Old National reports 3rd quarter earnings of $77.9 million, or $0.47 per share

EVANSVILLE, Ind., Oct. 19, 2020 (GLOBE NEWSWIRE) --

Old National Bancorp (NASDAQ: ONB) reports 3Q20 net income of $77.9 million, diluted EPS of $0.47.
Adjusted¹ net income of $76.4 million, or $0.46 per diluted share.

CEO COMMENTARY:

“Our excellent 3rd quarter results are not only a testament to our ONB Way strategy and the overall strength of our organization, they are an indicator of the strength and resiliency of the clients and communities we serve,” said Chairman and CEO Jim Ryan. “More specifically, our quarterly success was driven by very strong commercial production throughout the franchise and outstanding credit metrics that actually resulted in net recoveries.”

THIRD QUARTER HIGHLIGHTS²:

Net income	• Net income of $77.9 million
	• Earnings per diluted share of $0.47
Net interest income/NIM	• Net interest income on a fully taxable equivalent basis of $149.0 million compared to $149.0 million
	• Net interest margin on a fully taxable equivalent basis of 3.03% compared to 3.14%
Operating Performance	• Pre-provision net revenue1 (“PPNR”) of $93.5 million
	• Adjusted PPNR1 of $94.6 million, up 3.4% over third quarter of 2019
	• Noninterest expense of $120.2 million
	• Adjusted noninterest expense1 of $114.2 million
	• Efficiency ratio1 of 55.93%
	• Adjusted efficiency ratio1 of 53.06%, a 73 basis point improvement
Loans and Credit Quality	• End-of-period total loans3 of $13,977.6 million compared to $13,738.2 million
	◦ Commercial real estate loans grew $298.2 million
	• Third-quarter total commercial production, excluding PPP loans, of $977.8 million
	• Provision for credit losses of $0.0 million
	• September 30 pipeline of $2.9 billion
	• Net recoveries of $3.0 million compared to net charge-offs of $0.5 million
	• Non-performing loans of 1.15% of total loans compared to 1.04%
Return Profile & Capital	• Return on average common equity of 10.79%
	• Return on average tangible common equity1 of 17.88%
	• Adjusted return on average tangible common equity1 of 17.54%
	• No shares of common stock were repurchased during the current quarter
Notable Items	• $2.9 million in ONB Way charges
	• $3.1 million in tax credit amortization

¹ Non-GAAP financial measure that Management believes is useful in evaluating the financial results of the Company – please refer to the Non GAAP reconciliations contained in this release    ² Comparisons are on a linked-quarter basis, unless otherwise noted    ³ Includes loans held for sale

RESULTS OF OPERATIONS

Old National Bancorp reported third quarter 2020 net income of $77.9 million, or $0.47 per diluted share.

Included in the third quarter were pre-tax charges of $2.9 million for the ONB Way. Excluding these charges from the current quarter and netting out debt securities gains, adjusted net income was $76.4 million, or $0.46 per diluted share.

LOANS
Strong commercial production drove total loan balances higher.

• Period-end total loans were $13,977.6 million at September 30, 2020, an increase of $239.4 million when compared to the $13,738.2 million at June 30, 2020.
• Commercial real estate loans increased $298.2 million to $5,701.5 million, or 22.1% annualized growth.
• Commercial and industrial loans decreased $42.9 million to $4,264.6 million.
• Consumer loans decreased $14.4 million to $1,661.1 million and residential mortgage loans increased $36.0 million to $2,265.3 million.
• Total commercial loan production in the third quarter, excluding $20 million in PPP loan production, was $977.8 million; period-end pipeline totaled $2.9 billion.
• Average total loans in the third quarter were $13,849.0 million, an increase of $398.9 million from the second quarter of 2020.

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

• Period-end total deposits were $16,506.5 million at September 30, 2020, an increase of $187.1 million when compared to the $16,319.4 million at June 30, 2020.
• Noninterest-bearing deposits increased to $5,463.0 million at September 30, 2020 from $5,217.7 million at June 30, 2020.
• On average, total deposits in the third quarter were $16,436.8 million, compared to $15,652.8 million in the second quarter of 2020.
  

NET INTEREST INCOME AND MARGIN
Net interest income unchanged while net interest margin is lower as decline in asset yields outpaces decline in deposit and funding costs.

• Net interest income remained unchanged at $145.6 million in the third quarter of 2020 when compared to the second quarter of 2020.
• The net interest margin on a fully taxable equivalent basis decreased 11 basis points to 3.03% compared to 3.14% in the second quarter of 2020.
• PPP interest and net fees combined to have a positive impact of $8.8 million to net interest income in the third quarter while having a net neutral impact to the interest margin.
• Accretion income was $5.4 million, or 11 basis points of net interest margin, in the third quarter of 2020 compared to $5.8 million, or 12 basis points of net interest margin, in the second quarter of 2020. In the third quarter of 2020, accretion income was 2.6% of adjusted total revenue.
• Interest collected on nonaccrual loans was $1.0 million, or 2 basis points of net interest margin, in the third quarter of 2020 compared to $0.6 million, or 1 basis point of net interest margin, in the second quarter of 2020.
• The cost of total deposits declined 4 basis points to 0.13% in the third quarter of 2020 while the cost of total interest-bearing deposits decreased 6 basis points to 0.19%.

