Press Release

Old National’s 3rd quarter net income increases 36% from a year ago to a record $69.8 million, or $0.41 per share

Company Release - 10/21/2019 6:30 AM ET

EVANSVILLE, Ind., Oct. 21, 2019 (GLOBE NEWSWIRE) --

Old National Bancorp (NASDAQ: ONB) reports 3Q19 net income of $69.8 million, diluted EPS of $0.41.
Adjusted1 net income of $70.5 million, or $0.41 per diluted share.

CEO COMMENTARY:

“For the 2nd straight quarter, Old National combined record net income with record loan production, defense of our net interest margin, good fee income and excellent credit metrics, all of which allowed us to continue to generate positive operating leverage,” said CEO Jim Ryan. “While loan prepayments and lower line utilization impacted overall balance sheet growth, activity levels were robust. Our granular loan portfolio and low-risk profile again led to low credit costs, and Old National remains on a path to high-performance.”

THIRD QUARTER HIGHLIGHTS2:

Net Income

  • Net income of $69.8 million, an increase of 36% from third quarter of 2018
  • Earnings per share of $0.41, an increase of 21% from third quarter of 2018

Net Interest Income/NIM

  • Net interest income on a fully taxable equivalent basis was $156.3 million compared to $158.5 million
  • Net interest margin on a fully taxable equivalent basis was 3.57% compared to 3.66%

Operating Performance

  • Pre-provision net revenue1 (“PPNR”) was $87.6 million
  • Adjusted PPNR1 was $89.7 million, up 26.5% over third quarter of 2018
  • Noninterest expense was $122.6 million
  • Adjusted noninterest expense1 was $120.1 million
  • Efficiency ratio1 was 56.44%
  • Adjusted efficiency ratio1 was 55.26%, a 341 basis point improvement from third quarter of 2018

Loans and Credit Quality

  • End-of-period total loans3 were $12,075.9 million compared to $12,084.5 million
  • Third-quarter total commercial production was a record $680 million; September 30 pipeline was a record $2.0 billion
  • Provision for loan losses was $1.4 million
  • Net charge-offs were $0.8 million, or 0.03% annualized, compared to net charge-offs of $0.3 million
  • Non-performing loans were 1.31% of total loans compared to 1.34%

Return Profile & Capital

  • Return on average common equity was 9.91%
  • Return on average tangible common equity1 was 17.01%
  • Adjusted return on average tangible common equity1 was 17.16%
  • Repurchased 2.2 million shares of common stock during the quarter

Notable Items

  • $1.3 million in merger and integration 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 third-quarter 2019 net income of $69.8 million, or $0.41 per diluted share. 

Included in the third quarter were pre-tax charges of $1.3 million for merger and integration activity.  Excluding these charges from the current quarter and netting out debt securities gains, adjusted net income was $70.5 million, or $0.41 per diluted share.

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

  • Period-end total loans were $12,075.9 million at September 30, 2019, compared to $12,084.5 million at June 30, 2019.
  • Commercial and industrial loans decreased $124.3 million to $2,950.6 million; commercial real estate loans increased $118.4 million to $5,112.1 million; consumer loans decreased $37.5 million to $1,718.3 million.
  • Commercial loan production in the third quarter was $680 million; period-end pipeline totaled $2.0 billion.
  • On average, total loans in the third quarter were $12,073.8 million, down from $12,091.0 million in the second quarter of 2019.

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

  • Period-end total deposits were $14,448.4 million at September 30, 2019, an increase of $85.3 million from the second quarter of 2019.
  • On average, total deposits in the third quarter were $14,330.5 million, compared to $14,369.5 million in the second quarter of 2019. 

NET INTEREST INCOME AND MARGIN
Net interest income and margin lower with decline in interest collected on nonaccrual loans and mix shift partially offset by higher accretion and higher day count.

  • Net interest income decreased to $153.1 million in the third quarter of 2019 from $155.2 million in the second quarter of 2019.
  • The net interest margin on a fully taxable equivalent basis decreased 9 basis points to 3.57% compared to 3.66% in the second quarter of 2019.
  • Accretion income was $13.4 million, or 31 basis points of net interest margin, in the third quarter of 2019 compared to $11.8 million, or 27 basis points of net interest margin, in the second quarter of 2019.  In the third quarter of 2019, accretion income was 6.4% of adjusted total revenue.
  • Interest collected on nonaccrual loans was $2.0 million, or 5 basis points of net interest margin, in the third quarter of 2019 compared to $5.7 million, or 13 basis points of net interest margin, in the second quarter of 2019.
  • The cost of total deposits remained flat at 0.52% in the third quarter of 2019 while the cost of total interest-bearing deposits increased just 1 basis point to 0.71%.

