed properties | 3,729 | 6,735 | 11,071 | 3,729 | 11,071 | ||||||||||||
| Total underperforming assets | $ | 161,525 | $ | 151,160 | $ | 150,914 | $ | 161,525 | $ | 150,914 | |||||||
| Classified and Criticized Assets: | |||||||||||||||||
| Nonaccrual loans (2) | 139,082 | 127,295 | 125,519 | 139,082 | 125,519 | ||||||||||||
| Substandard accruing loans | 109,051 | 118,123 | 112,277 | 109,051 | 112,277 | ||||||||||||
| Loans 90 days and over (still accruing) | 1,575 | 328 | 201 | 1,575 | 201 | ||||||||||||
| Total classified loans – “problem loans” | $ | 249,708 | $ | 245,746 | $ | 237,997 | $ | 249,708 | $ | 237,997 | |||||||
| Other classified assets | 3,149 | 2,987 | 7,449 | 3,149 | 7,449 | ||||||||||||
| Criticized loans – “special mention loans” | 154,891 | 174,873 | 99,502 | 154,891 | 99,502 | ||||||||||||
| Total classified and criticized assets | $ | 407,748 | $ | 423,606 | $ | 344,948 | $ | 407,748 | $ | 344,948 | |||||||
| Non-performing loans / EOP loans (1) | 1.38 | % | 1.28 | % | 1.51 | % | 1.38 | % | 1.51 | % | |||||||
| Allowance to non-performing loans (3) | 34 | % | 35 | % | 37 | % | 34 | % | 37 | % | |||||||
| Under-performing assets / EOP loans (1) | 1.43 | % | 1.34 | % | 1.63 | % | 1.43 | % | 1.63 | % | |||||||
| EOP total assets | $ | 17,482,990 | $ | 17,496,287 | $ | 14,957,281 | $ | 17,482,990 | $ | 14,957,281 | |||||||
| Under-performing assets / EOP assets | 0.92 | % | 0.86 | % | 1.01 | % | 0.92 | % | 1.01 | % | |||||||
| EOP – End of period actual balances | |||||||||||||||||
| (1) Excludes loans held for sale. | |||||||||||||||||
| (2) Includes renegotiated loans totaling $34.0 million at June 30, 2018, $36.9 million at March 31, 2018, and $46.2 million at June 30, 2017. | |||||||||||||||||
| (3) Includes acquired loans that were recorded at fair value in accordance with ASC 805 at the date of acquisition. As such, the credit risk was incorporated in the fair value recorded and no allowance for loan losses was recorded on the acquisition date. | |||||||||||||||||
| Non-GAAP Measures (unaudited) | ||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||
| 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||
| Actual End of Period Balances | ||||||||||||||||||
| GAAP shareholders’ equity | $ | 2,200,215 | $ | 2,179,118 | $ | 1,886,594 | $ | 2,200,215 | $ | 1,886,594 | ||||||||
| Deduct: | ||||||||||||||||||
| Goodwill | 828,804 | 828,804 | 655,018 | 828,804 | 655,018 | |||||||||||||
| Intangibles | 45,417 | 48,833 | 31,876 | 45,417 | 31,876 | |||||||||||||
| 874,221 | 877,637 | 686,894 | 874,221 | 686,894 | ||||||||||||||
| Tangible shareholders’ equity | $ | 1,325,994 | $ | 1,301,481 | $ | 1,199,700 | $ | 1,325,994 | $ | 1,199,700 | ||||||||
| Average Balances | ||||||||||||||||||
| GAAP shareholders’ equity | $ | 2,183,604 | $ | 2,166,055 | $ | 1,865,318 | $ | 2,174,878 | $ | 1,845,598 | ||||||||
| Deduct: | ||||||||||||||||||
| Goodwill | 828,804 | 828,141 | 655,018 | 828,474 | 655,018 | |||||||||||||