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

• Old National recorded no provision for credit losses in the third quarter of 2020, compared to $22.5 million in the second quarter.
• Net recoveries in the third quarter were $3.0 million, compared to net charge-offs of $0.5 million in the second quarter.

• 30-89 day delinquencies were 0.20% at the end of the third quarter.
• Non-performing loans increased as a percentage of total loans to 1.15%.
• Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. As of September 30, 2020, the remaining discount on these acquired loans was $56.0 million.
• The allowance for credit losses was $131.4 million, or 0.95% of total loans at September 30, 2020.

NONINTEREST INCOME
Noninterest income increased due to a rebound in deposit service charges and continued strength in mortgage banking revenue.

• Total noninterest income for the third quarter of 2020 was $64.7 million, an increase of $6.3 million from the second quarter of 2020.
• Service charges on deposit accounts increased $1.1 million and mortgage banking revenue increased $0.8 million when compared to the second quarter of 2020.
• Gains on sales of debt securities increased $4.4 million when compared to the second quarter of 2020.
  

NONINTEREST EXPENSE
Third quarter results demonstrate benefit of The ONB Way, helping drive positive operating leverage¹.

• Noninterest expense for the third quarter of 2020 was $120.2 million and included $2.9 million in ONB Way charges and $3.1 million in tax credit amortization.
• Excluding these items, adjusted noninterest expense for the third quarter was $114.2 million, compared to the $115.0 million in adjusted noninterest expense in the second quarter of 2020.
• The third quarter efficiency ratio was 55.93%, while the adjusted efficiency ratio was 53.06%.
• Adjusted operating leverage¹ was +298 basis points for the third quarter of 2020 as compared to the third quarter of 2019.

INCOME TAXES

• On a fully taxable-equivalent basis, income tax expense in the third quarter was $15.6 million, resulting in a 16.6% FTE tax rate.
• Income tax expense included $3.7 million in tax credit benefit.

CAPITAL AND LIQUIDITY
Capital ratios remain strong.

• At the end of the third quarter, total risk-based capital was 13.10% and regulatory tier 1 capital was 12.10%.
• Tangible common equity to tangible assets was 8.58% at the end of the third quarter compared to 8.45% in the second quarter of 2020.
• The Company did not repurchase any shares of common stock during the third quarter.
• A low loan to deposit ratio of 84.7%, combined with existing funding sources plus available unencumbered, high-quality collateral, provides strong liquidity.

NON-GAAP RECONCILIATIONS

($ in millions, except EPS, shares in 000s)	3Q20				Adjustments4				Adjusted 3Q20
Total Revenues (FTE)	$	213.7			$	(4.9	)		$	208.8
Less: Provision for Credit Losses	—				—				—
Less: Noninterest Expenses	(120.2		)		2.9				(117.3		)
Income before Income Taxes (FTE)	$	93.5			$	(2.0	)		$	91.5
Income Taxes	(15.6		)		0.5				(15.1		)
Net Income	$	77.9			$	(1.5	)		$	76.4
Average Shares Outstanding	165,419				—				165,419
Earnings Per Share - Diluted	$	0.47			$	(0.01	)		$	0.46

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

($ in millions)	3Q20				2Q20
Net Interest Income	$	145.6			$	145.6
Add: FTE Adjustment	3.4				3.4
Net Interest Income (FTE)	$	149.0			$	149.0
Average Earning Assets	$	19,654.3			$	19,007.7
Net Interest Margin (FTE)	3.03		%		3.14		%
($ in millions)	3Q20				3Q19
Net Interest Income	$	145.6			$	153.1
Add: FTE Adjustment	3.4				3.2
Net Interest Income (FTE)	$	149.0			$	156.3
Add: Total Noninterest Income	64.7				53.9
Less: Noninterest Expense	120.2				122.6
Pre-Provision Net Revenue	$	93.5			$	87.6
Less: Debt Securities Gains	(4.9		)		(0.4		)
Add: ONB Way Charges	2.9				1.8
Add: Merger and Integration Charges	—				1.3
Add: Amortization of Tax Credit Investments	3.1				1.2
Adjusted Pre-Provision Net Revenue	$	94.6			$	91.5

($ in millions)	3Q20				2Q20				3Q19
Noninterest Expense	$	120.2			$	120.2			$	122.6
Less: ONB Way Charges	(2.9		)		(4.9		)		(1.8		)
Less: Merger and Integration Charges	—				—				(1.3		)
Noninterest Expense less Charges	$	117.3			$	115.3			$	119.5
Less: Amortization of Tax Credit Investments	(3.1		)		(0.3		)		(1.2		)
Adjusted Noninterest Expense	$	114.2			$	115.0			$	118.3
Less: Intangible Amortization	(3.4		)		(3.6		)		(4.2		)
Adjusted Noninterest Expense Less Intangible Amortization	$	110.8			$	111.4			$	114.1
Net Interest Income	$	145.6			$	145.6			$	153.1
FTE Adjustment	3.4				3.4				3.2
Net Interest Income (FTE)	$	149.0			$	149.0			$	156.3
Total Noninterest Income	64.7				58.5				53.9
Total Revenue (FTE)	$	213.7			$	207.5			$	210.2
Less: Debt Securities Gains/Losses	(4.9		)		(0.5		)		(0.4		)
Add: Loss on Branch Actions	—				0.1				—
Adjusted Total Revenue (FTE)	$	208.8			$	207.1			$	209.8
Efficiency Ratio	55.93		%		56.29		%		56.44		%
Adjusted Efficiency Ratio	53.06		%		53.79		%		54.40		%
Operating Leverage5 (basis points)	357
Adjusted Operating Leverage6 (basis points)	298