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

  • Asset quality remained strong with net charge-offs in the third quarter of $0.8 million, or 0.03% of total average loans, and 30-89 day delinquencies of 0.21%.
  • Provision expense was $1.4 million in the third quarter compared to $1.0 million in the second quarter.
  • Non-performing loans decreased as a percentage of total loans to 1.31%.
  • 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 September 30, 2019, the remaining discount on these acquired loans was $87.1 million.
  • The allowance for loan losses was $56.9 million, or 0.47% of total loans at September 30, 2019.
  • Estimated day one increase to the allowance for loan losses and unfunded commitment liability of approximately $35 million to $45 million upon adoption of CECL. 

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

  • Total noninterest income for the third quarter of 2019 was $53.9 million, an increase of $2.7 million from the second quarter of 2019.
  • Mortgage banking revenue increased $1.7 million and capital markets income increased $1.4 million when compared to the second quarter of 2019.

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

  • Noninterest expense for the third quarter of 2019 was $122.6 million and included $1.3 million in merger & integration charges and $1.2 million in tax credit amortization.
  • Excluding these items, adjusted noninterest expense for the third quarter was $120.1 million, compared to the $124.3 million in adjusted noninterest expense in the second quarter of 2019. 
  • The third quarter efficiency ratio was 56.44%, while the adjusted efficiency ratio was 55.26%.

INCOME TAXES

  • On a fully taxable-equivalent basis, income tax expense in the third quarter was $16.4 million, resulting in a 19.1% FTE tax rate.
  • Income tax expense included $1.8 million in tax credit benefit.

CAPITAL
Strong quarterly earnings drove capital ratios higher.

  • At the end of the third quarter, total risk-based capital was 13.0% and regulatory tier 1 capital was 12.0%.
  • Tangible common equity to tangible assets was 8.95% at the end of the third quarter compared to 8.92% in the second quarter of 2019.
  • The Company repurchased 2.2 million shares of common stock during the third quarter with a weighted average price of $16.80 per share, excluding commissions.

NON-GAAP RECONCILIATIONS

($ in millions, except EPS, shares in 000s)3Q19Adjustments4Adjusted 3Q19
Total Revenues (FTE)$210.2 $(0.4)$209.8 
Less: Provision for Loan Losses (1.4) -  (1.4)
Less: Noninterest Expenses (122.6) 1.3  (121.3)
Income before Income Taxes (FTE)$86.2 $0.9 $87.1 
Income Taxes 16.4  0.2  16.6 
Net Income$69.8 $0.7 $70.5 
Average Shares Outstanding 171,551  -  171,551 
Earnings Per Share - Diluted$0.41 $- $0.41 
          

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

($ in millions)3Q192Q19
Net Interest Income$153.1 $155.2 
Add: FTE Adjustment 3.2  3.3 
Net Interest Income (FTE)$156.3 $158.5 
Average Earning Assets$17,510.5 $17,302.7 
Net Interest Margin (FTE) 3.57% 3.66%
       


($ in millions)3Q192Q19
Net Interest Income$153.1 $155.2 
Add: FTE Adjustment 3.2  3.3 
Net Interest Income (FTE)$156.3 $158.5 
Add: Total Noninterest Income 53.9  51.2 
Less: Noninterest Expense 122.6  128.1 
Pre-Provision Net Revenue$87.6 $81.6 
Less: Debt Securities Gains/Losses (0.4) (1.2)
Add: Merger and Integration Charges 1.3  3.2 
Add: Amortization of Tax Credit Investments 1.2  0.6 
Adjusted Pre-Provision Net Revenue$89.7 $84.2 
       