| Intangibles | 47,052 | 51,092 | 33,189 | 49,061 | 34,635 | |||||||||||||
| 875,856 | 879,233 | 688,207 | 877,535 | 689,653 | ||||||||||||||
| Average tangible shareholders’ equity | $ | 1,307,748 | $ | 1,286,822 | $ | 1,177,111 | $ | 1,297,343 | $ | 1,155,945 | ||||||||
| Actual End of Period Balances | ||||||||||||||||||
| GAAP assets | $ | 17,482,990 | $ | 17,496,287 | $ | 14,957,281 | $ | 17,482,990 | $ | 14,957,281 | ||||||||
| Add: | ||||||||||||||||||
| Trust overdrafts | 46 | 50 | 31 | 46 | 31 | |||||||||||||
| Deduct: | ||||||||||||||||||
| Goodwill | 828,804 | 828,804 | 655,018 | 828,804 | 655,018 | |||||||||||||
| Intangibles | 45,417 | 48,833 | 31,876 | 45,417 | 31,876 | |||||||||||||
| 874,221 | 877,637 | 686,894 | 874,221 | 686,894 | ||||||||||||||
| Tangible assets | $ | 16,608,815 | $ | 16,618,700 | $ | 14,270,418 | $ | 16,608,815 | $ | 14,270,418 | ||||||||
| Risk-weighted assets | $ | 12,648,732 | $ | 12,523,432 | $ | 10,367,804 | $ | 12,648,732 | $ | 10,367,804 | ||||||||
| GAAP net income | $ | 44,001 | $ | 47,983 | $ | 38,854 | $ | 91,984 | $ | 74,846 | ||||||||
| Add: | ||||||||||||||||||
| Amortization of intangibles (net of tax) | 2,699 | 2,851 | 1,807 | 5,550 | 3,770 | |||||||||||||
| Tangible net income | $ | 46,700 | $ | 50,834 | $ | 40,661 | $ | 97,534 | $ | 78,616 | ||||||||
| Tangible Ratios | ||||||||||||||||||
| Return on tangible common equity | 14.09 | % | 15.62 | % | 13.56 | % | 14.71 | % | 13.11 | % | ||||||||
| Return on average tangible common equity | 14.28 | % | 15.80 | % | 13.82 | % | 15.04 | % | 13.60 | % | ||||||||
| Return on tangible assets | 1.12 | % | 1.22 | % | 1.14 | % | 1.17 | % | 1.10 | % | ||||||||
| Tangible common equity to tangible assets | 7.98 | % | 7.83 | % | 8.41 | % | 7.98 | % | 8.41 | % | ||||||||
| Tangible common equity to risk-weighted assets | 10.48 | % | 10.39 | % | 11.57 | % | 10.48 | % | 11.57 | % | ||||||||
| Tangible common book value (1) | 8.70 | 8.55 | 8.85 | 8.70 | 8.85 | |||||||||||||
| 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 | $ | 1,371,918 | $ | 1,341,261 | $ | 1,222,250 | $ | 1,371,918 | $ | 1,222,250 | ||||||||
| Deduct: | ||||||||||||||||||
| Trust Preferred Securities (2) | – | – | 45,000 | – | 45,000 | |||||||||||||
| Additional Tier 1 capital deductions | – | – | (14,977 | ) | – | (14,977 | ) | |||||||||||
| – | – | 30,023 | – | 30,023 | ||||||||||||||
| Tier 1 common equity | $ | 1,371,918 | $ | 1,341,261 | $ | 1,192,227 | $ | 1,371,918 | $ | 1,192,227 | ||||||||
| Risk-weighted assets | 12,648,732 | 12,523,432 | 10,367,804 | 12,648,732 | 10,367,804 | |||||||||||||
| Tier 1 common equity to risk-weighted assets | 10.85 | % | 10.71 | % | 11.50 | % | 10.85 | % | 11.50 | % | ||||||||
| (2) Trust Preferred Securities are now included in Tier 2 capital as a result of exceeding the $15 billion asset threshold from the Anchor-Minnesota acquisition. | ||||||||||||||||||
Media: Kathy A. Schoettlin (812) 465-7269
Investors: Lynell J. Walton (812) 464-1366