⁵ Year-over-year basis point change in noninterest expenses plus change in total revenue
⁶ Year-over-year basis point change in adjusted noninterest expense plus change in adjusted total revenue

($ in millions)	3Q20				2Q20
Net Income	$	77.9			$	51.7
Add: Intangible Amortization (net of tax7)	2.6				2.7
Tangible Net Income	$	80.5			$	54.4
Less: Securities Gains/Losses (net of tax7)	(3.7		)		(0.4		)
Add: Loss on Branch Actions (net of tax7)	—				0.1
Add: ONB Way Charges (net of tax7)	2.2				3.7
Adjusted Tangible Net Income	$	79.0			$	57.8
Average Total Shareholders’ Equity	2,889.5				2,845.4
Less: Average Goodwill	(1,037.0		)		(1,037.0		)
Less: Average Intangibles	(50.9		)		(54.4		)
Average Tangible Shareholders’ Equity	$	1,801.6			$	1,754.0
Return on Average Tangible Common Equity	17.88		%		12.41		%
Adjusted Return on Average Tangible Common Equity	17.54		%		13.18		%

⁷Tax-effect calculations use the current statutory FTE tax rates (federal + state)

CONFERENCE CALL AND WEBCAST
Old National will host a conference call and live webcast at 9:00 a.m. Central Time on Monday, October 19, 2020, to review third-quarter 2020 financial results. The live audio web cast of the call, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at oldnational.com and will be archived there for 12 months. A replay of the call will also be available from Noon Central Time on October 19 through November 2. To access the replay, dial 1-855-859-2056, Conference ID Code 1086029.

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 $22.5 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 nine consecutive years.  Since its founding in Evansville in 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships and keeping our clients at the center of all we do. This is an approach to business that we call The ONB Way. Today, Old National’s footprint includes Indiana, Kentucky, Michigan, Minnesota and Wisconsin. In addition to providing extensive services in retail and commercial banking, Old National offers comprehensive wealth management, investment and capital market services. For more information and financial data, please visit Investor Relations at oldnational.com.

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

FORWARD-LOOKING STATEMENT
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements include, but are not limited to, descriptions of Old National Bancorp’s (“Old National’s”) financial condition, results of operations, asset and credit quality trends and profitability.  Forward-looking statements can be identified by the use of the words “anticipate,” “believe,” “expect,” “intend,” “could” and “should,” and other words of similar meaning.  These forward-looking statements express management’s current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties, such as statements about the potential impacts of the COVID-19 pandemic. There are a number of factors that could cause actual results to differ materially from those in such statements.  Factors that might cause such a difference include, but are not limited to: the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on our operations and personnel, and on commercial activity and demand across our and our customers’ businesses; market, economic, operational, liquidity, credit and interest rate risks associated with Old National’s business(including developments and volatility arising from the COVID-19 pandemic); competition; government legislation and policies (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its related regulations); ability of Old National to execute its business plan, including the anticipated impact from the ONB Way strategic plan that may differ from current estimates; changes in the economy which could materially impact credit quality trends and the ability to generate loans and gather deposits; failure or circumvention of our internal controls; failure or disruption of our information systems; significant changes in accounting, tax or regulatory practices or requirements, including the impact of the CECL standard as well as changes to address the impact of COVID-19; new legal obligations or liabilities or unfavorable resolutions of litigations; disruptive technologies in payment systems and other services traditionally provided by banks; computer hacking and other cybersecurity threats; other matters discussed in this press release; and other factors identified in our Annual Report on Form 10-K and other periodic filings with the SEC.  These forward-looking statements are made only as of the date of this press release, and Old National does not undertake an obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this press release.

