• Old National's Strong 2nd Quarter Driven by Robust Commercial Loan Growth and Net Interest Margin Expansion

    ソース: Nasdaq GlobeNewswire / 26 7 2022 08:00:03   America/New_York

    EVANSVILLE, Ind., July 26, 2022 (GLOBE NEWSWIRE) --  

    Old National Bancorp (NASDAQ: ONB) reports 2Q22 net income applicable to common shares of $111.0 million, diluted EPS of $0.38. Adjusted net income applicable to common shares1 of $134.6 million,
    or $0.46 per diluted common share.

    CEO COMMENTARY:

    “As evidenced by a 17% increase in annualized loan growth and strong net interest margin expansion, this was a very robust earnings quarter for Old National,” said CEO Jim Ryan. “We are especially pleased with the growth opportunities that are taking shape in our Chicagoland market as we begin to realize the full potential of our recently completed merger."

    SECOND QUARTER HIGHLIGHTS2:

    Net Income
    • Net income applicable to common shares of $111.0 million; adjusted net income applicable to common shares1 of $134.6 million
    • Earnings per diluted common share ("EPS") of $0.38; adjusted EPS1 of $0.46
      
    Net Interest Income/NIM
    • Net interest income on a fully taxable equivalent basis1 of $341.8 million
    • Net interest margin on a fully taxable equivalent basis1 ("NIM") of 3.33%, up 45 basis points ("bps")
      
    Operating Performance



    • Pre-provision net revenue1 (“PPNR”) of $153.5 million; adjusted PPNR1 of $191.7 million
    • Noninterest expense of $277.4 million; adjusted noninterest expense1 of $239.3 million
    • Efficiency ratio1 of 62.7%; adjusted efficiency ratio1 of 53.9%
      
    Loans and Credit Quality
    • End-of-period total loans3 of $29.6 billion, up 17.0% annualized compared to $28.4 billion at March 31, 2022
    • Total commercial loans increased 17.9% annualized, excluding Paycheck Protection Program ("PPP") loans1
    • Total consumer loans4 increased 21.9% annualized
    • Second quarter total commercial production of $2.2 billion
    • June 30 commercial loan pipeline of $5.9 billion
    • Provision for credit losses ("provision") of $9.2 million
    • Net charge-offs of $1.8 million, or 2 bps of average loans
    • Non-performing loans of 0.78% of total loans
     
    Return Profile & Capital
    • Return on average tangible common equity1 of 16.9%; adjusted return on average tangible common equity1 of 20.4%
      
    Notable Items
    • $36.6 million of merger-related charges
    • $1.5 million of tax credit amortization

    1 Non-GAAP financial measure that management believes is useful in evaluating the financial results of the Company – refer to the Non-GAAP reconciliations contained in this release 2 Certain comparisons to prior period are not meaningful due to the full quarter impact of the merger with First Midwest Bancorp, Inc. ("First Midwest") 3 Includes loans held for sale 4 Includes consumer and residential real estate loans

    RESULTS OF OPERATIONS

    Old National Bancorp ("Old National") reported second quarter 2022 net income applicable to common shares of $111.0 million, or $0.38 per diluted share.

    Included in the second quarter were pre-tax charges of $36.6 million related to the February 15, 2022 merger with First Midwest. Excluding these charges and debt securities gains from the current quarter, adjusted net income was $134.6 million, or $0.46 per diluted share.

    LOANS
    Robust broad-based commercial and consumer loan growth.

    • Period-end total loans3 were $29.6 billion at June 30, 2022, up 17.0% annualized from $28.4 billion at March 31, 2022, driven by strong commercial and consumer loan production.
    • PPP loans decreased $123.8 million to $81.6 million at June 30, 2022, compared to $205.3 million at March 31, 2022.
    • Excluding PPP loans, total loans increased 19.1%, annualized, and total commercial loans increased 17.9%, annualized.
    • Total commercial loan production in the second quarter was $2.2 billion; period-end commercial pipeline totaled $5.9 billion.
    • Consumer loans grew $86.0 million, or 12.9% annualized, to $2.8 billion and residential mortgage loans grew $372.9 million, or 26.1% annualized, to $6.1 billion, driven by strong production which was partially offset by acquired transactional portfolio run-off.
    • Average total loans in the second quarter were $28.9 billion, an increase of $8.1 billion from the first quarter of 2022, driven by the full quarter impact of the merger with First Midwest, as well as organic loan growth.

    DEPOSITS
    Strong deposit franchise with stable balances.

    • Period-end total deposits were $35.5 billion at June 30, 2022, consistent with $35.6 billion at March 31, 2022.
    • The gradual deployment of commercial and retail deposits was partially offset by the seasonal increase in municipal deposits.
    • On average, total deposits in the second quarter increased to $35.8 billion, compared to $26.9 billion for the first quarter of 2022, due primarily to the full quarter impact of the merger.

    NET INTEREST INCOME AND MARGIN
    Strong loan growth, the higher rate environment and the full quarter impact of the merger favorably impact net interest income and margin.

    • Net interest income on a fully taxable equivalent basis increased to $341.8 million in the second quarter of 2022 compared to $226.6 million in the first quarter of 2022, driven by the full quarter impact of the merger, loan growth, higher interest rates, higher accretion income, and an additional day in the quarter.
    • Net interest margin on a fully taxable equivalent basis increased 45 bps to 3.33% compared to 2.88% in the first quarter of 2022.
    • PPP interest and net fees combined were $1.7 million, or less than 1 bp of net interest margin, in the second quarter of 2022 compared to $3.7 million, or 3 bps of net interest margin, in the first quarter of 2022.
    • Accretion income on loans and borrowings was $35.0 million, or 34 bps of net interest margin, in the second quarter of 2022 compared to $15.9 million, or 20 bps of net interest margin, in the first quarter of 2022.
    • Interest collected on nonaccrual loans was $3.2 million, or 3 bps of net interest margin, in the second quarter of 2022 compared to $1.1 million, or 1 bp of net interest margin, in the first quarter of 2022.
    • Cost of total deposits continue to be low at 0.06%, increasing 1 bp in the second quarter of 2022 and the cost of total interest-bearing deposits increased just 2 bps to 0.09%.

