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): July 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) |
Registrants 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. ☐
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Common Stock, No Par Value | ONB | The NASDAQ Stock Market LLC |
Item 2.02 Results of Operations and Financial Condition.
On July 22, 2019, Old National Bancorp (the Company) issued a press release (Press Release) reporting its financial results for the second quarter of 2019. The Press Release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference. In connection therewith, a slide presentation outlining second-quarter earnings, strategic developments, and the Companys financial outlook will be available on the Investor Relations section of the Companys website to complement the conference call to be held on July 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 July 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: July 22, 2019
OLD NATIONAL BANCORP | ||
By: | /s/ Brendon B. Falconer | |
Brendon B. Falconer | ||
Senior Executive Vice President and | ||
Chief Financial Officer |
3
Exhibit 99.1
Old National Bancorp One Main Street Evansville, IN 47708 oldnational.com |
Media: Kathy A. Schoettlin (812) 465-7269 Investors: Lynell J. Walton (812) 464-1366 |
Old Nationals record 2nd quarter net income increases 43% from a year ago to $63.0 million, or $0.36 per share
Evansville, Ind. (July 22, 2019)
Old National Bancorp (NASDAQ: ONB) reports 2Q19 net income of $63.0 million, diluted EPS of $0.36.
Adjusted1 net income of $64.5 million, or $0.37 per diluted share.
CEO COMMENTARY:
This was a quarter that saw Old National report record net income, strong loan production, good fee income and excellent credit metrics, all of which allowed us to continue to generate positive operating leverage, said CEO Jim Ryan. While loan prepayments and planned exits impacted overall balance sheet growth, activity levels were robust, and we successfully converted our KleinBank-Minnesota branches during the quarter. Our granular loan portfolio and low-risk profile again resulted in very low credit costs, and Old National remains on a high-performance path.
SECOND QUARTER HIGHLIGHTS2:
Net Income | Net income of $63.0 million, an increase of 43.1% from second quarter of 2018 Earnings per share of $0.36, an increase of 24.1% from second quarter of 2018 | |
Net Interest Income/NIM | Net interest income on a fully taxable equivalent basis was $158.5 million, up 5.5% Net interest margin on a fully taxable equivalent basis was 3.66% compared to 3.51% | |
Operating Performance | Pre-provision net revenue1 (PPNR) was $81.6 million Adjusted PPNR1 was $84.2 million, up 28.4% over second quarter of 2018 Noninterest expense was $128.1 million Adjusted noninterest expense1 was $124.3 million Efficiency ratio1 was 59.35% Adjusted efficiency ratio1 was 57.52%, a 416 basis point improvement from second quarter of 2018 | |
Loans and Credit Quality |
End-of-period total loans3 were $12,084.5 million compared to $12,083.1 million Second-quarter total commercial production was a record $628.0 million; June 30 pipeline was $1.7 billion Provision for loan losses was $1.0 million Net charge-offs were $0.3 million, or 0.01% annualized, compared to net charge-offs of $0.9 million Non-performing loans were 1.34% of total loans compared to 1.41% | |
Return Profile & Capital |
Return on average common equity was 9.13% Return on average tangible common equity1 was 16.04% Adjusted return on average tangible common equity1 was 16.41% Repurchased 1.8 million shares of common stock during the quarter | |
Notable Items |
$3.2 million in merger and integration charges $0.6 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 second-quarter 2019 net income of $63.0 million, or $0.36 per diluted share.
Included in the second quarter were pre-tax charges of $3.2 million for merger and integration activity. Excluding these charges from the current quarter and netting out debt securities gains, adjusted net income was $64.5 million, or $0.37 per diluted share.
LOANS
Record high commercial loan production; paydowns continued to impact outstandings.
| Period-end total loans were $12,084.5 million at June 30, 2019, compared to $12,083.1 million at March 31, 2019. |
| Commercial and industrial loans increased to $3,074.8 million; commercial real estate loans decreased to $4,993.7 million; consumer loans decreased to $1,755.8 million. |
| Record commercial loan production in the second quarter of $628.0 million; period-end pipeline totaled $1.7 billion. |
| On average, total loans in the second quarter were $12,091.0 million, down from $12,152.1 million in the first quarter of 2019. |
DEPOSITS
A low-cost core deposit franchise continues to be one of Old Nationals strengths.
| Period-end total deposits were $14,363.1 million at June 30, 2019, relatively flat despite normal seasonal patterns. |
| On average, total deposits in the second quarter were $14,369.5 million, compared to $14,211.0 million in the first quarter of 2019. |
NET INTEREST INCOME AND MARGIN
Net interest income and margin benefit from higher accretion and interest collected on nonaccrual loans as well as higher day count.
| Net interest income increased to $155.2 million in the second quarter of 2019 from $147.0 million in the first quarter of 2019. |
| The net interest margin on a fully taxable equivalent basis increased 15 basis points to 3.66% compared to 3.51% in the first quarter of 2019, with 3 basis points of the increase due to more days offset by a 5 basis points decline from mix change. |
| Accretion income was $11.8 million, or 27 basis points of net interest margin, in the second quarter of 2019 compared to $8.9 million, or 21 basis points of net interest margin, in the first quarter of 2019. In the second quarter of 2019, accretion income was 5.6% of adjusted total revenue. |
| Interest collected on nonaccrual loans was $5.7 million, or 13 basis points of net interest margin, in the second quarter of 2019 compared to $1.0 million, or 2 basis points of net interest margin, in the first quarter of 2019. |
| Loan yields, excluding accretion income and interest collected on nonaccrual loans, increased 3 basis points to 4.48%. |
| The cost of total deposits rose 6 basis points to 0.52% in the second quarter of 2019 while the cost of total interest-bearing deposits rose 6 basis points to 0.70%. |
CREDIT QUALITY
Strong credit quality remains a hallmark of the Old National franchise.
| Asset quality remained strong with net charge-offs in the second quarter of $0.3 million, or 0.01% of total average loans, and 30-89 day delinquencies of 0.34%. |
| Provision expense was $1.0 million in both the second quarter and first quarter of 2019. |
| Non-performing loans decreased as a percentage of total loans to 1.34%. |
| 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 June 30, 2019, the remaining discount on these acquired loans was $100.5 million. |
| The allowance for loan losses was $56.3 million, or 0.47% of total loans at June 30, 2019. |
NONINTEREST INCOME
Noninterest income increased due to wealth management tax preparation fees and increases in mortgage banking revenue and capital markets fees.
