| | | | | | | | |
| | Exhibit 99.1 |
| Old National Bancorp | | |
| One Main Street | |
| Evansville, IN 47708 | | Media: Kathy A. Schoettlin (812) 465-7269 |
| oldnational.com | | Investors: Lynell J. Walton (812) 464-1366 |
Old National reports 1st quarter earnings of $86.8 million,
or $0.52 per share
Evansville, Ind. (April 19, 2021)
| | |
Old National Bancorp (NASDAQ: ONB) reports 1Q21 net income of $86.8 million, diluted EPS of $0.52. |
Adjusted1 net income of $86.4 million, or $0.52 per diluted share. |
CEO COMMENTARY:
| | |
| "Old National's positive first quarter results were driven by record first-quarter commercial loan production, strong mortgage revenue and excellent credit quality," said Chairman and CEO Jim Ryan. "We also continue to work with our small business and non-profit clients who are affected by the pandemic to help them gain access to Paycheck Protection Program funds and also to complete the loan forgiveness process." |
FIRST QUARTER HIGHLIGHTS2:
| | | | | |
| Net income | •Net income of $86.8 million |
•Earnings per diluted share of $0.52 |
| |
| Net interest income/NIM | •Net interest income on a fully taxable equivalent basis of $151.6 million compared to $164.6 million |
•Net interest margin on a fully taxable equivalent basis of 2.94% compared to 3.26% |
| |
| Operating Performance | •Pre-provision net revenue1 (“PPNR”) of $90.6 million |
•Adjusted PPNR1 of $91.3 million, up 17.9% over first quarter of 2020 |
•Noninterest expense of $117.7 million |
•Adjusted noninterest expense1 of $115.0 million |
•Efficiency ratio1 of 55.57% |
•Adjusted efficiency ratio1 of 54.25% |
|
|
| Loans and Credit Quality | •End-of-period total loans3 of $13,975.5 million compared to $13,849.7 million |
◦Total commercial loans increased $59.0 million, excluding the $181.1 million increase in PPP loans |
•First-quarter total commercial production of $718.0 million |
•Provision for credit losses was a recapture of $17.4 million |
•March 31 pipeline of $2.6 billion |
•Net recoveries of $5 thousand compared to net recoveries of $1.1 million |
•Non-performing loans of 1.13% of total loans compared to 1.20% |
|
| Return Profile & Capital | •Return on average common equity of 11.69% |
•Return on average tangible common equity1 of 18.88% |
•Adjusted return on average tangible common equity1 of 18.79% |
•No shares of common stock were repurchased during the current quarter |
| |
| Notable Items | •$1.5 million in ONB Way charges |
•$1.2 million in tax credit amortization |
1 Non-GAAP financial measure that Management believes is useful in evaluating the financial results of the Company – please refer to the Non GAAP reconciliations contained in this release 2 Comparisons are on a linked-quarter basis, unless otherwise noted 3 Includes loans held for sale
RESULTS OF OPERATIONS
Old National Bancorp reported first quarter 2021 net income of $86.8 million, or $0.52 per diluted share.
Included in the first quarter were pre-tax charges of $1.5 million for the ONB Way. Excluding these charges from the current quarter and netting out debt securities gains, adjusted net income was $86.4 million, or $0.52 per diluted share.
LOANS
Strong commercial production continues.
•Period-end total loans were $13,975.5 million at March 31, 2021, an increase of $125.8 million, or 3.6% annualized, when compared to the $13,849.7 million at December 31, 2020.
•Paycheck Protection Program (PPP) loans totaled $1,124.1 million at March 31, 2021, compared to $943.0 million at December 31, 2020.
•Excluding the $181.1 million increase in PPP loans during the quarter, total loans decreased $55.3 million, or 1.7% annualized.
•Excluding PPP loans, total commercial loans increased $59.0 million, or 2.6% annualized.
•Total commercial loan production in the first quarter was $718.0 million; period-end pipeline totaled $2.6 billion.
•Consumer loans decreased $56.2 million to $1,579.0 million and residential mortgage loans decreased $45.1 million to $2,203.3 million.
•Average total loans in the first quarter were $13,832.2 million, a decrease of $95.6 million from the fourth quarter of 2020.
•Excluding PPP loans, average total loans in the first quarter increased $117.6 million from the fourth quarter of 2020.
DEPOSITS
Government stimulus actions continue to bolster deposit balances.
•Period-end total deposits were $17,849.8 million at March 31, 2021, an increase of $812.3 million, or 19.1% annualized, when compared to the $17,037.5 million at December 31, 2020.
•Interest-bearing checking deposits increased $56.7 million to $4,933.8 million at March 31, 2021.
•Noninterest-bearing deposits increased $457.4 million to $6,091.1 million at March 31, 2021 from $5,633.7 million at December 31, 2020.
•On average, total deposits in the first quarter were $17,341.8 million, compared to $16,810.6 million in the fourth quarter of 2020.
NET INTEREST INCOME AND MARGIN
Decrease in PPP fees negatively impact net interest income and margin; deposit and funding costs continue to decline.
•Net interest income decreased to $148.1 million in the first quarter of 2021 compared to $161.1 million in the fourth quarter of 2020.
•The net interest margin on a fully taxable equivalent basis decreased 32 basis points to 2.94% compared to 3.26% in the fourth quarter of 2020.
•PPP interest and net fees combined were $12.6 million, or 10 basis points of net interest margin, in the first quarter of 2021 compared to $22.6 million, or 26 basis points of net interest margin, in the fourth quarter of 2020.
•Accretion income was $4.7 million, or 9 basis points of net interest margin, in the first quarter of 2021 compared to $5.4 million, or 10 basis points of net interest margin, in the fourth quarter of 2020. In the first quarter of 2021, accretion income was 2.3% of adjusted total revenue.
•Interest collected on nonaccrual loans was $0.6 million, or 1 basis point of net interest margin, in the first quarter of 2021 compared to $0.9 million, or 2 basis points of net interest margin, in the fourth quarter of 2020.
