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Section 1: 8-K (8-K)

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 22, 2019

 

 

OLD NATIONAL BANCORP

(Exact name of Registrant as specified in its charter)

 

 

 

Indiana   001-15817   35-1539838
(State or other jurisdiction of incorporation)   (Commission File Number)   (IRS Employer Identification No.)

One Main Street

Evansville, Indiana

  47708
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (800) 731-2265

(Former name or former address if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (s230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (s240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02

Results of Operations and Financial Condition.

On January 22, 2019, Old National Bancorp (the “Company”) issued a press release (“Press Release”) reporting its financial results for the fourth quarter of 2018. The Press Release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference. In connection therewith, a slide presentation outlining fourth-quarter earnings, strategic developments, and the Company’s financial outlook will be available on the “Investor Relations” section of the Company’s website to complement the conference call to be held on January 22, 2019, at 7:00 a.m. CDT and will be accessible at http://www.oldnational.com before the conference call begins.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit No.

  

Description

99.1    Press Release issued by Old National Bancorp on January 22, 2019

 

2


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: January 22, 2019

 

OLD NATIONAL BANCORP
By:   /s/ James C. Ryan, III
  James C. Ryan, III
  Senior Executive Vice President and
  Chief Financial Officer

 

3

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Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

Old National Bancorp

  LOGO

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 4th quarter net income of $47.5 million,

or $0.28 earnings per share

Evansville, Ind. (January 22, 2019)

 

Old National Bancorp (NASDAQ: ONB) reports 4Q18 net income of $47.5 million, diluted EPS of $0.28.

Adjusted1 net income of $54.1 million, or $0.32 per diluted share.

2018 annual net income of $190.8 million, diluted EPS of $1.22.

Adjusted1 2018 annual net income of $201.8 million, diluted EPS of $1.29.

CEO COMMENTARY:

 

“Old National’s strong 4th quarter – punctuated by the 2nd highest commercial loan production in our history – capped a year of outstanding performance that included $283.2 million in organic commercial loan growth, positive operating leverage and strong credit and capital ratios,” said Old National Chairman & CEO Bob Jones. “The 4th quarter also saw us continue to execute our growth strategy by closing on our KleinBank partnership, which effectively doubles our presence in the state of Minnesota.”

FOURTH-QUARTER HIGHLIGHTS2:

 

Net Income     

•   Net income of $47.5 million

  

•   Earnings per share of $0.28

  
Net Interest   Income/NIM     

•   Net interest income on a fully taxable equivalent basis was $149.3 million, up 11.7%

   •   Net interest margin on a fully taxable equivalent basis was 3.64% compared to 3.51%
  
Operating   Performance     

•   Pre-provision net revenue1 (“PPNR”) was $57.2 million

   •   Adjusted PPNR1 was $67.0 million, up 16.0% over fourth quarter of 2017
   •   Noninterest expense was $150.3 million
   •   Adjusted noninterest expense1 was $126.9 million
   •   Efficiency ratio1 was 70.33%
   •   Adjusted efficiency ratio1 was 63.31%, a 27 basis point improvement from fourth quarter of 2017
  

Loans and   Credit  

Quality  

  

•   End-of-period total loans3 were $12,258.8 million compared to $11,314.0 million

  

•   End-of-period commercial and industrial loans were $3,233.0 million compared to $2,949.3 million

  

•   Fourth quarter total commercial production was $594.0 million; December 31 pipeline was $1.5 billion

   •   Provision for loan losses was $3.4 million compared to $0.8 million
   •   Net charge-offs were $0.6 million, or 0.02% annualized, compared to net charge-offs of $1.7 million
   •   Non-performing loans were 1.43% of total loans compared to 1.47%
  
Capital   Returns     

•   Return on average common equity was 7.59%

   •   Return on average tangible common equity1 was 13.84%
   •   Adjusted return on average tangible common equity1 was 15.62%
  

Notable  

Items  

  

•   Closing of Klein partnership on November 1, 2018

   •   Sale of 10 Wisconsin branches resulting in a $14.0 million net gain
   •   $14.8 million in merger/integration charges and $7.5 million in ONB Foundation funding
   •   $7.6 million in incentive compensation annual true-ups and benefit adjustments driven by higher
     hospitalization costs
   •   $1.1 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 fourth-quarter 2018 net income of $47.5 million, or $0.28 per diluted share.

Included in the fourth quarter were pre-tax charges of $14.8 million for merger and integration and $7.5 million in ONB Foundation funding. The current quarter also included a $14.0 million net gain resulting from the sale of 10 Wisconsin branches. Excluding these items from the current quarter and netting out securities gains, Old National would have reported net income of $54.1 million, or $0.32 per share. The fourth quarter also included $7.6 million in incentive compensation annual true-ups and benefit adjustments driven by higher hospitalization costs.

As was previously disclosed, Old National closed on its partnership with Minnesota-based Klein Financial, Inc. (Klein) as of November 1, 2018.

LOANS

Pipeline and production remain strong with paydowns impacting outstandings; quarterly balances benefitted from the Klein partnership.

 

 

Period-end total loans increased to $12,258.8 million at December 31, 2018 from $11,314.0 million at September 30, 2018.

 

 

Total loans acquired though the partnership with Klein were $1,049.1 million as of the date of closing.

 

 

Fourth quarter commercial loan production was $594.0 million, second highest in company history, while period-end pipeline totaled $1.5 billion.

 

 

On average, total loans in the fourth quarter were $11,972.6 million, up from $11,291.7 million in the third quarter of 2018.

 

 

For the full-year 2018, total loans grew $1,122.8 million. Excluding the $1,049.1 million in loans acquired from Klein and the $64.9 million in student loans sold in the second quarter, organic loan growth for the full year was $138.6 million.

