• Old National reports 2021 record net income driven by commercial loan growth of 7.2%

    Source: Nasdaq GlobeNewswire / 18 Jan 2022 08:00:05   America/New_York

    EVANSVILLE, Ind., Jan. 18, 2022 (GLOBE NEWSWIRE) --

    Old National Bancorp (NASDAQ: ONB) reports 4Q21 net income of $56.2 million, diluted EPS of $0.34.
    Adjusted1 net income of $60.9 million, or $0.37 per diluted share.
    Full-year net income of $277.5 million, or $1.67 per diluted share.
    Adjusted1 net income of $286.5 million, or$1.73 per diluted share.

    CEO COMMENTARY:

    "Old National's 4th quarter capped off a year of record earnings driven by robust commercial loan growth, strong credit quality and well controlled expenses," said Chairman and CEO Jim Ryan. "I'm particularly pleased that we achieved these strong results while also working steadily to remain on-task to complete our anticipated merger with First Midwest Bank – which also enjoyed strong 4th quarter and full-year 2021 results."

    FOURTH QUARTER HIGHLIGHTS2:

    Net income
    • Net income of $56.2 million
    • Earnings per diluted share of $0.34
      
    Net interest income/NIM
    • Net interest income on a fully taxable equivalent basis of $150.2 million compared to $155.1 million
    • Net interest margin on a fully taxable equivalent basis of 2.77% compared to 2.92%
      
    Operating Performance









    • Pre-provision net revenue1 (“PPNR”) of $69.8 million
    • Adjusted PPNR1 of $78.1 million
    • Noninterest expense of $131.9 million
    • Adjusted noninterest expense1 of $123.2 million
    • Efficiency ratio1 of 64.27%
    • Adjusted efficiency ratio1 of 59.95%
      
    Loans and Credit Quality
    • End-of-period total loans3 of $13,637.3 million compared to $13,636.1 million
    • Total commercial loans increased $162.5 million, excluding the $185.9 million decrease in PPP loans
    • Fourth-quarter total commercial production of $1.1 billion
    • Provision for credit losses was a recapture of $1.9 million
    • December 31 pipeline of $2.5 billion
    • Net recoveries of $1.4 million compared to net recoveries of $3.0 million
    • Non-performing loans of 0.92% of total loans compared to 0.94%
     
    Return Profile & Capital
    • Return on average common equity of 7.49%
    • Return on average tangible common equity1 of 12.07%
    • Adjusted return on average tangible common equity1 of 13.04%
    • No shares of common stock were repurchased during the current quarter
      
    Notable Items
    • $2.0 million in tax credit amortization
    • $6.7 million in merger-related charges

    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 ("Old National") reported fourth quarter 2021 net income of $56.2 million, or $0.34 per diluted share.

    Included in the fourth quarter were pre-tax charges of $6.7 million related to the pending merger with First Midwest Bancorp, Inc. Excluding these charges from the current quarter and netting out debt securities gains, adjusted net income was $60.9 million, or $0.37 per diluted share.

    LOANS
    Strong commercial production resulted in 6.9% annualized commercial loan growth.

    • Period-end total loans were $13,637.3 million at December 31, 2021, consistent with the $13,636.1 million at September 30, 2021.
    • Paycheck Protection Program (PPP) loans declined $185.9 million to $169.0 million at December 31, 2021, compared to $354.9 million at September 30, 2021.
    • Excluding the $185.9 million decrease in PPP loans during the quarter, total loans increased $187.1 million, or 5.6% annualized.
    • Excluding PPP loans, total commercial loans increased $162.5 million, or 6.9% annualized.
    • Total commercial loan production in the fourth quarter was $1.1 billion; period-end pipeline totaled $2.5 billion.
    • Consumer loans increased $9.9 million to $1,574.1 million and residential mortgage loans increased $30.5 million to $2,255.3 million.
    • Average total loans in the fourth quarter were $13,603.6 million, a decrease of $83.7 million from the third quarter of 2021.
    • Excluding PPP loans, average total loans in the fourth quarter increased $178.1 million from the third quarter of 2021.

    DEPOSITS
    Total deposit growth bolstered by strong increase in checking and NOW accounts.

    • Period-end total deposits were $18,569.2 million at December 31, 2021, an increase of $373.0 million, or 8.2% annualized, when compared to the $18,196.1 million at September 30, 2021.
    • Checking and NOW deposits increased $382.0 million to $5,338.0 million at December 31, 2021 from $4,956.0 million at September 30, 2021.
    • On average, total deposits in the fourth quarter increased $438.3 million to $18,414.3 million, compared to $17,976.0 million in the third quarter of 2021.

    NET INTEREST INCOME AND MARGIN
    Decrease in PPP interest and fees negatively impact net interest income and margin; funding costs modestly lower.

    • Net interest income decreased to $146.8 million in the fourth quarter of 2021 compared to $151.6 million in the third quarter of 2021.
    • The net interest margin on a fully taxable equivalent basis decreased 15 basis point to 2.77% compared to 2.92% in the third quarter of 2021.
    • PPP interest and net fees combined were $7.7 million, or 11 basis points of net interest margin, in the fourth quarter of 2021 compared to $12.2 million, or 16 basis points of net interest margin, in the third quarter of 2021.
    • Accretion income was $3.9 million, or 7 basis points of net interest margin, in the fourth quarter of 2021 compared to $3.0 million, or 6 basis points of net interest margin, in the third quarter of 2021.
    • Interest collected on nonaccrual loans was $1.4 million, or 3 basis points of net interest margin, in the fourth quarter of 2021 compared to $2.3 million, or 4 basis points of net interest margin, in the third quarter of 2021.
    • The cost of total deposits declined 1 basis point to 0.05% in the fourth quarter of 2021 and the cost of total interest-bearing deposits also declined 1 basis point to 0.08%.

