Press Release

Old National reports 3rd quarter earnings of $77.9 million, or $0.47 per share

Company Release - 10/19/2020 8:00 AM ET

EVANSVILLE, Ind., Oct. 19, 2020 (GLOBE NEWSWIRE) --

Old National Bancorp (NASDAQ: ONB) reports 3Q20 net income of $77.9 million, diluted EPS of $0.47.
Adjusted1 net income of $76.4 million, or $0.46 per diluted share.

CEO COMMENTARY:

“Our excellent 3rd quarter results are not only a testament to our ONB Way strategy and the overall strength of our organization, they are an indicator of the strength and resiliency of the clients and communities we serve,” said Chairman and CEO Jim Ryan. “More specifically, our quarterly success was driven by very strong commercial production throughout the franchise and outstanding credit metrics that actually resulted in net recoveries.”

THIRD QUARTER HIGHLIGHTS2:

Net income
• Net income of $77.9 million
• Earnings per diluted share of $0.47
  
Net interest
income/NIM

• Net interest income on a fully taxable equivalent basis of $149.0 million compared to $149.0 million
• Net interest margin on a fully taxable equivalent basis of 3.03% compared to 3.14%
  
Operating
Performance

• Pre-provision net revenue1 (“PPNR”) of $93.5 million
• Adjusted PPNR1 of $94.6 million, up 3.4% over third quarter of 2019
• Noninterest expense of $120.2 million
• Adjusted noninterest expense1 of $114.2 million
• Efficiency ratio1 of 55.93%
• Adjusted efficiency ratio1 of 53.06%, a 73 basis point improvement
  

Loans and
Credit
Quality



• End-of-period total loans3 of $13,977.6 million compared to $13,738.2 million
◦ Commercial real estate loans grew $298.2 million
• Third-quarter total commercial production, excluding PPP loans, of $977.8 million
• Provision for credit losses of $0.0 million
• September 30 pipeline of $2.9 billion
• Net recoveries of $3.0 million compared to net charge-offs of $0.5 million
• Non-performing loans of 1.15% of total loans compared to 1.04%
 
Return
Profile &
Capital

• Return on average common equity of 10.79%
• Return on average tangible common equity1 of 17.88%
• Adjusted return on average tangible common equity1 of 17.54%
• No shares of common stock were repurchased during the current quarter
  
Notable
Items

• $2.9 million in ONB Way charges
• $3.1 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 2020 net income of $77.9 million, or $0.47 per diluted share.

Included in the third quarter were pre-tax charges of $2.9 million for the ONB Way. Excluding these charges from the current quarter and netting out debt securities gains, adjusted net income was $76.4 million, or $0.46 per diluted share.

LOANS
Strong commercial production drove total loan balances higher.

  • Period-end total loans were $13,977.6 million at September 30, 2020, an increase of $239.4 million when compared to the $13,738.2 million at June 30, 2020.
  • Commercial real estate loans increased $298.2 million to $5,701.5 million, or 22.1% annualized growth.
  • Commercial and industrial loans decreased $42.9 million to $4,264.6 million.
  • Consumer loans decreased $14.4 million to $1,661.1 million and residential mortgage loans increased $36.0 million to $2,265.3 million.
  • Total commercial loan production in the third quarter, excluding $20 million in PPP loan production, was $977.8 million; period-end pipeline totaled $2.9 billion.
  • Average total loans in the third quarter were $13,849.0 million, an increase of $398.9 million from the second quarter of 2020.

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

  • Period-end total deposits were $16,506.5 million at September 30, 2020, an increase of $187.1 million when compared to the $16,319.4 million at June 30, 2020.
  • Noninterest-bearing deposits increased to $5,463.0 million at September 30, 2020 from $5,217.7 million at June 30, 2020.
  • On average, total deposits in the third quarter were $16,436.8 million, compared to $15,652.8 million in the second quarter of 2020.

NET INTEREST INCOME AND MARGIN
Net interest income unchanged while net interest margin is lower as decline in asset yields outpaces decline in deposit and funding costs.

