• Old National Bancorp Reports First Quarter 2024 Results

    المصدر: Nasdaq GlobeNewswire / 23 أبريل 2024 07:00:55   America/Chicago

    EVANSVILLE, Ind., April 23, 2024 (GLOBE NEWSWIRE) --

    Old National Bancorp (NASDAQ: ONB) reports 1Q24 net income applicable to common shares of $116.3 million, diluted EPS of $0.40; $130.8 million and $0.45 on an adjusted1 basis, respectively.

    CEO COMMENTARY:

     "Old National's positive quarterly results were highlighted by continued growth in our granular, peer-leading deposit franchise, disciplined loan growth, a year-over-year tangible book value increase, and stable credit quality," said Chairman and CEO Jim Ryan. "We accomplished these strong results while driving toward a successful close (on April 1) of our partnership with Nashville-based CapStar Bank." 


    FIRST     QUARTER HIGHLIGHTS2:

    Net Income
    • Net income applicable to common shares of $116.3 million; adjusted net income applicable to common shares1 of $130.8 million
    • Earnings per diluted common share ("EPS") of $0.40; adjusted EPS1 of $0.45
      
    Net Interest Income/NIM
    • Net interest income on a fully taxable equivalent basis1 of $362.7 million
    • Net interest margin on a fully taxable equivalent basis1 ("NIM") of 3.28%, down 11 basis points ("bps")
      
    Operating Performance
    • Pre-provision net revenue1 (“PPNR”) of $177.9 million; adjusted PPNR1 of $197.2 million
    • Noninterest expense of $262.3 million; adjusted noninterest expense1 of $243.1 million
    • Efficiency ratio1 of 58.3%; adjusted efficiency ratio1 of 53.4%
      
    Deposits and Funding
    • Period-end total deposits of $37.7 billion, up 5.0% annualized; core deposits up 3.2% annualized
    • Granular low-cost deposit franchise; total deposit costs of 201 bps and a cycle to date (2Q22-1Q24) total deposit beta of 38% (interest-bearing deposit beta of 50%)
      
    Loans and Credit Quality
    • End-of-period total loans3 of $33.6 billion, up 7.5% annualized
    • Provision for credit losses4 ("provision") of $18.9 million
    • Net charge-offs of $11.8 million, or 14 bps of average loans; 7 bps excluding purchased credit deteriorated ("PCD") loans that had an allowance at acquisition
    • 30+ day delinquencies of 0.16% and non-performing loans of 0.98% of total loans
      
    Return Profile & Capital
    • Return on average tangible common equity1 of 14.9%; adjusted return on average tangible common equity1 of 16.7%
      
    Notable Items
    • $13.3 million pre-tax distribution of excess legacy First Midwest pension plan assets5
    • $3.0 million pre-tax FDIC special assessment6
    • $2.9 million of pre-tax merger-related charges

    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 Comparisons are on a linked-quarter basis, unless otherwise noted 3 Includes loans held-for-sale 4 Includes the provision for unfunded commitments 5 Includes non-cash expense associated with the distribution of excess pension assets with the resolution of the legacy First Midwest Bancorp, Inc. plan 6 Represents the Company's estimate of its FDIC special assessment using the FDIC's updated estimate of losses to its Deposit Insurance Fund


    RESULTS OF OPERATIONS    2
    Old National Bancorp ("Old National") reported first quarter 2024 net income applicable to common shares of $116.3 million, or $0.40 per diluted common share.

    Included in first quarter results was a $13.3 million non-cash, pre-tax expense associated with the distribution of excess pension assets with the resolution of the legacy First Midwest plan, as well as pre-tax charges of $3.0 million for the FDIC special assessment and $2.9 million of merger-related charges. Excluding these transactions and realized debt securities losses from the current quarter, adjusted net income1 was $130.8 million, or $0.45 per diluted common share.

    DEPOSITS AND FUNDING
    Growth in deposits including normal seasonal patterns in business checking and public funds.

    • Period-end total deposits were $37.7 billion, up $464.2 million, or 5.0% annualized; core deposits increased 3.2% annualized; includes normal seasonal patterns in business checking and public funds.
    • On average, total deposits for the first quarter were $37.1 billion, a decrease of 1.2%.
    • Granular low-cost deposit franchise; total deposit costs of 201 bps and a cycle to date total deposit beta of 38% (interest-bearing deposit beta of 50%).
    • A loan to deposit ratio of 89%, combined with existing funding sources, provides strong liquidity.

    LOANS
    Broad-based disciplined commercial loan growth.

    • Period-end total loans3 were $33.6 billion, up 7.5% annualized.
    • Total commercial loan production in the first quarter was $1.1 billion; period-end commercial pipeline totaled $2.7 billion.
    • Average total loans in the first quarter were $33.2 billion, an increase of $480.3 million.

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

    • Provision4 expense was $18.9 million, compared to $11.6 million, reflecting net charge-offs and loan growth, as well as economic factors.
    • Net charge-offs were $11.8 million, or 14 bps of average loans compared to net charge-offs of 12 bps of average loans.
      • Excluding PCD loans that had an allowance for credit losses established at acquisition, net charge-offs to average loans were 7 bps.
    • 30+ day delinquencies as a percentage of loans were 0.16%, compared to 0.22%.
    • Non-performing loans as a percentage of total loans were 0.98% compared to 0.83%.
    • Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. The remaining discount on these acquired loans was $75.0 million.
    • The allowance for credit losses, including the allowance for credit losses on unfunded commitments, stood at $346.0 million, or 1.03% of total loans, compared to $338.8 million, or 1.03% of total loans.