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

    • Old National recorded a provision recapture in the fourth quarter of 2021 of $1.9 million, compared to $4.6 million in provision recapture recorded in the third quarter of 2021.
    • Net recoveries in the fourth quarter were $1.4 million, compared to net recoveries of $3.0 million in the third quarter of 2021.
    • 30-89 day delinquencies were 0.11% at the end of the fourth quarter.
    • Non-performing loans decreased as a percentage of total loans to 0.92%.
    • Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. As of December 31, 2021, the remaining discount on these acquired loans was $33.7 million.
    • The allowance for credit losses stood at $107.3 million, or 0.79% of total loans at December 31, 2021.

    NONINTEREST INCOME
    Noninterest income decreased primarily due to lower mortgage banking revenue.

    • Total noninterest income for the fourth quarter of 2021 was $51.5 million, a decrease of $3.0 million from the third quarter of 2021.
    • Mortgage banking revenue decreased $3.5 million when compared to the third quarter of 2021, due primarily to a smaller pipeline.
    • Gains on sales of debt securities decreased $0.8 million when compared to the third quarter of 2021.

    NONINTEREST EXPENSE
    Increase in fourth quarter expenses due primarily to increased personnel and marketing expenses.

    • Noninterest expense for the fourth quarter of 2021 was $131.9 million and included $6.7 million in merger-related charges and $2.0 million in tax credit amortization.
    • Excluding these items, adjusted noninterest expense for the fourth quarter was $123.2 million, compared to the $118.2 million in adjusted noninterest expense in the third quarter of 2021.
    • The fourth quarter efficiency ratio was 64.27%, while the adjusted efficiency ratio was 59.95%.

    INCOME TAXES

    • On a fully taxable-equivalent basis, income tax expense in the fourth quarter was $15.5 million, resulting in a 21.6% FTE tax rate, compared to 22.8% in the third quarter of 2021.
    • Income tax expense included $2.9 million in tax credit benefit.

    CAPITAL AND LIQUIDITY
    Capital ratios remain strong.

    • At the end of the fourth quarter, preliminary total risk-based capital was 12.77% and preliminary regulatory tier 1 capital was 12.04%.
    • Tangible common equity to tangible assets was 8.30% at the end of the fourth quarter compared to 8.55% in the third quarter of 2021.
    • The Company did not repurchase any shares of common stock during the fourth quarter.
    • A low loan to deposit ratio of 73.4%, combined with existing funding sources plus available unencumbered, high-quality collateral, provides strong liquidity.

    NON-GAAP RECONCILIATIONS

    ($ in millions, except EPS, shares in 000s)4Q21Adjustments4Adjusted 4Q21
    Total Revenues (FTE)$201.7 $(0.4)$201.3 
    Less: Provision for Credit Losses 1.9  —  1.9 
    Less: Noninterest Expenses (131.9) 6.7  (125.2)
    Income before Income Taxes (FTE)$71.7 $6.3 $78.0 
    Income Taxes (FTE) (15.5) (1.6) (17.1)
    Net Income$56.2 $4.7 $60.9 
    Average Shares Outstanding 166,128  —  166,128 
    Earnings Per Share - Diluted$0.34 $0.03 $0.37 

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

    ($ in millions, except EPS, shares in 000s) 2021 Adjustments4Adjusted 2021
    Total Revenues (FTE)$824.5 $(4.3)$820.2 
    Less: Provision for Credit Losses 28.8  —  28.8 
    Less: Noninterest Expenses (500.5) 16.5  (484.0)
    Income before Income Taxes (FTE)$352.8 $12.2 $365.0 
    Income Taxes (FTE) (75.3) (3.2) (78.5)
    Net Income$277.5 $9.0 $286.5 
    Average Shares Outstanding 165,929  —  165,929 
    Earnings Per Share - Diluted$1.67 $0.06 $1.73 

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

    ($ in millions)4Q213Q21
    Net Interest Income$146.8 $151.6 
    Add: FTE Adjustment 3.4  3.5 
    Net Interest Income (FTE)$150.2 $155.1 
    Average Earning Assets$21,670.7 $21,228.6 
    Net Interest Margin (FTE) 2.77% 2.92%
       


    ($ in millions)4Q214Q20
    Net Interest Income$146.8 $161.1 
    Add: FTE Adjustment 3.4  3.5 
    Net Interest Income (FTE)$150.2 $164.6 
    Add: Total Noninterest Income 51.5  58.5 
    Less: Noninterest Expense 131.9  142.3 
    Pre-Provision Net Revenue$69.8 $80.8 
    Less: Debt Securities Gains/Losses (0.4) (0.2)
    Less: Gain on Branch Actions —  (0.1)
    Add: Merger-Related Charges 6.7  — 
    Add: ONB Way Charges —  3.6 
    Add: Amortization of Tax Credit Investments 2.0  9.9 
    Adjusted Pre-Provision Net Revenue$78.1 $94.0 