•The cost of total deposits declined 2 basis points to 0.07% in the first quarter of 2021 while the cost of total interest-bearing deposits decreased 2 basis points to 0.11%.
CREDIT QUALITY
Strong credit quality remains a hallmark of the Old National franchise.
•Old National recorded a provision recapture in the first quarter of 2021 of $17.4 million, compared to $1.1 million in provision recapture recorded in the fourth quarter of 2020.
•Net recoveries in the first quarter were $5 thousand, compared to net recoveries of $1.1 million in the fourth quarter of 2020.
•30-89 day delinquencies were 0.12% at the end of the first quarter.
•Non-performing loans decreased as a percentage of total loans to 1.13%.
•Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. As of March 31, 2021, the remaining discount on these acquired loans was $45.9 million.
•The allowance for credit losses stood at $114.0 million, or 0.82% of total loans at March 31, 2021.
NONINTEREST INCOME
Noninterest income decreased due to lower capital markets income.
•Total noninterest income for the first quarter of 2021 was $56.7 million, a decrease of $1.8 million from the fourth quarter of 2020.
•Capital markets income decreased $2.8 million when compared to the fourth quarter of 2020.
•Gains on sales of debt securities increased $1.8 million when compared to the fourth quarter of 2020.
NONINTEREST EXPENSE
First quarter expense discipline helped drive positive operating leverage1.
•Noninterest expense for the first quarter of 2021 was $117.7 million and included $1.5 million in ONB Way charges and $1.2 million in tax credit amortization.
•Excluding these items, adjusted noninterest expense for the first quarter was $115.0 million, compared to the $128.8 million in adjusted noninterest expense in the fourth quarter of 2020.
•The first quarter efficiency ratio was 55.57%, while the adjusted efficiency ratio was 54.25%.
•Adjusted operating leverage1 was +919 basis points for the first quarter of 2021 as compared to the first quarter of 2020.
INCOME TAXES
•On a fully taxable-equivalent basis, income tax expense in the first quarter was $21.2 million, resulting in a 19.6% FTE tax rate.
•Income tax expense included $1.7 million in tax credit benefit.
CAPITAL AND LIQUIDITY
Capital ratios remain strong.
•At the end of the first quarter, preliminary total risk-based capital was 12.84% and preliminary regulatory tier 1 capital was 12.01%.
•Tangible common equity to tangible assets was 8.38% at the end of the first quarter compared to 8.64% in the fourth quarter of 2020.
•The Company did not repurchase any shares of common stock during the first quarter.
•A low loan to deposit ratio of 78.3%, combined with existing funding sources plus available unencumbered, high-quality collateral, provides strong liquidity.
NON-GAAP RECONCILIATIONS
| | | | | | | | | | | |
| ($ in millions, except EPS, shares in 000s) | 1Q21 | Adjustments4 | Adjusted 1Q21 |
| Total Revenues (FTE) | $ | 208.3 | | $ | (2.0) | | $ | 206.3 | |
| Less: Provision for Credit Losses | 17.4 | | — | | 17.4 | |
| Less: Noninterest Expenses | (117.7) | | 1.5 | | (116.2) | |
| Income before Income Taxes (FTE) | $ | 108.0 | | $ | (0.5) | | $ | 107.5 | |
| Income Taxes | (21.2) | | 0.1 | | (21.1) | |
| Net Income | $ | 86.8 | | $ | (0.4) | | $ | 86.4 | |
| Average Shares Outstanding | 165,707 | | — | | 165,707 | |
| Earnings Per Share - Diluted | $ | 0.52 | | $ | — | | $ | 0.52 | |
4 Tax-effect calculations use the current statutory FTE tax rates (federal + state)
| | | | | | | | |
| ($ in millions) | 1Q21 | 4Q20 |
| Net Interest Income | $ | 148.1 | | $ | 161.1 | |
| Add: FTE Adjustment | 3.5 | | 3.5 | |
| Net Interest Income (FTE) | $ | 151.6 | | $ | 164.6 | |
| Average Earning Assets | $ | 20,601.7 | | $ | 20,182.0 | |
| Net Interest Margin (FTE) | 2.94 | % | 3.26 | % |
| | |
| | | | | | | | |
| ($ in millions) | 1Q21 | 1Q20 |
| Net Interest Income | $ | 148.1 | | $ | 143.8 | |
| Add: FTE Adjustment | 3.5 | | 3.3 | |
| Net Interest Income (FTE) | $ | 151.6 | | $ | 147.1 | |
| Add: Total Noninterest Income | 56.7 | | 57.5 | |
| Less: Noninterest Expense | 117.7 | | 158.7 | |
| Pre-Provision Net Revenue | $ | 90.6 | | $ | 45.9 | |
| Less: Debt Securities Gains/Losses | (2.0) | | (5.2) | |
| | |
| Add: ONB Way Charges | 1.5 | | 31.2 | |
| | |
| Add: Amortization of Tax Credit Investments | 1.2 | | 5.5 | |
| Adjusted Pre-Provision Net Revenue | $ | 91.3 | | $ | 77.4 | |
| | | | | | | | | | | | | |
| ($ in millions) | 1Q21 | 4Q20 | 1Q20 | | |
| Noninterest Expense | $ | 117.7 | | $ | 142.3 | | $ | 158.7 | | | |
| Less: ONB Way Charges | (1.5) | | (3.6) | | (31.2) | | | |
| | | | | |
| Noninterest Expense less Charges | $ | 116.2 | | $ | 138.7 | | $ | 127.5 | | | |
| Less: Amortization of Tax Credit Investments | (1.2) | | (9.9) | | (5.5) | | | |
| Adjusted Noninterest Expense | $ | 115.0 | | $ | 128.8 | | $ | 122.0 | | | |
| Less: Intangible Amortization | (3.1) | | (3.3) | | (3.8) | | | |
| Adjusted Noninterest Expense Less Intangible Amortization | $ | 111.9 | | $ | 125.5 | | $ | 118.2 | | | |
| Net Interest Income | $ | 148.1 | | $ | 161.1 | | $ | 143.8 | | | |
| FTE Adjustment | 3.5 | | 3.5 | | 3.3 | | | |
| Net Interest Income (FTE) | $ | 151.6 | | $ | 164.6 | | $ | 147.1 | | | |
| Total Noninterest Income | 56.7 | | 58.5 | | 57.5 | | | |
| Total Revenue (FTE) | $ | 208.3 | | $ | 223.1 | | $ | 204.6 | | | |
| Less: Debt Securities Gains/Losses | (2.0) | | (0.2) | | (5.2) | | | |
| Less: Gain on Branch Actions | — | | (0.1) | | — | | | |