($ in millions)3Q192Q193Q18
Noninterest Expense$122.6 $128.1 $119.4 
Less: Merger and Integration Charges (1.3) (3.2) (1.7)
Less: Branch Action Charges & Severance -  -  (0.1)
Noninterest Expense less Charges$121.3 $124.9 $117.6 
Less: Amortization of Tax Credit Investments (1.2) (0.6) (9.2)
Adjusted Noninterest Expense$120.1 $124.3 $108.4 
Less: Intangible Amortization (4.2) (4.3) (3.3)
Adjusted Noninterest Expense Less Intangible Amortization$115.9 $120.0 $105.1 
Net Interest Income$153.1 $155.2 $130.8 
FTE Adjustment 3.2  3.3  2.8 
Net Interest Income (FTE)$156.3 $158.5 $133.6 
Total Noninterest Income 53.9  51.2  46.0 
Total Revenue (FTE)$210.2 $209.7 $179.6 
Less: Debt Securities Gains/Losses (0.4) (1.2) (0.1)
Less: Gain on Branch Actions -  -  (0.2)
Adjusted Total Revenue (FTE)$209.8 $208.5 $179.3 
Efficiency Ratio 56.44% 59.35% 64.71%
Adjusted Efficiency Ratio 55.26% 57.52% 58.67%
    
Operating Leverage5 (basis points) 1,440   
Adjusted Operating Leverage6 (basis points) 624   
      

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)3Q192Q19
Net Income$69.8 $63.0 
Add: Intangible Amortization (net of tax7) 3.1  3.2 
Tangible Net Income$72.9 $66.2 
Less: Securities Gains/Losses (net of tax7)  (0.3)  (0.9)
Add: Merger & Integration Charges (net of tax7) 1.0  2.4 
Adjusted Tangible Net Income$73.6 $67.7 
Average Total Shareholders’ Equity$2,817.5 $2,758.3 
Less: Average Goodwill (1,036.3) (1,036.3)
Less: Average Intangibles (66.0) (70.3)
Average Tangible Shareholders’ Equity$1,715.2 $1,651.7 
Return on Average Tangible Common Equity 17.01% 16.04%
Adjusted Return on Average Tangible Common Equity 17.16% 16.41%
       

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, October 21, 2019, to review third 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 October 21 through November 4.  To access the replay, dial 1-855-859-2056, Conference ID Code 1869785.

ABOUT OLD NATIONAL
Old National Bancorp (NASDAQ: ONB) is the holding company of Old National Bank. Headquartered in Evansville with $20.4 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: 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, including the impact of the new CECL standard; new legal obligations or liabilities or unfavorable resolutions of litigations; disruptive technologies in payment systems and other services traditionally provided by banks; computer hacking and other cybersecurity threats; other matters discussed in this press release; and other factors identified in our Annual Report on Form 10-K and other periodic filings with the SEC.  These forward-looking statements are made only as of the date of this press release, and Old National does not undertake an obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this press release.

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

 
Financial Highlights (unaudited) 
($ and shares in thousands, except per share data) 
        
 Three Months Ended Nine Months Ended 
 September 30,June 30,September 30, September 30,September 30, 
  2019  2019  2018   2019  2018  
Income Statement       
Net interest income$153,096 $155,230 $130,842  $455,374 $391,377  
Provision for loan losses 1,437  1,003  750   3,483  3,576  
Noninterest income 53,961  51,214  45,957   151,591  137,151  
Noninterest expense 122,585  128,118  119,376   373,744  366,993  
Net income 69,781  62,964  51,348   189,021  143,332  
        
        
Per Common Share Data       
Net income (diluted)$0.41 $0.36 $0.34  $1.09 $0.94  
Average diluted shares outstanding 171,551  173,675  152,784   173,527  152,616  
Book value 16.66  16.28  14.58   16.66  14.58  
Stock price 17.20  16.59  19.30   17.20  19.30  
Dividend payout ratio 32% 35% 38%  35% 41% 
Tangible common book value (1) 10.18  9.86  8.86   10.18  8.86  
        
        
Performance Ratios       
Return on average assets 1.39% 1.26% 1.18%  1.26% 1.10% 
Return on average common equity 9.91% 9.13% 9.28%  9.12% 8.74% 
Return on average tangible common equity (1) 17.01% 16.04% 16.10%  16.00% 15.40% 
Net interest margin (FTE) 3.57% 3.66% 3.51%  3.58% 3.51% 
Efficiency ratio (2) 56.44% 59.35% 64.71%  58.65% 66.74% 
Net charge-offs (recoveries) to average loans 0.03% 0.01% 0.06%  0.02% 0.01% 
Allowance for loan losses to ending loans 0.47% 0.47% 0.47%  0.47% 0.47% 
Non-performing loans to ending loans 1.31% 1.34% 1.47%  1.31% 1.47% 
        