    CREDIT QUALITY
    Strong credit quality continues to be a hallmark of the Old National franchise.

    • Provision expense in the second quarter of 2022 was $9.2 million, compared to $97.6 million in the first quarter of 2022, which included $96.3 million of Current Expected Credit Losses ("CECL") Day 1 non-purchased credit deteriorated ("non-PCD") provision expense related to the allowance for credit losses established on acquired non-PCD loans as a result of the merger with First Midwest.
    • Net charge-offs in the second quarter were $1.8 million, or 2 bps of average loans, compared to net charge-offs of $2.8 million in the first quarter of 2022, or 5 bps of average loans.
    • 30+ day delinquencies were 0.17% at the end of the second quarter, down from 0.34% at the end of the first quarter.
    • Non-performing loans improved as a percentage of total loans to 0.78% from 0.88% at the end of the first quarter due to the merger.
    • Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. As of June 30, 2022, the remaining discount on these acquired loans was $131 million.
    • The allowance for credit losses stood at $288.0 million, or 0.97% of total loans at June 30, 2022, compared to 0.99% at March 31, 2022.

    NONINTEREST INCOME
    Increase driven by the full quarter impact of the merger.

    • Total noninterest income for the second quarter of 2022 was $89.1 million, an increase of $23.9 million from the first quarter of 2022, driven by the full quarter impact of the merger.
    • Mortgage banking revenue was impacted by the higher rate environment, lower gain on sale margins and a higher mix of portfolio production.
    • Other income higher primarily due to equity investment returns and recoveries on previously charged-off acquired loans.

    NONINTEREST EXPENSE
    Increase due primarily to full quarter impact of operating costs associated with the merger; efficiency ratio improved.

    • Noninterest expense for the second quarter of 2022 was $277.4 million and included $36.6 million of merger-related charges, as well as $1.5 million of tax credit amortization.
    • Excluding these items, adjusted noninterest expense for the second quarter was $239.3 million, compared to $172.9 million in the first quarter of 2022, up due primarily to the full quarter impact of the merger, as well as higher incentive accruals reflective of strong performance.
    • The second quarter efficiency ratio was 62.7%, while the adjusted efficiency ratio was 53.9% compared to 57.7% for the first quarter of 2022.

    INCOME TAXES

    • On a fully taxable equivalent basis, income tax expense in the second quarter was $29.3 million, resulting in a 20.3% FTE tax rate, compared to 15.2% in the first quarter of 2022, reflective of higher pre-tax net income.
    • Income tax expense included $1.5 million of tax credit benefit.

    CAPITAL AND LIQUIDITY
    Capital ratios remain strong.

    • Preliminary total risk-based capital was 12.03% and preliminary regulatory Tier 1 capital was 10.63%, impacted by strong loan growth, partly offset by retained earnings.
    • Tangible common equity to tangible assets was 6.20% at the end of the second quarter compared to 6.51% in the first quarter of 2022, driven by the higher rate environment's impact on unrealized losses within the investment portfolio.
    • The Company did not repurchase any shares of common stock during the quarter.
    • A low loan to deposit ratio of 83.2%, combined with existing funding sources plus available unencumbered, high-quality collateral, provides strong liquidity.

    HEALTH SAVINGS ACCOUNTS SALE
    As previously disclosed on June 27, 2022, Old National Bank, a wholly-owned subsidiary of Old National Bancorp, entered into a Custodial Transfer and Asset Purchase Agreement with UMB Bank, n.a. (“UMB”), pursuant to which UMB will acquire Old National Bank’s business of acting as a qualified custodian for, and administering, health savings accounts. Old National Bank serves as custodian for health savings accounts comprised of both investment accounts and deposit accounts. Upon completion of the sale, UMB will pay Old National a premium on deposit account balances transferred at closing, or approximately $95 million based on June 30, 2022 balances. Subject to customary closing conditions and regulatory approval, the parties anticipate completing the sale in the fourth quarter of 2022.

    NON-GAAP RECONCILIATIONS
    See the "Use of Non-GAAP Financial Measures" section presented later in this release for a discussion of these non-GAAP financial measures.

    ($ in millions, except EPS, shares in 000s)2Q22Adjustments4Adjusted 2Q22
    Total Revenues (FTE)$430.9 $0.1 $431.0 
    Less: Provision for Credit Losses 9.2  —  9.2 
    Less: Noninterest Expenses (277.4) 36.6  (240.8)
    Income before Income Taxes (FTE)$144.3 $36.7 $181.0 
    Income Taxes (FTE) (29.3) (13.1) (42.4)
    Net Income (loss)$115.0 $23.6 $138.6 
    Preferred Dividends (4.0) —  (4.0)
    Net Income (loss) applicable to common shares$111.0 $23.6 $134.6 
    Weighted Average Diluted Shares Outstanding 291,881  —  291,881 
    Earnings Per Common Share - Diluted$0.38 $0.08 $0.46 

    4 Tax-effect calculations use management's estimate of the full year FTE tax rates (federal + state)

    ($ in millions)2Q221Q22
    Net Interest Income$337.5 $222.8 
    Add: FTE Adjustment 4.3  3.8 
    Net Interest Income (FTE)$341.8 $226.6 
    Average Earning Assets$41,003.3 $31,483.6 
    Net Interest Margin (FTE) 3.33% 2.88%


