EX-99.1 2 onb_exhibit991er4q21.htm EX-99.1 Document

Exhibit 99.1
Old National Bancorp
capturea.jpg
One Main Street
Evansville, IN 47708Media: Kathy A. Schoettlin (812) 465-7269
oldnational.comInvestors: Lynell J. Walton (812) 464-1366

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

Evansville, Ind. (January 18, 2022)
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)
4Q21
Adjustments4
Adjusted 4Q21
Total Revenues (FTE)$201.7 $(0.4)$201.3 
Less: Provision for Credit Losses1.9 — 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 Outstanding166,128 — 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
Adjustments4
Adjusted 2021
Total Revenues (FTE)$824.5 $(4.3)$820.2 
Less: Provision for Credit Losses28.8 — 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 Outstanding165,929 — 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)
4Q21
3Q21
Net Interest Income$146.8 $151.6 
Add: FTE Adjustment3.4 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)
4Q21
4Q20
Net Interest Income$146.8 $161.1 
Add: FTE Adjustment3.4 3.5 
Net Interest Income (FTE)$150.2 $164.6 
Add: Total Noninterest Income51.5 58.5 
Less: Noninterest Expense131.9 142.3 
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 Charges6.7 — 
Add: ONB Way Charges— 3.6 
Add: Amortization of Tax Credit Investments2.0 9.9 
Adjusted Pre-Provision Net Revenue$78.1 $94.0 


($ in millions)
4Q21
3Q21
4Q20
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 Adjustment3.4 3.5 3.5 13.9 13.6 
Net Interest Income (FTE)$150.2 $155.1 $164.6 $610.3 $609.7 
Total Noninterest Income51.5 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 Ratio64.27 %56.86 %62.37 %59.65 %62.91 %
Adjusted Efficiency Ratio59.95 %55.38 %56.35 %56.80 %55.59 %
        
($ in millions)
4Q21
3Q21
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’ Equity2,998.8 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 Equity12.07 %15.13 %
Adjusted Return on Average Tangible Common Equity13.04 %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; diversion 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 EndedTwelve Months Ended
December 31,September 30,December 31,December 31,December 31,
20212021202020212020
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 basis150,223 155,073 164,596 610,313 609,680 
Provision for credit losses(1,914)(4,613)(1,100)(28,812)38,395 
Noninterest income51,484 54,515 58,552 214,219 239,274 
Noninterest expense131,937 121,274 142,318 500,569 541,417 
Net income56,188 71,746 74,120 277,538 226,409 
Per Common Share Data
Weighted average diluted shares166,128 165,939 165,631 165,929 166,177 
Net income (diluted)$0.34 $0.43 $0.44 $1.67 $1.36 
Cash dividends0.14 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 price18.12 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 assets0.93 %1.20 %1.30 %1.17 %1.04 %
Return on average common equity7.49 %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 loans0.79 %0.79 %0.95 %0.79 %0.95 %
Non-performing loans to ending loans0.92 %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 assets24,453,56424,018,73322,960,62224,453,56422,960,622
Total deposits18,569,19518,196,14917,037,45318,569,19517,037,453
Total borrowed funds2,575,2402,536,3032,676,5542,575,2402,676,554
Total shareholders' equity3,012,0183,035,8922,972,6563,012,0182,972,656
Capital Ratios (3)
Risk-based capital ratios (EOP):
    Tier 1 common equity12.04 %12.08 %11.75 %12.04 %11.75 %
    Tier 112.04 %12.08 %11.75 %12.04 %11.75 %
    Total12.77 %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 assets8.30 %8.55 %8.64 %8.30 %8.64 %
Nonfinancial Data
Full-time equivalent employees 2,3742,4102,4452,3742,445
Banking centers162162162162162
(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 EndedTwelve Months Ended
December 31,September 30,December 31,December 31,December 31,
20212021202020212020
Interest income$156,928 $162,026 $173,249 $638,649 $663,308 