  • Net interest income remained unchanged at $145.6 million in the third quarter of 2020 when compared to the second quarter of 2020.
  • The net interest margin on a fully taxable equivalent basis decreased 11 basis points to 3.03% compared to 3.14% in the second quarter of 2020.
  • PPP interest and net fees combined to have a positive impact of $8.8 million to net interest income in the third quarter while having a net neutral impact to the interest margin.
  • Accretion income was $5.4 million, or 11 basis points of net interest margin, in the third quarter of 2020 compared to $5.8 million, or 12 basis points of net interest margin, in the second quarter of 2020. In the third quarter of 2020, accretion income was 2.6% of adjusted total revenue.
  • Interest collected on nonaccrual loans was $1.0 million, or 2 basis points of net interest margin, in the third quarter of 2020 compared to $0.6 million, or 1 basis point of net interest margin, in the second quarter of 2020.
  • The cost of total deposits declined 4 basis points to 0.13% in the third quarter of 2020 while the cost of total interest-bearing deposits decreased 6 basis points to 0.19%.

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

  • Old National recorded no provision for credit losses in the third quarter of 2020, compared to $22.5 million in the second quarter.
  • Net recoveries in the third quarter were $3.0 million, compared to net charge-offs of $0.5 million in the second quarter.
  • 30-89 day delinquencies were 0.20% at the end of the third quarter.
  • Non-performing loans increased as a percentage of total loans to 1.15%.
  • Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. As of September 30, 2020, the remaining discount on these acquired loans was $56.0 million.
  • The allowance for credit losses was $131.4 million, or 0.95% of total loans at September 30, 2020.

NONINTEREST INCOME
Noninterest income increased due to a rebound in deposit service charges and continued strength in mortgage banking revenue.

  • Total noninterest income for the third quarter of 2020 was $64.7 million, an increase of $6.3 million from the second quarter of 2020.
  • Service charges on deposit accounts increased $1.1 million and mortgage banking revenue increased $0.8 million when compared to the second quarter of 2020.
  • Gains on sales of debt securities increased $4.4 million when compared to the second quarter of 2020.

NONINTEREST EXPENSE
Third quarter results demonstrate benefit of The ONB Way, helping drive positive operating leverage1.

  • Noninterest expense for the third quarter of 2020 was $120.2 million and included $2.9 million in ONB Way charges and $3.1 million in tax credit amortization.
  • Excluding these items, adjusted noninterest expense for the third quarter was $114.2 million, compared to the $115.0 million in adjusted noninterest expense in the second quarter of 2020.
  • The third quarter efficiency ratio was 55.93%, while the adjusted efficiency ratio was 53.06%.
  • Adjusted operating leverage1 was +298 basis points for the third quarter of 2020 as compared to the third quarter of 2019.

INCOME TAXES

  • On a fully taxable-equivalent basis, income tax expense in the third quarter was $15.6 million, resulting in a 16.6% FTE tax rate.
  • Income tax expense included $3.7 million in tax credit benefit.

CAPITAL AND LIQUIDITY
Capital ratios remain strong.

  • At the end of the third quarter, total risk-based capital was 13.10% and regulatory tier 1 capital was 12.10%.
  • Tangible common equity to tangible assets was 8.58% at the end of the third quarter compared to 8.45% in the second quarter of 2020.
  • The Company did not repurchase any shares of common stock during the third quarter.
  • A low loan to deposit ratio of 84.7%, combined with existing funding sources plus available unencumbered, high-quality collateral, provides strong liquidity.

NON-GAAP RECONCILIATIONS

($ in millions, except EPS, shares in 000s)3Q20Adjustments4Adjusted 3Q20
Total Revenues (FTE)$213.7  $(4.9) $208.8  
Less: Provision for Credit Losses      
Less: Noninterest Expenses(120.2) 2.9  (117.3) 
Income before Income Taxes (FTE)$93.5  $(2.0) $91.5  
Income Taxes(15.6) 0.5  (15.1) 
Net Income$77.9  $(1.5) $76.4  
Average Shares Outstanding165,419    165,419  
Earnings Per Share - Diluted$0.47  $(0.01) $0.46  

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

($ in millions)3Q202Q20
Net Interest Income$145.6  $145.6  
Add: FTE Adjustment3.4  3.4  
Net Interest Income (FTE)$149.0  $149.0  
Average Earning Assets$19,654.3  $19,007.7  
Net Interest Margin (FTE)3.03% 3.14% 
   