Financial Highlights (unaudited)
($ and shares in thousands, except per share data)
	Three Months Ended											Nine Months Ended
	September 30,				June 30,			September 30,				September 30,			September 30,
	2020				2020			2019				2020			2019
Income Statement
Net interest income	$	145,573			$	145,671		$	153,096			$	435,015		$	455,374
Tax equivalent adjustment (1)	3,379				3,367			3,171				10,069			9,659
Net interest income - tax equivalent basis	148,952				149,038			156,267				445,084			465,033
Provision for loan losses (4)	—				22,545			1,437				39,495			3,483
Noninterest income	64,759				58,461			53,961				180,722			151,591
Noninterest expense	120,234				120,121			122,585				399,099			373,744
Net income	77,944				51,705			69,781				152,289			189,021
Per Common Share Data
Weighted average diluted shares	165,419				165,302			171,551				166,370			173,527
Net income (diluted)	$	0.47			$	0.32		$	0.41			$	0.92		$	1.09
Cash dividends	0.14				0.14			0.13				0.42			0.39
Common dividend payout ratio (2)	30		%		44		%	32		%		46		%	35		%
Book value	$	17.67			$	17.35		$	16.66			$	17.67		$	16.66
Stock price	12.56				13.76			17.20				12.56			17.20
Tangible common book value (3)	11.10				10.75			10.18				11.10			10.18
Performance Ratios
Return on average assets	1.40		%		0.96		%	1.39		%		0.95		%	1.26		%
Return on average common equity	10.79		%		7.27		%	9.91		%		7.11		%	9.12		%
Return on tangible common equity (3)	17.56		%		12.27		%	16.85		%		11.66		%	15.31		%
Return on average tangible common equity (3)	17.88		%		12.41		%	17.01		%		12.12		%	16.00		%
Net interest margin (FTE)	3.03		%		3.14		%	3.57		%		3.15		%	3.58		%
Efficiency ratio (5)	55.93		%		56.29		%	56.44		%		63.11		%	58.65		%
Net charge-offs (recoveries) to average loans	(0.09		)%		0.02		%	0.03		%		0.04		%	0.02		%
Allowance for loan losses to ending loans (4)	0.95		%		0.94		%	0.47		%		0.95		%	0.47		%
Non-performing loans to ending loans	1.15		%		1.04		%	1.31		%		1.15		%	1.31		%
Balance Sheet (EOP)
Total loans	$	13,892,509			$	13,615,701		$	12,017,648			$	13,892,509		$	12,017,648
Total assets	22,460,476				22,102,188			20,438,788				22,460,476			20,438,788
Total deposits	16,506,494				16,319,446			14,448,352				16,506,494			14,448,352
Total borrowed funds	2,725,731				2,641,436			2,831,863				2,725,731			2,831,863
Total shareholders' equity	2,921,149				2,864,255			2,832,530				2,921,149			2,832,530
Capital Ratios (3)
Risk-based capital ratios (EOP):
Tier 1 common equity	12.10		%		11.70		%	12.03		%		12.10		%	12.03		%
Tier 1	12.10		%		11.70		%	12.03		%		12.10		%	12.03		%
Total	13.10		%		12.68		%	12.97		%		13.10		%	12.97		%
Leverage ratio (to average assets)	8.15		%		8.12		%	8.79		%		8.15		%	8.79		%
Total equity to assets (averages)	12.97		%		13.16		%	13.98		%		13.33		%	13.84		%
Tangible common equity to tangible assets	8.58		%		8.45		%	8.95		%		8.58		%	8.95		%
Nonfinancial Data
Full-time equivalent employees	2,484				2,530			2,778				2,484			2,778
Banking centers	162				162			192				162			192
(1) Calculated using the federal statutory tax rate in effect of 21% for all periods.
(2) Cash dividends per share divided by net income per share (basic).
(3) Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures.
(4) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.
(5) 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										N/A - Not applicable

Income Statement (unaudited)
($ and shares in thousands, except per share data)
	Three Months Ended													Nine Months Ended
	September 30,				June 30,				September 30,					September 30,					September 30,
	2020				2020				2019					2020					2019
Interest income	$	160,086			$	161,974			$	185,853				$		490,059			$	553,834
Less: interest expense	14,513				16,303				32,757					55,044					98,460
Net interest income	145,573				145,671				153,096					435,015					455,374
Provision for loan losses (1)	—				22,545				1,437					39,495					3,483
Net interest income after provision for loan losses	145,573				123,126				151,659					395,520					451,891
Wealth management fees	9,239				9,424				9,160					27,547					27,604
Service charges on deposit accounts	8,698				7,582				11,860					26,357					34,201
Debit card and ATM fees	5,276				4,832				5,370					15,106					16,292
Mortgage banking revenue	18,110				17,313				8,850					46,542					20,996
Investment product fees	5,351				4,845				5,244					16,070					16,106
Capital markets income	5,428				6,179				4,560					15,935					10,227
Company-owned life insurance	2,830				2,968				2,703					8,878					8,602
Other income	4,906				4,807				5,790					13,681					16,077
Gains (losses) on sales of debt securities	4,921				511				424					10,606					1,486
Total noninterest income	64,759				58,461				53,961					180,722					151,591
Salaries and employee benefits	69,860				66,556				71,729					215,589					214,478
Occupancy	13,930				13,245				11,934					42,308					41,071
Equipment	3,754				3,853				3,954					12,912					12,945
Marketing	2,140				2,395				4,105					7,632					12,267
Data processing	9,628				9,629				8,961					28,724					28,509
Communication	2,241				2,296				2,349					7,335					8,252
Professional fees	3,083				3,545				5,037					10,921					12,868
FDIC assessment	1,319				2,014				960					4,942					4,501
Amortization of intangibles	3,459				3,612				4,168					10,847					12,965
Amortization of tax credit investments	3,115				287				1,211					8,917					2,039
Other expense	7,705				12,689				8,177					48,972					23,849
Total noninterest expense	120,234				120,121				122,585					399,099					373,744
Income before income taxes	90,098				61,466				83,035					177,143					229,738
Income tax expense	12,154				9,761				13,254					24,854					40,717
Net income	$	77,944			$	51,705			$	69,781				$		152,289			$	189,021
Diluted Earnings Per Share
Net income	$	0.47			$	0.32			$	0.41				$		0.92			$	1.09
Average Common Shares Outstanding
Basic	164,773				164,732				170,746					165,748					172,807
Diluted	165,419				165,302				171,551					166,370					173,527
Common shares outstanding at end of period	165,333				165,093				170,031					165,333					170,031
(1) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.