    ($ in millions)2Q221Q22
    Net Interest Income$337.5$222.8 
    Add: FTE Adjustment 4.3 3.8 
    Net Interest Income (FTE)$341.8$226.6 
    Add: Total Noninterest Income 89.1 65.2 
    Less: Noninterest Expense 277.4 226.7 
    Pre-Provision Net Revenue$153.5$65.1 
    Less: Debt Securities (Gains)/Losses 0.1 (0.3)
    Add: Merger-Related Charges 36.6 52.3 
    Add: Amortization of Tax Credit Investments 1.5 1.5 
    Adjusted Pre-Provision Net Revenue$191.7$118.6 


    ($ in millions, end of period balances)2Q221Q22
    Commercial Loans$20,721.0 $19,962.0 
    Less: PPP Loans (81.6) (205.3)
    Commercial Loans, excluding PPP Loans$20,639.4 $19,756.7 
    Consumer and Residential Real Estate Loans 8,833.0  8,374.3 
    Total Loans, excluding PPP Loans$29,472.4 $28,131.0 


    ($ in millions)2Q221Q22
    Noninterest Expense$277.4 $226.7 
    Less: Merger-Related Charges (36.6) (52.3)
    Noninterest Expense less Charges$240.8 $174.4 
    Less: Amortization of Tax Credit Investments (1.5) (1.5)
    Adjusted Noninterest Expense$239.3 $172.9 
    Less: Intangible Amortization (7.2) (4.8)
    Adjusted Noninterest Expense Less Intangible Amortization$232.1 $168.1 
    Net Interest Income$337.5 $222.8 
    FTE Adjustment 4.3  3.8 
    Net Interest Income (FTE)$341.8 $226.6 
    Total Noninterest Income 89.1  65.2 
    Total Revenue (FTE)$430.9 $291.8 
    Less: Debt Securities (Gains)/Losses 0.1  (0.3)
    Adjusted Total Revenue (FTE)$431.0 $291.5 
    Efficiency Ratio 62.7% 76.2%
    Adjusted Efficiency Ratio 53.9% 57.7%

                    

    ($ in millions)2Q221Q22
    Net (Loss) Income Applicable to Common Shares$111.0 $(29.6)
    Add: Intangible Amortization (net of tax4) 5.4  3.9 
    Tangible Net (Loss) Income Applicable to Common Shares$116.3 $(25.7)
    Less: Securities (Gains)/Losses (net of tax4) 0.1  (0.2)
    Add: Provision for credit losses - CECL Day 1 non-PCD provision expense5 (net of tax4) —  78.6 
    Add: Merger-Related Charges (net of tax4) 23.5  42.8 
    Adjusted Tangible Net Income Applicable to Common Shares$139.9 $95.5 
    Average Shareholders’ Common Equity 4,886.2  4,101.2 
    Less: Average Goodwill (1,992.9) (1,476.7)
    Less: Average Intangibles (144.1) (73.9)
    Average Tangible Shareholders’ Common Equity$2,749.2 $2,550.6 
    Return on Average Common Equity 9.1%(2.9)   %
    Adjusted Return on Average Common Equity 11.0% 8.9%
    Return on Average Tangible Common Equity 16.9%(4.0)   %
    Adjusted Return on Average Tangible Common Equity 20.4% 15.0%

    5 Provision for Credit Losses adjustment refers to the initial increase in allowance for credit losses required
    on acquired non-PCD loans through the provision for credit losses as a result of the completed merger

    CONFERENCE CALL AND WEBCAST
    Old National will host a conference call and live webcast at 9:00 a.m. Central Time on Tuesday, July 26, 2022, to review second quarter 2022 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. (844) 200-6205 or International (929) 526-1599, Access code 498391. A replay of the call will also be available from noon Central Time on July 26 through August 9. To access the replay, dial U.S. (866) 813-9403 or international +44 (204) 525-0658, Access code 946843.

    ABOUT OLD NATIONAL
    Old National Bancorp (NASDAQ: ONB), the holding company of Old National Bank, is the sixth largest commercial bank headquartered in the Midwest. With approximately $46 billion of assets and $28 billion of assets under management, Old National ranks among the top 35 banking companies based in the U.S. and has been recognized as a World’s Most Ethical Company by the Ethisphere Institute for eleven consecutive years.  Since its founding in 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships with clients and in the communities it serves. 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
    The Company's accounting and reporting policies conform to U.S. generally accepted accounting principles ("GAAP") and general practices within the banking industry. As a supplement to GAAP, the Company provides non-GAAP performance results, which the Company believes are useful because they assist investors in assessing the Company's operating performance. 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.

    The Company presents EPS, the efficiency ratio, return on average common equity, and return on average tangible common equity, all adjusted for certain notable items. These items include the CECL Day 1 non-PCD provision expense, merger related charges associated with completed acquisitions, and net securities gains. Management believes excluding these items from EPS, the efficiency ratio, return on average common equity, and return on average tangible common equity may be useful in assessing the Company's underlying operational performance since these items do not pertain to its core business operations and their exclusion may facilitate better comparability between periods. Management believes that excluding merger related charges and the CECL Day 1 non-PCD provision expense from these metrics may be useful to the Company, as well as analysts and investors, since these expenses can vary significantly based on the size, type, and structure of each acquisition. Additionally, management believes excluding these items from these metrics may enhance comparability for peer comparison purposes.

    The Company presents loans excluding PPP loans. Management believes that excluding PPP loans is useful as it facilitates better comparability between periods. PPP loans are fully guaranteed by the Small Business Administration and are expected to be forgiven if the applicable criteria are met. Additionally, management believes excluding PPP loans from this item may enhance comparability for peer comparison.