| Adjusted Total Revenue (FTE) | $ | 206.3 | | $ | 222.8 | | $ | 199.4 | | | |
| Efficiency Ratio | 55.57 | % | 62.37 | % | 77.71 | % | | |
| Adjusted Efficiency Ratio | 54.25 | % | 56.35 | % | 59.31 | % | | |
Operating Leverage5 (basis points) | 2,762 | | | | | |
Adjusted Operating Leverage6 (basis points) | 919 | | | | | |
5 Year-over-year basis point change in noninterest expenses plus change in total revenue
6 Year-over-year basis point change in adjusted noninterest expense plus change in adjusted total revenue
| | | | | | | | |
| ($ in millions) | 1Q21 | 4Q20 |
| Net Income | $ | 86.8 | | $ | 74.1 | |
Add: Intangible Amortization (net of tax7) | 2.3 | | 2.4 | |
| Tangible Net Income | $ | 89.1 | | $ | 76.5 | |
Less: Securities Gains/Losses (net of tax7) | (1.5) | | (0.2) | |
Add: Gains/Losses on Branch Actions (net of tax7) | — | | (0.1) | |
Add: ONB Way Charges (net of tax7) | 1.1 | | 2.7 | |
| Adjusted Tangible Net Income | $ | 88.7 | | $ | 78.9 | |
| Average Total Shareholders’ Equity | 2,970.0 | | 2,932.6 | |
| Less: Average Goodwill | (1,037.0) | | (1,037.0) | |
| Less: Average Intangibles | (44.4) | | (47.5) | |
| Average Tangible Shareholders’ Equity | $ | 1,888.6 | | $ | 1,848.1 | |
| Return on Average Tangible Common Equity | 18.88 | % | 16.57 | % |
| Adjusted Return on Average Tangible Common Equity | 18.79 | % | 17.08 | % |
7Tax-effect calculations use the current statutory FTE tax rates (federal + state)
CONFERENCE CALL AND WEBCAST
Old National will host a conference call and live webcast at 9:00 a.m. Central Time on Monday, April 19, 2021, to review first-quarter 2021 financial results. The live audio web cast of the call, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at oldnational.com and will be archived there for 12 months. A replay of the call will also be available from Noon Central Time on April 19 through May 3. To access the replay, dial 1-855-859-2056, Conference ID Code 9135118 .
ABOUT OLD NATIONAL
Old National Bancorp (NASDAQ: ONB), the holding company of Old National Bank, is the largest bank holding company headquartered in Indiana. With $23.7 billion in assets, it ranks among the top 100 banking companies in the U.S. and has been recognized as a World’s Most Ethical Company by the Ethisphere Institute for ten consecutive years. Since its founding in Evansville in 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships and keeping our clients at the center of all we do. This is an approach to business that we call The ONB Way. Today, Old National’s footprint includes Indiana, Kentucky, Michigan, Minnesota and Wisconsin. In addition to providing extensive services in retail and commercial banking, Old National offers comprehensive wealth management, investment and capital market services. For more information and financial data, please visit Investor Relations at oldnational.com.
USE OF NON-GAAP FINANCIAL MEASURES
This earnings release contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Old National’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables of this release.
FORWARD-LOOKING STATEMENT
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, descriptions of Old National Bancorp’s (“Old National’s”) financial condition, results of operations, asset and credit quality trends and profitability. Forward-looking statements can be identified by the use of the words “anticipate,” “believe,” “expect,” “intend,” “could” and “should,” and other words of similar meaning. These forward-looking statements express management’s current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties, such as statements about the potential impacts of the COVID-19 pandemic. There are a number of factors that could cause actual results to differ materially from those in such statements. Factors that might cause such a difference include, but are not limited to: the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on our operations and personnel, and on commercial activity and demand across our and our customers’ businesses; market, economic, operational, liquidity, credit and interest rate risks associated with Old National’s business (including developments and volatility arising from the COVID-19 pandemic); competition; heightened regulatory and governmental oversight and scrutiny of Old National's business practices; current, pending or future government legislation and policies (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its related regulations); ability of Old National to execute its business plan, including the anticipated impact from the ONB Way strategic plan that may differ from current estimates; changes in the economy which could materially impact credit quality trends and the ability to generate loans and gather deposits; failure or circumvention of our internal controls; failure or disruption of our information systems; significant changes in accounting, tax or regulatory practices or requirements, including the impact of the CECL standard as well as changes to address the impact of COVID-19; new legal obligations or liabilities or unfavorable resolutions of litigations; disruptive technologies in payment systems and other services traditionally provided by banks; computer hacking and other cybersecurity threats; other matters discussed in this press release; and other factors identified in our Annual Report on Form 10-K and other periodic filings with the SEC. These forward-looking statements are made only as of the date of this press release, and Old National does not undertake an obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this press release.