Balance Sheet (unaudited)
($ in thousands)
	September 30,					June 30,					September 30,
	2020					2020					2019
Assets
Federal Reserve Bank account	$	87,682				$	54,807				$	80,018
Money market investments	13,437					14,633					19,410
Investments:
Treasury and government-sponsored agencies	501,771					489,232					524,919
Mortgage-backed securities	3,382,280					3,304,054					3,248,367
States and political subdivisions	1,426,495					1,355,959					1,231,248
Other securities	462,958					512,375					490,389
Total investments	5,773,504					5,661,620					5,494,923
Loans held for sale, at fair value	85,091					122,507					58,285
Loans:
Commercial	4,264,568					4,307,505					2,950,559
Commercial and agriculture real estate	5,701,493					5,403,316					5,112,123
Consumer:
Home equity	549,115					547,286					555,905
Other consumer loans	1,112,034					1,128,296					1,162,438
Subtotal of commercial and consumer loans	11,627,210					11,386,403					9,781,025
Residential real estate	2,265,299					2,229,298					2,236,623
Total loans	13,892,509					13,615,701					12,017,648
Total earning assets	19,852,223					19,469,268					17,670,284
Allowance for loan losses (1)	(131,388		)			(128,394		)			(56,910		)
Non-earning Assets:
Cash and due from banks	229,631					241,054					320,822
Premises and equipment, net	463,253					462,796					492,065
Operating lease right-of-use assets	77,482					80,400					102,976
Goodwill and other intangible assets	1,086,252					1,089,711					1,101,045
Company-owned life insurance	455,975					453,116					447,110
Other assets	427,048					434,237					361,396
Total non-earning assets	2,739,641					2,761,314					2,825,414
Total assets	$	22,460,476				$	22,102,188				$	20,438,788
Liabilities and Equity
Noninterest-bearing demand deposits	$	5,463,007				$	5,217,678				$	3,996,264
Interest-bearing:
Checking and NOW accounts	4,588,432					4,567,046					3,936,318
Savings accounts	3,287,302					3,166,680					2,863,718
Money market accounts	1,904,404					1,895,809					1,821,989
Other time deposits	1,206,658					1,321,499					1,704,238
Total core deposits	16,449,803					16,168,712					14,322,527
Brokered CD's	56,691					150,734					125,825
Total deposits	16,506,494					16,319,446					14,448,352
Federal funds purchased and interbank borrowings	1,259					801					240,589
Securities sold under agreements to repurchase	399,141					367,744					337,551
Federal Home Loan Bank advances	2,087,648					2,035,014					2,001,960
Other borrowings	237,683					237,877					251,763
Total borrowed funds	2,725,731					2,641,436					2,831,863
Operating lease liabilities	88,552					91,845					107,272
Accrued expenses and other liabilities	218,550					185,206					218,771
Total liabilities	19,539,327					19,237,933					17,606,258
Common stock, surplus, and retained earnings	2,771,865					2,715,212					2,774,016
Accumulated other comprehensive income (loss), net of tax	149,284					149,043					58,514
Total shareholders' equity	2,921,149					2,864,255					2,832,530
Total liabilities and shareholders' equity	$	22,460,476				$	22,102,188				$	20,438,788
(1) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.