($ in millions)3Q203Q19
Net Interest Income$145.6  $153.1  
Add: FTE Adjustment3.4  3.2  
Net Interest Income (FTE)$149.0  $156.3  
Add: Total Noninterest Income64.7  53.9  
Less: Noninterest Expense120.2  122.6  
Pre-Provision Net Revenue$93.5  $87.6  
Less: Debt Securities Gains(4.9) (0.4) 
Add: ONB Way Charges2.9  1.8  
Add: Merger and Integration Charges  1.3  
Add: Amortization of Tax Credit Investments3.1  1.2  
Adjusted Pre-Provision Net Revenue$94.6  $91.5  


($ in millions)3Q202Q203Q19
Noninterest Expense$120.2  $120.2  $122.6  
Less: ONB Way Charges(2.9) (4.9) (1.8) 
Less: Merger and Integration Charges    (1.3) 
Noninterest Expense less Charges$117.3  $115.3  $119.5  
Less: Amortization of Tax Credit Investments(3.1) (0.3) (1.2) 
Adjusted Noninterest Expense$114.2  $115.0  $118.3  
Less: Intangible Amortization(3.4) (3.6) (4.2) 
Adjusted Noninterest Expense Less Intangible Amortization$110.8  $111.4  $114.1  
Net Interest Income$145.6  $145.6  $153.1  
FTE Adjustment3.4  3.4  3.2  
Net Interest Income (FTE)$149.0  $149.0  $156.3  
Total Noninterest Income64.7  58.5  53.9  
Total Revenue (FTE)$213.7  $207.5  $210.2  
Less: Debt Securities Gains/Losses(4.9) (0.5) (0.4) 
Add: Loss on Branch Actions  0.1    
Adjusted Total Revenue (FTE)$208.8  $207.1  $209.8  
Efficiency Ratio55.93% 56.29% 56.44% 
Adjusted Efficiency Ratio53.06% 53.79% 54.40% 
Operating Leverage5 (basis points)357    
Adjusted Operating Leverage6 (basis points)298    

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)3Q202Q20
Net Income$77.9  $51.7  
Add: Intangible Amortization (net of tax7)2.6  2.7  
Tangible Net Income$80.5  $54.4  
Less: Securities Gains/Losses (net of tax7)(3.7) (0.4) 
Add: Loss on Branch Actions (net of tax7)  0.1  
Add: ONB Way Charges (net of tax7)2.2  3.7  
Adjusted Tangible Net Income$79.0  $57.8  
Average Total Shareholders’ Equity2,889.5  2,845.4  
Less: Average Goodwill(1,037.0) (1,037.0) 
Less: Average Intangibles(50.9) (54.4) 
Average Tangible Shareholders’ Equity$1,801.6  $1,754.0  
Return on Average Tangible Common Equity17.88% 12.41% 
Adjusted Return on Average Tangible Common Equity17.54% 13.18% 

7Tax-effect calculations use the current statutory FTE tax rates (federal + state)

CONFERENCE CALL AND WEBCAST
Old National will host a conference call and live webcast at 9:00 a.m. Central Time on Monday, October 19, 2020, to review third-quarter 2020 financial results. The live audio web cast of the call, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at oldnational.com and will be archived there for 12 months. A replay of the call will also be available from Noon Central Time on October 19 through November 2. To access the replay, dial 1-855-859-2056, Conference ID Code 1086029.

ABOUT OLD NATIONAL
Old National Bancorp (NASDAQ: ONB), the holding company of Old National Bank, is the largest bank holding company headquartered in Indiana. With $22.5 billion in assets, it ranks among the top 100 banking companies in the U.S.and has been recognized as a World’s Most Ethical Company by the Ethisphere Institute for nine consecutive years.  Since its founding in Evansville in 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships and keeping our clients at the center of all we do. This is an approach to business that we call The ONB Way. Today, Old National’s footprint includes Indiana, Kentucky, Michigan, Minnesota and Wisconsin. In addition to providing extensive services in retail and commercial banking, Old National offers comprehensive wealth management, investment and capital market services. For more information and financial data, please visit Investor Relations at oldnational.com.