    Income tax expense, provision for credit losses, and the certain notable items listed above are excluded from the calculation of pre-provision net revenues, adjusted due to the fluctuation in income before income tax and the level of provision for credit losses required. Management believes pre-provision net revenues, adjusted may be useful in assessing the Company's underlying operating performance and their exclusion may facilitate better comparability between periods and for peer comparison purposes.

    The Company presents adjusted noninterest expense, which excludes merger related charges, ONB Way charges and amortization of tax credit investments. Management believes that excluding these items from noninterest expense may be useful in assessing the Company’s underlying operational performance as these items either do not pertain to its core business operations or their exclusion may facilitate better comparability between periods and for peer comparison purposes.

    The tax-equivalent adjustment to net interest income and net interest margin recognizes the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal income tax rate of 21%. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on a fully tax-equivalent basis and that it may enhance comparability for peer comparison purposes.

    In management's view, tangible common equity measures are capital adequacy metrics that may be meaningful to the Company, as well as analysts and investors, in assessing the Company's use of equity and in facilitating comparisons with peers. These non-GAAP measures are valuable indicators of a financial institution's capital strength since they eliminate intangible assets from stockholders' equity and retain the effect of accumulated other comprehensive loss in stockholders' equity.

    Although intended to enhance investors' understanding of the Company's business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. In addition, these non-GAAP financial measures may differ from those used by other financial institutions to assess their business and performance. See the previously provided tables and the following reconciliations in the "Non-GAAP Reconciliations" section for details on the calculation of these measures to the extent presented herein.

    FORWARD-LOOKING STATEMENTS
    This communication 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’s financial condition, results of operations, asset and credit quality trends, profitability and business plans or opportunities. Forward-looking statements can be identified by the use of the words "anticipate," "believe," "contemplate," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "should," and "will," and other words of similar meaning. These forward-looking statements express management’s current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those in such statements. Factors that might cause such a difference include, but are not limited to: the continued impact of the COVID-19 pandemic on our business as well as the business of our customers; competition; government legislation, regulations and policies; ability of Old National to execute its business plan, including the completion of the integration related to the merger between Old National and First Midwest and the achievement of the synergies and other benefits from the merger; changes in economic conditions which could materially impact credit quality trends and the ability to generate loans and gather deposits; failure or circumvention of our internal controls; significant changes in accounting, tax or regulatory practices or requirements; new legal obligations; disruptive technologies in payment systems and other services traditionally provided by banks; failure or disruption of our information systems; computer hacking and other cybersecurity threats; other matters discussed in this communication; and other factors identified in our Annual Report on Form 10-K for the year ended December 31, 2021 and other filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date of this communication and are not guarantees of future results or performance, and Old National does not undertake an obligation to update these forward-looking statements to reflect events or conditions after the date of this communication.

    CONTACTS:  
    Media: Kathy Schoettlin Investors: Lynell Walton
    (812) 465-7269 (812) 464-1366
    Kathy.Schoettlin@oldnational.com Lynell.Walton@oldnational.com


           
    Financial Highlights (unaudited)
    ($ and shares in thousands, except per share data)
           
     Three Months Ended Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2022  2022  2021   2022  2021 
    Income Statement      
    Net interest income$337,472 $222,785 $149,927  $560,257 $298,047 
    Tax equivalent adjustment (1) 4,314  3,772  3,470   8,086  6,970 
    Net interest income - tax equivalent basis 341,786  226,557  153,397   568,343  305,017 
    Provision for credit losses 9,245  97,569  (4,929)  106,814  (22,285)
    Noninterest income 89,117  65,240  51,508   154,357  108,220 
    Noninterest expense 277,395  226,756  129,618   504,151  247,358 
    Net income (loss) available to common shareholders 110,952  (29,603) 62,786   81,349  149,604 
           
           
    Per Common Share Data      
    Weighted average diluted shares 291,881  227,002  165,934   260,253  165,821 
    Net income (loss) (diluted)$0.38 $(0.13)$0.38  $0.31 $0.90 
    Cash dividends 0.14  0.14  0.14   0.28  0.28 
    Common dividend payout ratio (2) 37%(108)        % 37%  90% 31%
    Book value$16.51 $17.03 $18.05  $16.51 $18.05 
    Stock price 14.79  16.38  17.61   14.79  17.61 
    Tangible common book value (3) 9.23  9.71  11.55   9.23  11.55 
           
           
    Performance Ratios      
    Return on average assets 1.0%(0.3)   % 1.1%  0.4% 1.3%
    Return on average common equity 9.1%(2.9)   % 8.4%  3.6% 10.0%
    Return on average tangible common equity (3) 16.9%(4.0)   % 13.6%  6.8% 16.2%
    Net interest margin (FTE) 3.33% 2.88% 2.91%  3.13% 2.93%
    Efficiency ratio (4) 62.7% 76.2% 62.1%  68.1% 58.8%
    Net charge-offs (recoveries) to average loans 0.02% 0.05%(0.01)        %  0.04% 0.00%
    Allowance for credit losses to ending loans 0.97% 0.99% 0.79%  0.97% 0.79%
    Non-performing loans to ending loans 0.78% 0.88% 1.03%  0.78% 1.03%
           
           
    Balance Sheet (EOP)      
    Total loans$29,553,648 $28,336,244 $13,784,677  $29,553,648 $13,784,677 
    Total assets 45,748,355  45,834,648  23,675,666   45,748,355  23,675,666 
    Total deposits 35,538,975  35,607,390  17,868,911   35,538,975  17,868,911 
    Total borrowed funds 4,384,411  4,347,560  2,559,113   4,384,411  2,559,113 
    Total shareholders' equity 5,078,783  5,232,114  2,991,118   5,078,783  2,991,118 
           