    NET INTEREST INCOME AND MARGIN
    Lower net interest income and margin compression reflective of the rate environment.

    • Net interest income on a fully taxable equivalent basis1 decreased to $362.7 million compared to $370.5 million, driven by higher funding costs and fewer days in the quarter, partly offset by loan growth.
    • Net interest margin on a fully taxable equivalent basis1 decreased 11 bps to 3.28%.
    • Accretion income on loans and borrowings was $5.1 million, or 5 bps of net interest margin1, compared to $6.2 million, or 6 bps of net interest margin1.
    • Cost of total deposits was 2.01%, increasing 16 bps and the cost of total interest-bearing deposits increased 15 bps to 2.68%.

    NONINTEREST INCOME
    Increased mortgage fees, wealth fees, and other income, offset by lower capital markets income.

    • Total noninterest income was $77.5 million.
    • Excluding realized debt securities gains/losses for both periods and gain on sale of Visa Class B restricted shares for the fourth quarter of 2023, adjusted noninterest income was down 2.2% due to lower capital markets income, partially offset by an increase in mortgage fees, wealth fees, and other income.

    NONINTEREST EXPENSE
    Disciplined expense management.

    • Noninterest expense was $262.3 million and included a $13.3 million non-cash expense associated with the distribution of excess pension assets with the resolution of the legacy First Midwest plan, as well as $3.0 million of FDIC special assessment charges and $2.9 million of merger-related charges.
    • Excluding these items, adjusted noninterest expense was $243.1 million, compared to $255.2 million; lower due to elevated performance-driven incentive accruals and higher amortization of tax credit investments for the fourth quarter of 2023, as well as lower professional fees and other expense for the first quarter of 2024, partially offset by payroll tax due to timing.
    • The efficiency ratio1 was 58.3%, while the adjusted efficiency ratio1 was 53.4% compared to 59.0% and 53.8%, respectively.

    INCOME TAXES

    • Income tax expense was $32.5 million, resulting in an effective tax rate of 21.3% compared to 21.5%. On an adjusted fully taxable equivalent ("FTE") basis, the effective tax rate was 24.4% compared to 24.2%.
    • Income tax expense included $3.3 million of tax credit benefit.

    CAPITAL
    Capital ratios remain strong.

    • All regulatory capital ratios grew in the quarter with preliminary total risk-based capital up 10 bps to 12.74% and preliminary regulatory Tier 1 capital up 5 bps to 11.40%, driven by retained earnings, partly offset by strong loan growth.
    • Tangible common equity to tangible assets was 6.86% compared to 6.85%.

    CAPSTAR TRANSACTION
    On April 1, 2024, Old National completed its acquisition of CapStar Financial Holdings, Inc. ("CapStar"), and its wholly-owned subsidiary, CapStar Bank. This partnership strengthens Old National’s Nashville, Tennessee presence and adds several new high-growth markets. At closing, CapStar had approximately $3.0 billion of total assets, $2.3 billion of total loans, and $2.6 billion of deposits. Old National expects system conversions related to the transaction to be completed in the third quarter of 2024.

    CONFERENCE CALL AND WEBCAST
    Old National will host a conference call and live webcast at 9:00 a.m. Central Time on Tuesday, April 23, 2024, to review first quarter financial results. The live audio webcast link and corresponding presentation slides will be available on the Company’s Investor Relations website at oldnational.com and will be archived there for 12 months. To listen to the live conference call, dial U.S. (800) 715-9871 or International (646) 307-1963, access code 3992332. A replay of the call will also be available from approximately noon Central Time on April 23, 2024 through May 7, 2024. To access the replay, dial U.S. (800) 770-2030 or International (647) 362-9199; Access code 3992332.

    ABOUT OLD NATIONAL
    Old National Bancorp (NASDAQ: ONB) is the holding company of Old National Bank, which is the sixth largest commercial bank headquartered in the Midwest. With approximately $53 billion of assets and $29 billion of assets under management (including CapStar Financial Holdings, Inc. on a pro forma basis as of December 31, 2023), Old National ranks among the top 30 banking companies headquartered in the U.S. Tracing our roots to 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 at the end of this release.

    The Company presents EPS, the efficiency ratio, return on average common equity, return on average tangible common equity, and net income applicable to common shares, all adjusted for certain notable items. These items include gain on sale of Visa Class B restricted shares, distribution of excess pension assets expense, FDIC special assessment expense, contract termination charges, merger-related charges associated with completed and pending acquisitions, debt securities gains/losses, expenses related to the tragic April 10, 2023 event at our downtown Louisville location ("Louisville expenses"), and property optimization charges. 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 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.