| Total noninterest income for the second quarter of 2019 was $51.2 million, an increase of $4.8 million from the first quarter of 2019. |
| Wealth management fees benefitted from seasonal tax preparation fees of $1.0 million. |
| Mortgage banking revenue increased $2.1 million, service charges on deposit accounts increased $0.7 million, while capital markets income increased $0.6 million. |
NONINTEREST EXPENSE
Second quarter results demonstrated continued discipline with respect to expense management, helping to drive positive operating leverage1.
| Noninterest expense for the second quarter of 2019 was $128.1 million and included $3.2 million in merger & integration charges and $0.6 million in tax credit amortization. |
| Excluding these items, adjusted noninterest expense for the second quarter was $124.3 million, compared to the $121.5 million in adjusted noninterest expense in the first quarter of 2019. |
| The second quarter efficiency ratio was 59.35%, while the adjusted efficiency ratio was 57.52%. |
INCOME TAXES
| On a fully taxable-equivalent basis, income tax expense in the second quarter was $17.6 million, resulting in a 21.9% FTE tax rate. |
| Income tax expense included the benefit of a $1.0 million state tax refund as well as $0.7 million in tax credit benefit. |
CAPITAL
Strong quarterly earnings drove capital ratios higher.
| At the end of the second quarter, total risk-based capital was 12.8% and regulatory tier 1 capital was 11.9%. |
| Tangible common equity to tangible assets was 8.92% at the end of the second quarter compared to 8.66% in the first quarter of 2019. |
| The Company repurchased 1.8 million shares of common stock during the second quarter with a weighted average price of $16.37 per share, excluding commissions. |
NON-GAAP RECONCILIATIONS
($ in millions, except EPS, shares in 000s) | 2Q19 | Adjustments4 | Adjusted 2Q19 | |||||||||
Total Revenues (FTE) |
$ | 209.7 | ($ | 1.2 | ) | $ | 208.5 | |||||
Less: Provision for Loan Losses |
(1.0 | ) | | (1.0 | ) | |||||||
Less: Noninterest Expenses |
(128.1 | ) | 3.2 | (124.9 | ) | |||||||
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Income before Income Taxes (FTE) |
$ | 80.6 | $ | 2.0 | $ | 82.6 | ||||||
Income Taxes |
17.6 | 0.5 | 18.1 | |||||||||
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Net Income |
$ | 63.0 | $ | 1.5 | $ | 64.5 | ||||||
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Average Shares Outstanding |
173,675 | | 173,675 | |||||||||
Earnings Per ShareDiluted |
$ | 0.36 | $ | 0.01 | $ | 0.37 |
4 | Tax-effect calculations use the current statutory FTE tax rates (federal + state) |
($ in millions) | 2Q19 | 1Q19 | ||||||
Net Interest Income |
$ | 155.2 | $ | 147.0 | ||||
Add: FTE Adjustment |
3.3 | 3.2 | ||||||
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Net Interest Income (FTE) |
$ | 158.5 | $ | 150.2 | ||||
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Average Earning Assets |
$ | 17,302.7 | $ | 17,143.6 | ||||
Net Interest Margin (FTE) |
3.66 | % | 3.51 | % |
($ in millions) | 2Q19 | 1Q19 | ||||||
Net Interest Income |
$ | 155.2 | $ | 147.0 | ||||
Add: FTE Adjustment |
3.3 | 3.2 | ||||||
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Net Interest Income (FTE) |
$ | 158.5 | $ | 150.2 | ||||
Add: Total Noninterest Income |
51.2 | 46.4 | ||||||
Less: Noninterest Expense |
128.1 | 123.0 | ||||||
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Pre-Provision Net Revenue |
$ | 81.6 | $ | 73.6 | ||||
Less: Debt Securities Gains/Losses |
(1.2 | ) | 0.1 | |||||
Add: Merger and Integration Charges |
3.2 | 1.2 | ||||||
Add: Amortization of Tax Credit Investments |
0.6 | 0.3 | ||||||
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Adjusted Pre-Provision Net Revenue |
$ | 84.2 | $ | 75.2 |
($ in millions) | 2Q19 | 1Q19 | 2Q18 | |||||||||
Noninterest Expense |
$ | 128.1 | $ | 123.0 | $ | 130.5 | ||||||
Less: Merger and Integration Charges |
(3.2 | ) | (1.2 | ) | (2.5 | ) | ||||||
Less: Branch Action Charges & Severance |
| | (1.6 | ) | ||||||||
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Noninterest Expense less Charges |
$ | 124.9 | $ | 121.8 | $ | 126.4 | ||||||
Less: Amortization of Tax Credit Investments |
(0.6 | ) | (0.3 | ) | (11.9 | ) | ||||||
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Adjusted Noninterest Expense |
$ | 124.3 | $ | 121.5 | $ | 114.5 | ||||||
Less: Intangible Amortization |
(4.3 | ) | (4.5 | ) | (3.4 | ) | ||||||
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Adjusted Noninterest Expense Less Intangible Amortization |
$ | 120.0 | $ | 117.0 | $ | 111.1 | ||||||
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Net Interest Income |
$ | 155.2 | $ | 147.0 | $ | 132.0 | ||||||
FTE Adjustment |
3.3 | 3.2 | 2.8 | |||||||||
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Net Interest Income (FTE) |
$ | 158.5 | $ | 150.2 | $ | 134.8 | ||||||
Total Noninterest Income |
51.2 | 46.4 | 49.3 | |||||||||
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Total Revenue (FTE) |
$ | 209.7 | $ | 196.6 | $ | 184.1 | ||||||
Less: Debt Securities Gains/Losses |
(1.2 | ) | 0.1 | (1.5 | ) | |||||||
Less: Gain on Student Loan Sale |
| | (2.2 | ) | ||||||||
Less: Gain on Branch Actions |
| | (0.3 | ) | ||||||||
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Adjusted Total Revenue (FTE) |
$ | 208.5 | $ | 196.7 | $ | 180.1 | ||||||
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Efficiency Ratio |
59.35 | % | 60.26 | % | 69.58 | % |
Adjusted Efficiency Ratio |
57.52 | % | 59.51 | % | 61.68 | % | ||||||
Operating Leverage5 (basis points) |
1,574 | |||||||||||
Adjusted Operating Leverage6 (basis points) |
724 |
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) | 2Q19 | 1Q19 | ||||||
Net Income |
$ | 63.0 | $ | 56.3 | ||||
Add: Intangible Amortization (net of tax7) |
3.2 | 3.4 | ||||||
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Tangible Net Income |
$ | 66.2 | $ | 59.7 | ||||
Less: Securities Gains/Losses (net of tax7) |
(0.9 | ) | 0.1 | |||||
Add: Merger & Integration Charges (net of tax7) |
2.4 | 0.9 | ||||||
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Adjusted Tangible Net Income |
$ | 67.7 | $ | 60.7 | ||||
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Average Total Shareholders Equity |
$ | 2,758.3 | $ | 2,714.2 | ||||
Less: Average Goodwill |
(1,036.3 | ) | (1,036.3 | ) | ||||
Less: Average Intangibles |
(70.3 | ) | (74.8 | ) | ||||
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Average Tangible Shareholders Equity |
$ | 1,651.7 | $ | 1,603.1 | ||||
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Return on Average Tangible Common Equity |
16.04 | % | 14.88 | % | ||||
Adjusted Return on Average Tangible Common Equity |
16.41 | % | 15.13 | % |
7 | Tax-effect calculations use the current statutory FTE tax rates (federal + state) |
CONFERENCE CALL AND WEBCAST
Old National will host a conference call and live webcast at 7:00 a.m. Central Time on Monday, July 22, 2019, to review second quarter 2019 financial results. The live audio web cast of the call, along with the corresponding presentation slides, will be available on the Companys 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 July 22 through August 5. To access the replay, dial 1-855-859-2056, Conference ID Code 4869447.