        
Balance Sheet       
Total loans$12,017,648 $12,046,578 $11,292,659  $12,017,648 $11,292,659  
Total assets 20,438,788  20,145,285  17,567,759   20,438,788  17,567,759  
Total deposits 14,448,352  14,363,101  12,598,200   14,448,352  12,598,200  
Total borrowed funds 2,831,863  2,726,481  2,576,039   2,831,863  2,576,039  
Total shareholders' equity 2,832,530  2,803,139  2,220,680   2,832,530  2,220,680  
        
        
Capital Ratios (1)       
Risk-based capital ratios (EOP):       
Tier 1 common equity 12.0% 11.9% 11.1%  12.0% 11.1% 
Tier 1 12.0% 11.9% 11.1%  12.0% 11.1% 
Total 13.0% 12.8% 12.1%  13.0% 12.1% 
Leverage ratio (to average assets) 8.8% 8.8% 8.6%  8.8% 8.6% 
        
Total equity to assets (averages) 13.98% 13.82% 12.69%  13.84% 12.55% 
Tangible common equity to tangible assets 8.95% 8.92% 8.08%  8.95% 8.08% 
        
        
Nonfinancial Data       
Full-time equivalent employees 2,778  2,829  2,554   2,778  2,554  
Number of branches 192  192  182   192  182  
        
(1) See "Non-GAAP Measures" table.       
(2) Efficiency ratio is defined as noninterest expense before amortization of intangibles as a percent of FTE net interest income and noninterest revenues, excluding net gains from debt securities transactions. This presentation excludes amortization of intangibles and net debt securities gains, as is common in other company releases, and better aligns with true operating performance. 
FTE - Fully taxable equivalent basis EOP - End of period actual balances    
        


 
Income Statement (unaudited)
($ and shares in thousands, except per share data)
        
 Three Months Ended Nine Months Ended 
 September 30,June 30,September 30, September 30,September 30, 
  2019  2019 2018  2019 2018 
Interest income$185,853 $189,063 $155,369 $553,834 $456,811 
Less: interest expense 32,757  33,833  24,527  98,460  65,434 
Net interest income 153,096  155,230  130,842  455,374  391,377 
Provision for loan losses 1,437  1,003  750  3,483  3,576 
Net interest income after provision for loan losses 151,659  154,227  130,092  451,891  387,801 
        
Wealth management fees 9,160  9,909  9,022  27,604  27,794 
Service charges on deposit accounts 11,860  11,515  11,028  34,201  32,552 
Debit card and ATM fees 5,370  5,419  4,706  16,292  14,651 
Mortgage banking revenue 8,850  7,135  4,348  20,996  13,729 
Investment product fees 5,244  5,591  5,073  16,106  15,170 
Capital markets income 4,560  3,150  2,700  10,227  4,094 
Company-owned life insurance 2,703  2,711  2,958  8,602  7,993 
Other income 5,900  4,716  5,986  16,318  18,702 
Gains (losses) on sales of debt securities 424  1,165  135  1,486  2,417 
Gains (losses) on derivatives (110) (97) 1  (241) 49 
Total noninterest income 53,961  51,214  45,957  151,591  137,151 
        
Salaries and employee benefits 71,729  71,566  63,158  214,478  193,929 
Occupancy 11,934  14,559  12,578  41,071  38,731 
Equipment 3,954  4,517  3,652  12,945  10,945 
Marketing 4,105  4,439  3,406  12,267  11,065 
Data processing 8,961  10,207  8,628  28,509  26,752 
Communication 2,349  2,849  2,473  8,252  8,309 
Professional fees 5,037  4,921  3,235  12,868  8,888 
Loan expenses 1,811  1,657  1,564  5,380  5,151 
FDIC assessment 960  1,454  2,722  4,501  8,528 
Amortization of intangibles 4,168  4,325  3,283  12,965  10,308 
Amortization of tax credit investments 1,211  568  9,233  2,039  21,807 
Other expense 6,366  7,056  5,444  18,469  22,580 
Total noninterest expense 122,585  128,118  119,376  373,744  366,993 
        