 

 

For the full-year 2018, total commercial loans increased to $8,191.8 million. Excluding the $836.8 million in commercial loans acquired from Klein, organic commercial loan growth was $283.2 million.

DEPOSITS

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

 

 

Period-end total deposits increased to $14,349.9 million at December 31, 2018, from $12,598.2 million at September 30, 2018.

 

 

Total deposits assumed from Klein were $1,713.1 million. Total deposits sold during the fourth quarter (as part of the Wisconsin branch sale) totaled $230.6 million. Excluding these transactions, organic deposit growth for the quarter was $269.3 million, or 8.5% annualized.

 

 

On average, total deposits in the fourth quarter were $13,620.6 million, compared to $12,597.8 million in the third quarter of 2018.

 

 

For the full-year 2018, total deposits grew $1,744.2 million. Excluding the deposits assumed and the deposits sold (as noted above), organic deposit growth was $261.7 million, or 2.1%, for the year.

NET INTEREST INCOME AND MARGIN

Controlled deposit costs and the Klein partnership benefited both net interest income and margin in the fourth quarter.

 

 

Net interest income increased to $146.2 million in the fourth quarter of 2018 from $130.8 million in the third quarter of 2018, benefitting primarily from the Klein partnership.

 

 

The net interest margin on a fully taxable equivalent basis increased 13 basis points to 3.64% compared to 3.51% in the third quarter of 2018.

 

 

Accretion income was $11.3 million, or 27 basis points of net interest margin, in the fourth quarter of 2018 compared to $7.3 million, or 19 basis points of net interest margin, in the third quarter of 2018. In the fourth quarter of 2018, accretion income was 5.8% of adjusted total revenue.


 

Loan yields, excluding accretion income, increased 11 basis points to 4.42%

 

 

The cost of total deposits rose 4 basis points to 0.40% in the fourth quarter of 2018 while the cost of total interest-bearing deposits rose 7 basis points to 0.56%.

CREDIT QUALITY

Strong credit quality remains a hallmark of the Old National franchise, with larger quarterly provision driven mostly by two specific reserves.

 

 

Asset quality remained strong with net charge-offs in the fourth quarter of $0.6 million, or 0.02% of total average loans, and 30-89 day delinquencies of 0.39%.

 

 

Provision expense for the fourth quarter was $3.4 million, driven primarily by two specific reserves.

 

 

Non-performing loans as a percentage of total loans was 1.43%.

 

 

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 December 31, 2018, the remaining discount on these acquired loans was $121.3 million.

 

 

The allowance for loan losses was $55.5 million, or 0.45% of total loans at December 31, 2018.

NONINTEREST INCOME

Noninterest income included a gain on sale of Wisconsin branches and demonstrated normal seasonal patterns in several fee income businesses.

 

 

Total noninterest income for the fourth quarter of 2018 was $58.2 million, an increase of $12.2 million from the third quarter of 2018.

 

 

Included in noninterest income in the fourth quarter was a net gain of $14.0 million from the sale of 10 Wisconsin branches.

 

 

Klein contributed $2.8 million to noninterest income during the quarter (for the two months since the closing of the partnership), which was offset by lower capital markets income (down $1.9 million) and the normal seasonal decline in mortgage banking revenue.

 

 

Securities losses were $0.4 million, compared to securities gains of $0.1 million in the third quarter of 2018.

NONINTEREST EXPENSE

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

 

 

Noninterest expense for the fourth quarter of 2018 was $150.3 million and included $14.8 million in merger and integration charges, $7.5 million in ONB Foundation funding and $1.1 million in tax credit amortization.

 

 

Excluding these items, adjusted noninterest expense for the fourth quarter was $126.9 million, compared to the $108.4 million in adjusted noninterest expense in the third quarter of 2018.

 

 

Klein noninterest expenses were $7.4 million during the fourth quarter (for the two months since the closing of the partnership).

 

 

The fourth quarter of 2018 also included $7.6 million in incentive compensation true-ups and benefit adjustments, which is included in adjusted noninterest expense defined above.

 

 

The fourth quarter efficiency ratio was 70.33%, while the adjusted efficiency ratio was 63.31%.

 

 

For the full year 2018, the efficiency ratio was 67.74%, while the adjusted efficiency ratio was 61.56%

 

 

Adjusted operating leverage1 was +215 basis points in for the full-year 2018 as compared to 2017.

INCOME TAXES

 

 

On a fully taxable-equivalent basis, income tax expense in the fourth quarter was $6.3 million, resulting in a 11.7% FTE tax rate.


CAPITAL

Strong quarterly earnings drove capital ratios higher.

 

 

At the end of the fourth quarter, total risk-based capital was 12.3% and regulatory tier 1 capital was 11.4%.

 

 

Tangible common equity to tangible assets was 8.47% at the end of the fourth quarter compared to 8.08% in the third quarter of 2018.

NON-GAAP RECONCILIATIONS

 

($ in millions, except EPS, shares in 000s)

   4Q18      Adjustments4      Adjusted 4Q18  

Total Revenues (FTE)

   $ 207.5      ($ 13.6    $ 193.9  

Less: Provision for Loan Losses

     (3.4      —          (3.4

Less: Noninterest Expenses

     (150.3      22.3        (128.0

Income before Income Taxes (FTE)

   $ 53.8      $ 8.7      $ 62.5  

Income Taxes

     (6.3      (2.1      (8.4

Net Income

   $ 47.5      $ 6.6      $ 54.1  

Average Shares Outstanding

     167,992        —          167,992  

Earnings Per Share

   $ 0.28      $ 0.04      $ 0.32  

 

  4

Tax-effect calculations use the 2018 statutory FTE tax rates (federal + state)

 

($ in millions, except EPS, shares in 000s)

   2018      Adjustments4      Adjusted 2018  

Total Revenues (FTE)