ABOUT OLD NATIONAL
Old National Bancorp (NASDAQ: ONB) is the holding company of Old National Bank. Headquartered in Evansville with $20.1 billion in assets, it is a top 100 U.S. bank, the largest Indiana-based bank and has been recognized as a Worlds Most Ethical Company by the Ethisphere Institute for eight consecutive years. For 185 years, Old National has been a community bank committed to building long-term, highly valued relationships with clients. With locations in Indiana, Kentucky, Michigan, Minnesota and Wisconsin, Old National provides retail and commercial banking services along with comprehensive wealth management, investment and capital markets services. For information and financial data, please visit Investor Relations at oldnational.com.
USE OF NON-GAAP FINANCIAL MEASURES
This earnings release contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Old Nationals 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 Bancorps (Old Nationals) 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 managements 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 Nationals 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 | Six Months Ended | |||||||||||||||||||
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
June 30, 2019 |
June 30, 2018 |
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Income Statement |
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Net interest income |
$ | 155,230 | $ | 147,048 | $ | 131,963 | $ | 302,278 | $ | 260,535 | ||||||||||
Provision for loan losses |
1,003 | 1,043 | 2,446 | 2,046 | 2,826 | |||||||||||||||
Noninterest income |
51,214 | 46,416 | 49,289 | 97,630 | 91,194 | |||||||||||||||
Noninterest expense |
128,118 | 123,041 | 130,460 | 251,159 | 247,617 | |||||||||||||||
Net income |
62,964 | 56,276 | 44,001 | 119,240 | 91,984 | |||||||||||||||
Per Common Share Data |
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Net income (diluted) |
$ | 0.36 | $ | 0.32 | $ | 0.29 | $ | 0.68 | $ | 0.60 | ||||||||||
Average diluted shares outstanding |
173,675 | 175,368 | 152,568 | 174,531 | 152,483 | |||||||||||||||
Book value |
16.28 | 15.82 | 14.44 | 16.28 | 14.44 | |||||||||||||||
Stock price |
16.59 | 16.40 | 18.60 | 16.59 | 18.60 | |||||||||||||||
Dividend payout ratio |
35 | % | 41 | % | 45 | % | 38 | % | 43 | % | ||||||||||
Tangible common book value (1) |
9.86 | 9.44 | 8.70 | 9.86 | 8.70 | |||||||||||||||
Performance Ratios |
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Return on average assets |
1.26 | % | 1.14 | % | 1.01 | % | 1.20 | % | 1.06 | % | ||||||||||
Return on average common equity |
9.13 | % | 8.29 | % | 8.06 | % | 8.72 | % | 8.46 | % | ||||||||||
Return on average tangible common equity (1) |
16.04 | % | 14.88 | % | 14.28 | % | 15.47 | % | 15.04 | % | ||||||||||
Net interest margin (FTE) |
3.66 | % | 3.51 | % | 3.55 | % | 3.59 | % | 3.50 | % | ||||||||||
Efficiency ratio (2) |
59.35 | % | 60.26 | % | 69.58 | % | 59.79 | % | 67.76 | % | ||||||||||
Net charge-offs (recoveries) to average loans |
0.01 | % | 0.03 | % | -0.03 | % | 0.02 | % | -0.01 | % | ||||||||||
Allowance for loan losses to ending loans |
0.47 | % | 0.46 | % | 0.48 | % | 0.47 | % | 0.48 | % | ||||||||||
Non-performing loans to ending loans |
1.34 | % | 1.41 | % | 1.38 | % | 1.34 | % | 1.38 | % | ||||||||||
Balance Sheet |
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Total loans |
$ | 12,046,578 | $ | 12,068,977 | $ | 11,295,629 | $ | 12,046,578 | $ | 11,295,629 | ||||||||||
Total assets |
20,145,285 | 20,084,420 | 17,482,990 | 20,145,285 | 17,482,990 | |||||||||||||||
Total deposits |
14,363,101 | 14,429,270 | 12,596,376 | 14,363,101 | 12,596,376 | |||||||||||||||
Total borrowed funds |
2,726,481 | 2,639,038 | 2,530,104 | 2,726,481 | 2,530,104 | |||||||||||||||
Total shareholders equity |
2,803,139 | 2,751,872 | 2,200,215 | 2,803,139 | 2,200,215 | |||||||||||||||
Capital Ratios (1) |
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Risk-based capital ratios (EOP): |
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Tier 1 common equity |
11.9 | % | 11.8 | % | 10.9 | % | 11.9 | % | 10.9 | % | ||||||||||
Tier 1 |
11.9 | % | 11.8 | % | 10.9 | % | 11.9 | % | 10.9 | % | ||||||||||
Total |
12.8 | % | 12.7 | % | 11.9 | % | 12.8 | % | 11.9 | % | ||||||||||
Leverage ratio (to average assets) |
8.8 | % | 8.8 | % | 8.3 | % | 8.8 | % | 8.3 | % | ||||||||||
Total equity to assets (averages) |
13.82 | % | 13.70 | % | 12.54 | % | 13.76 | % | 12.48 | % | ||||||||||
Tangible common equity to tangible assets |
8.92 | % | 8.66 | % | 7.98 | % | 8.92 | % | 7.98 | % | ||||||||||
Nonfinancial Data | ||||||||||||||||||||
Full-time equivalent employees |
2,829 | 2,908 | 2,683 | 2,829 | 2,683 | |||||||||||||||
Number of branches |
192 | 193 | 183 | 192 | 183 |
(1) | See Non-GAAP Measures table. |
(2) | Efficiency ratio is defined as noninterest expense before amortization of intangibles as a percent of FTE net interest income and noninterest revenues, excluding net gains from debt securities transactions. This presentation excludes amortization of intangibles and net debt securities gains, as is common in other company releases, and better aligns with true operating performance. |
FTEFully taxable equivalent basis | EOPEnd of period actual balances |
Income Statement (unaudited)
($ and shares in thousands, except per share data)