    ($ in millions)4Q213Q214Q20 2021  2020 
    Noninterest Expense$131.9 $121.3 $142.3 $500.5 $541.4 
    Less: ONB Way Charges —  —  (3.6) (1.9) (42.6)
    Less: Merger-Related Charges (6.7) (1.4) —  (14.6) — 
    Noninterest Expense less Charges$125.2 $119.9 $138.7 $484.0 $498.8 
    Less: Amortization of Tax Credit Investments (2.0) (1.7) (9.9) (6.7) (18.8)
    Adjusted Noninterest Expense$123.2 $118.2 $128.8 $477.3 $480.0 
    Less: Intangible Amortization (2.6) (2.8) (3.3) (11.4) (14.1)
    Adjusted Noninterest Expense Less Intangible Amortization$120.6 $115.4 $125.5 $465.9 $465.9 
    Net Interest Income$146.8 $151.6 $161.1 $596.4 $596.1 
    FTE Adjustment 3.4  3.5  3.5  13.9  13.6 
    Net Interest Income (FTE)$150.2 $155.1 $164.6 $610.3 $609.7 
    Total Noninterest Income 51.5  54.5  58.5  214.2  239.2 
    Total Revenue (FTE)$201.7 $209.6 $223.1 $824.5 $848.9 
    Less: Debt Securities Gains/Losses (0.4) (1.2) (0.2) (4.3) (10.8)
    Less: Gain on Branch Actions —  —  (0.1) —  — 
    Adjusted Total Revenue (FTE)$201.3 $208.4 $222.8 $820.2 $838.1 
    Efficiency Ratio 64.27% 56.86% 62.37% 59.65% 62.91%
    Adjusted Efficiency Ratio 59.95% 55.38% 56.35% 56.80% 55.59%

                    

    ($ in millions)4Q213Q21
    Net Income$56.2 $71.7 
    Add: Intangible Amortization (net of tax5) 1.9  2.1 
    Tangible Net Income$58.1 $73.8 
    Less: Securities Gains/Losses (net of tax5) (0.3) (0.9)
    Add: Merger-Related Charges (net of tax5) 5.0  1.1 
    Adjusted Tangible Net Income$62.8 $74.0 
    Average Total Shareholders’ Equity 2,998.8  3,027.9 
    Less: Average Goodwill (1,037.0) (1,037.0)
    Less: Average Intangibles (36.0) (38.6)
    Average Tangible Shareholders’ Equity$1,925.8 $1,952.3 
    Return on Average Tangible Common Equity 12.07% 15.13%
    Adjusted Return on Average Tangible Common Equity 13.04% 15.16%

    5 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 9:00 a.m. Central Time on Tuesday, January 18, 2022, to review fourth-quarter 2021 financial results. The live audio webcast link and 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. To listen to the live conference call, dial U.S. (877) 660-9071 or International (929) 517-9523, Conference I.D. 3313815. A replay of the call will also be available from Noon Central Time on January 18 through February 1. To access the replay, dial (855) 859-2056, Conference ID Code 3313815.

    ABOUT OLD NATIONAL
    Old National Bancorp (NASDAQ: ONB), the holding company of Old National Bank, is the largest bank holding company headquartered in Indiana. With $24.5 billion in assets, it ranks among the top 100 banking companies in the U.S. and has been recognized as a World’s Most Ethical Company by the Ethisphere Institute for ten consecutive years.  Since its founding in Evansville in 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships and keeping our clients at the center of all we do. This is an approach to business that we call The ONB Way. Today, Old National’s footprint includes Indiana, Kentucky, Michigan, Minnesota and Wisconsin. In addition to providing extensive services in retail and commercial banking, Old National offers comprehensive wealth management, investment and capital market services. For more information and financial data, please visit Investor Relations at oldnational.com.

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

    FORWARD-LOOKING STATEMENTS
    This communication includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to Old National’s future plans, objectives, performance, revenues, growth, profits, operating expenses or Old National’s underlying assumptions; First Midwest’s and Old National’s beliefs, goals, intentions, and expectations regarding the proposed transaction, revenues, earnings, loan production, asset quality, and capital levels, among other matters; our estimates of future costs and benefits of the actions we may take; our assessments of expected losses on loans; our assessments of interest rate and other market risks; our ability to achieve our financial and other strategic goals; the expected timing of completion of the proposed transaction; the expected cost savings, synergies and other anticipated benefits from the proposed transaction; and other statements that are not historical facts.

    Forward‐looking statements are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “should,” “will,” and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. These forward-looking statements include, without limitation, those relating to the terms, timing and closing of the proposed transaction.