Income before income taxes 83,035  77,323  56,673  229,738  157,959 
Income tax expense 13,254  14,359  5,325  40,717  14,627 
Net income$69,781 $62,964 $51,348 $189,021 $143,332 
        
Diluted Earnings Per Share        
Net income$0.41 $0.36 $0.34 $1.09 $0.94 
        
Average Common Shares Outstanding       
Basic 170,746  172,985  151,930  172,807  151,844 
Diluted 171,551  173,675  152,784  173,527  152,616 
        
Common shares outstanding at end of period 170,031  172,231  152,352  170,031  152,352 
        
        


 
Balance Sheet (unaudited)
($ in thousands)
 
 September 30, June 30, September 30, 
  2019   2019   2018  
Assets      
Federal Reserve Bank account$80,018  $40,945  $65,878  
Money market investments 19,410   20,210   5,859  
Investments:      
Treasury and government-sponsored agencies 524,919   725,327   690,709  
Mortgage-backed securities 3,248,367   2,900,235   1,640,254  
States and political subdivisions 1,231,248   1,186,311   1,099,535  
Other securities 490,389   489,855   496,199  
Total investments 5,494,923   5,301,728   3,926,697  
Loans held for sale, at fair value 58,285   37,904   21,384  
Loans:      
Commercial 2,950,559   3,074,849   2,949,277  
Commercial and agriculture real estate 5,112,123   4,993,693   4,481,554  
Consumer:      
Home equity 555,905   553,991   498,325  
Other consumer loans 1,162,438   1,201,847   1,197,300  
Subtotal of commercial and consumer loans 9,781,025   9,824,380   9,126,456  
Residential real estate 2,236,623   2,222,198   2,166,203  
Total loans 12,017,648   12,046,578   11,292,659  
Total earning assets 17,670,284   17,447,365   15,312,477  
       
Allowance for loan losses (56,910)  (56,292)  (52,713) 
Non-earning Assets:      
Cash and due from banks 320,822   239,831   215,024  
Premises and equipment, net 492,065   493,481   450,253  
Operating lease right-of-use assets 102,976   106,222   -  
Goodwill and other intangible assets 1,101,045   1,104,478   870,938  
Company-owned life insurance 447,110   445,749   405,245  
Net deferred tax assets 26,523   36,002   94,667  
Loan servicing rights 24,623   24,332   24,336  
Other assets 310,250   304,117   247,532  
Total non-earning assets 2,825,414   2,754,212   2,307,995  
Total assets$20,438,788  $20,145,285  $17,567,759  
       
Liabilities and Equity      
Noninterest-bearing demand deposits$3,996,264  $3,771,888  $3,588,370  
Interest-bearing:      
Checking and NOW accounts 3,936,318   3,950,161   3,011,544  
Savings accounts 2,863,718   2,877,673   2,920,712  
Money market accounts 1,821,989   1,819,716   1,185,439  
Other time deposits 1,704,238   1,756,814   1,667,055  
Total core deposits 14,322,527   14,176,252   12,373,120  
Brokered CD's 125,825   186,849   225,080  
Total deposits 14,448,352   14,363,101   12,598,200  
       
Federal funds purchased and interbank borrowings 240,589   410,036   450,031  
Securities sold under agreements to repurchase 337,551   334,540   319,831  
Federal Home Loan Bank advances 2,001,960   1,730,065   1,554,515  
Other borrowings 251,763   251,840   251,662  
Total borrowed funds 2,831,863   2,726,481   2,576,039  
Operating lease liabilities 107,272   110,596   -  
Accrued expenses and other liabilities 218,771   141,968   172,840  
Total liabilities 17,606,258   17,342,146   15,347,079  
       
Common stock, surplus, and retained earnings 2,774,016   2,761,102   2,300,610  
Accumulated other comprehensive income (loss), net of tax 58,514   42,037   (79,930) 
Total shareholders' equity 2,832,530   2,803,139   2,220,680  
Total liabilities and shareholders' equity$20,438,788  $20,145,285  $17,567,759  
      
      


     
Average Balance Sheet and Interest Rates (unaudited) 
($ in thousands) 
             