    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 distribution of excess pension assets expense, FDIC special assessment expense, contract termination charges, merger-related charges, property optimization charges, Louisville expenses, as well as adjusted noninterest income, which excludes the gain on sale of Visa Class B restricted shares and debt securities gains/losses. Management believes that excluding these items from noninterest expense and noninterest income 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 (the “Act”), notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the Securities and Exchange Commission ("SEC"), in press releases, and in oral and written statements made by us that are not statements of historical fact and constitute forward‐looking statements within the meaning of the Act. 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 words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "should," "would," 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, including, but not limited to: competition; government legislation, regulations and policies; the ability of Old National to execute its business plan; unanticipated changes in our liquidity position, including but not limited to changes in our access to sources of liquidity and capital to address our liquidity needs; changes in economic conditions and economic and business uncertainty which could materially impact credit quality trends and the ability to generate loans and gather deposits; inflation and governmental responses to inflation, including increasing interest rates; market, economic, operational, liquidity, credit, and interest rate risks associated with our business; our ability to successfully manage our credit risk and the sufficiency of our allowance for credit losses; the expected cost savings, synergies and other financial benefits from the merger (the “Merger”) between Old National and CapStar Financial Holdings, Inc. not being realized within the expected time frames and costs or difficulties relating to integration matters being greater than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the Merger; the potential impact of future business combinations on our performance and financial condition, including our ability to successfully integrate the businesses and the success of revenue-generating and cost reduction initiatives; failure or circumvention of our internal controls; operational risks or risk management failures by us or critical third parties, including without limitation with respect to data processing, information systems, cybersecurity, technological changes, vendor issues, business interruption, and fraud risks; significant changes in accounting, tax or regulatory practices or requirements; new legal obligations or liabilities; 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; the effects of climate change on Old National and its customers, borrowers, or service providers; political and economic uncertainty and instability; the impacts of pandemics, epidemics and other infectious disease outbreaks; other matters discussed in this communication; and other factors identified in our Annual Report on Form 10-K for the year ended December 31, 2023 and other filings with the SEC. These forward-looking statements are made only as of the date of this communication and are not guarantees of future results, performance or outcomes, 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 Durchholz
    (812) 465-7269 (812) 464-1366
    Kathy.Schoettlin@oldnational.com Lynell.Durchholz@oldnational.com
       


         
    Financial Highlights (unaudited)
    ($ and shares in thousands, except per share data)
          
     Three Months Ended
     March 31,December 31,September 30,June 30,March 31,
      2024  2023  2023  2023  2023 
    Income Statement     
    Net interest income$356,458 $364,408 $375,086 $382,171 $381,488 
    FTE adjustment1,3 6,253  6,100  5,837  5,825  5,666 
    Net interest income - tax equivalent basis3 362,711  370,508  380,923  387,996  387,154 
    Provision for credit losses 18,891  11,595  19,068  14,787  13,437 
    Noninterest income 77,522  100,094  80,938  81,629  70,681 
    Noninterest expense 262,317  284,235  244,776  246,584  250,711 
    Net income available to common shareholders$116,250 $128,446 $143,842 $151,003 $142,566 
    Per Common Share Data     
    Weighted average diluted shares 292,207  292,029  291,717  291,266  292,756 
    EPS, diluted$0.40 $0.44 $0.49 $0.52 $0.49 
    Cash dividends 0.14  0.14  0.14  0.14  0.14 
    Dividend payout ratio2 35% 32% 29% 27% 29%
    Book value$18.24 $18.18 $17.07 $17.25 $17.24 
    Stock price 17.41  16.89  14.54  13.94  14.42 
    Tangible book value3 11.10  11.00  9.87  10.03  9.98 
    Performance Ratios     
    ROAA 0.98% 1.09% 1.22% 1.29% 1.25%
    ROAE 8.7% 10.2% 11.4% 12.0% 11.6%
    ROATCE3 14.9% 18.1% 20.2% 21.4% 21.0%
    NIM (FTE) 3.28% 3.39% 3.49% 3.60% 3.69%
    Efficiency ratio3 58.3% 59.0% 51.7% 51.2% 52.8%
    NCOs to average loans 0.14% 0.12% 0.24% 0.13% 0.21%
    ACL on loans to EOP loans 0.95% 0.93% 0.93% 0.93% 0.94%
    ACL4 to EOP loans 1.03% 1.03% 1.03% 1.04% 1.05%
    NPLs to EOP loans 0.98% 0.83% 0.80% 0.91% 0.74%
    Balance Sheet (EOP)     
    Total loans$33,623,319 $32,991,927 $32,577,834 $32,432,473 $31,822,374 
    Total assets 49,534,918  49,089,836  49,059,448  48,496,755  47,842,644 
    Total deposits 37,699,418  37,235,180  37,252,676  36,231,315  34,917,792 
    Total borrowed funds 5,331,161  5,331,147  5,556,010  6,034,008  6,740,454 
    Total shareholders' equity 5,595,408  5,562,900  5,239,537  5,292,095  5,277,426 
    Capital Ratios     
    Risk-based capital ratios (EOP):     
    Tier 1 common equity 10.76% 10.70% 10.41% 10.14% 9.98%
    Tier 1 capital 11.40% 11.35% 11.06% 10.79% 10.64%
    Total capital 12.74% 12.64% 12.32% 12.14% 11.96%
    Leverage ratio (average assets) 8.96% 8.83% 8.70% 8.59% 8.53%
    Equity to assets (averages)3 11.32% 10.81% 10.88% 10.96% 11.00%
    TCE to TA3 6.86% 6.85% 6.15% 6.33% 6.37%
    Nonfinancial Data     
    Full-time equivalent employees 3,955  3,940  3,981  4,021  4,023 
    Banking centers 258  258  257  256  256 
    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.
        March 31, 2024 capital ratios are preliminary.
    4 Includes the allowance for credit losses on loans and unfunded loan commitments.
          