   $ 744.3      ($ 18.7    $ 725.6  

Less: Provision for Loan Losses

     (7.0      —          (7.0

Less: Noninterest Expenses

     (517.3      33.3        (484.0

Income before Income Taxes (FTE)

   $ 220.0      $ 14.6      $ 234.6  

Income Taxes

     (29.2      (3.6      (32.8

Net Income

   $ 190.8      $ 11.0      $ 201.8  

Average Shares Outstanding

     156,539        —          156,539  

Earnings Per Share

   $ 1.22      $ 0.07      $ 1.29  

 

  4

Tax-effect calculations use the 2018 statutory FTE tax rates (federal + state)

 

($ in millions)

   4Q18        3Q18  

Net Interest Income

   $ 146.2        $ 130.8  

FTE Adjustment

     3.1          2.8  

Net Interest Income (FTE)

   $ 149.3        $ 133.6  

Average Earning Assets

   $ 16,398.3        $ 15,213.4  

Net Interest Margin (FTE)

     3.64%          3.51%  

 

($ in millions)

   4Q18        3Q18  

Net Interest Income

   $ 146.2        $ 130.8  

FTE Adjustment

     3.1          2.8  

Net Interest Income (FTE)

   $ 149.3        $ 133.6  

Total Noninterest Income

   $ 58.2        $ 46.0  

Noninterest Expense

     150.3          119.4  

Pre-Provision Net Revenue

   $ 57.2        $ 60.2  

Less: Securities Gains/Losses

     0.4          (0.1

Less: Gain on Branch Actions

     (14.0        (0.2

Add: Merger and Integration Charges

     14.8          1.7  

Add: Branch Action Charges and Severance

     —            0.1  

Add: ONB Foundation Funding

     7.5          —    

Add: Amortization of Tax Credit Investments

     1.1          9.2  

Adjusted Pre-Provision Net Revenue

   $ 67.0        $ 70.9  


($ in millions)

   4Q18     3Q18     4Q17     2018     2017  

Noninterest Expense

   $ 150.3     $ 119.4     $ 140.4     $ 517.3     $ 448.8  

Less: Merger and Integration Charges

     (14.8     (1.7     (11.9     (21.3     (12.3

Less: Branch Action Charges, Severance, ONB Foundation Funding and Client Experience Initiative Charges

     (7.5     (0.1     (6.6     (12.0     (14.0

Noninterest Expense less Charges

   $ 128.0     $ 117.6     $ 121.9     $ 484.0     $ 422.5  

Less: Amortization of Tax Credit Investments

     (1.1     (9.2     (11.7     (22.9     (11.7

Adjusted Noninterest Expense

   $ 126.9     $ 108.4     $ 110.2     $ 461.1     $ 410.8  

Less: Intangible Amortization

     (4.1     (3.3     (3.4     (14.4     (11.8

Adjusted Noninterest Expense Less Intangible Amortization

   $ 122.8     $ 105.1     $ 106.8     $ 446.7     $ 399.0  

Net Interest Income

   $ 146.2     $ 130.8     $ 118.6     $ 537.5     $ 437.2  

FTE Adjustment

     3.1       2.8       6.1       11.5       23.1  

Net Interest Income (FTE)

   $ 149.3     $ 133.6     $ 124.7     $ 549.0     $ 460.3  

Total Noninterest Income

   $ 58.2     $ 46.0     $ 44.8     $ 195.3     $ 183.3  

Total Revenue (FTE)

   $ 207.5     $ 179.6     $ 169.5     $ 744.3     $ 643.6  

Less: Securities Gains/Losses

     0.4       (0.1     (1.6     (2.0     (9.1

Less: Gain on Student Loan Sale

     —         —         —         (2.2     —    

Less: Gain on Branch Actions

     (14.0     (0.2     —         (14.5     (0.2

Adjusted Total Revenue (FTE)

   $ 193.9     $ 179.3     $ 167.9     $ 725.6     $ 634.3  

Efficiency Ratio

     70.33%       64.71%       81.60%       67.74%       68.87%  

Adjusted Efficiency Ratio

     63.31%       58.67%       63.58%       61.56%       62.90%  

Operating Leverage5 (basis points)

     1,536           40    

Adjusted Operating Leverage6 (basis points)

     30           215    

 

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)

   4Q18      3Q18  

Net Income (Loss)

   $ 47.5      $ 51.3  

Add: Intangible Amortization (net of tax7)

     3.3        2.6  

Tangible Net Income (Loss)

   $ 50.8      $ 53.9  

Less: Securities Gains/Losses (net of tax7)

     0.3        (0.1

Less: Gain on Branch Sale (net of tax7)

     (10.6      —    

Add: Merger & Integration Charges (net of tax7)

     11.2        1.3  

Add: Branch Action Charges (net of gains) and Severance (net of tax7)

     —          (0.1

Add: ONB Foundation Funding (net of tax7)

     5.7        —    

Adjusted Tangible Net Income (Loss)

   $ 57.4      $ 55.0  

Average Total Shareholders’ Equity

   $ 2,503.8      $ 2,212.7  

Less: Average Goodwill

     (969.4      (828.8

Less: Average Intangibles

     (66.9      (43.7

Average Tangible Shareholders’ Equity

   $ 1,467.5      $ 1,340.2  

Return on Average Tangible Common Equity

     13.84%        16.10%  

Adjusted Return on Average Tangible Common Equity

     15.62%        16.42%  

 

  7 

Tax-effect calculations use the 2018 statutory FTE tax rates (federal + state)


CONFERENCE CALL AND WEBCAST

Old National will host a conference call and live webcast at 7:00 a.m. Central Time on Tuesday, January 22, 2019, to review fourth-quarter and full-year 2018 financial results. The live audio web cast of the call, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at oldnational.com and will be archived there for 12 months. A replay of the call will also be available from 10:00 a.m. Central Time on January 22 through February 5. To access the replay, dial 1-855-859-2056, Conference ID Code 5499497.