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

FORWARD-LOOKING STATEMENT
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements include, but are not limited to, descriptions of Old National Bancorp’s (“Old National’s”) financial condition, results of operations, asset and credit quality trends and profitability.  Forward-looking statements can be identified by the use of the words “anticipate,” “believe,” “expect,” “intend,” “could” and “should,” and other words of similar meaning.  These forward-looking statements express management’s current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties, such as statements about the potential impacts of the COVID-19 pandemic. There are a number of factors that could cause actual results to differ materially from those in such statements.  Factors that might cause such a difference include, but are not limited to: the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on our operations and personnel, and on commercial activity and demand across our and our customers’ businesses; market, economic, operational, liquidity, credit and interest rate risks associated with Old National’s business(including developments and volatility arising from the COVID-19 pandemic); competition; government legislation and policies (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its related regulations); ability of Old National to execute its business plan, including the anticipated impact from the ONB Way strategic plan that may differ from current estimates; changes in the economy which could materially impact credit quality trends and the ability to generate loans and gather deposits; failure or circumvention of our internal controls; failure or disruption of our information systems; significant changes in accounting, tax or regulatory practices or requirements, including the impact of the CECL standard as well as changes to address the impact of COVID-19; new legal obligations or liabilities or unfavorable resolutions of litigations; disruptive technologies in payment systems and other services traditionally provided by banks; computer hacking and other cybersecurity threats; other matters discussed in this press release; and other factors identified in our Annual Report on Form 10-K and other periodic filings with the SEC.  These forward-looking statements are made only as of the date of this press release, and Old National does not undertake an obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this press release.

       
Financial Highlights (unaudited)
($ and shares in thousands, except per share data)
       
 Three Months Ended Nine Months Ended
 September 30,June 30,September 30, September 30,September 30,
 202020202019 20202019
Income Statement      
Net interest income$145,573  $145,671 $153,096  $435,015 $455,374 
Tax equivalent adjustment (1)3,379  3,367 3,171  10,069 9,659 
Net interest income - tax equivalent basis148,952  149,038 156,267  445,084 465,033 
Provision for loan losses (4)  22,545 1,437  39,495 3,483 
Noninterest income64,759  58,461 53,961  180,722 151,591 
Noninterest expense120,234  120,121 122,585  399,099 373,744 
Net income77,944  51,705 69,781  152,289 189,021 
       
       
Per Common Share Data      
Weighted average diluted shares165,419  165,302 171,551  166,370 173,527 
Net income (diluted)$0.47  $0.32 $0.41  $0.92 $1.09 
Cash dividends0.14  0.14 0.13  0.42 0.39 
Common dividend payout ratio (2)30% 44%32% 46%35%
Book value$17.67  $17.35 $16.66  $17.67 $16.66 
Stock price12.56  13.76 17.20  12.56 17.20 
Tangible common book value (3)11.10  10.75 10.18  11.10 10.18 
       
       
Performance Ratios      
Return on average assets1.40% 0.96%1.39% 0.95%1.26%
Return on average common equity10.79% 7.27%9.91% 7.11%9.12%
Return on tangible common equity (3)17.56% 12.27%16.85% 11.66%15.31%
Return on average tangible common equity (3)17.88% 12.41%17.01% 12.12%16.00%
Net interest margin (FTE)3.03% 3.14%3.57% 3.15%3.58%
Efficiency ratio (5)55.93% 56.29%56.44% 63.11%58.65%
Net charge-offs (recoveries) to average loans(0.09)% 0.02%0.03% 0.04%0.02%
Allowance for loan losses to ending loans (4)0.95% 0.94%0.47% 0.95%0.47%
Non-performing loans to ending loans1.15% 1.04%1.31% 1.15%1.31%
       
       
Balance Sheet (EOP)      
Total loans$13,892,509  $13,615,701 $12,017,648  $13,892,509 $12,017,648 
Total assets22,460,476  22,102,188 20,438,788  22,460,476 20,438,788 
Total deposits16,506,494  16,319,446 14,448,352  16,506,494 14,448,352 
Total borrowed funds2,725,731  2,641,436 2,831,863  2,725,731 2,831,863 
Total shareholders' equity2,921,149  2,864,255 2,832,530  2,921,149 2,832,530 
       
       
Capital Ratios (3)      
Risk-based capital ratios (EOP):      
Tier 1 common equity12.10% 11.70%12.03% 12.10%12.03%
Tier 112.10% 11.70%12.03% 12.10%12.03%
Total13.10% 12.68%12.97% 13.10%12.97%
Leverage ratio (to average assets)8.15% 8.12%8.79% 8.15%8.79%
       
Total equity to assets (averages)12.97% 13.16%13.98% 13.33%13.84%
Tangible common equity to tangible assets8.58% 8.45%8.95% 8.58%8.95%
       
       
Nonfinancial Data      
Full-time equivalent employees2,484  2,530 2,778  2,484 2,778 
Banking centers162  162 192  162 192 
       