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| | | | | | |
| Financial Highlights (unaudited) |
| ($ and shares in thousands, except per share data) |
| | | | | | |
| Three Months Ended | | |
| March 31, | December 31, | March 31, | | | |
| 2021 | 2020 | 2020 | | | |
| Income Statement | | | | | | |
| Net interest income | $ | 148,120 | | $ | 161,079 | | $ | 143,771 | | | | |
| Tax equivalent adjustment (1) | 3,500 | | 3,517 | | 3,323 | | | | |
| Net interest income - tax equivalent basis | 151,620 | | 164,596 | | 147,094 | | | | |
| Provision for credit losses | (17,356) | | (1,100) | | 16,950 | | | | |
| Noninterest income | 56,712 | | 58,552 | | 57,502 | | | | |
| Noninterest expense | 117,740 | | 142,318 | | 158,744 | | | | |
| Net income | 86,818 | | 74,120 | | 22,640 | | | | |
| | | | | | |
| | | | | | |
| Per Common Share Data | | | | | | |
| Weighted average diluted shares | 165,707 | | 165,631 | | 168,404 | | | | |
| Net income (diluted) | $ | 0.52 | | $ | 0.44 | | $ | 0.13 | | | | |
| Cash dividends | 0.14 | | 0.14 | | 0.14 | | | | |
| Common dividend payout ratio (2) | 26 | % | 31 | % | 108 | % | | | |
| Book value | $ | 17.98 | | $ | 17.98 | | $ | 17.10 | | | | |
| Stock price | 19.34 | | 16.56 | | 13.19 | | | | |
| Tangible common book value (3) | 11.47 | | 11.43 | | 10.48 | | | | |
| | | | | | |
| | | | | | |
| Performance Ratios | | | | | | |
| Return on average assets | 1.49 | % | 1.30 | % | 0.44 | % | | | |
| Return on average common equity | 11.69 | % | 10.11 | % | 3.20 | % | | | |
| Return on tangible common equity (3) | 18.77 | % | 16.20 | % | 5.89 | % | | | |
| Return on average tangible common equity (3) | 18.88 | % | 16.57 | % | 5.86 | % | | | |
| Net interest margin (FTE) | 2.94 | % | 3.26 | % | 3.31 | % | | | |
| Efficiency ratio (4) | 55.57 | % | 62.37 | % | 77.71 | % | | | |
| Net charge-offs (recoveries) to average loans | 0.00 | % | (0.03) | % | 0.21 | % | | | |
| Allowance for credit losses to ending loans | 0.82 | % | 0.95 | % | 0.86 | % | | | |
| Non-performing loans to ending loans | 1.13 | % | 1.20 | % | 1.16 | % | | | |
| | | | | | |
| | | | | | |
| Balance Sheet (EOP) | | | | | | |
| Total loans | $ | 13,925,261 | $ | 13,786,479 | $ | 12,384,612 | | | |
| Total assets | 23,744,451 | 22,960,622 | 20,741,141 | | | |
| Total deposits | 17,849,755 | 17,037,453 | 14,305,362 | | | |
| Total borrowed funds | 2,574,987 | 2,676,554 | 3,245,214 | | | |
| Total shareholders' equity | 2,979,447 | 2,972,656 | 2,823,435 | | | |
| | | | | | |
| | | | | | |
| Capital Ratios (3) | | | | | | |
| Risk-based capital ratios (EOP): | | | | | | |
| Tier 1 common equity | 12.01 | % | 11.75 | % | 11.40 | % | | | |
| Tier 1 | 12.01 | % | 11.75 | % | 11.40 | % | | | |
| Total | 12.84 | % | 12.69 | % | 12.28 | % | | | |
| Leverage ratio (to average assets) | 8.33 | % | 8.20 | % | 8.46 | % | | | |
| | | | | | |
| Total equity to assets (averages) | 12.78 | % | 12.83 | % | 13.91 | % | | | |
| Tangible common equity to tangible assets | 8.38 | % | 8.64 | % | 8.81 | % | | | |
| | | | | | |
| | | | | | |
| Nonfinancial Data | | | | | | |
| Full-time equivalent employees | 2,451 | 2,445 | 2,736 | | | |
| Banking centers | 162 | 162 | 192 | | | |
| | | | | | |
| (1) Calculated using the federal statutory tax rate in effect of 21% for all periods. | | | | |
| (2) Cash dividends per share divided by net income per share (basic). | | | | | |
| (3) Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures. | | | | |
| March 31, 2021 capital ratios are preliminary. | | | | | | |
| (4) Efficiency ratio is defined as noninterest expense before amortization of intangibles as a percent of FTE net interest income and | | | | |
| noninterest revenues, excluding net gains from debt securities transactions. This presentation excludes amortization of intangibles |
| and net debt securities gains, as is common in other company releases, and better aligns with true operating performance. | | | | |
| FTE - Fully taxable equivalent basis EOP - End of period actual balances | |
| | | | | | | | | | | | | | |
| | | | | | |
| Income Statement (unaudited) |
| ($ and shares in thousands, except per share data) |
| | | | | | |
| Three Months Ended | | |
| March 31, | December 31, | March 31, | | | |
| 2021 | 2020 | 2020 | | | |
| Interest income | $ | 159,237 | | $ | 173,249 | | $ | 167,999 | | | | |
| Less: interest expense | 11,117 | | 12,170 | | 24,228 | | | | |
| Net interest income | 148,120 | | 161,079 | | 143,771 | | | | |
| Provision for credit losses | (17,356) | | (1,100) | | 16,950 | | | | |
| Net interest income after provision for credit losses | 165,476 | | 162,179 | | 126,821 | | | | |