    FTE - Fully taxable equivalent basis ROAA - Return on average assets ROAE - Return on average equity ROATCE - Return on average tangible common equity
    NCOs - Net Charge-offs ALL - Allowance for loan losses ACL - Allowance for Credit Losses
    EOP - End of period actual balances NPLs - Non-performing Loans TCE - Tangible common equity TA - Tangible assets



          
    Income Statement (unaudited)
    ($ and shares in thousands, except per share data)
     Three Months Ended
     March 31,December 31,September 30,June 30,March 31,
      2024  2023  2023  2023  2023 
    Interest income$595,981 $589,751 $576,519 $544,902 $495,649 
    Less: interest expense 239,523  225,343  201,433  162,731  114,161 
    Net interest income 356,458  364,408  375,086  382,171  381,488 
    Provision for credit losses 18,891  11,595  19,068  14,787  13,437 
    Net interest income
    after provision for credit losses    		 337,567  352,813  356,018  367,384  368,051 
    Wealth and investment services fees 28,304  27,656  26,687  26,521  26,920 
    Service charges on deposit accounts 17,898  18,667  18,524  17,751  17,003 
    Debit card and ATM fees 10,054  10,700  10,818  10,653  9,982 
    Mortgage banking revenue 4,478  3,691  5,063  4,165  3,400 
    Capital markets income 2,900  5,416  5,891  6,173  6,939 
    Company-owned life insurance 3,434  3,773  3,740  4,698  3,186 
    Gain on sale of Visa Class B restricted shares —  21,635  —  —  — 
    Other income 10,470  9,381  10,456  11,651  8,467 
    Debt securities gains (losses), net (16) (825) (241) 17  (5,216)
    Total noninterest income 77,522  100,094  80,938  81,629  70,681 
    Salaries and employee benefits 149,803  141,649  131,541  135,810  137,364 
    Occupancy 27,019  26,514  25,795  26,085  28,282 
    Equipment 8,671  8,769  8,284  7,721  7,389 
    Marketing 10,634  10,813  9,448  9,833  9,417 
    Technology 20,023  20,493  20,592  20,056  19,202 
    Communication 4,000  4,212  4,075  4,232  4,461 
    Professional fees 6,406  8,250  5,956  6,397  6,732 
    FDIC assessment 11,313  27,702  9,000  9,624  10,404 
    Amortization of intangibles 5,455  5,869  6,040  6,060  6,186 
    Amortization of tax credit investments 2,749  7,200  2,644  2,762  2,761 
    Other expense 16,244  22,764  21,401  18,004  18,513 
    Total noninterest expense 262,317  284,235  244,776  246,584  250,711 
    Income before income taxes 152,772  168,672  192,180  202,429  188,021 
    Income tax expense 32,488  36,192  44,304  47,393  41,421 
    Net income$120,284 $132,480 $147,876 $155,036 $146,600 
    Preferred dividends (4,034) (4,034) (4,034) (4,033) (4,034)
    Net income applicable to common shares$116,250 $128,446 $143,842 $151,003 $142,566 
          
    EPS, diluted$0.40 $0.44 $0.49 $0.52 $0.49 
    Weighted Average Common Shares Outstanding     
    Basic 290,980  290,701  290,648  290,559  291,088 
    Diluted 292,207  292,029  291,717  291,266  292,756 
    Common shares outstanding (EOP) 293,330  292,655  292,586  292,597  291,922 
          



     
    End of Period Balance Sheet (unaudited)
    ($ in thousands)
     March 31,December 31,September 30,June 30,March 31,
      2024  2023  2023  2023  2023 
    Assets     
    Cash and due from banks$350,990 $430,866 $381,343 $473,023 $386,879 
    Money market and other interest-earning investments 588,509  744,192  1,282,087  724,863  727,056 
    Investments:     
    Treasury and government-sponsored agencies 2,243,754  2,453,950  2,515,249  2,309,285  2,236,412 
    Mortgage-backed securities 5,566,881  5,245,691  4,906,290  5,168,458  5,395,680 
    States and political subdivisions 1,672,061  1,693,819  1,705,200  1,760,725  1,785,073 
    Other securities 760,847  779,048  751,404  802,323  826,575 
    Total investments 10,243,543  10,172,508  9,878,143  10,040,791  10,243,740 
    Loans held-for-sale, at fair value 19,418  32,006  122,033  114,369  10,584 
    Loans:     
    Commercial 9,648,269  9,512,230  9,333,448  9,698,241  9,751,875 
    Commercial and agriculture real estate 14,653,958  14,140,629  13,916,221  13,450,209  12,908,380 
    Residential real estate 6,661,379  6,699,443  6,696,288  6,684,480  6,568,666 
    Consumer 2,659,713  2,639,625  2,631,877  2,599,543  2,593,453 
    Total loans 33,623,319  32,991,927  32,577,834  32,432,473  31,822,374 
    Allowance for credit losses on loans (319,713) (307,610) (303,982) (300,555) (298,711)
    Premises and equipment, net 564,007  565,396  565,607  564,299  566,758 
    Goodwill and other intangible assets 2,095,511  2,100,966  2,106,835  2,112,875  2,118,935 
    Company-owned life insurance 767,423  767,902  774,517  771,753  770,471 
    Accrued interest receivable and other assets 1,601,911  1,591,683  1,675,031  1,562,864  1,494,558 
    Total assets$49,534,918 $49,089,836 $49,059,448 $48,496,755 $47,842,644 
          