(1) Calculated using the federal statutory tax rate in effect of 21% for all periods.
(2) Cash dividends per share divided by net income per share (basic).
(3) Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures.
(4) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.
(5) 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 basisEOP - End of period actual balancesN/A - Not applicable


       
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,
 202020202019 20202019
Interest income$160,086 $161,974 $185,853  $490,059 $553,834 
Less: interest expense14,513 16,303 32,757  55,044 98,460 
Net interest income145,573 145,671 153,096  435,015 455,374 
Provision for loan losses (1) 22,545 1,437  39,495 3,483 
  Net interest income after provision for loan losses145,573 123,126 151,659  395,520 451,891 
       
Wealth management fees9,239 9,424 9,160  27,547 27,604 
Service charges on deposit accounts8,698 7,582 11,860  26,357 34,201 
Debit card and ATM fees5,276 4,832 5,370  15,106 16,292 
Mortgage banking revenue18,110 17,313 8,850  46,542 20,996 
Investment product fees5,351 4,845 5,244  16,070 16,106 
Capital markets income5,428 6,179 4,560  15,935 10,227 
Company-owned life insurance2,830 2,968 2,703  8,878 8,602 
Other income4,906 4,807 5,790  13,681 16,077 
Gains (losses) on sales of debt securities4,921 511 424  10,606 1,486 
  Total noninterest income64,759 58,461 53,961  180,722 151,591 
       
Salaries and employee benefits69,860 66,556 71,729  215,589 214,478 
Occupancy13,930 13,245 11,934  42,308 41,071 
Equipment3,754 3,853 3,954  12,912 12,945 
Marketing2,140 2,395 4,105  7,632 12,267 
Data processing9,628 9,629 8,961  28,724 28,509 
Communication2,241 2,296 2,349  7,335 8,252 
Professional fees3,083 3,545 5,037  10,921 12,868 
FDIC assessment1,319 2,014 960  4,942 4,501 
Amortization of intangibles3,459 3,612 4,168  10,847 12,965 
Amortization of tax credit investments3,115 287 1,211  8,917 2,039 
Other expense7,705 12,689 8,177  48,972 23,849 
  Total noninterest expense120,234 120,121 122,585  399,099 373,744 
       
  Income before income taxes90,098 61,466 83,035  177,143 229,738 
  Income tax expense12,154 9,761 13,254  24,854 40,717 
   Net income$77,944 $51,705 $69,781  $152,289 $189,021 
       
Diluted Earnings Per Share       
Net income$0.47 $0.32 $0.41  $0.92 $1.09 
       
Average Common Shares Outstanding      
   Basic164,773 164,732 170,746  165,748  172,807  
   Diluted165,419 165,302 171,551  166,370  173,527  
                     
Common shares outstanding at end of period165,333 165,093 170,031  165,333  170,031  
       
(1) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.
         


 
Balance Sheet (unaudited)
($ in thousands)
 September 30, June 30, September 30,
 2020 2020 2019
Assets     
Federal Reserve Bank account$87,682   $54,807   $80,018  
Money market investments13,437   14,633   19,410  
Investments:     
Treasury and government-sponsored agencies501,771   489,232   524,919  
Mortgage-backed securities3,382,280   3,304,054   3,248,367  
States and political subdivisions1,426,495   1,355,959   1,231,248  
Other securities462,958   512,375   490,389  
Total investments5,773,504   5,661,620   5,494,923  
Loans held for sale, at fair value85,091   122,507   58,285  
Loans:     
Commercial4,264,568   4,307,505   2,950,559  
Commercial and agriculture real estate5,701,493   5,403,316   5,112,123  
Consumer:     
Home equity549,115   547,286   555,905  
Other consumer loans1,112,034   1,128,296   1,162,438  
Subtotal of commercial and consumer loans11,627,210   11,386,403   9,781,025  
Residential real estate2,265,299   2,229,298   2,236,623  
Total loans13,892,509   13,615,701   12,017,648  
Total earning assets19,852,223   19,469,268   17,670,284  
      
Allowance for loan losses (1)(131,388)  (128,394)  (56,910) 
Non-earning Assets:     
Cash and due from banks229,631   241,054   320,822  
Premises and equipment, net463,253   462,796   492,065  
Operating lease right-of-use assets77,482   80,400   102,976  
Goodwill and other intangible assets1,086,252   1,089,711   1,101,045  
Company-owned life insurance455,975   453,116   447,110  
Other assets427,048   434,237   361,396  
Total non-earning assets2,739,641   2,761,314   2,825,414  
Total assets$22,460,476   $22,102,188   $20,438,788  
      