| | | | | | |
| Wealth management fees | 9,708 | | 9,259 | | 8,884 | | | | |
| Service charges on deposit accounts | 8,124 | | 8,724 | | 10,077 | | | | |
| Debit card and ATM fees | 5,143 | | 5,072 | | 4,998 | | | | |
| Mortgage banking revenue | 16,525 | | 16,233 | | 11,119 | | | | |
| Investment product fees | 5,864 | | 5,544 | | 5,874 | | | | |
| Capital markets income | 3,715 | | 6,545 | | 4,328 | | | | |
| Company-owned life insurance | 2,714 | | 3,153 | | 3,080 | | | | |
| Other income | 2,926 | | 3,861 | | 3,968 | | | | |
| Gains (losses) on sales of debt securities | 1,993 | | 161 | | 5,174 | | | | |
| Total noninterest income | 56,712 | | 58,552 | | 57,502 | | | | |
| | | | | | |
| Salaries and employee benefits | 68,117 | | 78,001 | | 79,173 | | | | |
| Occupancy | 14,872 | | 13,008 | | 15,133 | | | | |
| Equipment | 3,969 | | 3,778 | | 5,305 | | | | |
| Marketing | 2,062 | | 3,242 | | 3,097 | | | | |
| Data processing | 12,353 | | 12,362 | | 9,467 | | | | |
| Communication | 2,878 | | 2,396 | | 2,798 | | | | |
| Professional fees | 2,724 | | 4,834 | | 4,293 | | | | |
| FDIC assessment | 1,607 | | 1,780 | | 1,609 | | | | |
| Amortization of intangibles | 3,075 | | 3,244 | | 3,776 | | | | |
| Amortization of tax credit investments | 1,202 | | 9,871 | | 5,515 | | | | |
| Other expense | 4,881 | | 9,802 | | 28,578 | | | | |
| Total noninterest expense | 117,740 | | 142,318 | | 158,744 | | | | |
| | | | | | |
| Income before income taxes | 104,448 | | 78,413 | | 25,579 | | | | |
| Income tax expense | 17,630 | | 4,293 | | 2,939 | | | | |
| Net income | $ | 86,818 | | $ | 74,120 | | $ | 22,640 | | | | |
| | | | | | |
| Diluted Earnings Per Share | | | | | | |
| Net income | $ | 0.52 | | $ | 0.44 | | $ | 0.13 | | | | |
| | | | | | |
| Average Common Shares Outstanding | | | | | | |
| Basic | 164,997 | 164,799 | 167,748 | | | |
| Diluted | 165,707 | 165,631 | 168,404 | | | |
| | | | | | |
| Common shares outstanding at end of period | 165,676 | 165,367 | 165,109 | | | |
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|
| Balance Sheet (unaudited) |
| ($ in thousands) |
| March 31, | | December 31, | | March 31, |
| 2021 | | 2020 | | 2020 |
| Assets | | | | | |
| | | | | |
| Federal Reserve Bank account | $ | 293,230 | | | $ | 307,967 | | | $ | 130,295 | |
| Money market investments | 10,217 | | | 13,537 | | | 9,349 | |
| Investments: | | | | | |
| Treasury and government-sponsored agencies | 1,602,423 | | | 852,196 | | | 530,904 | |
| Mortgage-backed securities | 3,385,339 | | | 3,339,098 | | | 3,210,000 | |
| States and political subdivisions | 1,467,804 | | | 1,492,162 | | | 1,302,395 | |
| Other securities | 440,810 | | | 458,639 | | | 497,709 | |
| Total investments | 6,896,376 | | | 6,142,095 | | | 5,541,008 | |
| Loans held for sale, at fair value | 50,281 | | | 63,250 | | | 54,209 | |
| | | | | |
| Loans: | | | | | |
| Commercial | 4,068,896 | | | 3,956,422 | | | 3,046,579 | |
| Commercial and agriculture real estate | 6,074,135 | | | 5,946,512 | | | 5,283,464 | |
| Consumer: | | | | | |
| Home equity | 541,149 | | | 556,414 | | | 561,789 | |
| Other consumer loans | 1,037,804 | | | 1,078,709 | | | 1,164,929 | |
| Subtotal of commercial and consumer loans | 11,721,984 | | | 11,538,057 | | | 10,056,761 | |
| Residential real estate | 2,203,277 | | | 2,248,422 | | | 2,327,851 | |
| Total loans | 13,925,261 | | | 13,786,479 | | | 12,384,612 | |
| Total earning assets | 21,175,365 | | | 20,313,328 | | | 18,119,473 | |
| | | | | |
| Allowance for credit losses | (114,037) | | | (131,388) | | | (106,380) | |
| Non-earning Assets: | | | | | |
| Cash and due from banks | 154,330 | | | 268,208 | | | 203,533 | |
| Premises and equipment, net | 466,559 | | | 464,408 | | | 462,364 | |
| Operating lease right-of-use assets | 74,611 | | | 76,197 | | | 86,819 | |
| Goodwill and other intangible assets | 1,079,933 | | | 1,083,008 | | | 1,093,323 | |
| Company-owned life insurance | 456,782 | | | 456,110 | | | 450,148 | |
| Other assets | 450,908 | | | 430,751 | | | 431,861 | |
| Total non-earning assets | 2,683,123 | | | 2,778,682 | | | 2,728,048 | |
| Total assets | $ | 23,744,451 | | | $ | 22,960,622 | | | $ | 20,741,141 | |
| | | | | |
| Liabilities and Equity | | | | | |
| Noninterest-bearing demand deposits | $ | 6,091,054 | | | $ | 5,633,672 | | | $ | 4,058,559 | |
| Interest-bearing: | | | | | |
| Checking and NOW accounts | 4,933,770 | | | 4,877,046 | | | 4,105,006 | |
| Savings accounts | 3,631,145 | | | 3,395,747 | | | 2,853,305 | |
| Money market accounts | 2,075,852 | | | 1,908,118 | | | 1,746,798 | |
| Other time deposits | 1,042,903 | | | 1,103,313 | | | 1,469,185 | |