Less: interest expense10,147 10,454 12,170 42,249 67,214 
  Net interest income146,781 151,572 161,079 596,400 596,094 
Provision for credit losses(1,914)(4,613)(1,100)(28,812)38,395 
  Net interest income after provision for credit losses148,695 156,185 162,179 625,212 557,699 
Wealth management fees9,833 10,134 9,259 40,409 36,806 
Service charges on deposit accounts9,121 8,926 8,724 34,685 35,081 
Debit card and ATM fees5,071 4,942 5,072 20,739 20,178 
Mortgage banking revenue7,336 10,870 16,233 42,558 62,775 
Investment product fees6,258 6,475 5,544 24,639 21,614 
Capital markets income6,394 6,017 6,545 21,997 22,480 
Company-owned life insurance2,737 2,355 3,153 10,589 12,031 
Other income4,299 3,589 3,861 14,276 17,542 
Gains (losses) on sales of debt securities435 1,207 161 4,327 10,767 
  Total noninterest income51,484 54,515 58,552 214,219 239,274 
Salaries and employee benefits72,336 71,005 78,001 284,098 293,590 
Occupancy13,151 12,757 13,008 54,834 55,316 
Equipment4,473 3,756 3,778 16,704 16,690 
Marketing4,723 3,267 3,242 12,684 10,874 
Data processing 11,489 11,508 12,362 47,047 41,086 
Communication2,412 2,372 2,396 10,073 9,731 
Professional fees5,409 3,416 4,834 20,077 15,755 
FDIC assessment1,598 1,628 1,780 6,059 6,722 
Amortization of intangibles2,573 2,779 3,244 11,336 14,091 
Amortization of tax credit investments2,019 1,736 9,871 6,770 18,788 
Other expense11,754 7,050 9,802 30,887 58,774 
  Total noninterest expense131,937 121,274 142,318 500,569 541,417 
  Income before income taxes68,242 89,426 78,413 338,862 255,556 
  Income tax expense12,054 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
    Basic165,278165,258164,799165,178165,509
    Diluted166,128165,939165,631165,929166,177
Common shares outstanding at end of period165,838165,814165,367165,838165,367


Balance Sheet (unaudited)
($ in thousands)
December 31,September 30,December 31,
202120212020
Assets
  Federal Reserve Bank account$627,354 $600,581 $307,967 
  Money market investments22,002 16,294 13,537 
  Investments:
    Treasury and government-sponsored agencies1,778,357 1,803,273 852,196 
    Mortgage-backed securities3,698,831 3,354,701 3,339,098 
    States and political subdivisions1,654,986 1,609,283 1,492,162 
    Other securities432,478 442,503 458,639 
      Total investments7,564,652 7,209,760 6,142,095 
  Loans held for sale, at fair value35,458 51,306 63,250 
  Loans:
    Commercial3,391,769 3,505,183 3,956,422 
    Commercial and agriculture real estate6,380,674 6,290,632 5,946,512 
    Consumer:
      Home equity560,590 554,322 556,414 
      Other consumer loans1,013,524 1,009,909 1,078,709 
    Subtotal of commercial and consumer loans11,346,557 11,360,046 11,538,057 
    Residential real estate2,255,289 2,224,782 2,248,422 
      Total loans13,601,846 13,584,828 13,786,479 
        Total earning assets21,851,312 21,462,769 20,313,328 
Allowance for credit losses(107,341)(107,868)(131,388)
Non-earning Assets:
    Cash and due from banks172,663 180,583 268,208 
    Premises and equipment, net476,186 476,036 464,408 
    Operating lease right-of-use assets69,560 69,912 76,197 
    Goodwill and other intangible assets1,071,672 1,074,245 1,083,008 
    Company-owned life insurance463,324 461,310 456,110 
    Other assets 456,188 401,746 430,751 
      Total non-earning assets2,709,593 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 accounts5,338,022 4,956,012 4,877,046 
    Savings accounts3,798,494 3,708,807 3,395,747 
    Money market accounts2,169,160 2,097,967 1,908,118 
    Other time deposits960,413 992,837 1,103,313 
     Total core deposits18,569,195 18,196,149 16,917,896 
  Brokered deposits— — 119,557 
     Total deposits18,569,195 18,196,149 17,037,453 
  Federal funds purchased and interbank borrowings276 34 1,166 
  Securities sold under agreements to repurchase392,275 375,247 431,166 