Liabilities and Equity     
Noninterest-bearing demand deposits$5,463,007   $5,217,678   $3,996,264  
Interest-bearing:     
Checking and NOW accounts4,588,432   4,567,046   3,936,318  
Savings accounts3,287,302   3,166,680   2,863,718  
Money market accounts1,904,404   1,895,809   1,821,989  
Other time deposits1,206,658   1,321,499   1,704,238  
Total core deposits16,449,803   16,168,712   14,322,527  
Brokered CD's56,691   150,734   125,825  
Total deposits16,506,494   16,319,446   14,448,352  
      
Federal funds purchased and interbank borrowings1,259   801   240,589  
Securities sold under agreements to repurchase399,141   367,744   337,551  
Federal Home Loan Bank advances2,087,648   2,035,014   2,001,960  
Other borrowings237,683   237,877   251,763  
Total borrowed funds2,725,731   2,641,436   2,831,863  
Operating lease liabilities88,552   91,845   107,272  
Accrued expenses and other liabilities218,550   185,206   218,771  
Total liabilities19,539,327   19,237,933   17,606,258  
Common stock, surplus, and retained earnings2,771,865   2,715,212   2,774,016  
Accumulated other comprehensive income (loss), net of tax149,284   149,043   58,514  
Total shareholders' equity2,921,149   2,864,255   2,832,530  
 Total liabilities and shareholders' equity$22,460,476   $22,102,188   $20,438,788  

(1) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.


             
Average Balance Sheet and Interest Rates (unaudited)
($ in thousands)
             
             
  Three Months Ended Three Months Ended Three Months Ended
  September 30, 2020 June 30, 2020 September 30, 2019
  AverageIncome (1)/Yield/ AverageIncome (1)/Yield/ AverageIncome (1)/Yield/
Earning Assets: BalanceExpenseRate BalanceExpenseRate BalanceExpenseRate
Money market and other interest-earning investments $137,880  $59 0.17% $85,680  $34 0.16% $63,142  $528 3.32%
Investments:            
  Treasury and government-sponsored agencies 454,005  2,457 2.17% 501,838  3,033 2.42% 682,940  4,341 2.54%
  Mortgage-backed securities 3,342,284  17,478 2.09% 3,179,165  17,930 2.26% 3,019,322  18,589 2.46%
  States and political subdivisions 1,383,765  11,860 3.43% 1,293,756  11,757 3.63% 1,172,017  10,896 3.72%
  Other securities 487,405  2,922 2.40% 497,204  3,224 2.59% 499,308  4,049 3.24%
     Total investments 5,667,459  34,717 2.45% 5,471,963  35,944 2.63% 5,373,587  37,875 2.82%
Loans: (2)            
  Commercial 4,274,894  33,223 3.04% 4,049,403  31,729 3.10% 3,018,638  35,428 4.59%
  Commercial and agriculture real estate 5,546,486  55,891 3.94% 5,340,622  58,007 4.30% 5,037,909  71,604 5.56%
  Consumer:            
    Home equity 551,380  4,336 3.13% 554,701  4,213 3.06% 557,607  7,102 5.05%
    Other consumer loans 1,120,681  11,635 4.13% 1,135,943  11,530 4.08% 1,175,900  12,226 4.13%
  Subtotal commercial and consumer loans 11,493,441  105,085 3.64% 11,080,669  105,479 3.83% 9,790,054  126,360 5.12%
  Residential real estate loans 2,355,512  23,604 4.01% 2,369,407  23,884 4.03% 2,283,704  24,261 4.25%
             
     Total loans 13,848,953  128,689 3.66% 13,450,076  129,363 3.82% 12,073,758  150,621 4.91%
             
     Total earning assets $19,654,292  $163,465 3.29% $19,007,719  $165,341 3.46% $17,510,487  $189,024 4.27%
             
Less: Allowance for loan losses (3) (132,447)    (107,619)    (56,894)   
             
Non-earning Assets:            
Cash and due from banks $346,343     $332,745     $264,145    
Other assets 2,405,517     2,384,934     2,429,466    
             