| Total core deposits | 17,774,724 | | | 16,917,896 | | | 14,232,853 | |
| Brokered deposits | 75,031 | | | 119,557 | | | 72,509 | |
| Total deposits | 17,849,755 | | | 17,037,453 | | | 14,305,362 | |
| | | | | |
| Federal funds purchased and interbank borrowings | 922 | | | 1,166 | | | 560,770 | |
| Securities sold under agreements to repurchase | 395,242 | | | 431,166 | | | 318,067 | |
| Federal Home Loan Bank advances | 1,912,541 | | | 1,991,435 | | | 2,130,263 | |
| Other borrowings | 266,282 | | | 252,787 | | | 236,114 | |
| Total borrowed funds | 2,574,987 | | | 2,676,554 | | | 3,245,214 | |
| Operating lease liabilities | 84,665 | | | 86,598 | | | 95,830 | |
| Accrued expenses and other liabilities | 255,597 | | | 187,361 | | | 271,300 | |
| Total liabilities | 20,765,004 | | | 19,987,966 | | | 17,917,706 | |
| Common stock, surplus, and retained earnings | 2,887,538 | | | 2,824,885 | | | 2,685,278 | |
| Accumulated other comprehensive income (loss), net of tax | 91,909 | | | 147,771 | | | 138,157 | |
| Total shareholders' equity | 2,979,447 | | | 2,972,656 | | | 2,823,435 | |
| Total liabilities and shareholders' equity | $ | 23,744,451 | | | $ | 22,960,622 | | | $ | 20,741,141 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| Average Balance Sheet and Interest Rates (unaudited) |
| ($ in thousands) |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Three Months Ended | | Three Months Ended | | Three Months Ended |
| | March 31, 2021 | | December 31, 2020 | | March 31, 2020 |
| | Average | Income (1)/ | Yield/ | | Average | Income (1)/ | Yield/ | | Average | Income (1)/ | Yield/ |
| Earning Assets: | | Balance | Expense | Rate | | Balance | Expense | Rate | | Balance | Expense | Rate |
| Money market and other interest-earning | | | | | | | | | | | | |
| investments | | $ | 370,087 | | $ | 88 | | 0.10 | % | | $ | 413,782 | | $ | 126 | | 0.12 | % | | $ | 58,406 | | $ | 349 | | 2.41 | % |
| Investments: | | | | | | | | | | | | |
| Treasury and government-sponsored agencies | | 1,155,525 | | 4,885 | | 1.69 | % | | 648,314 | | 2,937 | | 1.81 | % | | 583,971 | | 3,697 | | 2.53 | % |
| Mortgage-backed securities | | 3,312,311 | | 15,833 | | 1.91 | % | | 3,291,436 | | 16,137 | | 1.96 | % | | 3,171,650 | | 19,065 | | 2.40 | % |
| States and political subdivisions | | 1,478,143 | | 12,200 | | 3.30 | % | | 1,437,890 | | 12,008 | | 3.34 | % | | 1,273,156 | | 11,409 | | 3.58 | % |
| Other securities | | 453,411 | | 2,743 | | 2.42 | % | | 462,836 | | 2,629 | | 2.27 | % | | 494,500 | | 3,216 | | 2.60 | % |
| Total investments | | 6,399,390 | | 35,661 | | 2.23 | % | | 5,840,476 | | 33,711 | | 2.31 | % | | 5,523,277 | | 37,387 | | 2.71 | % |
| Loans: (2) | | | | | | | | | | | | |
| Commercial | | 3,974,762 | | 35,568 | | 3.58 | % | | 4,132,831 | | 46,468 | | 4.40 | % | | 2,907,297 | | 29,053 | | 3.95 | % |
| Commercial and agriculture real estate | | 5,980,774 | | 55,746 | | 3.73 | % | | 5,829,912 | | 58,334 | | 3.92 | % | | 5,188,597 | | 62,439 | | 4.76 | % |
| Consumer: | | | | | | | | | | | | |
| Home equity | | 544,049 | | 4,152 | | 3.10 | % | | 550,548 | | 4,380 | | 3.17 | % | | 558,356 | | 5,631 | | 4.06 | % |
| Other consumer loans | | 1,058,731 | | 10,175 | | 3.90 | % | | 1,099,504 | | 11,276 | | 4.08 | % | | 1,167,802 | | 12,219 | | 4.21 | % |
| Subtotal commercial and consumer loans | | 11,558,316 | | 105,641 | | 3.71 | % | | 11,612,795 | | 120,458 | | 4.13 | % | | 9,822,052 | | 109,342 | | 4.48 | % |
| Residential real estate loans | | 2,273,859 | | 21,347 | | 3.76 | % | | 2,314,938 | | 22,471 | | 3.88 | % | | 2,370,295 | | 24,244 | | 4.09 | % |
| | | | | | | | | | | | |
| Total loans | | 13,832,175 | | 126,988 | | 3.68 | % | | 13,927,733 | | 142,929 | | 4.04 | % | | 12,192,347 | | 133,586 | | 4.35 | % |
| | | | | | | | | | | | |
| Total earning assets | | $ | 20,601,652 | | $ | 162,737 | | 3.16 | % | | $ | 20,181,991 | | $ | 176,766 | | 3.46 | % | | $ | 17,774,030 | | $ | 171,322 | | 3.84 | % |
| | | | | | | | | | | | |
| Less: Allowance for credit losses | | (133,869) | | | | | (137,539) | | | | | (83,244) | | | |
| | | | | | | | | | | | |
| Non-earning Assets: | | | | | | | | | | | | |
| Cash and due from banks | | $ | 288,623 | | | | | $ | 341,154 | | | | | $ | 287,601 | | | |
| Other assets | | 2,486,604 | | | | | 2,479,253 | | | | | 2,388,092 | | | |
| | | | | | | | | | | | |
| Total assets | | $ | 23,243,010 | | | | | $ | 22,864,859 | | | | | $ | 20,366,479 | | | |
| | | | | | | | | | | | |
| Interest-Bearing Liabilities: | | | | | | | | | | | | |