  Federal Home Loan Bank advances1,886,019 1,890,054 1,991,435 
  Other borrowings296,670 270,968 252,787 
     Total borrowed funds2,575,240 2,536,303 2,676,554 
Operating lease liabilities76,236 76,771 86,598 
Accrued expenses and other liabilities220,875 173,618 187,361 
     Total liabilities21,441,546 20,982,841 19,987,966 
Common stock, surplus, and retained earnings3,014,393 2,979,082 2,824,885 
Accumulated other comprehensive income (loss), net of tax(2,375)56,810 147,771 
     Total shareholders' equity3,012,018 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 EndedThree Months EndedThree Months Ended
December 31, 2021September 30, 2021December 31, 2020
AverageIncome (1)/Yield/AverageIncome (1)/Yield/AverageIncome (1)/Yield/
Earning Assets:BalanceExpenseRateBalanceExpenseRateBalanceExpenseRate
  Money market and other interest-earning
      investments$726,144 $276 0.15 %$467,572 $177 0.15 %$413,782 $126 0.12 %
  Investments:
    Treasury and government-sponsored agencies1,763,544 6,390 1.45 %1,730,553 6,968 1.61 %648,314 2,937 1.81 %
    Mortgage-backed securities3,513,482 15,071 1.72 %3,313,027 14,509 1.75 %3,291,436 16,137 1.96 %
    States and political subdivisions1,625,390 12,941 3.18 %1,586,743 12,609 3.18 %1,437,890 12,008 3.34 %
    Other securities438,583 2,608 2.38 %443,393 2,638 2.38 %462,836 2,629 2.27 %
       Total investments7,340,999 37,010 2.02 %7,073,716 36,724 2.08 %5,840,476 33,711 2.31 %
  Loans: (2)
    Commercial3,420,274 31,641 3.62 %3,645,197 36,139 3.88 %4,132,831 46,468 4.40 %
    Commercial and agriculture real estate6,341,296 57,347 3.54 %6,200,144 57,820 3.65 %5,829,912 58,334 3.92 %
    Consumer:
      Home equity556,851 4,380 3.12 %549,229 4,448 3.21 %550,548 4,380 3.17 %
      Other consumer loans1,009,690 9,488 3.73 %1,018,385 9,690 3.77 %1,099,504 11,276 4.08 %
    Subtotal commercial and consumer loans11,328,111 102,856 3.60 %11,412,955 108,097 3.76 %11,612,795 120,458 4.13 %
    Residential real estate loans2,275,469 20,228 3.56 %2,274,347 20,529 3.61 %2,314,938 22,471 3.88 %
       Total loans13,603,580 123,084 3.56 %13,687,302 128,626 3.70 %13,927,733 142,929 4.04 %
      Total earning assets$21,670,723 $160,370 2.93 %$21,228,590 $165,527 3.08 %$20,181,991 $176,766 3.46 %
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 assets2,481,792 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 $458 0.04 %$4,873,914 $484 0.04 %$4,708,568 $629 0.05 %
  Savings accounts3,766,543 524 0.06 %3,678,944 500 0.05 %3,329,494 487 0.06 %
  Money market accounts2,139,702 456 0.08 %2,110,981 438 0.08 %1,932,594 445 0.09 %
  Other time deposits978,723 1,047 0.42 %998,060 1,156 0.46 %1,158,715 2,189 0.75 %
     Total interest-bearing core deposits11,978,464 2,485 0.08 %11,661,899 2,578 0.09 %11,129,371 3,750 0.13 %
  Brokered deposits— — 0.00 %— — 0.00 %37,176 26 0.28 %
     Total interest-bearing deposits11,978,464 2,485 0.08 %11,661,899 2,578 0.09 %11,166,547 3,776 0.13 %
  Federal funds purchased and interbank borrowings1,162 — 0.00 %689 — 0.00 %843 — 0.03 %
  Securities sold under agreements to repurchase381,744 92 0.10 %384,724 90 0.09 %438,272 125 0.11 %
 Federal Home Loan Bank advances1,887,821 5,122 1.08 %1,890,916 5,326 1.12 %2,089,519 5,953 1.13 %
 Other borrowings274,926 2,448 3.56 %270,597 2,460 3.64 %240,815 2,316 3.85 %
     Total borrowed funds2,545,653 7,662 1.19 %2,546,926 7,876 1.23 %2,769,449 8,394 1.21 %
     Total interest-bearing liabilities$14,524,117 $10,147 0.28 %$14,208,825 $10,454 0.29 %$13,935,996 $12,170 0.35 %
Noninterest-Bearing Liabilities and Shareholders' Equity
Demand deposits$6,435,829 $6,314,100 $5,644,017 
Other liabilities313,880 318,448 352,256 
Shareholders' equity2,998,825 3,027,935 2,932,590 
Total liabilities and shareholders' equity$24,272,651 $23,869,308 $22,864,859 
Net interest rate spread2.65 %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 EndedTwelve Months Ended