             
 Three Months Ended Three Months Ended Three Months Ended 
 September 30, 2019 June 30, 2019 September 30, 2018 
 AverageIncome (1)/Yield/ AverageIncome (1)/Yield/ AverageIncome (1)/Yield/ 
Earning Assets:BalanceExpenseRate BalanceExpenseRate BalanceExpenseRate 
Money market and other interest-earning investments$63,142 $5283.32% $58,321 $3342.29% $35,928 $1401.54% 
Investments:            
Treasury and government-sponsored agencies 682,940  4,3412.54%  695,775  4,3012.47%  685,919  3,7482.19% 
Mortgage-backed securities 3,019,322  18,5892.46%  2,767,791  18,7992.72%  1,595,630  9,3812.35% 
States and political subdivisions 1,172,017  10,8963.72%  1,193,176  11,2353.77%  1,103,347  10,1103.67% 
Other securities 499,308  4,0493.24%  496,631  4,0633.27%  500,837  4,1163.29% 
  Total investments 5,373,587  37,8752.82%  5,153,373  38,3982.98%  3,885,733  27,3552.82% 
Loans: (2)            
Commercial 3,018,638  35,4284.59%  3,063,590  37,8284.88%  2,928,744  33,3814.46% 
Commercial and agriculture real estate 5,037,909  71,6045.56%  5,019,859  72,2145.69%  4,465,105  57,3775.03% 
Consumer:            
Home equity 557,607  7,1025.05%  558,223  7,3905.31%  495,161  6,0704.86% 
Other consumer loans 1,175,900  12,2264.13%  1,201,752  12,4084.14%  1,215,583  11,2633.68% 
Subtotal commercial and consumer loans 9,790,054  126,3605.12%  9,843,424  129,8405.29%  9,104,593  108,0914.71% 
Residential real estate loans 2,283,704  24,2614.25%  2,247,570  23,7804.23%  2,187,130  22,5364.12% 
             
  Total loans 12,073,758  150,6214.91%  12,090,994  153,6205.05%  11,291,723  130,6274.56% 
             
  Total earning assets$17,510,487 $189,0244.27% $17,302,688 $192,3524.43% $15,213,384 $158,1224.11% 
             
Less: Allowance for loan losses (56,894)    (56,632)    (53,734)   
             
Non-earning Assets:            
Cash and due from banks$264,145    $234,337    $205,446    
Other assets 2,429,466     2,473,255     2,068,469    
             
  Total assets$20,147,204    $19,953,648    $17,433,565    
             
Interest-Bearing Liabilities:            
Checking and NOW accounts$3,895,654 $4,4480.45% $3,895,881 $4,1960.43% $3,026,289 $1,1800.15% 
Savings accounts 2,855,401  2,1280.30%  2,879,704  2,1450.30%  2,974,147  2,1190.28% 
Money market accounts 1,822,698  4,0170.87%  1,789,777  3,7290.84%  1,153,906  1,2540.43% 
Other time deposits 1,733,492  7,0161.61%  1,779,770  7,1811.62%  1,669,039  5,7801.37% 
  Total interest-bearing deposits 10,307,245  17,6090.68%  10,345,132  17,2510.67%  8,823,381  10,3330.46% 
Brokered CD's 181,425  1,0982.40%  212,198  1,2682.40%  178,283  8561.90% 
  Total interest-bearing deposits and CD's 10,488,670  18,7070.71%  10,557,330  18,5190.70%  9,001,664  11,1890.49% 
             
Federal funds purchased and interbank borrowings 254,971  1,4842.31%  300,810  1,8172.42%  238,514  1,1911.98% 
Securities sold under agreements to repurchase 340,158  7150.83%  331,695  6710.81%  352,998  5350.60% 
Federal Home Loan Bank advances 1,889,407  9,1231.92%  1,695,681  10,0392.37%  1,624,661  8,8802.17% 
Other borrowings 251,817  2,7284.33%  251,577  2,7874.43%  250,255  2,7324.37% 
  Total borrowed funds 2,736,353  14,0502.04%  2,579,763  15,3142.38%  2,466,428  13,3382.15% 
             
  Total interest-bearing liabilities$13,225,023 $32,7570.98% $13,137,093 $33,8331.03% $11,468,092 $24,5270.85% 
             
Noninterest-Bearing Liabilities and Shareholders' Equity           
Demand deposits$3,841,867    $3,812,175    $3,596,159    
Other liabilities 262,862     246,134     156,614    
Shareholders' equity 2,817,452     2,758,246     2,212,700    
             