    Liabilities and Equity     
    Noninterest-bearing demand deposits$9,257,709 $9,664,247 $10,091,352 $10,532,838 $10,995,083 
    Interest-bearing:     
    Checking and NOW accounts 7,236,667  7,331,487  7,495,417  7,654,202  7,903,520 
    Savings accounts 5,020,095  5,099,186  5,296,985  5,578,323  6,030,255 
    Money market accounts 10,234,113  9,561,116  8,793,218  7,200,288  5,867,239 
    Other time deposits 4,760,659  4,565,137  4,398,182  4,012,813  3,361,979 
    Total core deposits 36,509,243  36,221,173  36,075,154  34,978,464  34,158,076 
    Brokered deposits 1,190,175  1,014,007  1,177,522  1,252,851  759,716 
    Total deposits 37,699,418  37,235,180  37,252,676  36,231,315  34,917,792 
          
    Federal funds purchased and interbank borrowings 50,416  390  918  136,060  618,955 
    Securities sold under agreements to repurchase 274,493  285,206  279,061  311,447  393,018 
    Federal Home Loan Bank advances 4,193,039  4,280,681  4,412,576  4,771,183  4,981,612 
    Other borrowings 813,213  764,870  863,455  815,318  746,869 
    Total borrowed funds 5,331,161  5,331,147  5,556,010  6,034,008  6,740,454 
    Accrued expenses and other liabilities 908,931  960,609  1,011,225  939,337  906,972 
    Total liabilities 43,939,510  43,526,936  43,819,911  43,204,660  42,565,218 
    Preferred stock, common stock, surplus, and retained earnings 6,375,036  6,301,709  6,208,352  6,100,728  5,985,784 
    Accumulated other comprehensive income (loss), net of tax (779,628) (738,809) (968,815) (808,633) (708,358)
    Total shareholders' equity 5,595,408  5,562,900  5,239,537  5,292,095  5,277,426 
    Total liabilities and shareholders' equity$49,534,918 $49,089,836 $49,059,448 $48,496,755 $47,842,644 
     



                 
    Average Balance Sheet and Interest Rates (unaudited)
    ($ in thousands)
                 
      Three Months Ended Three Months Ended Three Months Ended
      March 31, 2024 December 31, 2023 March 31, 2023
      AverageIncome1/Yield/ AverageIncome1/Yield/ AverageIncome1/Yield/
    Earning Assets: BalanceExpenseRate BalanceExpenseRate BalanceExpenseRate
    Money market and other interest-earning investments $757,244 $9,9855.30% $1,094,196 $14,4255.23% $497,953 $3,0982.52%
    Investments:            
    Treasury and government-sponsored agencies  2,362,477  23,2663.94%  2,490,793  25,8484.15%  2,197,426  16,5313.01%
    Mortgage-backed securities  5,357,085  38,8882.90%  4,913,151  34,2092.79%  5,429,200  35,0902.59%
    States and political subdivisions  1,680,175  13,9763.33%  1,686,119  14,5413.45%  1,808,316  14,6903.25%
    Other securities  770,438  12,1736.32%  749,697  10,4405.57%  738,139  8,6044.66%
    Total investments  10,170,175  88,3033.47%  9,839,760  85,0383.46%  10,173,081  74,9152.95%
    Loans:2            
    Commercial  9,540,385  167,2637.01%  9,351,344  163,9217.01%  9,457,089  147,6206.24%
    Commercial and agriculture real estate  14,368,370  230,0866.41%  14,074,908  226,7166.44%  12,654,366  179,4755.67%
    Residential real estate loans  6,693,814  63,0033.76%  6,706,425  62,0543.70%  6,523,074  58,0993.56%
    Consumer  2,645,091  43,5946.63%  2,634,650  43,6976.58%  2,636,350  38,1085.86%
    Total loans  33,247,660  503,9466.07%  32,767,327  496,3886.06%  31,270,879  423,3025.42%
                 
    Total earning assets $44,175,079 $602,2345.46% $43,701,283 $595,8515.45% $41,941,913 $501,3154.79%
                 
    Less: Allowance for credit losses on loans  (313,470)    (304,195)    (304,393)  
                 
    Non-earning Assets:            
    Cash and due from banks $362,676    $415,266    $437,872   
    Other assets  4,961,595     5,027,892     4,907,115   
                 