    Additionally, forward‐looking statements speak only as of the date they are made; Old National does not assume any duty, and does not undertake, to update such forward‐looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise. Furthermore, because forward‐looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in such forward-looking statements as a result of a variety of factors, many of which are beyond the control of Old National. Such statements are based upon the current beliefs and expectations of the management of Old National and are subject to significant risks and uncertainties outside of the control of the parties. Caution should be exercised against placing undue reliance on forward-looking statements. The factors that could cause actual results to differ materially include the following: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between First Midwest and Old National; the outcome of any legal proceedings that may be instituted against First Midwest or Old National; the possibility that the proposed transaction will not close when expected or at all because required regulatory or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated (and the risk that required regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction); the ability of First Midwest and Old National to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the common stock of either or both parties to the proposed transaction; the possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where First Midwest and Old National do business; certain restrictions during the pendency of the proposed transaction that may impact the parties’ ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; iversion of management’s attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or at all and to successfully integrate First Midwest’s operations and those of Old National; such integration may be more difficult, time consuming or costly than expected; revenues following the proposed transaction may be lower than expected; First Midwest’s and Old National’s success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the dilution caused by Old National’s issuance of additional shares of its capital stock in connection with the proposed transaction; effects of the announcement, pendency or completion of the proposed transaction on the ability of First Midwest and Old National to retain customers and retain and hire key personnel and maintain relationships with their suppliers, and on their operating results and businesses generally; risks related to the potential impact of general economic, political and market factors on the companies or the proposed transaction and other factors that may affect future results of First Midwest and Old National; uncertainty as to the extent of the duration, scope, and impacts of the COVID-19 pandemic on First Midwest, Old National and the proposed transaction; and the other factors discussed in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of each of First Midwest’s and Old National’s Annual Report on Form 10‐K for the year ended December 31, 2020, in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of each of First Midwest’s and Old National’s Quarterly Report on Form 10‐Q for the quarter ended September 30, 2021, and in other reports First Midwest and Old National file with the U.S. Securities and Exchange Commission (the “SEC”).

           
    Financial Highlights (unaudited)
    ($ and shares in thousands, except per share data)
           
     Three Months Ended Twelve Months Ended
     December 31,September 30,December 31, December 31,December 31,
      2021  2021  2020   2021  2020 
    Income Statement      
    Net interest income$146,781 $151,572 $161,079  $596,400 $596,094 
    Tax equivalent adjustment (1) 3,442  3,501  3,517   13,913  13,586 
    Net interest income - tax equivalent basis 150,223  155,073  164,596   610,313  609,680 
    Provision for credit losses (1,914) (4,613) (1,100)  (28,812) 38,395 
    Noninterest income 51,484  54,515  58,552   214,219  239,274 
    Noninterest expense 131,937  121,274  142,318   500,569  541,417 
    Net income 56,188  71,746  74,120   277,538  226,409 
           
           
    Per Common Share Data      
    Weighted average diluted shares 166,128  165,939  165,631   165,929  166,177 
    Net income (diluted)$0.34 $0.43 $0.44  $1.67 $1.36 
    Cash dividends 0.14  0.14  0.14   0.56  0.56 
    Common dividend payout ratio (2) 41% 33% 31%  33% 41%
    Book value$18.16 $18.31 $17.98  $18.16 $17.98 
    Stock price 18.12  16.95  16.56   18.12  16.56 
    Tangible common book value (3) 11.70  11.83  11.43   11.70  11.43 
           
           
    Performance Ratios      
    Return on average assets 0.93% 1.20% 1.30%  1.17% 1.04%
    Return on average common equity 7.49% 9.48% 10.11%  9.26% 7.87%
    Return on tangible common equity (3) 11.98% 15.05% 16.20%  14.74% 12.54%
    Return on average tangible common equity (3) 12.07% 15.13% 16.57%  14.89% 13.27%
    Net interest margin (FTE) 2.77% 2.92% 3.26%  2.89% 3.18%
    Efficiency ratio (4) 64.27% 56.86% 62.37%  59.65% 62.91%
    Net charge-offs (recoveries) to average loans(0.04)        %(0.09)        %(0.03)        % (0.03)        % 0.02%
    Allowance for credit losses to ending loans 0.79% 0.79% 0.95%  0.79% 0.95%
    Non-performing loans to ending loans 0.92% 0.94% 1.20%  0.92% 1.20%
           
           
    Balance Sheet (EOP)      
    Total loans$13,601,846 $13,584,828 $13,786,479  $13,601,846 $13,786,479 
    Total assets 24,453,564  24,018,733  22,960,622   24,453,564  22,960,622 
    Total deposits 18,569,195  18,196,149  17,037,453   18,569,195  17,037,453 
    Total borrowed funds 2,575,240  2,536,303  2,676,554   2,575,240  2,676,554 
    Total shareholders' equity 3,012,018  3,035,892  2,972,656   3,012,018  2,972,656 
           
           
    Capital Ratios (3)      
    Risk-based capital ratios (EOP):      
    Tier 1 common equity 12.04% 12.08% 11.75%  12.04% 11.75%
    Tier 1 12.04% 12.08% 11.75%  12.04% 11.75%
    Total 12.77% 12.84% 12.69%  12.77% 12.69%
    Leverage ratio (to average assets) 8.59% 8.54% 8.20%  8.59% 8.20%
           
    Total equity to assets (averages) 12.35% 12.69% 12.83%  12.60% 13.20%
    Tangible common equity to tangible assets 8.30% 8.55% 8.64%  8.30% 8.64%
           
           
    Nonfinancial Data      
    Full-time equivalent employees 2,374  2,410  2,445   2,374  2,445 
    Banking centers 162  162  162   162  162 
           
    (1) Calculated using the federal statutory tax rate in effect of 21% for all periods.    
    (2) Cash dividends per share divided by net income per share (basic). 
    (3) Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures. 
    December 31, 2021 capital ratios are preliminary.      
    (4) Efficiency ratio is defined as noninterest expense before amortization of intangibles as a percent of FTE net interest income and 
    noninterest revenues, excluding net gains from debt securities transactions. This presentation excludes amortization of intangibles
    and net debt securities gains, as is common in other company releases, and better aligns with true operating performance. 
    FTE - Fully taxable equivalent basis EOP - End of period actual balances 