     Total assets $22,273,705     $21,617,779     $20,147,204    
             
Interest-Bearing Liabilities:            
  Checking and NOW accounts $4,607,427  $886 0.08% $4,431,074  $1,075 0.10% $3,895,654  $4,448 0.45%
  Savings accounts 3,232,375  634 0.08% 3,060,012  736 0.10% 2,855,401  2,128 0.30%
  Money market accounts 1,902,407  724 0.15% 1,844,488  910 0.20% 1,822,698  4,017 0.87%
  Other time deposits 1,253,058  2,852 0.91% 1,378,115  3,786 1.10% 1,733,492  7,016 1.61%
     Total interest-bearing deposits 10,995,267  5,096 0.18% 10,713,689  6,507 0.24% 10,307,245  17,609 0.68%
  Brokered CD's 150,545  201 0.53% 68,149  291 1.72% 181,425  1,098 2.40%
     Total interest-bearing deposits and CD's 11,145,812  5,297 0.19% 10,781,838  6,798 0.25% 10,488,670  18,707 0.71%
             
Federal funds purchased and interbank borrowings 18,347  12 0.25% 143,811  44 0.12% 254,971  1,484 2.31%
Securities sold under agreements to repurchase 385,149  160 0.16% 350,545  185 0.21% 340,158  715 0.83%
Federal Home Loan Bank advances 2,021,468  6,709 1.32% 2,144,497  6,844 1.28% 1,889,407  9,123 1.92%
Other borrowings 237,811  2,335 3.93% 251,738  2,432 3.87% 251,817  2,728 4.33%
     Total borrowed funds 2,662,775  9,216 1.38% 2,890,591  9,505 1.32% 2,736,353  14,050 2.04%
             
     Total interest-bearing liabilities 13,808,587  14,513 0.42% 13,672,429  16,303 0.48% 13,225,023  32,757 0.98%
             
Noninterest-Bearing Liabilities and Shareholders' Equity            
Demand deposits $5,291,037     $4,871,002     $3,841,867    
Other liabilities 284,536     228,950     262,862    
Shareholders' equity 2,889,545     2,845,398     2,817,452    
             
Total liabilities and shareholders' equity $22,273,705     $21,617,779     $20,147,204    
             
Net interest rate spread   2.87%   2.98%   3.29%
             
Net interest margin (FTE)   3.03%   3.14%   3.57%
             
FTE adjustment  $3,379    $3,367    $3,171  
             
(1) Interest income is reflected on a fully taxable equivalent basis (FTE).
(2) Includes loans held for sale.
(3) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.


         
Average Balance Sheet and Interest Rates (unaudited)
($ in thousands)
         
         
  Nine Months Ended Nine Months Ended
  September 30, 2020 September 30, 2019
  AverageIncome (1)/Yield/ AverageIncome (1)/Yield/
Earning Assets: BalanceExpenseRate BalanceExpenseRate
Money market and other interest-earning investments $94,149  $442 0.63% $60,071  $1,140 2.54%
Investments:        
Treasury and government-sponsored agencies 513,055  9,187 2.39% 694,628  12,544 2.41%
Mortgage-backed securities 3,231,439  54,474 2.25% 2,763,406  54,991 2.65%
States and political subdivisions 1,317,136  35,026 3.55% 1,198,962  33,584 3.73%
Other securities 493,016  9,361 2.53% 497,854  12,553 3.36%
Total investments $5,554,646  $108,048 2.59% $5,154,850  $113,672 2.94%
Loans: (2)        
Commercial 3,745,803  94,005 3.30% 3,067,830  109,290 4.70%
Commercial and agriculture real estate 5,359,254  176,337 4.32% 5,015,973  208,894 5.49%
Consumer:        
Home equity 554,800  14,180 3.41% 567,953  22,089 5.20%
Other consumer loans 1,141,399  35,384 4.14% 1,189,988  36,436 4.09%
Subtotal commercial and consumer loans 10,801,256  319,906 3.96% 9,841,744  376,709 5.12%
Residential real estate loans 2,365,037  71,732 4.04% 2,263,595  71,972 4.24%
         
Total loans 13,166,293  391,638 3.93% 12,105,339  448,681 4.91%
         
Total earning assets $18,815,088  $500,128 3.52% $17,320,260  $563,493 4.32%
         
Less: Allowance for loan losses (3) (107,860)    (56,442)   
         
Non-earning Assets:        
Cash and due from banks $322,318     $242,938    
Other assets 2,392,893     2,464,192    
         
Total assets $21,422,439     $19,970,948