Average Balance Sheet and Interest Rates (unaudited)
($ in thousands)
		Three Months Ended										Three Months Ended										Three Months Ended
		September 30, 2020										June 30, 2020										September 30, 2019
		Average				Income (1)/			Yield/			Average				Income (1)/			Yield/			Average				Income (1)/			Yield/
Earning Assets:		Balance				Expense			Rate			Balance				Expense			Rate			Balance				Expense			Rate
Money market and other interest-earning investments		$	137,880			$	59		0.17	%		$	85,680			$	34		0.16	%		$	63,142			$	528		3.32	%
Investments:
Treasury and government-sponsored agencies		454,005				2,457			2.17	%		501,838				3,033			2.42	%		682,940				4,341			2.54	%
Mortgage-backed securities		3,342,284				17,478			2.09	%		3,179,165				17,930			2.26	%		3,019,322				18,589			2.46	%
States and political subdivisions		1,383,765				11,860			3.43	%		1,293,756				11,757			3.63	%		1,172,017				10,896			3.72	%
Other securities		487,405				2,922			2.40	%		497,204				3,224			2.59	%		499,308				4,049			3.24	%
Total investments		5,667,459				34,717			2.45	%		5,471,963				35,944			2.63	%		5,373,587				37,875			2.82	%
Loans: (2)
Commercial		4,274,894				33,223			3.04	%		4,049,403				31,729			3.10	%		3,018,638				35,428			4.59	%
Commercial and agriculture real estate		5,546,486				55,891			3.94	%		5,340,622				58,007			4.30	%		5,037,909				71,604			5.56	%
Consumer:
Home equity		551,380				4,336			3.13	%		554,701				4,213			3.06	%		557,607				7,102			5.05	%
Other consumer loans		1,120,681				11,635			4.13	%		1,135,943				11,530			4.08	%		1,175,900				12,226			4.13	%
Subtotal commercial and consumer loans		11,493,441				105,085			3.64	%		11,080,669				105,479			3.83	%		9,790,054				126,360			5.12	%
Residential real estate loans		2,355,512				23,604			4.01	%		2,369,407				23,884			4.03	%		2,283,704				24,261			4.25	%
Total loans		13,848,953				128,689			3.66	%		13,450,076				129,363			3.82	%		12,073,758				150,621			4.91	%
Total earning assets		$	19,654,292			$	163,465		3.29	%		$	19,007,719			$	165,341		3.46	%		$	17,510,487			$	189,024		4.27	%
Less: Allowance for loan losses (3)		(132,447		)								(107,619		)								(56,894		)
Non-earning Assets:
Cash and due from banks		$	346,343									$	332,745									$	264,145
Other assets		2,405,517										2,384,934										2,429,466
Total assets		$	22,273,705									$	21,617,779									$	20,147,204
Interest-Bearing Liabilities:
Checking and NOW accounts		$	4,607,427			$	886		0.08	%		$	4,431,074			$	1,075		0.10	%		$	3,895,654			$	4,448		0.45	%
Savings accounts		3,232,375				634			0.08	%		3,060,012				736			0.10	%		2,855,401				2,128			0.30	%
Money market accounts		1,902,407				724			0.15	%		1,844,488				910			0.20	%		1,822,698				4,017			0.87	%
Other time deposits		1,253,058				2,852			0.91	%		1,378,115				3,786			1.10	%		1,733,492				7,016			1.61	%
Total interest-bearing deposits		10,995,267				5,096			0.18	%		10,713,689				6,507			0.24	%		10,307,245				17,609			0.68	%
Brokered CD's		150,545				201			0.53	%		68,149				291			1.72	%		181,425				1,098			2.40	%
Total interest-bearing deposits and CD's		11,145,812				5,297			0.19	%		10,781,838				6,798			0.25	%		10,488,670				18,707			0.71	%
Federal funds purchased and interbank borrowings		18,347				12			0.25	%		143,811				44			0.12	%		254,971				1,484			2.31	%
Securities sold under agreements to repurchase		385,149				160			0.16	%		350,545				185			0.21	%		340,158				715			0.83	%
Federal Home Loan Bank advances		2,021,468				6,709			1.32	%		2,144,497				6,844			1.28	%		1,889,407				9,123			1.92	%
Other borrowings		237,811				2,335			3.93	%		251,738				2,432			3.87	%		251,817				2,728			4.33	%
Total borrowed funds		2,662,775				9,216			1.38	%		2,890,591				9,505			1.32	%		2,736,353				14,050			2.04	%
Total interest-bearing liabilities		13,808,587				14,513			0.42	%		13,672,429				16,303			0.48	%		13,225,023				32,757			0.98	%
Noninterest-Bearing Liabilities and Shareholders' Equity
Demand deposits		$	5,291,037									$	4,871,002									$	3,841,867
Other liabilities		284,536										228,950										262,862
Shareholders' equity		2,889,545										2,845,398										2,817,452
Total liabilities and shareholders' equity		$	22,273,705									$	21,617,779									$	20,147,204
Net interest rate spread									2.87	%									2.98	%									3.29	%
Net interest margin (FTE)									3.03	%									3.14	%									3.57	%
FTE adjustment						$	3,379									$	3,367									$	3,171
(1) Interest income is reflected on a fully taxable equivalent basis (FTE).
(2) Includes loans held for sale.
(3) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.