ABOUT OLD NATIONAL

Old National Bancorp (NASDAQ: ONB) is the holding company of Old National Bank. Headquartered in Evansville with $19.7 billion in assets, it is a top 100 U.S. bank, the largest Indiana-based bank and has been recognized as a World’s Most Ethical Company by the Ethisphere Institute for seven consecutive years. For nearly 185 years, Old National has been a community bank committed to building long-term, highly valued relationships with clients. With locations in Indiana, Kentucky, Michigan, Minnesota and Wisconsin, Old National provides retail and commercial banking services along with comprehensive wealth management, investment and capital markets services. For information and financial data, please visit Investor Relations at oldnational.com.

USE OF NON-GAAP FINANCIAL MEASURES

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

FORWARD-LOOKING STATEMENT

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


Financial Highlights (unaudited)

($ and shares in thousands, except per share data)

 

     Three Months Ended     Twelve Months Ended  
     December 31,
2018
     September 30,
2018
     December 31,
2017
    December 31,
2018
     December 31,
2017
 

Income Statement

             

Net interest income

   $ 146,225      $ 130,842      $ 118,556     $ 537,602      $ 437,168  

Provision for loan losses

     3,390        750        1,037       6,966        3,050  

Noninterest income

     58,154        45,957        44,825       195,305        183,382  

Noninterest expense

     150,268        119,376        140,432       517,261        448,836  

Net income (loss)

     47,498        51,348        (18,493     190,830        95,725  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Per Common Share Data (Diluted)

             

Net income (loss) available to common shareholders

   $ 0.28      $ 0.34      $ (0.13   $ 1.22      $ 0.69  

Average diluted shares outstanding

     167,992        152,784        146,875       156,539        138,513  

Book value

     15.36        14.58        14.17       15.36        14.17  

Stock price

     15.40        19.30        17.45       15.40        17.45  

Dividend payout ratio

     46%        38%        N/M       42%        75%  

Tangible common book value (1)

     9.00        8.86        8.37       9.00        8.37  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Performance Ratios

             

Return on average assets

     1.01%        1.18%        -0.45%       1.07%        0.63%  

Return on average common equity

     7.59%        9.28%        -3.51%       8.42%        4.98%  

Return on average tangible common equity (1)

     13.84%        16.10%        -5.05%       14.97%        8.59%  

Net interest margin (FTE)

     3.64%        3.51%        3.47%       3.54%        3.48%  

Efficiency ratio (2)

     70.33%        64.71%        81.60%       67.74%        68.87%  

Net charge-offs (recoveries) to average loans

     0.02%        0.06%        0.03%       0.02%        0.03%  

Allowance for loan losses to ending loans

     0.45%        0.47%        0.45%       0.45%        0.45%  

Non-performing loans to ending loans

     1.43%        1.47%        1.30%       1.43%        1.30%  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Balance Sheet

             

Total loans

   $ 12,243,892      $ 11,292,659      $ 11,118,121     $ 12,243,892      $ 11,118,121  

Total assets

     19,728,435        17,567,759        17,518,292       19,728,435        17,518,292  

Total deposits

     14,349,949        12,598,200        12,605,764       14,349,949        12,605,764  

Total borrowed funds

     2,493,793        2,576,039        2,578,204       2,493,793        2,578,204  

Total shareholders' equity

     2,689,570        2,220,680        2,154,397       2,689,570        2,154,397  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Capital Ratios (1)

             

Risk-based capital ratios (EOP):

             

Tier 1 common equity

     11.4%        11.1%        10.5%       11.4%        10.5%  

Tier 1

     11.4%        11.1%        10.4%       11.4%        10.4%  

Total

     12.3%        12.1%        11.4%       12.3%        11.4%  

Leverage ratio (to average assets)

     9.2%        8.6%        8.3%       9.2%        8.3%  

Total equity to assets (averages)

     13.28%        12.69%        12.69%       12.74%        12.57%  

Tangible common equity to tangible assets

     8.47%        8.08%        7.65%       8.47%        7.65%  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Nonfinancial Data

             

Full-time equivalent employees

     2,892        2,554        2,801       2,892        2,801  

Number of branches

     191        182        191       191        191  

 

(1)

See "Non-GAAP Measures" table.

(2)

Efficiency ratio is defined as noninterest expense before amortization of intangibles as a percent of FTE net interest income and noninterest revenues, excluding net gains from securities transactions. This presentation excludes amortization of intangibles and net securities gains, as is common in other company releases, and better aligns with true operating performance.

FTE – Fully taxable equivalent basis EOP – End of period actual balances N/M – Not meaningful


Income Statement (unaudited)

($ and shares in thousands, except per share data)

 

     Three Months Ended     Twelve Months Ended  
     December 31,
2018
    September 30,
2018
     December 31,
2017
    December 31,
2018
     December 31,
2017
 

Interest income

   $ 175,234     $ 155,369      $ 135,134     $ 632,045      $ 495,336  

Less: interest expense

     29,009       24,527        16,578       94,443        58,168  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Net interest income

     146,225       130,842        118,556       537,602        437,168  

Provision for loan losses

     3,390       750        1,037       6,966        3,050  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Net interest income after provision for loan losses

     142,835       130,092        117,519       530,636        434,118  

Wealth management fees

     9,069       9,022        9,801       36,863        37,316  

Service charges on deposit accounts

     11,474       11,028        10,913       44,026        41,331  

Debit card and ATM fees

     5,565       4,706        4,756       20,216        17,676  

Mortgage banking revenue

     3,928       4,348        3,933       17,657        18,449  

Investment product fees

     5,369       5,073        5,791       20,539        20,977  

Capital markets income

     840       2,700        923       4,934        6,544  

Company-owned life insurance

     2,591       2,958        2,366       10,584        8,654  

Other income

     5,700       5,986        4,676       24,402        23,083  

Net gain on branch divestitures

     13,989       —          —         13,989        —    

Gains (losses) on sales of securities

     (357     135        1,588       2,060        9,135  

Gains (losses) on derivatives

     (14     1        78       35        217  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total noninterest income