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
June 30, 2019 |
June 30, 2018 |
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Interest income |
$ | 189,063 | $ | 178,918 | $ | 153,736 | $ | 367,981 | $ | 301,442 | ||||||||||
Less: interest expense |
33,833 | 31,870 | 21,773 | 65,703 | 40,907 | |||||||||||||||
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Net interest income |
155,230 | 147,048 | 131,963 | 302,278 | 260,535 | |||||||||||||||
Provision for loan losses |
1,003 | 1,043 | 2,446 | 2,046 | 2,826 | |||||||||||||||
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Net interest income after provision for loan losses |
154,227 | 146,005 | 129,517 | 300,232 | 257,709 | |||||||||||||||
Wealth management fees |
9,909 | 8,535 | 9,746 | 18,444 | 18,772 | |||||||||||||||
Service charges on deposit accounts |
11,515 | 10,826 | 10,765 | 22,341 | 21,524 | |||||||||||||||
Debit card and ATM fees |
5,419 | 5,503 | 5,080 | 10,922 | 9,945 | |||||||||||||||
Mortgage banking revenue |
7,135 | 5,011 | 5,189 | 12,146 | 9,381 | |||||||||||||||
Investment product fees |
5,591 | 5,271 | 5,066 | 10,862 | 10,097 | |||||||||||||||
Capital markets income |
3,150 | 2,517 | 896 | 5,667 | 1,394 | |||||||||||||||
Company-owned life insurance |
2,711 | 3,188 | 2,430 | 5,899 | 5,035 | |||||||||||||||
Other income |
4,716 | 5,702 | 8,586 | 10,418 | 12,716 | |||||||||||||||
Gains (losses) on sales of debt securities |
1,165 | (103 | ) | 1,494 | 1,062 | 2,282 | ||||||||||||||
Gains (losses) on derivatives |
(97 | ) | (34 | ) | 37 | (131 | ) | 48 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total noninterest income |
51,214 | 46,416 | 49,289 | 97,630 | 91,194 | |||||||||||||||
Salaries and employee benefits |
71,566 | 71,183 | 66,592 | 142,749 | 130,771 | |||||||||||||||
Occupancy |
14,559 | 14,578 | 12,873 | 29,137 | 26,153 | |||||||||||||||
Equipment |
4,517 | 4,474 | 3,728 | 8,991 | 7,293 | |||||||||||||||
Marketing |
4,439 | 3,723 | 3,962 | 8,162 | 7,659 | |||||||||||||||
Data processing |
10,207 | 9,341 | 9,724 | 19,548 | 18,124 | |||||||||||||||
Communication |
2,849 | 3,054 | 2,772 | 5,903 | 5,836 | |||||||||||||||
Professional fees |
4,921 | 2,910 | 2,923 | 7,831 | 5,653 | |||||||||||||||
Loan expenses |
1,657 | 1,912 | 1,843 | 3,569 | 3,587 | |||||||||||||||
FDIC assessment |
1,454 | 2,087 | 3,161 | 3,541 | 5,806 | |||||||||||||||
Amortization of intangibles |
4,325 | 4,472 | 3,416 | 8,797 | 7,025 | |||||||||||||||
Amortization of tax credit investments |
568 | 260 | 11,858 | 828 | 12,574 | |||||||||||||||
Other expense |
7,056 | 5,047 | 7,608 | 12,103 | 17,136 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total noninterest expense |
128,118 | 123,041 | 130,460 | 251,159 | 247,617 | |||||||||||||||
Income before income taxes |
77,323 | 69,380 | 48,346 | 146,703 | 101,286 | |||||||||||||||
Income tax expense |
14,359 | 13,104 | 4,345 | 27,463 | 9,302 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income |
$ | 62,964 | $ | 56,276 | $ | 44,001 | $ | 119,240 | $ | 91,984 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Diluted Earnings Per Share |
||||||||||||||||||||
Net income |
$ | 0.36 | $ | 0.32 | $ | 0.29 | $ | 0.68 | $ | 0.60 | ||||||||||
Average Common Shares Outstanding |
||||||||||||||||||||
Basic |
172,985 | 174,734 | 151,878 | 173,855 | 151,800 | |||||||||||||||
Diluted |
173,675 | 175,368 | 152,568 | 174,531 | 152,483 | |||||||||||||||
Common shares outstanding at end of period |
172,231 | 173,979 | 152,351 | 172,231 | 152,351 |
Balance Sheet (unaudited)
($ in thousands)
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
||||||||||
Assets |
||||||||||||
Federal Reserve Bank account |
$ | 40,945 | $ | 101,033 | $ | 43,889 | ||||||
Money market investments |
20,210 | 10,909 | 10,359 | |||||||||
Investments: |
||||||||||||
Treasury and government-sponsored agencies |
725,327 | 782,486 | 647,058 | |||||||||
Mortgage-backed securities |
2,900,235 | 2,684,330 | 1,588,120 | |||||||||
States and political subdivisions |
1,186,311 | 1,252,448 | 1,110,087 | |||||||||
Other securities |
489,855 | 498,977 | 503,920 | |||||||||
|
|
|
|
|
|
|||||||
Total investments |
5,301,728 | 5,218,241 | 3,849,185 | |||||||||
|
|
|
|
|
|
|||||||
Loans held for sale, at fair value |
37,904 | 14,082 | 26,198 | |||||||||
Loans: |
||||||||||||
Commercial |
3,074,849 | 3,042,790 | 2,962,895 | |||||||||
Commercial and agriculture real estate |
4,993,693 | 5,023,620 | 4,451,772 | |||||||||
Consumer: |
||||||||||||
Home equity |
553,991 | 553,264 | 488,038 | |||||||||
Other consumer loans |
1,201,847 | 1,205,418 | 1,238,951 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal of commercial and consumer loans |
9,824,380 | 9,825,092 | 9,141,656 | |||||||||
Residential real estate |
2,222,198 | 2,243,885 | 2,153,973 | |||||||||
|
|
|
|
|
|
|||||||
Total loans |
12,046,578 | 12,068,977 | 11,295,629 | |||||||||
|
|
|
|
|
|
|||||||
Total earning assets |
17,447,365 | 17,413,242 | 15,225,260 | |||||||||
|
|
|
|
|
|
|||||||
Allowance for loan losses |
(56,292 | ) | (55,559 | ) | (53,660 | ) | ||||||
Non-earning Assets: |
||||||||||||
Cash and due from banks |
239,831 | 211,174 | 219,626 | |||||||||
Premises and equipment, net |
493,481 | 490,216 | 449,304 | |||||||||
Operating lease right-of-use assets |