           
    Income Statement (unaudited)
    ($ and shares in thousands, except per share data)
           
     Three Months Ended Twelve Months Ended
     December 31,September 30,December 31, December 31,December 31,
      2021  2021  2020   2021  2020
    Interest income$156,928 $162,026 $173,249  $638,649 $663,308
    Less: interest expense 10,147  10,454  12,170   42,249  67,214
    Net interest income 146,781  151,572  161,079   596,400  596,094
    Provision for credit losses (1,914) (4,613) (1,100)  (28,812) 38,395
    Net interest income after provision for credit losses 148,695  156,185  162,179   625,212  557,699
           
    Wealth management fees 9,833  10,134  9,259   40,409  36,806
    Service charges on deposit accounts 9,121  8,926  8,724   34,685  35,081
    Debit card and ATM fees 5,071  4,942  5,072   20,739  20,178
    Mortgage banking revenue 7,336  10,870  16,233   42,558  62,775
    Investment product fees 6,258  6,475  5,544   24,639  21,614
    Capital markets income 6,394  6,017  6,545   21,997  22,480
    Company-owned life insurance 2,737  2,355  3,153   10,589  12,031
    Other income 4,299  3,589  3,861   14,276  17,542
    Gains (losses) on sales of debt securities 435  1,207  161   4,327  10,767
    Total noninterest income 51,484  54,515  58,552   214,219  239,274
           
    Salaries and employee benefits 72,336  71,005  78,001   284,098  293,590
    Occupancy 13,151  12,757  13,008   54,834  55,316
    Equipment 4,473  3,756  3,778   16,704  16,690
    Marketing 4,723  3,267  3,242   12,684  10,874
    Data processing 11,489  11,508  12,362   47,047  41,086
    Communication 2,412  2,372  2,396   10,073  9,731
    Professional fees 5,409  3,416  4,834   20,077  15,755
    FDIC assessment 1,598  1,628  1,780   6,059  6,722
    Amortization of intangibles 2,573  2,779  3,244   11,336  14,091
    Amortization of tax credit investments 2,019  1,736  9,871   6,770  18,788
    Other expense 11,754  7,050  9,802   30,887  58,774
    Total noninterest expense 131,937  121,274  142,318   500,569  541,417
           
    Income before income taxes 68,242  89,426  78,413   338,862  255,556
    Income tax expense 12,054  17,680  4,293   61,324  29,147
    Net income$56,188 $71,746 $74,120  $277,538 $226,409
           
    Diluted Earnings Per Share       
    Net income$0.34 $0.43 $0.44  $1.67 $1.36
           
    Average Common Shares Outstanding      
    Basic 165,278  165,258  164,799   165,178  165,509
    Diluted 166,128  165,939  165,631   165,929  166,177
           
    Common shares outstanding at end of period 165,838  165,814  165,367   165,838  165,367
           


     
    Balance Sheet (unaudited)
    ($ in thousands)
     December 31, September 30, December 31,
      2021   2021   2020 
    Assets     
    Federal Reserve Bank account$627,354  $600,581  $307,967 
    Money market investments 22,002   16,294   13,537 
    Investments:     
    Treasury and government-sponsored agencies 1,778,357   1,803,273   852,196 
    Mortgage-backed securities 3,698,831   3,354,701   3,339,098 
    States and political subdivisions 1,654,986   1,609,283   1,492,162 
    Other securities 432,478   442,503   458,639 
    Total investments 7,564,652   7,209,760   6,142,095 
    Loans held for sale, at fair value 35,458   51,306   63,250 
    Loans:     
    Commercial 3,391,769   3,505,183   3,956,422 
    Commercial and agriculture real estate 6,380,674   6,290,632   5,946,512 
    Consumer:     
    Home equity 560,590   554,322   556,414 
    Other consumer loans 1,013,524   1,009,909   1,078,709 
    Subtotal of commercial and consumer loans 11,346,557   11,360,046   11,538,057 
    Residential real estate 2,255,289   2,224,782   2,248,422 
    Total loans 13,601,846   13,584,828   13,786,479 
    Total earning assets 21,851,312   21,462,769   20,313,328 
          
    Allowance for credit losses (107,341)  (107,868)  (131,388)
    Non-earning Assets:     
    Cash and due from banks 172,663   180,583   268,208 
    Premises and equipment, net 476,186   476,036   464,408 
    Operating lease right-of-use assets 69,560   69,912   76,197 
    Goodwill and other intangible assets 1,071,672   1,074,245   1,083,008 
    Company-owned life insurance 463,324   461,310   456,110 
    Other assets 456,188   401,746   430,751 
    Total non-earning assets 2,709,593   2,663,832   2,778,682 
    Total assets$24,453,564  $24,018,733  $22,960,622 
          
    Liabilities and Equity     
    Noninterest-bearing demand deposits$6,303,106  $6,440,526  $5,633,672 
    Interest-bearing:     
    Checking and NOW accounts 5,338,022   4,956,012   4,877,046 
    Savings accounts 3,798,494   3,708,807   3,395,747 
    Money market accounts 2,169,160   2,097,967   1,908,118 
    Other time deposits 960,413   992,837   1,103,313 
    Total core deposits 18,569,195   18,196,149   16,917,896 
    Brokered deposits —   —   119,557 
    Total deposits 18,569,195   18,196,149   17,037,453 
          