    Total assets $49,185,880    $48,840,246    $46,982,507   
                 
    Interest-Bearing Liabilities:            
    Checking and NOW accounts $7,141,201 $25,2521.42% $7,280,268 $25,0151.36% $7,988,579 $19,3590.98%
    Savings accounts  5,025,400  5,0170.40%  5,184,712  5,1960.40%  6,183,409  2,2300.15%
    Money market accounts  9,917,572  94,2133.82%  9,244,117  85,7173.68%  5,641,288  20,0101.44%
    Other time deposits  4,689,136  47,4324.07%  4,516,432  44,3973.90%  3,057,870  15,2892.03%
    Total interest-bearing core deposits  26,773,309  171,9142.58%  26,225,529  160,3252.43%  22,871,146  56,8881.01%
    Brokered deposits  1,047,140  13,5255.19%  1,012,647  13,0405.11%  500,530  5,7054.62%
    Total interest-bearing deposits  27,820,449  185,4392.68%  27,238,176  173,3652.53%  23,371,676  62,5931.09%
                 
    Federal funds purchased and interbank borrowings  69,090  9615.59%  620  85.12%  419,291  4,8394.68%
    Securities sold under agreements to repurchase  296,236  9171.25%  277,927  9101.30%  412,819  7790.77%
    Federal Home Loan Bank advances  4,386,492  41,1673.77%  4,182,877  38,3943.64%  4,273,343  37,9963.61%
    Other borrowings  825,846  11,0395.38%  869,644  12,6665.78%  781,221  7,9544.13%
    Total borrowed funds  5,577,664  54,0843.90%  5,331,068  51,9783.87%  5,886,674  51,5683.55%
                 
    Total interest-bearing liabilities $33,398,113 $239,5232.88% $32,569,244 $225,3432.74% $29,258,350 $114,1611.58%
                 
    Noninterest-Bearing Liabilities and Shareholders' Equity           
    Demand deposits $9,258,136    $9,949,616    $11,526,267   
    Other liabilities  964,089     1,039,899     1,031,702   
    Shareholders' equity  5,565,542     5,281,487     5,166,188   
                 
    Total liabilities and shareholders' equity $49,185,880    $48,840,246    $46,982,507   
                 
    Net interest rate spread   2.58%   2.71%   3.21%
                 
    Net interest margin (GAAP)   3.23%   3.34%   3.64%
                 
    Net interest margin (FTE)3   3.28%   3.39%   3.69%
                 
    FTE adjustment  $6,253   $6,100   $5,666 
                 
    1 Interest income is reflected on a FTE basis. 
    2 Includes loans held-for-sale. 
    3 Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures. 
     



          
    Asset Quality (EOP) (unaudited)
    ($ in thousands)
          
     Three Months Ended
     March 31,December 31,September 30,June 30,March 31,
      2024  2023  2023  2023  2023 
    Allowance for credit losses:     
    Beginning allowance for credit losses on loans$307,610 $303,982 $300,555 $298,711 $303,671 
    Provision for credit losses on loans 23,853  13,329  23,115  11,936  11,469 
    Gross charge-offs (14,020) (13,202) (22,750) (14,331) (18,180)
    Gross recoveries 2,270  3,501  3,062  4,239  1,751 
    NCOs (11,750) (9,701) (19,688) (10,092) (16,429)
    Ending allowance for credit losses on loans$319,713 $307,610 $303,982 $300,555 $298,711 
    Beginning allowance for credit losses on unfunded commitments$31,226 $32,960 $37,007 $34,156 $32,188 
    Provision (release) for credit losses on unfunded commitments (4,962) (1,734) (4,047) 2,851  1,968 
    Ending allowance for credit losses on unfunded commitments$26,264 $31,226 $32,960 $37,007 $34,156 
    Allowance for credit losses$345,977 $338,836 $336,942 $337,562 $332,867 
    Provision for credit losses on loans$23,853 $13,329 $23,115 $11,936 $11,469 
    Provision (release) for credit losses on unfunded commitments (4,962) (1,734) (4,047) 2,851  1,968 
    Provision for credit losses$18,891 $11,595 $19,068 $14,787 $13,437 
    NCOs / average loans1 0.14% 0.12% 0.24% 0.13% 0.21%
    Average loans1$33,242,739 $32,752,406 $32,639,812 $32,251,242 $31,267,836 
    EOP loans1 33,623,319  32,991,927  32,577,834  32,432,473  31,822,374 
    ACL on loans / EOP loans1 0.95% 0.93% 0.93% 0.93% 0.94%
    ACL / EOP loans1 1.03% 1.03% 1.03% 1.04% 1.05%
    Underperforming Assets:     
    Loans 90 days and over (still accruing)$2,172 $961 $1,192 $303 $1,231 
    Nonaccrual loans 328,645  274,821  261,346  295,509  234,337 
    Foreclosed assets 9,344  9,434  9,761  9,824  10,817 
    Total underperforming assets$340,161 $285,216 $272,299 $305,636 $246,385 
    Classified and Criticized Assets:     
    Nonaccrual loans$328,645 $274,821 $261,346 $295,509 $234,337 
    Substandard loans (still accruing) 626,157  599,358  563,427  524,709  570,229 
    Loans 90 days and over (still accruing) 2,172  961  1,192  303  1,231 
    Total classified loans - "problem loans" 956,974  875,140  825,965  820,521  805,797 
    Other classified assets 54,392  48,930  48,998  40,942  26,441 
    Criticized loans - "special mention loans" 827,419  843,920  775,526  614,547  593,307 
    Total classified and criticized assets$1,838,785 $1,767,990 $1,650,489 $1,476,010 $1,425,545 
    Loans 30-89 days past due (still accruing)$53,112 $71,868 $56,772 $39,748 $42,071 
    Nonaccrual loans / EOP loans1 0.98% 0.83% 0.80% 0.91% 0.74%
    ACL / nonaccrual loans 105% 123% 129% 114% 142%
    Under-performing assets/EOP loans1 1.01% 0.86% 0.84% 0.94% 0.77%
    Under-performing assets/EOP assets 0.69% 0.58% 0.56% 0.63% 0.51%
    30+ day delinquencies/EOP loans1 0.16% 0.22% 0.18% 0.12% 0.14%
          