           
    Capital Ratios (3)      
    Risk-based capital ratios (EOP):      
    Tier 1 common equity 9.90% 10.04% 11.95%  9.90% 11.95%
    Tier 1 10.63% 10.79% 11.95%  10.63% 11.95%
    Total 12.03% 12.19% 12.73%  12.03% 12.73%
    Leverage ratio (to average assets) 8.19% 10.58% 8.38%  8.19% 8.38%
           
    Total equity to assets (averages) 11.22% 12.03% 12.61%  11.57% 12.69%
    Tangible common equity to tangible assets 6.20% 6.51% 8.47%  6.20% 8.47%
           
           
    Nonfinancial Data      
    Full-time equivalent employees 4,196  4,333  2,465   4,196  2,465 
    Banking centers 266  267  162   266  162 
           
    (1) Calculated using the federal statutory tax rate in effect of 21% for all periods.    
    (2) Cash dividends per common share divided by net income per common share (basic). 
    (3) Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures. 
    June 30, 2022 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 PCD - Purchased credit deteriorated


           
    Income Statement (unaudited)
    ($ and shares in thousands, except per share data)
           
     Three Months Ended Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2022  2022  2021   2022  2021 
    Interest income$354,358 $235,505 $160,458  $589,863 $319,695 
    Less: interest expense 16,886  12,720  10,531   29,606  21,648 
    Net interest income 337,472  222,785  149,927   560,257  298,047 
    Provision for credit losses 9,245  97,569  (4,929)  106,814  (22,285)
    Net interest income after provision for credit losses 328,227  125,216  154,856   453,443  320,332 
           
    Wealth management fees 19,304  14,630  10,734   33,934  20,442 
    Service charges on deposit accounts 21,144  14,726  8,514   35,870  16,638 
    Debit card and ATM fees 10,402  6,899  5,583   17,301  10,726 
    Mortgage banking revenue 6,522  7,245  7,827   13,767  24,352 
    Investment product fees 8,568  7,322  6,042   15,890  11,906 
    Capital markets income 7,261  4,442  5,871   11,703  9,586 
    Company-owned life insurance 4,571  3,524  2,783   8,095  5,497 
    Other income 11,430  6,110  3,462   17,540  6,388 
    Gains (losses) on sales of debt securities (85) 342  692   257  2,685 
    Total noninterest income 89,117  65,240  51,508   154,357  108,220 
           
    Salaries and employee benefits 161,817  124,147  72,640   285,964  140,757 
    Occupancy 26,496  21,019  14,054   47,515  28,926 
    Equipment 7,550  5,168  4,506   12,718  8,475 
    Marketing 9,119  4,276  2,632   13,395  4,694 
    Data processing 25,883  18,762  11,697   44,645  24,050 
    Communication 5,878  3,417  2,411   9,295  5,289 
    Professional fees 6,336  19,791  8,528   26,127  11,252 
    FDIC assessment 4,699  2,575  1,226   7,274  2,833 
    Amortization of intangibles 7,170  4,811  2,909   11,981  5,984 
    Amortization of tax credit investments 1,525  1,516  1,813   3,041  3,015 
    Other expense 20,922  21,274  7,202   42,196  12,083 
    Total noninterest expense 277,395  226,756  129,618   504,151  247,358 
           
    Income (loss) before income taxes 139,949  (36,300) 76,746   103,649  181,194 
    Income tax expense (benefit) 24,964  (8,714) 13,960   16,250  31,590 
    Net income (loss)$114,985 $(27,586)$62,786  $87,399 $149,604 
    Preferred dividends (4,033) (2,017) —   (6,050) — 
    Net income (loss) applicable to common shares$110,952 $(29,603)$62,786  $81,349 $149,604 
           
    Diluted Earnings Per Common Share       
    Net income (loss)$0.38 $(0.13)$0.38  $0.31 $0.90 
           
    Average Common Shares Outstanding      
    Basic 290,862  227,002  165,175   259,108  165,086 
    Diluted 291,881  227,002  165,934   260,253  165,821 
           
    Common shares outstanding at end of period 292,893  292,959  165,732   292,893  165,732 
           


     


     
    End of Period Balance Sheet (unaudited)
    ($ in thousands)
     June 30, March 31, June 30,
      2022   2022   2021 
    Assets     
    Federal Reserve Bank account$334,570  $1,545,389  $287,446 
    Money market investments 7,774   12,419   15,294 
    Investments:     
    Treasury and government-sponsored agencies 2,461,173   2,527,568   1,657,079 
    Mortgage-backed securities 5,976,921   6,086,853   3,280,983 
    States and political subdivisions 1,839,333   1,840,823   1,567,931 
    Other securities 719,223   735,550   441,037 
    Total investments 10,996,650   11,190,794   6,947,030 
    Loans held for sale, at fair value 26,217   39,376   50,121 
    Loans:     
    Commercial 8,923,983   8,624,253   3,802,943 
    Commercial and agriculture real estate 11,796,503   11,337,735   6,187,318 
    Consumer:     
    Home equity 1,097,852   1,080,885   549,951 
    Other consumer loans 1,656,253   1,587,216   1,029,409 
    Subtotal of commercial and consumer loans 23,474,591   22,630,089   11,569,621 
    Residential real estate 6,079,057   5,706,155   2,215,056 
    Total loans 29,553,648   28,336,244   13,784,677 
    Total earning assets 40,918,859   41,124,222   21,084,568 
          
    Allowance for credit losses on loans (288,003)  (280,507)  (109,444)
    Non-earning Assets:     
    Cash and due from banks 455,620   418,744   188,391 
    Premises and equipment, net 586,031   584,113   484,879 
    Operating lease right-of-use assets 192,196   201,802   72,207 
    Goodwill and other intangible assets 2,131,815   2,144,609   1,077,024 
    Company-owned life insurance 769,595   766,291   459,565 
    Other assets 982,242   875,374   418,476 
    Total non-earning assets 5,117,499   4,990,933   2,700,542 
    Total assets$45,748,355  $45,834,648  $23,675,666 
          