106,222 | 109,916 | | |||||||||
Goodwill and other intangible assets |
1,104,478 | 1,108,802 | 874,221 | |||||||||
Company-owned life insurance |
445,749 | 444,551 | 405,492 | |||||||||
Net deferred tax assets |
36,002 | 59,430 | 90,187 | |||||||||
Loan servicing rights |
24,332 | 24,254 | 24,303 | |||||||||
Other assets |
304,117 | 278,394 | 248,257 | |||||||||
|
|
|
|
|
|
|||||||
Total non-earning assets |
2,754,212 | 2,726,737 | 2,311,390 | |||||||||
|
|
|
|
|
|
|||||||
Total assets |
$ | 20,145,285 | $ | 20,084,420 | $ | 17,482,990 | ||||||
|
|
|
|
|
|
|||||||
Liabilities and Equity |
||||||||||||
Noninterest-bearing demand deposits |
$ | 3,771,888 | $ | 3,903,314 | $ | 3,600,793 | ||||||
Interest-bearing: |
||||||||||||
Checking and NOW accounts |
3,950,161 | 3,742,241 | 3,054,302 | |||||||||
Savings accounts |
2,877,673 | 2,941,361 | 3,026,110 | |||||||||
Money market accounts |
1,819,716 | 1,780,756 | 1,090,621 | |||||||||
Other time deposits |
1,756,814 | 1,835,110 | 1,648,390 | |||||||||
|
|
|
|
|
|
|||||||
Total core deposits |
14,176,252 | 14,202,782 | 12,420,216 | |||||||||
Brokered CDs |
186,849 | 226,488 | 176,160 | |||||||||
|
|
|
|
|
|
|||||||
Total deposits |
14,363,101 | 14,429,270 | 12,596,376 | |||||||||
Federal funds purchased and interbank borrowings |
410,036 | 325,030 | 175,044 | |||||||||
Securities sold under agreements to repurchase |
334,540 | 342,480 | 347,511 | |||||||||
Federal Home Loan Bank advances |
1,730,065 | 1,719,944 | 1,757,308 | |||||||||
Other borrowings |
251,840 | 251,584 | 250,241 | |||||||||
|
|
|
|
|
|
|||||||
Total borrowed funds |
2,726,481 | 2,639,038 | 2,530,104 | |||||||||
Operating lease liabilities |
110,596 | 114,040 | | |||||||||
Accrued expenses and other liabilities |
141,968 | 150,200 | 156,295 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
17,342,146 | 17,332,548 | 15,282,775 | |||||||||
Common stock, surplus, and retained earnings |
2,761,102 | 2,749,252 | 2,266,918 | |||||||||
Accumulated other comprehensive income (loss), net of tax |
42,037 | 2,620 | (66,703 | ) | ||||||||
|
|
|
|
|
|
|||||||
Total shareholders equity |
2,803,139 | 2,751,872 | 2,200,215 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities and shareholders equity |
$ | 20,145,285 | $ | 20,084,420 | $ | 17,482,990 | ||||||
|
|
|
|
|
|
Average Balance Sheet and Interest Rates (unaudited)
($ in thousands)
Three Months Ended June 30, 2019 |
Three Months Ended March 31, 2019 |
Three Months Ended June 30, 2018 |
||||||||||||||||||||||||||||||||||
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 |
$ | 58,321 | $ | 334 | 2.29 | % | $ | 58,701 | $ | 278 | 1.92 | % | $ | 51,724 | $ | 117 | 0.91 | % | ||||||||||||||||||
Investments: |
||||||||||||||||||||||||||||||||||||
Treasury and government-sponsored agencies |
695,775 | 4,301 | 2.47 | % | 705,417 | 3,902 | 2.21 | % | 648,778 | 3,387 | 2.09 | % | ||||||||||||||||||||||||
Mortgage-backed securities |
2,767,791 | 18,799 | 2.72 | % | 2,497,368 | 17,603 | 2.82 | % | 1,588,140 | 8,904 | 2.24 | % | ||||||||||||||||||||||||
States and political subdivisions |
1,193,176 | 11,235 | 3.77 | % | 1,232,355 | 11,453 | 3.72 | % | 1,118,395 | 10,591 | 3.79 | % | ||||||||||||||||||||||||
Other securities |
496,631 | 4,063 | 3.27 | % | 497,604 | 4,440 | 3.57 | % | 507,646 | 3,909 | 3.08 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total investments |
5,153,373 | 38,398 | 2.98 | % | 4,932,744 | 37,398 | 3.03 | % | 3,862,959 | 26,791 | 2.77 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Loans: (2) |
||||||||||||||||||||||||||||||||||||
Commercial |
3,063,590 | 37,828 | 4.88 | % | 3,122,402 | 36,035 | 4.62 | % | 2,873,781 | 32,527 | 4.48 | % | ||||||||||||||||||||||||
Commercial and agriculture real estate |
5,019,859 | 72,214 | 5.69 | % | 4,989,622 | 65,076 | 5.22 | % | 4,449,839 | 57,251 | 5.09 | % | ||||||||||||||||||||||||
Consumer: |
||||||||||||||||||||||||||||||||||||
Home equity |
558,223 | 7,390 | 5.31 | % | 588,366 | 7,596 | 5.24 | % | 492,151 | 6,076 | 4.95 | % | ||||||||||||||||||||||||
Other consumer loans |
1,201,752 | 12,408 | 4.14 | % | 1,192,496 | 11,802 | 4.01 | % | 1,268,670 | 11,591 | 3.66 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Subtotal commercial and consumer loans |
9,843,424 | 129,840 | 5.29 | % | 9,892,886 | 120,509 | 4.94 | % | 9,084,441 | 107,445 | 4.74 | % | ||||||||||||||||||||||||
Residential real estate loans |
2,247,570 | 23,780 | 4.23 | % | 2,259,243 | 23,931 | 4.24 | % | 2,177,587 | 22,208 | 4.08 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total loans |
12,090,994 | 153,620 | 5.05 | % | 12,152,129 | 144,440 | 4.76 | % | 11,262,028 | 129,653 | 4.57 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total earning assets |
$ | 17,302,688 | $ | 192,352 | 4.43 | % | $ | 17,143,574 | $ | 182,116 | 4.26 | % | $ | 15,176,711 | $ | 156,561 | 4.11 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Less: Allowance for loan losses |
(56,632 | ) | (55,789 | ) | (51,493 | ) | ||||||||||||||||||||||||||||||
Non-earning Assets: |
||||||||||||||||||||||||||||||||||||
Cash and due from banks |
$ | 234,337 | $ | 229,957 | $ | 205,617 | ||||||||||||||||||||||||||||||
Other assets |
2,473,255 | 2,490,524 | 2,086,822 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Total assets |