    Federal funds purchased and interbank borrowings 276   34   1,166 
    Securities sold under agreements to repurchase 392,275   375,247   431,166 
    Federal Home Loan Bank advances 1,886,019   1,890,054   1,991,435 
    Other borrowings 296,670   270,968   252,787 
    Total borrowed funds 2,575,240   2,536,303   2,676,554 
    Operating lease liabilities 76,236   76,771   86,598 
    Accrued expenses and other liabilities 220,875   173,618   187,361 
    Total liabilities 21,441,546   20,982,841   19,987,966 
    Common stock, surplus, and retained earnings 3,014,393   2,979,082   2,824,885 
    Accumulated other comprehensive income (loss), net of tax (2,375)  56,810   147,771 
    Total shareholders' equity 3,012,018   3,035,892   2,972,656 
    Total liabilities and shareholders' equity$24,453,564  $24,018,733  $22,960,622 
     


                 
    Average Balance Sheet and Interest Rates (unaudited)
    ($ in thousands)
                 
                 
      Three Months Ended Three Months Ended Three Months Ended
      December 31, 2021 September 30, 2021 December 31, 2020
      AverageIncome (1)/Yield/ AverageIncome (1)/Yield/ AverageIncome (1)/Yield/
    Earning Assets: BalanceExpenseRate BalanceExpenseRate BalanceExpenseRate
    Money market and other interest-earning            
    investments $726,144 $2760.15% $467,572 $1770.15% $413,782 $1260.12%
    Investments:            
    Treasury and government-sponsored agencies  1,763,544  6,3901.45%  1,730,553  6,9681.61%  648,314  2,9371.81%
    Mortgage-backed securities  3,513,482  15,0711.72%  3,313,027  14,5091.75%  3,291,436  16,1371.96%
    States and political subdivisions  1,625,390  12,9413.18%  1,586,743  12,6093.18%  1,437,890  12,0083.34%
    Other securities  438,583  2,6082.38%  443,393  2,6382.38%  462,836  2,6292.27%
    Total investments  7,340,999  37,0102.02%  7,073,716  36,7242.08%  5,840,476  33,7112.31%
    Loans: (2)            
    Commercial  3,420,274  31,6413.62%  3,645,197  36,1393.88%  4,132,831  46,4684.40%
    Commercial and agriculture real estate  6,341,296  57,3473.54%  6,200,144  57,8203.65%  5,829,912  58,3343.92%
    Consumer:            
    Home equity  556,851  4,3803.12%  549,229  4,4483.21%  550,548  4,3803.17%
    Other consumer loans  1,009,690  9,4883.73%  1,018,385  9,6903.77%  1,099,504  11,2764.08%
    Subtotal commercial and consumer loans  11,328,111  102,8563.60%  11,412,955  108,0973.76%  11,612,795  120,4584.13%
    Residential real estate loans  2,275,469  20,2283.56%  2,274,347  20,5293.61%  2,314,938  22,4713.88%
                 
    Total loans  13,603,580  123,0843.56%  13,687,302  128,6263.70%  13,927,733  142,9294.04%
                 
    Total earning assets $21,670,723 $160,3702.93% $21,228,590 $165,5273.08% $20,181,991 $176,7663.46%
                 
    Less: Allowance for credit losses  (107,990)    (111,216)    (137,539)  
                 
    Non-earning Assets:            
    Cash and due from banks $228,126    $272,855    $341,154   
    Other assets  2,481,792     2,479,079     2,479,253   
                 
    Total assets $24,272,651    $23,869,308    $22,864,859   
                 
    Interest-Bearing Liabilities:            
    Checking and NOW accounts $5,093,496 $4580.04% $4,873,914 $4840.04% $4,708,568 $6290.05%
    Savings accounts  3,766,543  5240.06%  3,678,944  5000.05%  3,329,494  4870.06%
    Money market accounts  2,139,702  4560.08%  2,110,981  4380.08%  1,932,594  4450.09%
    Other time deposits  978,723  1,0470.42%  998,060  1,1560.46%  1,158,715  2,1890.75%
    Total interest-bearing core deposits  11,978,464  2,4850.08%  11,661,899  2,5780.09%  11,129,371  3,7500.13%
    Brokered deposits  —  —0.00%  —  —0.00%  37,176  260.28%
    Total interest-bearing deposits  11,978,464  2,4850.08%  11,661,899  2,5780.09%  11,166,547  3,7760.13%
                 
    Federal funds purchased and interbank borrowings  1,162  —0.00%  689  —0.00%  843  —0.03%
    Securities sold under agreements to repurchase  381,744  920.10%  384,724  900.09%  438,272  1250.11%
    Federal Home Loan Bank advances  1,887,821  5,1221.08%  1,890,916  5,3261.12%  2,089,519  5,9531.13%
    Other borrowings  274,926  2,4483.56%  270,597  2,4603.64%  240,815  2,3163.85%
    Total borrowed funds  2,545,653  7,6621.19%  2,546,926  7,8761.23%  2,769,449  8,3941.21%
                 
    Total interest-bearing liabilities $14,524,117 $10,1470.28% $14,208,825 $10,4540.29% $13,935,996 $12,1700.35%
                 
    Noninterest-Bearing Liabilities and Shareholders' Equity            
    Demand deposits $6,435,829    $6,314,100    $5,644,017   
    Other liabilities  313,880     318,448     352,256   
    Shareholders' equity  2,998,825     3,027,935     2,932,590   
                 