     58,154       45,957        44,825       195,305        183,382  

Salaries and employee benefits

     87,346       63,158        74,785       281,275        246,738  

Occupancy

     13,210       12,578        12,168       51,941        46,511  

Equipment

     3,916       3,652        3,498       14,861        13,560  

Marketing

     4,782       3,406        3,803       15,847        13,172  

Data processing

     9,418       8,628        8,776       36,170        32,306  

Communication

     2,537       2,473        2,419       10,846        9,284  

Professional fees

     5,615       3,235        5,523       14,503        16,840  

Loan expenses

     1,877       1,564        1,730       7,028        6,596  

Supplies

     705       707        686       3,037        2,406  

FDIC assessment

     2,110       2,722        2,666       10,638        9,480  

Other real estate owned expense

     176       157        741       878        3,376  

Amortization of intangibles

     4,134       3,283        3,399       14,442        11,841  

Amortization of tax credit investments

     1,142       9,233        11,733       22,949        11,733  

Other expense

     13,300       4,580        8,505       32,846        24,993  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total noninterest expense

     150,268       119,376        140,432       517,261        448,836  

Income before income taxes

     50,721       56,673        21,912       208,680        168,664  

Income tax expense

     3,223       5,325        40,405       17,850        72,939  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Net income (loss)

   $ 47,498     $ 51,348      $ (18,493   $ 190,830      $ 95,725  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
Diluted Earnings Per Share             

Net income (loss)

   $ 0.28     $ 0.34      $ (0.13   $ 1.22      $ 0.69  
Average Common Shares Outstanding             

Basic

     167,044       151,930        146,073       155,675        137,821  

Diluted

     167,992       152,784        146,875       156,539        138,513  

Common shares outstanding at end of period

     175,141       152,352        152,040       175,141        152,040  


Balance Sheet (unaudited)

($ in thousands)

 

     December 31,
2018
    September 30,
2018
    December 31,
2017
 

Assets

      

Federal Reserve Bank account

   $ 26,182     $ 65,878     $ 54,361  

Money market investments

     6,980       5,859       13,318  

Investments:

      

Treasury and government-sponsored agencies

     707,438       690,709       669,838  

Mortgage-backed securities

     2,336,415       1,640,254       1,674,584  

States and political subdivisions

     1,245,657       1,099,535       1,207,353  

Other securities

     488,802       496,199       453,765  
  

 

 

   

 

 

   

 

 

 

Total investments

     4,778,312       3,926,697       4,005,540  
  

 

 

   

 

 

   

 

 

 

Loans held for sale, at fair value

     14,911       21,384       17,930  

Loans:

      

Commercial

     3,232,970       2,949,277       2,717,269  

Commercial and agriculture real estate

     4,958,851       4,481,554       4,354,552  

Consumer:

      

Home equity

     589,322       498,325       507,507  

Other consumer loans

     1,214,345       1,197,300       1,371,740  
  

 

 

   

 

 

   

 

 

 

Subtotal of commercial and consumer loans

     9,995,488       9,126,456       8,951,068  

Residential real estate

     2,248,404       2,166,203       2,167,053  
  

 

 

   

 

 

   

 

 

 

Total loans

     12,243,892       11,292,659       11,118,121  
  

 

 

   

 

 

   

 

 

 

Total earning assets

     17,070,277       15,312,477       15,209,270  
  

 

 

   

 

 

   

 

 

 

Allowance for loan losses

     (55,461     (52,713     (50,381

Non-earning Assets:

      

Cash and due from banks

     284,003       215,024       222,753  

Premises and equipment, net

     485,912       450,253       458,074  

Goodwill and other intangible assets

     1,113,274       870,938       881,147  

Company-owned life insurance

     444,224       405,245       403,753  

Net deferred tax assets

     87,048       94,667       110,857  

Loan servicing rights

     24,497       24,336       24,661  

Other real estate owned and repossessed personal property

     3,232       3,563       8,810  

Other assets

     271,429       243,969       249,348  
  

 

 

   

 

 

   

 

 

 

Total non-earning assets

     2,713,619       2,307,995       2,359,403  
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 19,728,435     $ 17,567,759     $ 17,518,292  
  

 

 

   

 

 

   

 

 

 

Liabilities and Equity

      

Noninterest-bearing demand deposits

   $ 3,965,380     $ 3,588,370     $ 3,680,807  

Interest-bearing:

      

Checking and NOW accounts

     3,788,339       3,011,544       3,115,822  

Savings accounts

     2,944,092       2,920,712       3,035,622  

Money market accounts

     1,627,882       1,185,439       1,139,077  

Other time deposits

     1,845,149       1,667,055       1,470,118  
  

 

 

   

 

 

   

 

 

 

Total core deposits

     14,170,842       12,373,120       12,441,446  

Brokered CD's

     179,107       225,080       164,318  
  

 

 

   

 

 

   

 

 

 

Total deposits

     14,349,949       12,598,200       12,605,764  

Federal funds purchased and interbank borrowings

     270,135       450,031       335,033  

Securities sold under agreements to repurchase

     362,294       319,831       384,810  

Federal Home Loan Bank advances

     1,613,481       1,554,515       1,609,579  

Other borrowings

     247,883       251,662       248,782  
  

 

 

   

 

 

   

 

 

 

Total borrowed funds

     2,493,793       2,576,039       2,578,204  

Accrued expenses and other liabilities

     195,123       172,840       179,927  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     17,038,865       15,347,079       15,363,895  