$ | 19,953,648 | $ | 19,808,266 | $ | 17,417,657 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Interest-Bearing Liabilities: |
||||||||||||||||||||||||||||||||||||
Checking and NOW accounts |
$ | 3,895,881 | $ | 4,196 | 0.43 | % | $ | 3,693,886 | $ | 3,142 | 0.34 | % | $ | 3,097,635 | $ | 969 | 0.13 | % | ||||||||||||||||||
Savings accounts |
2,879,704 | 2,145 | 0.30 | % | 2,935,710 | 2,283 | 0.32 | % | 3,036,936 | 1,777 | 0.23 | % | ||||||||||||||||||||||||
Money market accounts |
1,789,777 | 3,729 | 0.84 | % | 1,702,655 | 2,826 | 0.67 | % | 1,103,177 | 702 | 0.26 | % | ||||||||||||||||||||||||
Other time deposits |
1,779,770 | 7,181 | 1.62 | % | 1,840,514 | 7,102 | 1.56 | % | 1,615,527 | 4,813 | 1.20 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total interest-bearing deposits |
10,345,132 | 17,251 | 0.67 | % | 10,172,765 | 15,353 | 0.61 | % | 8,853,275 | 8,261 | 0.37 | % | ||||||||||||||||||||||||
Brokered CDs |
212,198 | 1,268 | 2.40 | % | 191,443 | 1,091 | 2.31 | % | 194,801 | 878 | 1.81 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total interest-bearing deposits and CDs |
10,557,330 | 18,519 | 0.70 | % | 10,364,208 | 16,444 | 0.64 | % | 9,048,076 | 9,139 | 0.41 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Federal funds purchased and interbank borrowings |
300,810 | 1,817 | 2.42 | % | 316,998 | 1,918 | 2.45 | % | 140,471 | 647 | 1.85 | % | ||||||||||||||||||||||||
Securities sold under agreements to repurchase |
331,695 | 671 | 0.81 | % | 361,261 | 662 | 0.74 | % | 332,599 | 434 | 0.52 | % | ||||||||||||||||||||||||
Federal Home Loan Bank advances |
1,695,681 | 10,039 | 2.37 | % | 1,672,376 | 9,931 | 2.41 | % | 1,713,832 | 8,824 | 2.07 | % | ||||||||||||||||||||||||
Other borrowings |
251,577 | 2,787 | 4.43 | % | 249,794 | 2,915 | 4.67 | % | 249,291 | 2,729 | 4.38 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total borrowed funds |
2,579,763 | 15,314 | 2.38 | % | 2,600,429 | 15,426 | 2.41 | % | 2,436,193 | 12,634 | 2.08 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total interest-bearing liabilities |
$ | 13,137,093 | $ | 33,833 | 1.03 | % | $ | 12,964,637 | $ | 31,870 | 1.00 | % | $ | 11,484,269 | $ | 21,773 | 0.76 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Noninterest-Bearing Liabilities and Shareholders Equity |
||||||||||||||||||||||||||||||||||||
Demand deposits |
$ | 3,812,175 | $ | 3,846,828 | $ | 3,602,732 | ||||||||||||||||||||||||||||||
Other liabilities |
246,134 | 282,615 | 147,052 | |||||||||||||||||||||||||||||||||
Shareholders equity |
2,758,246 | 2,714,186 | 2,183,604 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Total liabilities and shareholders equity |
$ | 19,953,648 | $ | 19,808,266 | $ | 17,417,657 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Net interest rate spread |
3.40 | % | 3.26 | % | 3.35 | % | ||||||||||||||||||||||||||||||
Net interest margin (FTE) |
3.66 | % | 3.51 | % | 3.55 | % | ||||||||||||||||||||||||||||||
FTE adjustment |
$ | 3,289 | $ | 3,198 | $ | 2,825 |
(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)
Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | |||||||||||||||||||||||
Average Balance |
Income (1)/ Expense |
Yield/ Rate |
Average Balance |
Income (1)/ Expense |
Yield/ Rate |
|||||||||||||||||||
Earning Assets: |
||||||||||||||||||||||||
Money market and other interest-earning investments |
$ | 58,510 | $ | 612 | 2.11 | % | $ | 59,089 | $ | 207 | 0.71 | % | ||||||||||||
Investments: |
||||||||||||||||||||||||
Treasury and government-sponsored agencies |
700,569 | 8,203 | 2.34 | % | 655,897 | 6,811 | 2.08 | % | ||||||||||||||||
Mortgage-backed securities |
2,633,326 | 36,402 | 2.76 | % | 1,610,252 | 18,424 | 2.29 | % | ||||||||||||||||
States and political subdivisions |
1,212,658 | 22,688 | 3.74 | % | 1,161,386 | 21,069 | 3.63 | % | ||||||||||||||||
Other securities |
497,115 | 8,503 | 3.42 | % | 483,685 | 7,578 | 3.13 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total investments |
5,043,668 | 75,796 | 3.01 | % | 3,911,220 | 53,882 | 2.76 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loans: (2) |
||||||||||||||||||||||||
Commercial |
3,092,833 | 73,863 | 4.75 | % | 2,817,050 | 60,733 | 4.29 | % | ||||||||||||||||
Commercial and agriculture real estate |
5,004,824 | 137,290 | 5.46 | % | 4,422,075 | 113,037 | 5.08 | % | ||||||||||||||||
Consumer: |
||||||||||||||||||||||||
Home equity |
573,211 | 14,987 | 5.27 | % | 496,978 | 11,765 | 4.77 | % | ||||||||||||||||
Other consumer loans |
1,197,150 | 24,208 | 4.08 | % | 1,307,805 | 23,730 | 3.66 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Subtotal commercial and consumer loans |
9,868,018 | 250,348 | 5.12 | % | 9,043,908 | 209,265 | 4.67 | % | ||||||||||||||||
Residential real estate loans |
2,253,375 | 47,712 | 4.23 | % | 2,177,003 | 43,680 | 4.01 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total loans |
12,121,393 | 298,060 | 4.91 | % | 11,220,911 | 252,945 | 4.50 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total earning assets |
$ | 17,223,571 | $ | 374,468 | 4.34 | % | $ | 15,191,220 | $ | 307,034 | 4.04 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Less: Allowance for loan losses |
(56,213 | ) | (51,225 | ) | ||||||||||||||||||||
Non-earning Assets: |
||||||||||||||||||||||||
Cash and due from banks |
$ | 232,159 | $ | 202,392 | ||||||||||||||||||||
Other assets |