Average Balance Sheet and Interest Rates (unaudited)
($ in thousands)
		Nine Months Ended										Nine Months Ended
		September 30, 2020										September 30, 2019
		Average				Income (1)/			Yield/			Average				Income (1)/			Yield/
Earning Assets:		Balance				Expense			Rate			Balance				Expense			Rate
Money market and other interest-earning investments		$	94,149			$	442		0.63	%		$	60,071			$	1,140		2.54	%
Investments:
Treasury and government-sponsored agencies		513,055				9,187			2.39	%		694,628				12,544			2.41	%
Mortgage-backed securities		3,231,439				54,474			2.25	%		2,763,406				54,991			2.65	%
States and political subdivisions		1,317,136				35,026			3.55	%		1,198,962				33,584			3.73	%
Other securities		493,016				9,361			2.53	%		497,854				12,553			3.36	%
Total investments		$	5,554,646			$	108,048		2.59	%		$	5,154,850			$	113,672		2.94	%
Loans: (2)
Commercial		3,745,803				94,005			3.30	%		3,067,830				109,290			4.70	%
Commercial and agriculture real estate		5,359,254				176,337			4.32	%		5,015,973				208,894			5.49	%
Consumer:
Home equity		554,800				14,180			3.41	%		567,953				22,089			5.20	%
Other consumer loans		1,141,399				35,384			4.14	%		1,189,988				36,436			4.09	%
Subtotal commercial and consumer loans		10,801,256				319,906			3.96	%		9,841,744				376,709			5.12	%
Residential real estate loans		2,365,037				71,732			4.04	%		2,263,595				71,972			4.24	%
Total loans		13,166,293				391,638			3.93	%		12,105,339				448,681			4.91	%
Total earning assets		$	18,815,088			$	500,128		3.52	%		$	17,320,260			$	563,493		4.32	%
Less: Allowance for loan losses (3)		(107,860		)								(56,442		)
Non-earning Assets:
Cash and due from banks		$	322,318									$	242,938
Other assets		2,392,893										2,464,192
Total assets		$	21,422,439									$	19,970,948
Interest-Bearing Liabilities:
Checking and NOW accounts		$	4,381,919			$	4,820		0.15	%		$	3,829,213			$	11,786		0.41	%
Savings accounts		3,040,889				2,669			0.12	%		2,889,977				6,556			0.30	%
Money market accounts		1,843,902				4,141			0.30	%		1,772,150				10,572			0.80	%
Other time deposits		1,397,222				11,823			1.13	%		1,784,200				21,299			1.60	%
Total interest-bearing deposits		10,663,932				23,453			0.29	%		10,275,540				50,213			0.65	%
Brokered CD's		101,112				940			1.24	%		194,985				3,457			2.37	%
Total interest-bearing deposits and CD's		10,765,044				24,393			0.30	%		10,470,525				53,670			0.69	%
Federal funds purchased and interbank borrowings		184,397				1,296			0.94	%		290,699				5,219			2.40	%
Securities sold under agreements to repurchase		355,039				729			0.27	%		344,294				2,048			0.80	%
Federal Home Loan Bank advances		2,043,617				21,321			1.39	%		1,753,283				29,093			2.22	%
Other borrowings		243,255				7,305			4.00	%		251,070				8,430			4.48	%
Total borrowed funds		2,826,308				30,651			1.45	%		2,639,346				44,790			2.27	%
Total interest-bearing liabilities		13,591,352				55,044			0.54	%		13,109,871				98,460			1.00	%
Noninterest-Bearing Liabilities and Shareholders' Equity
Demand deposits		$	4,710,969									$	3,833,605
Other liabilities		263,841										263,799
Shareholders' equity		2,856,277										2,763,673
Total liabilities and shareholders' equity		$	21,422,439									$	19,970,948
Net interest rate spread									2.98	%									3.32	%
Net interest margin (FTE)									3.15	%									3.58	%
FTE adjustment						$	10,069									$	9,659
(1) Interest income is reflected on a fully taxable equivalent basis (FTE).
(2) Includes loans held for sale.
(3) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.

Asset Quality (EOP) (unaudited)
($ in thousands)
	Three Months Ended													Nine Months Ended
	September 30,				June 30,				September 30,					September 30,				September 30,
	2020				2020				2019					2020				2019
Beginning allowance for loan losses	$	128,394			$	106,380			$	56,292				$	54,619			$	55,461
Impact of adopting ASC 326 on 1/1/2020 (1)	—				—				N/A					41,347				N/A
Provision for loan losses (1)	—				22,545				1,437					39,495				3,483
Gross charge-offs	(4,169		)		(2,232		)		(2,716		)			(14,846		)		(8,485		)
Gross recoveries	7,163				1,701				1,897					10,773				6,451
Net (charge-offs) recoveries	2,994				(531		)		(819		)			(4,073		)		(2,034		)
Ending allowance for loan losses (1)	$	131,388			$	128,394			$	56,910				$	131,388			$	56,910
Net charge-offs (recoveries) / average loans (2)	(0.09		)%		0.02		%		0.03		%			0.04		%		0.02		%
Average loans outstanding (2)	$	13,827,019			$	13,435,260			$	12,061,705				$	13,150,805			$	12,097,310
EOP loans outstanding (2)	13,892,509				13,615,701				12,017,648					13,892,509				12,017,648
Allowance for loan losses / EOP loans (1)(2)	0.95		%		0.94		%		0.47		%			0.95		%		0.47		%
Underperforming Assets:
Loans 90 Days and over (still accruing)	$	90			$	779			$	703				$	90			$	703
Non-performing loans:
Nonaccrual loans (3)	137,611				125,546				138,498					137,611				138,498
TDRs still accruing	22,037				16,582				18,884					22,037				18,884
Total non-performing loans	159,648				142,128				157,382					159,648				157,382
Foreclosed properties	1,248				1,786				2,941					1,248				2,941
Total underperforming assets	$	160,986			$	144,693			$	161,026				$	160,986			$	161,026
Classified and Criticized Assets:
Nonaccrual loans (3)	137,611				125,546				138,498					137,611				138,498
Substandard accruing loans	189,524				192,433				145,987					189,524				145,987
Loans 90 days and over (still accruing)	90				779				703					90				703
Total classified loans - "problem loans"	$	327,225			$	318,758			$	285,188				$	327,225			$	285,188
Other classified assets	3,860				2,565				2,556					3,860				2,556
Criticized loans - "special mention loans"	272,859				220,300				233,519					272,859				233,519
Total classified and criticized assets	$	603,944			$	541,623			$	521,263				$	603,944			$	521,263
Non-performing loans / EOP loans (2)	1.15		%		1.04		%		1.31		%			1.15		%		1.31		%
Allowance to non-performing loans (1)(4)	82		%		90		%		36		%			82		%		36		%
Under-performing assets / EOP loans (2)	1.16		%		1.06		%		1.34		%			1.16		%		1.34		%
EOP total assets	$	22,460,476			$	22,102,188			$	20,438,788				$	22,460,476			$	20,438,788
Under-performing assets / EOP assets	0.72		%		0.65		%		0.79		%			0.72		%		0.79		%
EOP - End of period actual balances
(1) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.
(2) Excludes loans held for sale.
(3) Includes non-accruing TDRs totaling $7.7 million at September 30, 2020, $11.3 million at June 30, 2020, and $21.8 million at September 30, 2019.
(4) Includes acquired loans that were recorded at fair value in accordance with ASC 805 at the date of acquisition. As such, the credit risk was incorporated in the fair value recorded and no allowance for loan losses was recorded for 2019 quarter ends.