Common stock, surplus, and retained earnings

     2,734,520       2,300,610       2,204,669  

Accumulated other comprehensive income (loss), net of tax

     (44,950     (79,930     (50,272
  

 

 

   

 

 

   

 

 

 

Total shareholders' equity

     2,689,570       2,220,680       2,154,397  
  

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders' equity

   $ 19,728,435     $ 17,567,759     $ 17,518,292  
  

 

 

   

 

 

   

 

 

 


Average Balance Sheet and Interest Rates (unaudited)

($ in thousands)

 

    Three Months Ended     Three Months Ended     Three Months Ended  
    December 31, 2018     September 30, 2018     December 31, 2017  
    Average
Balance
    Income (1)/
Expense
    Yield/
Rate
    Average
Balance
    Income (1)/
Expense
    Yield/
Rate
    Average
Balance
    Income (1)/
Expense
    Yield/
Rate
 

Earning Assets:

                 

Money market and other interest-earning investments

  $ 39,207     $ 205       2.07%     $ 35,928     $ 140       1.54%     $ 54,611     $ 87       0.63%  

Investments:

                 

Treasury and government-sponsored agencies

    694,409       3,874       2.23%       685,919       3,748       2.19%       611,982       3,031       1.98%  

Mortgage-backed securities

    2,011,275       13,688       2.72%       1,595,630       9,381       2.35%       1,573,578       8,139       2.07%  

States and political subdivisions

    1,187,404       11,147       3.76%       1,103,347       10,110       3.67%       1,178,113       13,312       4.52%  

Other securities

    493,426       4,017       3.26%       500,837       4,116       3.29%       454,824       3,126       2.75%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investments

    4,386,514       32,726       2.98%       3,885,733       27,355       2.82%       3,818,497       27,608       2.89%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loans: (2)

                 

Commercial

    3,133,153       37,358       4.67%       2,928,744       33,381       4.46%       2,480,987       26,577       4.19%  

Commercial and agriculture real estate

    4,834,589       65,461       5.30%       4,465,105       57,377       5.03%       3,989,684       47,683       4.68%  

Consumer:

                 

Home equity

    562,801       7,159       5.05%       495,161       6,070       4.86%       502,837       5,442       4.29%  

Other consumer loans

    1,203,436       11,702       3.86%       1,215,583       11,263       3.68%       1,371,986       12,248       3.54%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal commercial and consumer loans

    9,733,979       121,680       4.96%       9,104,593       108,091       4.71%       8,345,494       91,950       4.37%  

Residential real estate loans

    2,238,588       23,672       4.23%       2,187,130       22,536       4.12%       2,170,900       21,628       3.99%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

    11,972,567       145,352       4.78%       11,291,723       130,627       4.56%       10,516,394       113,578       4.26%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total earning assets

  $ 16,398,288     $ 178,283       4.30%     $ 15,213,384     $ 158,122       4.11%     $ 14,389,502     $ 141,273       3.88%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Less: Allowance for loan losses

    (53,045         (53,734         (50,601    

Non-earning Assets:

                 

Cash and due from banks

  $ 232,360         $ 205,446         $ 201,520      

Other assets

    2,275,907           2,068,469           2,046,544      
 

 

 

       

 

 

       

 

 

     

Total assets

  $ 18,853,510         $ 17,433,565         $ 16,586,965      
 

 

 

       

 

 

       

 

 

     

Interest-Bearing Liabilities:

                 

Checking and NOW accounts

  $ 3,391,630     $ 2,004       0.23%     $ 3,026,289     $ 1,180       0.15%     $ 2,905,440     $ 714       0.10%  

Savings accounts

    2,919,900       2,225       0.30%       2,974,147       2,119       0.28%       3,010,761       1,324       0.17%  

Money market accounts

    1,482,022       1,922       0.51%       1,153,906       1,254       0.43%       994,574       394       0.16%  

Other time deposits

    1,769,243       6,519       1.46%       1,669,039       5,780       1.37%       1,443,050       3,203       0.88%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing deposits

    9,562,795       12,670       0.53%       8,823,381       10,333       0.46%       8,353,825       5,635       0.27%  

Brokered CD's

    193,455       1,024       2.10%       178,283       856       1.90%       154,521       489       1.26%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing deposits and CD's

    9,756,250       13,694       0.56%       9,001,664       11,189       0.49%       8,508,346       6,124       0.29%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Federal funds purchased and interbank borrowings

    312,730       1,938       2.46%       238,514       1,191       1.98%       172,838       533       1.22%  

Securities sold under agreements to repurchase

    351,392       634       0.72%       352,998       535       0.60%       370,095       400       0.43%  

Federal Home Loan Bank advances

    1,649,304       9,441       2.27%       1,624,661       8,880       2.17%       1,543,690       6,871       1.77%  

Other borrowings

    250,926       3,302       5.26%       250,255       2,732       4.37%       241,695       2,650       4.39%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total borrowed funds

    2,564,352       15,315       2.37%       2,466,428       13,338       2.15%       2,328,318       10,454       1.78%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing liabilities

  $ 12,320,602     $ 29,009       0.93%     $ 11,468,092     $ 24,527       0.85%     $ 10,836,664     $ 16,578       0.61%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noninterest-Bearing Liabilities

                 

Demand deposits

  $ 3,864,302         $ 3,596,159         $ 3,486,412      

Other liabilities

    164,771           156,614           159,243      

Shareholders' equity

    2,503,835           2,212,700           2,104,646      
 

 

 

       

 

 

       

 

 

     

Total liabilities and shareholders' equity

  $ 18,853,510         $ 17,433,565         $ 16,586,965      
 

 

 

       

 

 

       

 

 

     

Net interest rate spread

        3.37%           3.26%           3.27%  

Net interest margin (FTE)