2,481,842 | 2,088,299 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total assets |
$ | 19,881,359 | $ | 17,430,686 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Interest-Bearing Liabilities: |
||||||||||||||||||||||||
Checking and NOW accounts |
$ | 3,795,441 | $ | 7,338 | 0.39 | % | $ | 3,082,619 | $ | 1,788 | 0.12 | % | ||||||||||||
Savings accounts |
2,907,552 | 4,428 | 0.31 | % | 3,044,748 | 3,120 | 0.21 | % | ||||||||||||||||
Money market accounts |
1,746,456 | 6,555 | 0.76 | % | 1,130,939 | 1,248 | 0.22 | % | ||||||||||||||||
Other time deposits |
1,809,975 | 14,283 | 1.59 | % | 1,588,884 | 8,713 | 1.11 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total interest-bearing deposits |
10,259,424 | 32,604 | 0.64 | % | 8,847,190 | 14,869 | 0.34 | % | ||||||||||||||||
Brokered CDs |
201,878 | 2,359 | 2.36 | % | 184,975 | 1,525 | 1.66 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total interest-bearing deposits and CDs |
10,461,302 | 34,963 | 0.67 | % | 9,032,165 | 16,394 | 0.37 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Federal funds purchased and interbank borrowings |
308,860 | 3,735 | 2.44 | % | 200,578 | 1,664 | 1.67 | % | ||||||||||||||||
Securities sold under agreements to repurchase |
346,396 | 1,333 | 0.78 | % | 337,612 | 793 | 0.47 | % | ||||||||||||||||
Federal Home Loan Bank advances |
1,684,093 | 19,970 | 2.39 | % | 1,694,871 | 16,604 | 1.98 | % | ||||||||||||||||
Other borrowings |
250,690 | 5,702 | 4.55 | % | 249,062 | 5,452 | 4.38 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total borrowed funds |
2,590,039 | 30,740 | 2.39 | % | 2,482,123 | 24,513 | 1.99 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total interest-bearing liabilities |
$ | 13,051,341 | $ | 65,703 | 1.02 | % | $ | 11,514,288 | $ | 40,907 | 0.72 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Noninterest-Bearing Liabilities and Shareholders Equity |
||||||||||||||||||||||||
Demand deposits |
$ | 3,829,406 | $ | 3,583,027 | ||||||||||||||||||||
Other liabilities |
264,274 | 158,493 | ||||||||||||||||||||||
Shareholders equity |
2,736,338 | 2,174,878 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total liabilities and shareholders equity |
$ | 19,881,359 | $ | 17,430,686 | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net interest rate spread |
3.32 | % | 3.32 | % | ||||||||||||||||||||
Net interest margin (FTE) |
3.59 | % | 3.50 | % | ||||||||||||||||||||
FTE adjustment |
$ | 6,487 | $ | 5,592 |
(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 | Six Months Ended | |||||||||||||||||||
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
June 30, 2019 |
June 30, 2018 |
||||||||||||||||
Beginning allowance for loan losses |
$ | 55,559 | $ | 55,461 | $ | 50,381 | $ | 55,461 | $ | 50,381 | ||||||||||
Provision for loan losses |
1,003 | 1,043 | 2,446 | 2,046 | 2,826 | |||||||||||||||
Gross charge-offs |
(2,876 | ) | (2,892 | ) | (3,054 | ) | (5,769 | ) | (5,739 | ) | ||||||||||
Gross recoveries |
2,606 | 1,947 | 3,887 | 4,554 | 6,192 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net (charge-offs) recoveries |
(270 | ) | (945 | ) | 833 | (1,215 | ) | 453 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ending allowance for loan losses |
$ | 56,292 | $ | 55,559 | $ | 53,660 | $ | 56,292 | $ | 53,660 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net charge-offs (recoveries) / average loans (1) |
0.01 | % | 0.03 | % | -0.03 | % | 0.02 | % | -0.01 | % | ||||||||||
Average loans outstanding (1) |
$ | 12,083,609 | $ | 12,147,560 | $ | 11,257,585 | $ | 12,115,408 | $ | 11,216,684 | ||||||||||
EOP loans outstanding (1) |
12,046,578 | $ | 12,068,977 | $ | 11,295,629 | $ | 12,046,578 | $ | 11,295,629 | |||||||||||
Allowance for loan losses / EOP loans (1) |
0.47 | % | 0.46 | % | 0.48 | % | 0.47 | % | 0.48 | % | ||||||||||
Underperforming Assets: |
||||||||||||||||||||
Loans 90 Days and over (still accruing) |
$ | 423 | $ | 560 | $ | 1,575 | $ | 423 | $ | 1,575 | ||||||||||
Non-performing loans: |
||||||||||||||||||||
Nonaccrual loans (2) |
142,421 | 152,881 | 139,082 | 142,421 | 139,082 | |||||||||||||||
Renegotiated loans |
19,031 | 17,123 | 17,139 | 19,031 | 17,139 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total non-performing loans |
161,452 | 170,004 | 156,221 | 161,452 | 156,221 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreclosed properties |
2,819 | 3,279 | 3,729 | 2,819 | 3,729 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total underperforming assets |
$ | 164,694 | $ | 173,843 | $ | 161,525 | $ | 164,694 | $ | 161,525 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Classified and Criticized Assets: |
||||||||||||||||||||
Nonaccrual loans (2) |
142,421 | 152,881 | 139,082 | 142,421 | 139,082 | |||||||||||||||
Substandard accruing loans |
174,728 | 210,680 | 109,051 | 174,728 | 109,051 | |||||||||||||||
Loans 90 days and over (still accruing) |
423 | 560 | 1,575 | 423 | 1,575 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total classified loansproblem loans |
$ | 317,572 | $ | 364,121 | $ | 249,708 | $ | 317,572 | $ | 249,708 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other classified assets |
2,550 | 2,715 | 3,149 | 2,550 | 3,149 | |||||||||||||||
Criticized loansspecial mention loans |