    Liabilities and Equity     
    Noninterest-bearing demand deposits$12,388,379  $12,463,136  $6,142,724 
    Interest-bearing:     
    Checking and NOW accounts 8,473,510   8,296,337   4,921,430 
    Savings accounts 6,796,152   6,871,767   3,675,701 
    Money market accounts 5,373,318   5,432,139   2,126,537 
    Other time deposits 2,479,304   2,544,011   1,002,519 
    Total core deposits 35,510,663   35,607,390   17,868,911 
    Brokered deposits 28,312   —   — 
    Total deposits 35,538,975   35,607,390   17,868,911 
          
    Federal funds purchased and interbank borrowings 1,561   1,721   1,523 
    Securities sold under agreements to repurchase 476,173   509,275   396,129 
    Federal Home Loan Bank advances 3,283,963   3,239,357   1,891,143 
    Other borrowings 622,714   597,207   270,318 
    Total borrowed funds 4,384,411   4,347,560   2,559,113 
    Operating lease liabilities 215,188   234,049   81,333 
    Accrued expenses and other liabilities 530,998   413,535   175,191 
    Total liabilities 40,669,572   40,602,534   20,684,548 
    Preferred stock, common stock, surplus, and retained earnings 5,647,916   5,570,313   2,928,856 
    Accumulated other comprehensive income (loss), net of tax (569,133)  (338,199)  62,262 
    Total shareholders' equity 5,078,783   5,232,114   2,991,118 
    Total liabilities and shareholders' equity$45,748,355  $45,834,648  $23,675,666 
     


                 
    Average Balance Sheet and Interest Rates (unaudited)
    ($ in thousands)
                 
                 
      Three Months Ended Three Months Ended Three Months Ended
      June 30, 2022 March 31, 2022 June 30, 2021
      AverageIncome (1)/Yield/ AverageIncome (1)/Yield/ AverageIncome (1)/Yield/
    Earning Assets: BalanceExpenseRate BalanceExpenseRate BalanceExpenseRate
    Money market and other interest-earning            
    investments $1,088,005 $1,8300.67% $1,336,404 $3080.09% $232,723 $480.08%
    Investments:            
    Treasury and government-sponsored agencies  2,487,717  11,8181.90%  2,195,470  8,2191.50%  1,637,396  5,9671.46%
    Mortgage-backed securities  6,008,470  33,5342.23%  4,869,038  24,3772.00%  3,287,254  15,0671.83%
    States and political subdivisions  1,834,189  14,5713.18%  1,738,652  13,6373.14%  1,503,447  12,3643.29%
    Other securities  723,279  5,4673.02%  605,552  4,1442.74%  439,197  2,6902.45%
    Total investments  11,053,655  65,3902.37%  9,408,712  50,3772.14%  6,867,294  36,0882.10%
    Loans: (2)            
    Commercial  8,692,646  95,7434.36%  5,893,907  55,2833.75%  4,019,553  34,7153.42%
    Commercial and agriculture real estate  11,547,958  113,5453.89%  8,749,162  77,4083.54%  6,146,057  57,6553.71%
    Consumer:            
    Home equity  1,000,373  11,2564.51%  783,729  7,3553.81%  538,999  4,2013.13%
    Other consumer loans  1,715,550  19,2224.49%  1,320,923  14,5604.47%  1,034,439  9,7473.78%
    Subtotal commercial and consumer loans  22,956,527  239,7664.19%  16,747,721  154,6063.74%  11,739,048  106,3183.63%
    Residential real estate loans  5,905,151  51,6863.50%  3,990,716  33,9863.41%  2,256,215  21,4743.81%
                 
    Total loans  28,861,678  291,4524.01%  20,738,437  188,5923.64%  13,995,263  127,7923.62%
                 
    Total earning assets $41,003,338 $358,6723.48% $31,483,553 $239,2773.04% $21,095,280 $163,9283.09%
                 
    Less: Allowance for credit losses on loans  (282,943)    (168,175)    (117,020)  
                 
    Non-earning Assets:            
    Cash and due from banks $277,283    $268,836    $238,326   
    Other assets  4,735,701     3,480,640     2,520,937   
                 
    Total assets $45,733,379    $35,064,854    $23,737,523   
                 
    Interest-Bearing Liabilities:            
    Checking and NOW accounts $8,445,683 $1,7860.08% $6,784,653 $5960.04% $4,948,773 $5130.04%
    Savings accounts  6,835,675  6730.04%  5,302,015  5890.05%  3,647,952  4920.05%
    Money market accounts  5,317,300  1,0270.08%  3,778,682  6910.07%  2,081,286  4330.08%
    Other time deposits  2,491,998  1,6270.26%  1,745,153  1,3180.31%  1,024,777  1,2930.51%
    Total interest-bearing core deposits  23,090,656  5,1130.09%  17,610,503  3,1940.07%  11,702,788  2,7310.09%
    Brokered deposits  7,447  740.00%  —  —0.00%  9,890  10.05%
    Total interest-bearing deposits  23,098,103  5,1870.09%  17,610,503  3,1940.07%  11,712,678  2,7320.09%
                 
    Federal funds purchased and interbank borrowings  1,222  20.47%  1,113  —0.01%  1,460  —0.02%
    Securities sold under agreements to repurchase  466,885  850.07%  449,939  960.09%  406,251  950.09%
    Federal Home Loan Bank advances  3,053,423  6,9250.91%  2,589,984  5,9630.93%  1,906,078  5,2181.10%
    Other borrowings  611,772  4,6873.06%  432,434  3,4673.21%  269,259  2,4863.69%
    Total borrowed funds  4,133,302  11,6991.14%  3,473,470  9,5261.11%  2,583,048  7,7991.21%
                 