        3.64%           3.51%           3.47%  

FTE adjustment

    $ 3,049         $ 2,753         $ 6,139    

 

(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)

 

    Twelve Months Ended      Twelve Months Ended  
    December 31, 2018      December 31, 2017  
    Average
Balance
    Income (1)/
Expense
     Yield/
Rate
     Average
Balance
    Income (1)/
Expense
     Yield/
Rate
 

Earning Assets:

              

Money market and other interest-earning investments

  $ 48,240     $ 630        1.31%      $ 35,584     $ 258        0.72%  

Investments:

              

Treasury and government-sponsored agencies

    673,171       14,433        2.14%        578,640       11,453        1.98%  

Mortgage-backed securities

    1,707,646       41,493        2.43%        1,506,677       30,782        2.04%  

States and political subdivisions

    1,153,315       42,326        3.67%        1,134,532       53,359        4.70%  

Other securities

    490,464       15,633        3.19%        450,127       11,863        2.64%  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total investments

    4,024,596       113,885        2.83%        3,669,976       107,457        2.93%  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Loans: (2)

              

Commercial

    2,924,878       131,471        4.49%        2,083,779       85,747        4.11%  

Commercial and agriculture real estate

    4,536,897       235,876        5.20%        3,426,757       171,483        5.00%  

Consumer:

              

Home equity

    513,111       25,029        4.88%        483,310       20,003        4.14%  

Other consumer loans

    1,258,253       46,660        3.71%        1,392,221       48,139        3.46%  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Subtotal commercial and consumer loans

    9,233,139       439,036        4.76%        7,386,067       325,372        4.41%  

Residential real estate loans

    2,195,078       89,888        4.09%        2,146,279       85,340        3.98%  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total loans

    11,428,217       528,924        4.63%        9,532,346       410,712        4.31%  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total earning assets

  $ 15,501,053     $ 643,439        4.15%      $ 13,237,906     $ 518,427        3.92%  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Less: Allowance for loan losses

    (52,316           (50,845     

Non-earning Assets:

              

Cash and due from banks

  $ 210,716           $ 207,677       

Other assets

    2,130,588             1,907,963       
 

 

 

         

 

 

      

Total assets

  $ 17,790,041           $ 15,302,701       
 

 

 

         

 

 

      

Interest-Bearing Liabilities:

              

Checking and NOW accounts

  $ 3,146,309     $ 4,973        0.16%      $ 2,676,760     $ 2,224        0.08%  

Savings accounts

    2,995,484       7,464        0.25%        2,964,875       4,980        0.17%  

Money market accounts

    1,225,220       4,424        0.36%        762,540       831        0.11%  

Other time deposits

    1,654,548       21,012        1.27%        1,363,529       10,907        0.80%  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total interest-bearing deposits

    9,021,561       37,873        0.42%        7,767,704       18,942        0.24%  

Brokered CD's

    185,426       3,404        1.84%        123,548       1,414        1.14%  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total interest-bearing deposits and CD's

    9,206,987       41,277        0.45%        7,891,252       20,356        0.26%  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Federal funds purchased and interbank borrowings

    238,408       4,793        2.01%        187,426       1,966        1.05%  

Securities sold under agreements to repurchase

    344,964       1,962        0.57%        336,539       1,270        0.38%  

Federal Home Loan Bank advances

    1,665,689       34,925        2.10%        1,481,314       24,818        1.68%  

Other borrowings

    249,832       11,486        4.60%        224,793       9,758        4.34%  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total borrowed funds

    2,498,893       53,166        2.13%        2,230,072       37,812        1.70%  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total interest-bearing liabilities

  $ 11,705,880     $ 94,443        0.81%      $ 10,121,324     $ 58,168        0.57%  
 

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Noninterest-Bearing Liabilities

              

Demand deposits

  $ 3,657,234           $ 3,111,672       

Other liabilities

    159,600             146,060       

Shareholders' equity

    2,267,327             1,923,645       
 

 

 

         

 

 

      

Total liabilities and shareholders' equity

  $ 17,790,041           $ 15,302,701       
 

 

 

         

 

 

      

Net interest rate spread

         3.34%             3.35%  

Net interest margin (FTE)

         3.54%             3.48%  

FTE adjustment

    $ 11,394           $ 23,091     

 

(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     Twelve Months Ended  
     December 31,
2018
    September 30,
2018
    December 31,
2017
    December 31,
2018
    December 31,
2017
 

Beginning allowance for loan losses

   $ 52,713     $ 53,660     $ 50,169     $ 50,381     $ 49,808  

Provision for loan losses

     3,390       750       1,037       6,966       3,050  

Gross charge-offs

     (2,969     (4,261     (3,278     (12,969     (12,717

Gross recoveries

     2,327       2,564       2,453       11,083       10,240  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (charge-offs) recoveries

     (642     (1,697     (825     (1,886     (2,477
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending allowance for loan losses

   $ 55,461     $ 52,713     $ 50,381     $ 55,461     $ 50,381  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net charge-offs (recoveries) / average loans (1)

     0.02%       0.06%       0.03%       0.02%       0.03%  

Average loans outstanding (1)

   $ 11,967,241     $ 11,284,531     $ 10,509,552     $ 11,422,967     $ 9,525,888  

EOP loans outstanding (1)

     12,243,892     $ 11,292,659     $ 11,118,121     $ 12,243,892     $ 11,118,121  

Allowance for loan losses / EOP loans (1)

     0.45%       0.47%       0.45%       0.45%       0.45%  
Underperforming Assets:           

Loans 90 Days and over (still accruing)

   $ 1,353     $ 980     $ 894     $ 1,353     $ 894  

Non-performing loans:

          

Nonaccrual loans (2)

     157,484       148,816       124,927       157,484       124,927  

Renegotiated loans

     17,356       17,547       19,589       17,356       19,589  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-performing loans