    Total liabilities and shareholders' equity $24,272,651    $23,869,308    $22,864,859   
                 
    Net interest rate spread   2.65%   2.79%   3.11%
                 
    Net interest margin (FTE)   2.77%   2.92%   3.26%
                 
    FTE adjustment  $3,442   $3,501   $3,517 
                 
    (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, 2021 December 31, 2020
      AverageIncome (1)/Yield/ AverageIncome (1)/Yield/
    Earning Assets: BalanceExpenseRate BalanceExpenseRate
    Money market and other interest-earning        
    investments $450,158 $5890.13% $174,494 $5680.33%
    Investments:        
    Treasury and government-sponsored agencies  1,573,855  24,2091.54%  547,054  12,1242.22%
    Mortgage-backed securities  3,356,950  60,4791.80%  3,246,520  70,6112.17%
    States and political subdivisions  1,548,939  50,1153.24%  1,347,490  47,0343.49%
    Other securities  443,606  10,6802.41%  485,430  11,9902.47%
    Total investments $6,923,350 $145,4832.10% $5,626,494 $141,7592.52%
    Loans: (2)        
    Commercial  3,763,099  138,0633.67%  3,843,089  140,4733.66%
    Commercial and agriculture real estate  6,168,146  228,5683.71%  5,477,562  234,6704.28%
    Consumer:        
    Home equity  547,322  17,1813.14%  553,570  18,5613.35%
    Other consumer loans  1,030,145  39,1003.80%  1,131,028  46,6614.13%
    Subtotal commercial and consumer loans  11,508,712  422,9123.67%  11,005,249  440,3654.00%
    Residential real estate loans  2,269,989  83,5783.68%  2,352,444  94,2024.00%
             
    Total loans  13,778,701  506,4903.68%  13,357,693  534,5674.00%
             
    Total earning assets $21,152,209 $652,5623.09% $19,158,681 $676,8943.53%
             
    Less: Allowance for credit losses  (117,436)    (115,321)  
             
    Non-earning Assets:        
    Cash and due from banks $256,860    $327,053   
    Other assets  2,492,054     2,414,602   
             
    Total assets $23,783,687    $21,785,015   
             
    Interest-Bearing Liabilities:        
    Checking and NOW accounts $4,945,435 $2,0650.04% $4,464,027 $5,4490.12%
    Savings accounts  3,648,019  2,0030.05%  3,113,435  3,1560.10%
    Money market accounts  2,080,332  1,7500.08%  1,866,196  4,5850.25%
    Other time deposits  1,020,359  5,1050.50%  1,337,269  14,0131.05%
    Total interest-bearing core deposits  11,694,145  10,9230.09%  10,780,927  27,2030.25%
    Brokered deposits  41,371  310.08%  85,041  9661.14%
    Total interest-bearing deposits  11,735,516  10,9540.09%  10,865,968  28,1690.26%
             
    Federal funds purchased and interbank borrowings  1,113  —0.00%  138,257  1,2960.94%
    Securities sold under agreements to repurchase  392,777  3970.10%  375,961  8540.23%
    Federal Home Loan Bank advances  1,902,407  21,0751.11%  2,055,155  27,2741.33%
    Other borrowings  269,484  9,8233.65%  242,642  9,6213.96%
    Total borrowed funds  2,565,781  31,2951.22%  2,812,015  39,0451.39%
             
    Total interest-bearing liabilities  14,301,297  42,2490.30%  13,677,983  67,2140.49%
             
    Noninterest-Bearing Liabilities and Shareholders' Equity        
    Demand deposits $6,163,937    $4,945,506   
    Other liabilities  320,933     286,066   
    Shareholders' equity  2,997,520     2,875,460   
             
    Total liabilities and shareholders' equity $23,783,687    $21,785,015   
             
    Net interest rate spread   2.79%   3.04%
             
    Net interest margin (FTE)   2.89%   3.18%
             
    FTE adjustment  $13,913   $13,586 
             
    (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,September 30,December 31, December 31,December 31,
      2021  2021  2020   2021  2020 
           
    Beginning allowance for credit losses$107,868 $109,444 $131,388  $131,388 $54,619 
    Impact of adopting ASC 326 on 01/01/2020 —  —  —   —  41,347 
           
    Provision for credit losses (1,914) (4,613) (1,100)  (28,812) 38,395 
           
    Gross charge-offs (545) (1,215) (707)  (4,310) (15,553)
    Gross recoveries 1,932  4,252  1,807   9,075  12,580 
    Net (charge-offs) recoveries 1,387  3,037  1,100   4,765  (2,973)
           
    Ending allowance for credit losses$107,341 $107,868 $131,388  $107,341 $131,388 
           
    Net charge-offs (recoveries) / average loans (1)(0.04)%(0.09)%(0.03)% (0.03)% 0.02%
           
    Average loans outstanding (1)$13,594,543 $13,675,436 $13,910,145  $13,766,590 $13,341,677 
           
    EOP loans outstanding (1) 13,601,846  13,584,828  13,786,479   13,601,846  13,786,479 
           
    Allowance for credit losses / EOP loans (1) 0.79% 0.79% 0.95%  0.79% 0.95%
           
    Underperforming Assets:      
    Loans 90 Days and over (still accruing)$7 $113 $167  $7 $167 
           