    Total interest-bearing liabilities $27,231,405 $16,8860.25% $21,083,973 $12,7200.24% $14,295,726 $10,5310.30%
                 
    Noninterest-Bearing Liabilities and Shareholders' Equity            
    Demand deposits $12,714,946    $9,294,876    $6,140,424   
    Other liabilities  657,128     467,589     308,680   
    Shareholders' equity  5,129,900     4,218,416     2,992,693   
                 
    Total liabilities and shareholders' equity $45,733,379    $35,064,854    $23,737,523   
                 
    Net interest rate spread   3.23%   2.80%   2.79%
                 
    Net interest margin (FTE)   3.33%   2.88%   2.91%
                 
    FTE adjustment  $4,314   $3,772   $3,470 
                 
    (1) Interest income is reflected on a FTE. 
    (2) Includes loans held for sale. 
     


             
    Average Balance Sheet and Interest Rates (unaudited)
    ($ in thousands)
             
             
      Six Months Ended Six Months Ended
      June 30, 2022 June 30, 2021
      AverageIncome (1)/Yield/ AverageIncome (1)/Yield/
    Earning Assets: BalanceExpenseRate BalanceExpenseRate
    Money market and other interest-earning        
    investments $1,211,518 $2,1380.36% $301,025 $1360.09%
    Investments:        
    Treasury and government-sponsored agencies  2,342,401  20,0381.71%  1,397,791  10,8521.55%
    Mortgage-backed securities  5,441,902  57,9102.13%  3,299,713  30,9001.87%
    States and political subdivisions  1,786,684  28,2083.16%  1,490,865  24,5643.30%
    Other securities  664,741  9,6112.89%  446,266  5,4332.44%
    Total investments $10,235,728 $115,7672.26% $6,634,635 $71,7492.16%
    Loans: (2)        
    Commercial  7,301,008  151,0264.11%  3,997,281  70,2823.50%
    Commercial and agriculture real estate  10,156,292  190,9523.74%  6,063,872  113,4013.72%
    Consumer:        
    Home equity  892,649  18,6114.20%  541,510  8,3533.11%
    Other consumer loans  1,519,327  33,7824.48%  1,046,518  19,9233.84%
    Subtotal commercial and consumer loans  19,869,276  394,3714.00%  11,649,181  211,9593.67%
    Residential real estate loans  4,953,222  85,6733.46%  2,264,988  42,8213.78%
             
    Total loans  24,822,498  480,0443.86%  13,914,169  254,7803.65%
             
    Total earning assets $36,269,744 $597,9493.29% $20,849,829 $326,6653.13%
             
    Less: Allowance for credit losses  (225,876)    (125,398)  
             
    Non-earning Assets:        
    Cash and due from banks $273,083    $263,336   
    Other assets  4,111,637     2,503,865   
             
    Total assets $40,428,588    $23,491,632   
             
    Interest-Bearing Liabilities:        
    Checking and NOW accounts $7,619,757 $2,3810.06% $4,906,530 $1,1240.05%
    Savings accounts  6,073,081  1,2620.04%  3,572,057  9790.06%
    Money market accounts  4,552,241  1,7190.08%  2,034,577  8550.08%
    Other time deposits  2,120,638  2,9450.28%  1,052,856  2,9020.56%
    Total interest-bearing core deposits  20,365,717  8,3070.08%  11,566,020  5,8600.10%
    Brokered deposits  3,744  743.99%  83,427  310.08%
    Total interest-bearing deposits  20,369,461  8,3810.08%  11,649,447  5,8910.10%
             
    Federal funds purchased and interbank borrowings  1,168  20.25%  1,303  —0.00%
    Securities sold under agreements to repurchase  458,459  1810.08%  402,478  2150.11%
    Federal Home Loan Bank advances  2,822,984  12,8880.92%  1,915,661  10,6271.12%
    Other borrowings  522,599  8,1543.12%  266,152  4,9153.69%
    Total borrowed funds  3,805,210  21,2251.12%  2,585,594  15,7571.23%
             
    Total interest-bearing liabilities  24,174,671  29,6060.25%  14,235,041  21,6480.31%
             
    Noninterest-Bearing Liabilities and Shareholders' Equity        
    Demand deposits $11,014,359    $5,949,412   
    Other liabilities  562,882     325,781   
    Shareholders' equity  4,676,676     2,981,398   
             
    Total liabilities and shareholders' equity $40,428,588    $23,491,632   
             
    Net interest rate spread   3.04%   2.82%
             
    Net interest margin (FTE)   3.13%   2.93%
             
    FTE adjustment  $8,086   $6,970 
             
    (1) Interest income is reflected on a FTE.
    (2) Includes loans held for sale.        
     


           
    Asset Quality (EOP) (unaudited)
    ($ in thousands)
           
     Three Months Ended Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2022  2022
    		  2021   2022  2021 
    Allowance for credit losses on loans:      
    Beginning allowance for credit losses$280,507 $107,341 $114,037  $107,341 $131,388 
    Allowance established for acquired PCD loans —  78,531  —   78,531  — 
           
    Provision for credit losses(1) 9,254  97,409  (4,929)  106,663  (22,285)
           
    Gross charge-offs (4,096) (4,664) (980)  (8,760) (2,550)
    Gross recoveries 2,338  1,890  1,316   4,228  2,891 
    Net (charge-offs) recoveries (1,758) (2,774) 336   (4,532) 341 
           
    Ending allowance for credit losses$288,003 $280,507 $109,444  $288,003 $109,444 
           
    Net charge-offs (recoveries) / average loans(2) 0.02% 0.05%(0.01)        %  0.04% 0.00%
           