     174,840       166,363       144,516       174,840       144,516  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Foreclosed properties

     3,232       3,563       8,810       3,232       8,810  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total underperforming assets

   $ 179,425     $ 170,906     $ 154,220     $ 179,425     $ 154,220  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Classified and Criticized Assets:           

Nonaccrual loans (2)

     157,484       148,816       124,927       157,484       124,927  

Substandard accruing loans

     175,948       107,257       100,762       175,948       100,762  

Loans 90 days and over (still accruing)

     1,353       980       894       1,353       894  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total classified loans – "problem loans"

   $ 334,785     $ 257,053     $ 226,583     $ 334,785     $ 226,583  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other classified assets

     2,820       3,070       4,556       2,820       4,556  

Criticized loans – "special mention loans"

     238,752       181,165       188,085       238,752       188,085  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total classified and criticized assets

   $ 576,357     $ 441,288     $ 419,224     $ 576,357     $ 419,224  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-performing loans / EOP loans (1)

     1.43%       1.47%       1.30%       1.43%       1.30%  

Allowance to non-performing loans (3)

     32%       32%       35%       32%       35%  

Under-performing assets / EOP loans (1)

     1.47%       1.51%       1.39%       1.47%       1.39%  

EOP total assets

   $ 19,728,435     $ 17,567,759     $ 17,518,292     $ 19,728,435     $ 17,518,292  

Under-performing assets / EOP assets

     0.91%       0.97%       0.88%       0.91%       0.88%  

 

EOP – End of period actual balances

(1)

Excludes loans held for sale.

(2)

Includes renegotiated loans totaling $26.3 million at December 31, 2018, $29.9 million at September 30, 2018, and $34.0 million at December 31, 2017.

(3)

Includes acquired loans that were recorded at fair value in accordance with ASC 805 at the date of acquisition. As such, the credit risk was incorporated in the fair value recorded and no allowance for loan losses was recorded on the acquisition date.


Non-GAAP Measures (unaudited)

($ in thousands)

 

     Three Months Ended     Twelve Months Ended  
     December 31,
2018
     September 30,
2018
     December 31,
2017
    December 31,
2018
     December 31,
2017
 
Actual End of Period Balances              

GAAP shareholders' equity

   $ 2,689,570      $ 2,220,680      $ 2,154,397     $ 2,689,570      $ 2,154,397  
Deduct:              
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Goodwill

     1,036,258        828,804        828,051       1,036,258        828,051  

Intangibles

     77,016        42,134        53,096       77,016        53,096  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
     1,113,274        870,938        881,147       1,113,274        881,147  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Tangible shareholders' equity

   $ 1,576,296      $ 1,349,742      $ 1,273,250     $ 1,576,296      $ 1,273,250  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
Average Balances              

GAAP shareholders' equity

   $ 2,503,835      $ 2,212,700      $ 2,104,646     $ 2,267,327      $ 1,923,645  
Deduct:              

Goodwill

     969,403        828,804        776,862       864,079        685,729  

Intangibles

     66,927        43,685        37,802       52,209        34,392  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
     1,036,330        872,489        814,664       916,288        720,121  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Average tangible shareholders' equity

   $ 1,467,505      $ 1,340,211      $ 1,289,982     $ 1,351,039      $ 1,203,524  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
Actual End of Period Balances              

GAAP assets

   $ 19,728,435      $ 17,567,759      $ 17,518,292     $ 19,728,435      $ 17,518,292  
Add:              

Trust overdrafts

     11        118        59       11        59  
Deduct:              

Goodwill

     1,036,258        828,804        828,051       1,036,258        828,051  

Intangibles

     77,016        42,134        53,096       77,016        53,096  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
     1,113,274        870,938        881,147       1,113,274        881,147  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Tangible assets

   $ 18,615,172      $ 16,696,939      $ 16,637,204     $ 18,615,172      $ 16,637,204  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Risk-weighted assets

   $ 14,248,562      $ 12,715,665      $ 12,491,430     $ 14,248,562      $ 12,491,430  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

GAAP net income (loss)

   $ 47,498      $ 51,348      $ (18,493   $ 190,830      $ 95,725  
Add:              

Amortization of intangibles (net of tax)

     3,266        2,593        2,210       11,410        7,697  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Tangible net income (loss)

   $ 50,764      $ 53,941      $ (16,283   $ 202,240      $ 103,422  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
Tangible Ratios              

Return on tangible common equity

     12.88%        15.99%        -5.12%       12.83%        8.12%  

Return on average tangible common equity

     13.84%        16.10%        -5.05%       14.97%        8.59%  

Return on tangible assets

     1.09%        1.29%        -0.39%       1.09%        0.62%  

Tangible common equity to tangible assets

     8.47%        8.08%        7.65%       8.47%        7.65%  

Tangible common equity to risk-weighted assets

     11.06%        10.61%        10.19%       11.06%        10.19%  

Tangible common book value (1)

     9.00        8.86        8.37       9.00        8.37  

Tangible common equity presentation includes other comprehensive income as is common in other company releases.

 

(1)   Tangible common shareholders' equity divided by common shares issued and outstanding at period-end.

    

Tier 1 capital

   $ 1,617,936      $ 1,409,775      $ 1,298,327     $ 1,617,936      $ 1,298,327  
Deduct:              

Tier 1 capital adjustments

     —          —          (10,000     —          (10,000
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
     —          —          (10,000     —          (10,000
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Tier 1 common equity

   $ 1,617,936      $ 1,409,775      $ 1,308,327     $ 1,617,936      $ 1,308,327  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Risk-weighted assets

     14,248,562        12,715,665        12,491,430       14,248,562        12,491,430  

Tier 1 common equity to risk-weighted assets

     11.36%        11.09%        10.47%       11.36%        10.47%  
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