| Checking and NOW accounts | | $ | 4,863,819 | | $ | 612 | | 0.05 | % | | $ | 4,708,568 | | $ | 629 | | 0.05 | % | | $ | 4,104,778 | | $ | 2,860 | | 0.28 | % |
| Savings accounts | | 3,495,319 | | 487 | | 0.06 | % | | 3,329,494 | | 487 | | 0.06 | % | | 2,828,177 | | 1,298 | | 0.18 | % |
| Money market accounts | | 1,987,348 | | 423 | | 0.09 | % | | 1,932,594 | | 445 | | 0.09 | % | | 1,784,169 | | 2,507 | | 0.57 | % |
| Other time deposits | | 1,081,248 | | 1,607 | | 0.60 | % | | 1,158,715 | | 2,189 | | 0.75 | % | | 1,562,074 | | 5,186 | | 1.34 | % |
| Total interest-bearing core deposits | | 11,427,734 | | 3,129 | | 0.11 | % | | 11,129,371 | | 3,750 | | 0.13 | % | | 10,279,198 | | 11,851 | | 0.46 | % |
| Brokered deposits | | 157,780 | | 30 | | 0.08 | % | | 37,176 | | 26 | | 0.28 | % | | 84,099 | | 447 | | 2.14 | % |
| Total interest-bearing deposits | | 11,585,514 | | 3,159 | | 0.11 | % | | 11,166,547 | | 3,776 | | 0.13 | % | | 10,363,297 | | 12,298 | | 0.48 | % |
| | | | | | | | | | | | |
| Federal funds purchased and interbank borrowings | | 1,144 | | — | | 0.00 | % | | 843 | | — | | 0.03 | % | | 392,857 | | 1,240 | | 1.27 | % |
| Securities sold under agreements to repurchase | | 398,662 | | 120 | | 0.12 | % | | 438,272 | | 125 | | 0.11 | % | | 329,091 | | 384 | | 0.47 | % |
| Federal Home Loan Bank advances | | 1,925,352 | | 5,409 | | 1.14 | % | | 2,089,519 | | 5,953 | | 1.13 | % | | 1,965,130 | | 7,768 | | 1.59 | % |
| Other borrowings | | 263,010 | | 2,429 | | 3.69 | % | | 240,815 | | 2,316 | | 3.85 | % | | 240,276 | | 2,538 | | 4.23 | % |
| Total borrowed funds | | 2,588,168 | | 7,958 | | 1.25 | % | | 2,769,449 | | 8,394 | | 1.21 | % | | 2,927,354 | | 11,930 | | 1.64 | % |
| | | | | | | | | | | | |
| Total interest-bearing liabilities | | $ | 14,173,682 | | $ | 11,117 | | 0.32 | % | | $ | 13,935,996 | | $ | 12,170 | | 0.35 | % | | $ | 13,290,651 | | $ | 24,228 | | 0.73 | % |
| | | | | | | | | | | | |
| Noninterest-Bearing Liabilities and Shareholders' Equity | | | | | | | | | | | | |
| Demand deposits | | $ | 5,756,277 | | | | | $ | 5,644,017 | | | | | $ | 3,964,493 | | | |
| Other liabilities | | 343,073 | | | | | 352,256 | | | | | 277,812 | | | |
| Shareholders' equity | | 2,969,978 | | | | | 2,932,590 | | | | | 2,833,523 | | | |
| | | | | | | | | | | | |
| Total liabilities and shareholders' equity | | $ | 23,243,010 | | | | | $ | 22,864,859 | | | | | $ | 20,366,479 | | | |
| | | | | | | | | | | | |
| Net interest rate spread | | | | 2.84 | % | | | | 3.11 | % | | | | 3.11 | % |
| | | | | | | | | | | | |
| Net interest margin (FTE) | | | | 2.94 | % | | | | 3.26 | % | | | | 3.31 | % |
| | | | | | | | | | | | |
| FTE adjustment | | | $ | 3,500 | | | | | $ | 3,517 | | | | | $ | 3,323 | | |
| | | | | | | | | | | | |
| (1) Interest income is reflected on a fully taxable equivalent basis (FTE). | |
| (2) Includes loans held for sale. | |
|
| | | | | | | | | | | | | | |
| | | | | | |
| Asset Quality (EOP) (unaudited) |
| ($ in thousands) |
| | | | | | |
| Three Months Ended | | |
| March 31, | December 31, | March 31, | | | |
| 2021 | 2020 | 2020 | | | |
| | | | | | |
| Beginning allowance for credit losses | $ | 131,388 | | $ | 131,388 | | $ | 54,619 | | | | |
| Impact of adopting ASC 326 on 01/01/2020 | — | | — | | 41,347 | | | | |
| | | | | | |
| Provision for credit losses | (17,356) | | (1,100) | | 16,950 | | | | |
| | | | | | |
| Gross charge-offs | (1,570) | | (707) | | (8,445) | | | | |
| Gross recoveries | 1,575 | | 1,807 | | 1,909 | | | | |
| Net (charge-offs) recoveries | 5 | | 1,100 | | (6,536) | | | | |
| | | | | | |
| Ending allowance for credit losses | $ | 114,037 | | $ | 131,388 | | $ | 106,380 | | | | |
| | | | | | |
| Net charge-offs (recoveries) / average loans (1) | 0.00 | % | (0.03) | % | 0.21 | % | | | |
| | | | | | |
| Average loans outstanding (1) | $ | 13,815,515 | | $ | 13,910,145 | | $ | 12,182,704 | | | | |
| | | | | | |
| EOP loans outstanding (1) | 13,925,261 | | 13,786,479 | | 12,384,612 | | | | |
| | | | | | |
| Allowance for credit losses / EOP loans (1) | 0.82 | % | 0.95 | % | 0.86 | % | | | |
| | | | | | |
| Underperforming Assets: | | | | | | |
| Loans 90 Days and over (still accruing) | $ | 49 | | $ | 167 | | $ | 658 | | | | |
| | | | | | |
| Non-performing loans: | | | | | | |
| Nonaccrual loans (2) | 142,138 | | 147,339 | | 126,987 | | | | |
| TDRs still accruing | 15,226 | | 17,749 | | 17,040 | | | | |
| Total non-performing loans | 157,364 | | 165,088 | | 144,027 | | | | |
| | | | | | |
| Foreclosed properties | 751 | | 1,324 | | 2,163 | | | | |
| | | | | | |
| Total underperforming assets | $ | 158,164 | | $ | 166,579 | | $ | 146,848 | | | | |
| | | | | | |
| Classified and Criticized Assets: | | | | | | |