    Average loans outstanding(2)$28,847,003 $20,725,313 $13,984,295  $24,808,593 $13,900,371 
           
    EOP loans outstanding(2) 29,553,648  28,336,244  13,784,677   29,553,648  13,784,677 
           
    Allowance for credit losses / EOP loans(2) 0.97% 0.99% 0.79%  0.97% 0.79%
           
    Underperforming Assets:      
    Loans 90 Days and over (still accruing)$882 $1,646 $9  $882 $9 
           
    Non-performing loans:      
    Nonaccrual loans(3) 214,924  227,925  128,268   214,924  128,268 
    TDRs still accruing 15,665  20,999  14,222   15,665  14,222 
    Total non-performing loans 230,589  248,924  142,490   230,589  142,490 
           
    Foreclosed assets 12,618  19,713  520   12,618  520 
           
    Total underperforming assets$244,089 $270,283 $143,019  $244,089 $143,019 
           
    Classified and Criticized Assets:      
    Nonaccrual loans(3) 214,924  227,925  128,268   214,924  128,268 
    Substandard accruing loans 490,566  518,341  160,995   490,566  160,995 
    Loans 90 days and over (still accruing) 882  1,646  9   882  9 
    Total classified loans - "problem loans"$706,372 $747,912 $289,272  $706,372 $289,272 
           
    Other classified assets 25,004  24,676  4,305   25,004  4,305 
    Criticized loans - "special mention loans" 452,835  507,689  228,264   452,835  228,264 
           
    Total classified and criticized assets$1,184,211 $1,280,277 $521,841  $1,184,211 $521,841 
           
    Non-performing loans / EOP loans(2) 0.78% 0.88% 1.03%  0.78% 1.03%
           
    Allowance to non-performing loans 125% 113% 77%  125% 77%
           
    Under-performing assets / EOP loans(2) 0.83% 0.95% 1.04%  0.83% 1.04%
           
    EOP total assets$45,748,355 $45,834,648 $23,675,666  $45,748,355 $23,675,666 
           
    Under-performing assets / EOP assets 0.53% 0.59% 0.60%  0.53% 0.60%
           
    EOP - End of period actual balances      
    (1) Excludes $0.2 million of expense to establish an allowance on held-to-maturity securities during the first quarter of 2022.
    (2) Excludes loans held for sale.    
    (3) Includes non-accruing TDRs totaling $24.3 million at June 30, 2022, $23.8 million at March 31, 2022, and $13.6 million at June 30, 2021.
    TDR - Troubled debt restructuring
           


           
    Non-GAAP Measures (unaudited)
    ($ in thousands)
           
     Three Months Ended Six Months Ended
     June 30,March 31,June 30, June 30,June 30,
      2022  2022  2021   2022  2021 
    Actual End of Period Balances      
    GAAP shareholders' common equity$4,835,064 $4,988,395 $2,991,118  $4,835,064 $2,991,118 
           
    Deduct:      
    Goodwill 1,991,534  1,997,157  1,036,994   1,991,534  1,036,994 
    Intangibles 140,281  147,452  40,030   140,281  40,030 
      2,131,815  2,144,609  1,077,024   2,131,815  1,077,024 
           
    Tangible shareholders' common equity $2,703,249 $2,843,786 $1,914,094  $2,703,249 $1,914,094 
           
    Average Balances      
    GAAP shareholders' common equity$4,886,181 $4,101,206 $2,992,693  $4,495,862 $2,981,398 
           
    Deduct:      
    Goodwill 1,992,860  1,476,726  1,036,994   1,736,227  1,036,994 
    Intangibles 144,104  73,898  41,410   109,195  42,901 
      2,136,964  1,550,624  1,078,404   1,845,422  1,079,895 
           
    Average tangible shareholders' common equity $2,749,217 $2,550,582 $1,914,289  $2,650,440 $1,901,503 
           
    Actual End of Period Balances      
    GAAP assets$45,748,355 $45,834,648 $23,675,666  $45,748,355 $23,675,666 
           
    Add:      
    Trust overdrafts —  1  24   —  24 
           
    Deduct:      
    Goodwill 1,991,534  1,997,157  1,036,994   1,991,534  1,036,994 
    Intangibles 140,281  147,452  40,030   140,281  40,030 
      2,131,815  2,144,609  1,077,024   2,131,815  1,077,024 
           
    Tangible assets $43,616,540 $43,690,040 $22,598,666  $43,616,540 $22,598,666 
           
    Risk-weighted assets (2)$33,662,205 $32,341,335 $15,971,711  $33,662,205 $15,971,711 
           
    GAAP net income (loss) applicable to common shares$110,952 $(29,603)$62,786  $81,349 $149,604 
           
    Add:      
    Amortization of intangibles (net of tax) 5,378  3,934  2,182   9,312  4,488 
           
    shares$116,330 $(25,669)$64,968  $90,661 $154,092 
           
    Tangible Ratios       
    Return on average tangible common equity 16.93%(4.03)        % 13.58%  6.84% 16.21%
    Tangible common equity to tangible assets 6.20% 6.51% 8.47%  6.20% 8.47%
    Tangible common equity to risk-weighted assets (2) 8.03% 8.79% 11.98%  8.03% 11.98%
    Tangible common book value (1) 9.23  9.71  11.55   9.23  11.55 
           
    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)$3,333,380 $3,246,482 $1,908,053  $3,333,380 $1,908,053 
           
    Risk-weighted assets (2) 33,662,205  32,341,335  15,971,711   33,662,205  15,971,711 
           
    Tier 1 common equity to risk-weighted assets (2) 9.90% 10.04% 11.95%  9.90% 11.95%
           
    (2) June 30, 2022 figures are preliminary.      
           

     


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