Non-GAAP Measures (unaudited)
($ in thousands)
	Three Months Ended													Nine Months Ended
	September 30,				June 30,				September 30,					September 30,				September 30,
		2020				2020				2019					2020				2019
Actual End of Period Balances
GAAP shareholders' equity	$		2,921,149		$		2,864,255		$		2,832,530			$		2,921,149		$		2,832,530
Deduct:
Goodwill		1,036,994				1,036,994				1,036,994					1,036,994				1,036,994
Intangibles		49,258				52,717				64,051					49,258				64,051
		1,086,252				1,089,711				1,101,045					1,086,252				1,101,045
Tangible shareholders' equity	$		1,834,897		$		1,774,544		$		1,731,485			$		1,834,897		$		1,731,485
Average Balances
GAAP shareholders' equity	$		2,889,545		$		2,845,398		$		2,817,452			$		2,856,277		$		2,763,673
Deduct:
Goodwill		1,036,994				1,036,994				1,036,306					1,036,994				1,036,274
Intangibles		50,926				54,449				66,047					54,488				70,361
		1,087,920				1,091,443				1,102,353					1,091,482				1,106,635
Average tangible shareholders' equity	$		1,801,625		$		1,753,955		$		1,715,099			$		1,764,795		$		1,657,038
Actual End of Period Balances
GAAP assets	$		22,460,476		$		22,102,188		$		20,438,788			$		22,460,476		$		20,438,788
Add:
Trust overdrafts		17				15				24					17				24
Deduct:
Goodwill		1,036,994				1,036,994				1,036,994					1,036,994				1,036,994
Intangibles		49,258				52,717				64,051					49,258				64,051
		1,086,252				1,089,711				1,101,045					1,086,252				1,101,045
Tangible assets	$		21,374,241		$		21,012,492		$		19,337,767			$		21,374,241		$		19,337,767
Risk-weighted assets	$		14,445,341		$		14,416,184		$		13,975,295			$		14,445,341		$		13,975,295
GAAP net income	$		77,944		$		51,705		$		69,781			$		152,289		$		189,021
Add:
Amortization of intangibles (net of tax)		2,595				2,708				3,145					8,152				9,780
Tangible net income	$		80,539		$		54,413		$		72,926			$		160,441		$		198,801
Tangible Ratios
Return on tangible common equity		17.56		%		12.27		%		16.85		%			11.66		%		15.31		%
Return on average tangible common equity		17.88		%		12.41		%		17.01		%			12.12		%		16.00		%
Return on tangible assets		1.51		%		1.04		%		1.51		%			1.00		%		1.37		%
Tangible common equity to tangible assets		8.58		%		8.45		%		8.95		%			8.58		%		8.95		%
Tangible common equity to risk-weighted assets		12.70		%		12.31		%		12.39		%			12.70		%		12.39		%
Tangible common book value (1)		11.10				10.75				10.18					11.10				10.18
Tangible common equity presentation includes other comprehensive income as is common in other company releases.
(1) Tangible common shareholders' equity divided by common shares issued and outstanding at period-end.
Tier 1 capital	$	1,748,150			$	1,686,714			$	1,681,457				$	1,748,150			$	1,681,457
Risk-weighted assets		14,445,341				14,416,184				13,975,295					14,445,341				13,975,295
Tier 1 common equity to risk-weighted assets		12.10		%		11.70		%		12.03		%			12.10		%		12.03		%

Media: Kathy A. Schoettlin [phone] 
Investors: Lynell J. Walton [phone]