    1 Excludes loans held-for-sale.   
          

              

          

          
    Non-GAAP Measures (unaudited)
    ($ and shares in thousands, except per share data)
          
     Three Months Ended
     March 31,December 31,September 30,June 30,March 31,
      2024  2023  2023  2023  2023 
    Earnings Per Share:     
    Net income applicable to common shares$116,250 $128,446 $143,842 $151,003 $142,566 
    Adjustments:     
    Distribution of excess pension assets 13,318  —  —  —  — 
    Tax effect1 (3,250) —  —  —  — 
    Distribution excess pension assets, net 10,068  —  —  —  — 
    FDIC special assessment 2,994  19,052  —  —  — 
    Tax effect1 (731) (4,628) —  —  — 
    FDIC special assessment, net 2,263  14,424  —  —  — 
    Merger-related charges 2,908  5,529  6,257  2,372  14,558 
    Tax effect1 (710) (1,343) (1,042) (277) (3,172)
    Merger-related charges, net 2,198  4,186  5,215  2,095  11,386 
    Debt securities (gains) losses 16  825  241  (17) 5,216 
    Tax effect1 (4) (200) (40) 2  (1,137)
    Debt securities (gains) losses, net 12  625  201  (15) 4,079 
    Gain on sale of Visa Class B restricted shares —  (21,635) —  —  — 
    Tax effect1 —  5,255  —  —  — 
    Gain on sale of Visa Class B restricted shares, net —  (16,380) —  —  — 
    Contract termination charge —  4,413  —  —  — 
    Tax effect1 —  (1,072) —  —  — 
    Contract termination charge, net —  3,341  —  —  — 
    Louisville expenses —  —  —  3,361  — 
    Tax effect1 —  —  —  (392) — 
    Louisville expenses, net —  —  —  2,969  — 
    Property optimization charges —  —  —  242  1,317 
    Tax effect1 —  —  —  (28) (287)
    Property optimization charges, net —  —  —  214  1,030 
    Total adjustments, net 14,541  6,196  5,416  5,263  16,495 
    Net income applicable to common shares, adjusted$130,791 $134,642 $149,258 $156,266 $159,061 
    Weighted average diluted common shares outstanding 292,207  292,029  291,717  291,266  292,756 
    EPS, diluted$0.40 $0.44 $0.49 $0.52 $0.49 
    Adjusted EPS, diluted$0.45 $0.46 $0.51 $0.54 $0.54 
    NIM:     
    Net interest income$356,458 $364,408 $375,086 $382,171 $381,488 
    Add: FTE adjustment2 6,253  6,100  5,837  5,825  5,666 
    Net interest income (FTE)$362,711 $370,508 $380,923 $387,996 $387,154 
    Average earning assets$44,175,079 $43,701,283 $43,617,456 $43,097,198 $41,941,913 
    NIM (GAAP) 3.23% 3.34% 3.44% 3.55% 3.64%
    NIM (FTE) 3.28% 3.39% 3.49% 3.60% 3.69%
          
    Refer to last page of Non-GAAP reconciliations for footnotes.   



          
    Non-GAAP Measures (unaudited)
    ($ in thousands)
          
     Three Months Ended
     March 31,December 31,September 30,June 30,March 31,
      2024  2023  2023  2023  2023 
    PPNR:     
    Net interest income (FTE)2$362,711 $370,508 $380,923 $387,996 $387,154 
    Add: Noninterest income 77,522  100,094  80,938  81,629  70,681 
    Total revenue (FTE) 440,233  470,602  461,861  469,625  457,835 
    Less: Noninterest expense (262,317) (284,235) (244,776) (246,584) (250,711)
    PPNR$177,916 $186,367 $217,085 $223,041 $207,124 
    Adjustments:     
    Gain on sale of Visa Class B restricted shares$— $(21,635)$— $— $— 
    Debt securities (gains) losses 16  825  241  (17) 5,216 
    Noninterest income adjustments 16  (20,810) 241  (17) 5,216 
    Adjusted noninterest income 77,538  79,284  81,179  81,612  75,897 
    Adjusted revenue$440,249 $449,792 $462,102 $469,608 $463,051 
    Adjustments:     
    Distribution of excess pension assets$13,318 $— $— $— $— 
    FDIC Special Assessment 2,994  19,052  —  —  — 
    Merger-related charges 2,908  5,529  6,257  2,372  14,558 
    Contract termination charges —  4,413  —  —  — 
    Louisville expenses —  —  —  3,361  — 
    Property optimization charges —  —  —  242  1,317 
    Noninterest expense adjustments 19,220  28,994  6,257  5,975  15,875 
    Adjusted total noninterest expense (243,097) (255,241) (238,519) (240,609) (234,836)
    Adjusted PPNR$197,152 $194,551 $223,583 $228,999 $228,215 
    Efficiency Ratio:     
    Noninterest expense$262,317 $284,235 $244,776 $246,584 $250,711 
    Less: Amortization of intangibles (5,455) (5,869) (6,040) (6,060) (6,186)
    Noninterest expense, excl. amortization of intangibles 256,862  278,366  238,736  240,524  244,525 
    Less: Amortization of tax credit investments (2,749) (7,200) (2,644) (2,762) (2,761)
    Less: Noninterest expense adjustments (19,220) (28,994) (6,257) (5,975) (15,875)
    Adjusted noninterest expense, excluding amortization$234,893 $242,172 $229,835 $231,787 $225,889 
    Total revenue (FTE)2$440,233 $470,602 $461,861 $469,625 $457,835 
    Less: Debt securities (gains) losses 16  825  241  (17) 5,216 
    Total revenue excl. debt securities (gains) losses 440,249  471,427  462,102  469,608  463,051 
    Less: Gain on sale of Visa Class B restricted shares —  (21,635) —  —  — 
    Total adjusted revenue$440,249 $449,792 $462,102 $469,608 $463,051 
    Efficiency Ratio 58.3% 59.0% 51.7% 51.2% 52.8%
    Adjusted Efficiency Ratio 53.4% 53.8% 49.7% 49.4% 48.8%
          