| Nonaccrual loans (2) | 142,138 | | 147,339 | | 126,987 | | | | |
| Substandard accruing loans | 160,314 | | 157,276 | | 181,157 | | | | |
| Loans 90 days and over (still accruing) | 49 | | 167 | | 658 | | | | |
| Total classified loans - "problem loans" | $ | 302,501 | | $ | 304,782 | | $ | 308,802 | | | | |
| | | | | | |
| Other classified assets | 3,791 | | 3,706 | | 2,616 | | | | |
| Criticized loans - "special mention loans" | 246,365 | | 287,192 | | 238,011 | | | | |
| | | | | | |
| Total classified and criticized assets | $ | 552,657 | | $ | 595,680 | | $ | 549,429 | | | | |
| | | | | | |
| Non-performing loans / EOP loans (1) | 1.13 | % | 1.20 | % | 1.16 | % | | | |
| | | | | | |
| Allowance to non-performing loans | 72 | % | 80 | % | 74 | % | | | |
| | | | | | |
| Under-performing assets / EOP loans (1) | 1.14 | % | 1.21 | % | 1.19 | % | | | |
| | | | | | |
| EOP total assets | $ | 23,744,451 | | $ | 22,960,622 | | $ | 20,741,141 | | | | |
| | | | | | |
| Under-performing assets / EOP assets | 0.67 | % | 0.73 | % | 0.71 | % | | | |
| | | | | | |
| EOP - End of period actual balances | | | | | | |
| (1) Excludes loans held for sale. | | | | |
(2) Includes non-accruing TDRs totaling $14.3 million at March 31, 2021, $14.9 million at December 31, 2020, and
$11.8 million at March 31, 2020. | | | | |
| | | | | | |
| | | | | | | | | | | | | | |
| | | | | | |
| Non-GAAP Measures (unaudited) |
| ($ in thousands) |
| | | | | | |
| Three Months Ended | | |
| March 31, | December 31, | March 31, | | | |
| 2021 | 2020 | 2020 | | | |
| Actual End of Period Balances | | | | | | |
| GAAP shareholders' equity | $ | 2,979,447 | | $ | 2,972,656 | | $ | 2,823,435 | | | | |
| | | | | | |
| Deduct: | | | | | | |
| Goodwill | 1,036,994 | | 1,036,994 | | 1,036,994 | | | | |
| Intangibles | 42,939 | | 46,014 | | 56,329 | | | | |
| 1,079,933 | | 1,083,008 | | 1,093,323 | | | | |
| | | | | | |
| Tangible shareholders' equity | $ | 1,899,514 | | $ | 1,889,648 | | $ | 1,730,112 | | | | |
| | | | | | |
| Average Balances | | | | | | |
| GAAP shareholders' equity | $ | 2,969,978 | | $ | 2,932,590 | | $ | 2,833,523 | | | | |
| | | | | | |
| Deduct: | | | | | | |
| Goodwill | 1,036,994 | | 1,036,994 | | 1,036,994 | | | | |
| Intangibles | 44,409 | | 47,536 | | 58,127 | | | | |
| 1,081,403 | | 1,084,530 | | 1,095,121 | | | | |
| | | | | | |
| Average tangible shareholders' equity | $ | 1,888,575 | | $ | 1,848,060 | | $ | 1,738,402 | | | | |
| | | | | | |
| Actual End of Period Balances | | | | | | |
| GAAP assets | $ | 23,744,451 | | $ | 22,960,622 | | $ | 20,741,141 | | | | |
| | | | | | |
| Add: | | | | | | |
| Trust overdrafts | 24 | | 26 | | 119 | | | | |
| | | | | | |
| Deduct: | | | | | | |
| Goodwill | 1,036,994 | | 1,036,994 | | 1,036,994 | | | | |
| Intangibles | 42,939 | | 46,014 | | 56,329 | | | | |
| 1,079,933 | | 1,083,008 | | 1,093,323 | | | | |
| | | | | | |
| Tangible assets | $ | 22,664,542 | | $ | 21,877,640 | | $ | 19,647,937 | | | | |
| | | | | | |
| Risk-weighted assets (2) | $ | 15,524,621 | | $ | 15,369,076 | | $ | 14,420,130 | | | | |
| | | | | | |
| GAAP net income | $ | 86,818 | | $ | 74,120 | | $ | 22,640 | | | | |
| | | | | | |
| Add: | | | | | | |
| Amortization of intangibles (net of tax) | 2,306 | | 2,433 | | 2,849 | | | | |
| | | | | | |
| Tangible net income | $ | 89,124 | | $ | 76,553 | | $ | 25,489 | | | | |
| | | | | | |
| Tangible Ratios | | | | | | |
| | | | | | |
| Return on tangible common equity | 18.77 | % | 16.20 | % | 5.89 | % | | | |
| Return on average tangible common equity | 18.88 | % | 16.57 | % | 5.86 | % | | | |
| Return on tangible assets | 1.57 | % | 1.40 | % | 0.52 | % | | | |
| | | | | | |
| | | | | | |
| Tangible common equity to tangible assets | 8.38 | % | 8.64 | % | 8.81 | % | | | |
| Tangible common equity to risk-weighted assets (2) | 12.24 | % | 12.30 | % | 12.00 | % | | | |
| | | | | | |
| Tangible common book value (1) | 11.47 | | 11.43 | | 10.48 | | | | |
| | | | | | |
| Tangible common equity presentation includes other comprehensive income as is common in other company releases. | | | | |
| (1) Tangible common shareholders' equity divided by common shares issued and outstanding at period-end. | | | | |
| | | | | | |
| Tier 1 common equity (2) | $ | 1,865,220 | | $ | 1,805,194 | | $ | 1,643,249 | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| Risk-weighted assets (2) | 15,524,621 | | 15,369,076 | | 14,420,130 | | | | |
| | | | | | |
| Tier 1 common equity to risk-weighted assets (2) | 12.01 | % | 11.75 | % | 11.40 | % | | | |
| | | | | | |
| (2) March 31, 2021 figures are preliminary. | | | | | | |
| | | | | | |