220,455 | 268,836 | 154,891 | 220,455 | 154,891 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total classified and criticized assets |
$ | 540,577 | $ | 635,672 | $ | 407,748 | $ | 540,577 | $ | 407,748 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Non-performing loans / EOP loans (1) |
1.34 | % | 1.41 | % | 1.38 | % | 1.34 | % | 1.38 | % | ||||||||||
Allowance to non-performing loans (3) |
35 | % | 33 | % | 34 | % | 35 | % | 34 | % | ||||||||||
Under-performing assets / EOP loans (1) |
1.37 | % | 1.44 | % | 1.43 | % | 1.37 | % | 1.43 | % | ||||||||||
EOP total assets |
$ | 20,145,285 | $ | 20,084,420 | $ | 17,482,990 | $ | 20,145,285 | $ | 17,482,990 | ||||||||||
Under-performing assets / EOP assets |
0.82 | % | 0.87 | % | 0.92 | % | 0.82 | % | 0.92 | % |
EOPEnd of period actual balances
(1) | Excludes loans held for sale. |
(2) | Includes renegotiated loans totaling $24.7 million at June 30, 2019, $27.0 million at March 31, 2019, and $34.0 million at June 30, 2018. |
(3) | Includes acquired loans that were recorded at fair value in accordance with ASC 805 at the date of acquisition. As such, the credit risk was incorporated in the fair value recorded and no allowance for loan losses was recorded on the acquisition date. |
Non-GAAP Measures (unaudited)
($ in thousands)
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
June 30, 2019 |
June 30, 2018 |
||||||||||||||||
Actual End of Period Balances |
||||||||||||||||||||
GAAP shareholders equity |
$ | 2,803,139 | $ | 2,751,872 | $ | 2,200,215 | $ | 2,803,139 | $ | 2,200,215 | ||||||||||
Deduct: |
||||||||||||||||||||
Goodwill |
1,036,258 | 1,036,258 | 828,804 | 1,036,258 | 828,804 | |||||||||||||||
Intangibles |
68,220 | 72,544 | 45,417 | 68,220 | 45,417 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
1,104,478 | 1,108,802 | 874,221 | 1,104,478 | 874,221 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tangible shareholders equity |
$ | 1,698,661 | $ | 1,643,070 | $ | 1,325,994 | $ | 1,698,661 | $ | 1,325,994 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Average Balances |
||||||||||||||||||||
GAAP shareholders equity |
$ | 2,758,246 | $ | 2,714,186 | $ | 2,183,604 | $ | 2,736,338 | $ | 2,174,878 | ||||||||||
Deduct: |
||||||||||||||||||||
Goodwill |
1,036,258 | 1,036,258 | 828,804 | 1,036,258 | 828,474 | |||||||||||||||
Intangibles |
70,282 | 74,849 | 47,052 | 72,554 | 49,061 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
1,106,540 | 1,111,107 | 875,856 | 1,108,812 | 877,535 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Average tangible shareholders equity |
$ | 1,651,706 | $ | 1,603,079 | $ | 1,307,748 | $ | 1,627,526 | $ | 1,297,343 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Actual End of Period Balances |
||||||||||||||||||||
GAAP assets |
$ | 20,145,285 | $ | 20,084,420 | $ | 17,482,990 | $ | 20,145,285 | $ | 17,482,990 | ||||||||||
Add: |
||||||||||||||||||||
Trust overdrafts |
29 | 28 | 46 | 29 | 46 | |||||||||||||||
Deduct: |
||||||||||||||||||||
Goodwill |
1,036,258 | 1,036,258 | 828,804 | 1,036,258 | 828,804 | |||||||||||||||
Intangibles |
68,220 | 72,544 | 45,417 | 68,220 | 45,417 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
1,104,478 | 1,108,802 | 874,221 | 1,104,478 | 874,221 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tangible assets |
$ | 19,040,836 | $ | 18,975,646 | $ | 16,608,815 | $ | 19,040,836 | $ | 16,608,815 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Risk-weighted assets |
$ | 13,996,770 | $ | 13,966,569 | $ | 12,648,732 | $ | 13,996,770 | $ | 12,648,732 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
GAAP net income |
$ | 62,964 | $ | 56,276 | $ | 44,001 | $ | 119,240 | $ | 91,984 | ||||||||||
Add: |
||||||||||||||||||||
Amortization of intangibles (net of tax) |
3,262 | 3,373 | 2,699 | 6,635 | 5,550 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tangible net income |
$ | 66,226 | $ | 59,649 | $ | 46,700 | $ | 125,875 | $ | 97,534 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tangible Ratios |
||||||||||||||||||||
Return on tangible common equity |
15.59 | % | 14.52 | % | 14.09 | % | 14.82 | % | 14.71 | % | ||||||||||
Return on average tangible common equity |
16.04 | % | 14.88 | % | 14.28 | % | 15.47 | % | 15.04 | % | ||||||||||
Return on tangible assets |
1.39 | % | 1.26 | % | 1.12 | % | 1.32 | % | 1.17 | % | ||||||||||
Tangible common equity to tangible assets |
8.92 | % | 8.66 | % | 7.98 | % | 8.92 | % | 7.98 | % | ||||||||||
Tangible common equity to risk-weighted assets |
12.14 | % | 11.76 | % | 10.48 | % | 12.14 | % | 10.48 | % | ||||||||||
Tangible common book value (1) |
9.86 | 9.44 | 8.70 | 9.86 | 8.70 | |||||||||||||||
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 |
$ | 1,664,277 | $ | 1,643,496 | $ | 1,371,918 | $ | 1,664,277 | $ | 1,371,918 | ||||||||||
Deduct: |
||||||||||||||||||||
Tier 1 capital adjustments |
| | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
| | | | | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tier 1 common equity |
$ | 1,664,277 | $ | 1,643,496 | $ | 1,371,918 | $ | 1,664,277 | $ | 1,371,918 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Risk-weighted assets |
13,996,770 | 13,966,569 | 12,648,732 | 13,996,770 | 12,648,732 | |||||||||||||||
Tier 1 common equity to risk-weighted assets |
11.89 | % | 11.77 | % | 10.85 | % | 11.89 | % | 10.85 | % |