    Non-performing loans:      
    Nonaccrual loans (2) 106,691  111,586  147,339   106,691  147,339 
    TDRs still accruing 18,378  16,420  17,749   18,378  17,749 
    Total non-performing loans 125,069  128,006  165,088   125,069  165,088 
           
    Foreclosed properties 2,030  1,943  1,324   2,030  1,324 
           
    Total underperforming assets$127,106 $130,062 $166,579  $127,106 $166,579 
           
    Classified and Criticized Assets:      
    Nonaccrual loans (2) 106,691  111,586  147,339   106,691  147,339 
    Substandard accruing loans 162,572  164,192  157,276   162,572  157,276 
    Loans 90 days and over (still accruing) 7  113  167   7  167 
    Total classified loans - "problem loans"$269,270 $275,891 $304,782  $269,270 $304,782 
           
    Other classified assets 4,338  4,300  3,706   4,338  3,706 
    Criticized loans - "special mention loans" 235,910  240,215  287,192   235,910  287,192 
           
    Total classified and criticized assets$509,518 $520,406 $595,680  $509,518 $595,680 
           
    Non-performing loans / EOP loans (1) 0.92% 0.94% 1.20%  0.92% 1.20%
           
    Allowance to non-performing loans 86% 84% 80%  86% 80%
           
    Under-performing assets / EOP loans (1) 0.93% 0.96% 1.21%  0.93% 1.21%
           
    EOP total assets$24,453,564 $24,018,733 $22,960,622  $24,453,564 $22,960,622 
           
    Under-performing assets / EOP assets 0.52% 0.54% 0.73%  0.52% 0.73%
           
    EOP - End of period actual balances      
    (1) Excludes loans held for sale.    
    (2) Includes non-accruing TDRs totaling $11.7 million at December 31, 2021, $12.8 million at September 30, 2021, and $14.9 million at December 30, 2020.
           


           
    Non-GAAP Measures (unaudited)
    ($ in thousands)
           
     Three Months Ended Twelve Months Ended
     December 31,September 30,December 31, December 31,December 31,
      2021  2021  2020   2021  2020 
    Actual End of Period Balances      
    GAAP shareholders' equity$3,012,018 $3,035,892 $2,972,656  $3,012,018 $2,972,656 
           
    Deduct:      
    Goodwill 1,036,994  1,036,994  1,036,994   1,036,994  1,036,994 
    Intangibles 34,678  37,251  46,014   34,678  46,014 
      1,071,672  1,074,245  1,083,008   1,071,672  1,083,008 
           
    Tangible shareholders' equity $1,940,346 $1,961,647 $1,889,648  $1,940,346 $1,889,648 
           
    Average Balances      
    GAAP shareholders' equity$2,998,825 $3,027,935 $2,932,590  $2,997,520 $2,875,460 
           
    Deduct:      
    Goodwill 1,036,994  1,036,994  1,036,994   1,036,994  1,036,994 
    Intangibles 35,992  38,585  47,536   40,071  52,740 
      1,072,986  1,075,579  1,084,530   1,077,065  1,089,734 
           
    Average tangible shareholders' equity $1,925,839 $1,952,356 $1,848,060  $1,920,455 $1,785,726 
           
    Actual End of Period Balances      
    GAAP assets$24,453,564 $24,018,733 $22,960,622  $24,453,564 $22,960,622 
           
    Add:      
    Trust overdrafts —  116  26   —  26 
           
    Deduct:      
    Goodwill 1,036,994  1,036,994  1,036,994   1,036,994  1,036,994 
    Intangibles 34,678  37,251  46,014   34,678  46,014 
      1,071,672  1,074,245  1,083,008   1,071,672  1,083,008 
           
    Tangible assets $23,381,892 $22,944,604 $21,877,640  $23,381,892 $21,877,640 
           
    Risk-weighted assets (2)$16,588,469 $16,227,070 $15,369,076  $16,588,469 $15,369,076 
           
    GAAP net income$56,188 $71,746 $74,120  $277,538 $226,409 
           
    Add:      
    Amortization of intangibles (net of tax) 1,930  2,084  2,433   8,502  10,585 
           
    Tangible net income$58,118 $73,830 $76,553  $286,040 $236,994 
           
    Tangible Ratios       
    Return on tangible common equity 11.98% 15.05% 16.20%  14.74% 12.54%
    Return on average tangible common equity 12.07% 15.13% 16.57%  14.89% 13.27%
    Return on tangible assets 0.99% 1.29% 1.40%  1.22% 1.08%
    Tangible common equity to tangible assets 8.30% 8.55% 8.64%  8.30% 8.64%
    Tangible common equity to risk-weighted assets (2) 11.70% 12.09% 12.30%  11.70% 12.30%
    Tangible common book value (1) 11.70  11.83  11.43   11.70  11.43 
           
    Tangible common equity presentation includes other comprehensive income as is common in other company releases. 
    (1) Tangible common shareholders' equity divided by common shares issued and outstanding at period-end. 
           
    Tier 1 common equity (2)$1,998,056 $1,960,340 $1,805,194  $1,998,056 $1,805,194 
           
    Risk-weighted assets (2) 16,588,469  16,227,070  15,369,076   16,588,469  15,369,076 
           
    Tier 1 common equity to risk-weighted assets (2) 12.04% 12.08% 11.75%  12.04% 11.75%
           
    (2) December 31, 2021 figures are preliminary.      
           


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

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