Total liabilities and shareholders' equity$20,147,204    $19,953,648    $17,433,565    
             
Net interest rate spread  3.29%   3.40%   3.26% 
             
Net interest margin (FTE)  3.57%   3.66%   3.51% 
             
FTE adjustment $3,171   $3,289   $2,753  
             
(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) 
         
         
 Nine Months Ended Nine Months Ended 
 September 30, 2019 September 30, 2018 
 AverageIncome (1)/Yield/ AverageIncome (1)/Yield/ 
Earning Assets:BalanceExpenseRate BalanceExpenseRate 
Money market and other interest-earning investments$60,071 $1,1402.54% $51,284 $3470.90% 
Investments:        
Treasury and government-sponsored agencies 694,628  12,5442.41%  666,015  10,5592.11% 
Mortgage-backed securities 2,763,406  54,9912.65%  1,605,324  27,8052.31% 
States and political subdivisions 1,198,962  33,5843.73%  1,141,827  31,1793.64% 
Other securities 497,854  12,5533.36%  489,465  11,6943.19% 
  Total investments 5,154,850  113,6722.94%  3,902,631  81,2372.78% 
Loans: (2)        
Commercial 3,067,830  109,2904.70%  2,854,691  94,1144.35% 
Commercial and agriculture real estate 5,015,973  208,8945.49%  4,436,576  170,4145.07% 
Consumer:        
Home equity 567,953  22,0895.20%  496,365  17,8344.80% 
Other consumer loans 1,189,988  36,4364.09%  1,276,727  34,9943.66% 
Subtotal commercial and consumer loans 9,841,744  376,7095.12%  9,064,359  317,3564.68% 
Residential real estate loans 2,263,595  71,9724.24%  2,180,416  66,2164.05% 
         
  Total loans 12,105,339  448,6814.91%  11,244,775  383,5724.52% 
         
  Total earning assets$17,320,260 $563,4934.32% $15,198,690 $465,1564.06% 
         
Less: Allowance for loan losses (56,442)    (52,070)   
         
Non-earning Assets:        
Cash and due from banks$242,938    $203,421    
Other assets 2,464,192     2,081,615    
         
  Total assets$19,970,948    $17,431,656    
         
Interest-Bearing Liabilities:        
Checking and NOW accounts$3,829,213 $11,7860.41% $3,063,636 $2,9690.13% 
Savings accounts 2,889,977  6,5560.30%  3,020,955  5,2390.23% 
Money market accounts 1,772,150  10,5720.80%  1,138,679  2,5020.29% 
Other time deposits 1,784,200  21,2991.60%  1,615,896  14,4931.20% 
  Total interest-bearing deposits 10,275,540  50,2130.65%  8,839,166  25,2030.38% 
Brokered CD's 194,985  3,4572.37%  182,720  2,3801.74% 
  Total interest-bearing deposits and CD's 10,470,525  53,6700.69%  9,021,886  27,5830.41% 
         
Federal funds purchased and interbank borrowings 290,699  5,2192.40%  213,362  2,8551.79% 
Securities sold under agreements to repurchase 344,294  2,0480.80%  342,797  1,3280.52% 
Federal Home Loan Bank advances 1,753,283  29,0932.22%  1,671,211  25,4842.04% 
Other borrowings 251,070  8,4304.48%  249,464  8,1844.37% 
  Total borrowed funds 2,639,346  44,7902.27%  2,476,834  37,8512.04% 
         
  Total interest-bearing liabilities$13,109,871 $98,4601.00% $11,498,720 $65,4340.76% 
         
Noninterest-Bearing Liabilities and Shareholders' Equity        
Demand deposits$3,833,605    $3,587,453    
Other liabilities 263,799     157,859    
Shareholders' equity 2,763,673     2,187,624    
         
Total liabilities and shareholders' equity$19,970,948    $17,431,656    
         
Net interest rate spread  3.32%   3.30% 
         
Net interest margin (FTE)  3.58%   3.51% 
         
FTE adjustment $9,659   $8,345  
         
(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 Nine Months Ended 
 September 30,June 30,September 30, September 30,September 30, 
 201920192018 20192018 
        
Beginning allowance for loan losses$56,292 $55,559 $53,660  $55,461 $50,381  <