December 31, 2021December 31, 2020
AverageIncome (1)/Yield/AverageIncome (1)/Yield/
Earning Assets:BalanceExpenseRateBalanceExpenseRate
  Money market and other interest-earning
      investments$450,158 $589 0.13 %$174,494 $568 0.33 %
  Investments:
    Treasury and government-sponsored agencies1,573,855 24,209 1.54 %547,054 12,124 2.22 %
    Mortgage-backed securities3,356,950 60,479 1.80 %3,246,520 70,611 2.17 %
    States and political subdivisions1,548,939 50,115 3.24 %1,347,490 47,034 3.49 %
    Other securities443,606 10,680 2.41 %485,430 11,990 2.47 %
       Total investments$6,923,350 $145,483 2.10 %$5,626,494 $141,759 2.52 %
  Loans: (2)
    Commercial3,763,099 138,063 3.67 %3,843,089 140,473 3.66 %
    Commercial and agriculture real estate6,168,146 228,568 3.71 %5,477,562 234,670 4.28 %
    Consumer:
      Home equity547,322 17,181 3.14 %553,570 18,561 3.35 %
      Other consumer loans1,030,145 39,100 3.80 %1,131,028 46,661 4.13 %
    Subtotal commercial and consumer loans11,508,712 422,912 3.67 %11,005,249 440,365 4.00 %
    Residential real estate loans2,269,989 83,578 3.68 %2,352,444 94,202 4.00 %
       Total loans13,778,701 506,490 3.68 %13,357,693 534,567 4.00 %
      Total earning assets$21,152,209 $652,562 3.09 %$19,158,681 $676,894 3.53 %
Less: Allowance for credit losses(117,436)(115,321)
Non-earning Assets:
Cash and due from banks$256,860 $327,053 
Other assets2,492,054 2,414,602 
      Total assets$23,783,687 $21,785,015 
Interest-Bearing Liabilities:
  Checking and NOW accounts$4,945,435 $2,065 0.04 %$4,464,027 $5,449 0.12 %
  Savings accounts3,648,019 2,003 0.05 %3,113,435 3,156 0.10 %
  Money market accounts2,080,332 1,750 0.08 %1,866,196 4,585 0.25 %
  Other time deposits1,020,359 5,105 0.50 %1,337,269 14,013 1.05 %
     Total interest-bearing core deposits11,694,145 10,923 0.09 %10,780,927 27,203 0.25 %
  Brokered deposits41,371 31 0.08 %85,041 966 1.14 %
     Total interest-bearing deposits11,735,516 10,954 0.09 %10,865,968 28,169 0.26 %
  Federal funds purchased and interbank borrowings1,113 — 0.00 %138,257 1,296 0.94 %
  Securities sold under agreements to repurchase392,777 397 0.10 %375,961 854 0.23 %
 Federal Home Loan Bank advances1,902,407 21,075 1.11 %2,055,155 27,274 1.33 %
 Other borrowings269,484 9,823 3.65 %242,642 9,621 3.96 %
     Total borrowed funds2,565,781 31,295 1.22 %2,812,015 39,045 1.39 %
     Total interest-bearing liabilities14,301,297 42,249 0.30 %13,677,983 67,214 0.49 %
Noninterest-Bearing Liabilities and Shareholders' Equity
Demand deposits$6,163,937 $4,945,506 
Other liabilities320,933 286,066 
Shareholders' equity2,997,520 2,875,460 
Total liabilities and shareholders' equity$23,783,687 $21,785,015 
Net interest rate spread2.79 %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 EndedTwelve Months Ended
December 31,September 30,December 31,December 31,December 31,
20212021202020212020
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 recoveries1,932 4,252 1,807 9,075 12,580 
  Net (charge-offs) recoveries1,387 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 accruing18,378 16,420 17,749 18,378 17,749 
         Total non-performing loans125,069 128,006 165,088 125,069 165,088 
   Foreclosed properties2,030 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 loans162,572 164,192 157,276 162,572 157,276 
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 assets4,338 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 loans86 %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 assets0.52 %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 EndedTwelve Months Ended
December 31,September 30,December 31,December 31,December 31,
20212021202020212020
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 equity11.98 %15.05 %16.20 %14.74 %12.54 %
Return on average tangible common equity12.07 %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.