    Refer to last page of Non-GAAP reconciliations for footnotes.   



          
    Non-GAAP Measures (unaudited)
    ($ in thousands)
          
     Three Months Ended
     March 31,December 31,September 30,June 30,March 31,
      2024  2023  2023  2023  2023 
    ROAE and ROATCE:     
    Net income applicable to common shares$116,250 $128,446 $143,842 $151,003 $142,566 
    Amortization of intangibles 5,455  5,869  6,040  6,060  6,186 
    Tax effect1 (1,364) (1,467) (1,510) (1,515) (1,547)
    Amortization of intangibles, net 4,091  4,402  4,530  4,545  4,639 
    Net income applicable to common shares, excluding intangibles amortization 120,341  132,848  148,372  155,548  147,205 
    Total adjustments, net (see pg.12) 14,541  6,196  5,416  5,263  16,495 
    Adjusted net income applicable to common shares, excluding intangibles amortization$134,882 $139,044 $153,788 $160,811 $163,700 
    Average shareholders' equity$5,565,542 $5,281,487 $5,294,072 $5,273,802 $5,166,188 
    Less: Average preferred equity (243,719) (243,719) (243,719) (243,719) (243,719)
    Average shareholders' common equity$5,321,823 $5,037,768 $5,050,353 $5,030,083 $4,922,469 
    Average goodwill and other intangible assets (2,098,338) (2,103,935) (2,109,944) (2,115,894) (2,122,157)
    Average tangible shareholder's common equity$3,223,485 $2,933,833 $2,940,409 $2,914,189 $2,800,312 
    ROAE 8.7% 10.2% 11.4% 12.0% 11.6%
    ROAE, adjusted 9.8% 10.7% 11.8% 12.4% 12.9%
    ROATCE 14.9% 18.1% 20.2% 21.4% 21.0%
    ROATCE, adjusted 16.7% 19.0% 20.9% 22.1% 23.4%
          
    Refer to last page of Non-GAAP reconciliations for footnotes.   



          
    Non-GAAP Measures (unaudited)
    ($ in thousands)
          
     As of
     March 31,December 31,September 30,June 30,March 31,
      2024  2023  2023  2023  2023 
    Tangible Common Equity:     
    Shareholders' equity$5,595,408 $5,562,900 $5,239,537 $5,292,095 $5,277,426 
    Less: Preferred equity (243,719) (243,719) (243,719) (243,719) (243,719)
    Shareholders' common equity$5,351,689 $5,319,181 $4,995,818 $5,048,376 $5,033,707 
    Less: Goodwill and other intangible assets (2,095,511) (2,100,966) (2,106,835) (2,112,875) (2,118,935)
    Tangible shareholders' common equity$3,256,178 $3,218,215 $2,888,983 $2,935,501 $2,914,772 
          
    Total assets$49,534,918 $49,089,836 $49,059,448 $48,496,755 $47,842,644 
    Less: Goodwill and other intangible assets (2,095,511) (2,100,966) (2,106,835) (2,112,875) (2,118,935)
    Tangible assets$47,439,407 $46,988,870 $46,952,613 $46,383,880 $45,723,709 
          
    Risk-weighted assets3$37,845,139 $37,407,347 $37,501,646 $37,414,177 $36,801,707 
          
    Tangible common equity to tangible assets 6.86% 6.85% 6.15% 6.33% 6.37%
    Tangible common equity to risk-weighted assets3 8.60% 8.60% 7.70% 7.85% 7.92%
    Tangible Common Book Value:     
    Common shares outstanding 293,330  292,655  292,586  292,597  291,922 
    Tangible common book value$11.10 $11.00 $9.87 $10.03 $9.98 
          
    1 Tax-effect calculations use management's estimate of the full year FTE tax rates (federal + state).
    2 Calculated using the federal statutory tax rate in effect of 21% for all periods.
    3 March 31, 2024 figures are preliminary.


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