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

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

CEO COMMENTARY:

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

FIRST-QUARTER HIGHLIGHTS²:

Net Income

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

Net Interest Income/NIM

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

Operating Performance

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

Loans and Credit Quality

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

Capital Returns

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

Notable Items

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

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

RESULTS OF OPERATIONS

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

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

LOANS
Record high pipeline though paydowns continued to impact outstandings.

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

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

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

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

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

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

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

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

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

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

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

INCOME TAXES

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

CAPITAL
Strong quarterly earnings drove capital ratios higher.

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

NON-GAAP RECONCILIATIONS

($ in millions, except EPS, shares in 000s)	1Q19			Adjustments4		Adjusted 1Q19
Total Revenues (FTE)	$	196.6		$	0.1	$	196.7
Less: Provision for Loan Losses		(1.0	)		-		(1.0	)
Less: Noninterest Expenses		(123.0	)		1.2		(121.8	)
Income before Income Taxes (FTE)	$	72.6		$	1.3	$	73.9
Income Taxes		16.3			0.3		16.6
Net Income	$	56.3		$	1.0	$	57.3
Average Shares Outstanding		175,368			-		175,368
Earnings Per Share	$	0.32		$	0.01	$	0.33
4 Tax-effect calculations use the current statutory FTE tax rates (federal + state)

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

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

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

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

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

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

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

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

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

 

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

 

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

 

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

 

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

 

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

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