Old National's 3rd Quarter Results Supported by Strong Deposit Franchise, Ample Capital, and Expense Discipline

Source: Nasdaq GlobeNewswire / 24 Oct 2023 07:00:18 America/Chicago

EVANSVILLE, Ind., Oct. 24, 2023 (GLOBE NEWSWIRE) --

Old National Bancorp (NASDAQ: ONB) reports 3Q23 net income applicable to common shares of $143.8 million, diluted EPS of $0.49; $149.3 million and $0.51 on an adjusted¹ basis, respectively.

CEO COMMENTARY:

"With a nearly 3% quarterly increase in total deposits, Old National once again demonstrated the strength and stability of our deposit franchise," said CEO Jim Ryan. "Additionally, our strong capital and liquidity position, disciplined expense management, and excellent credit metrics continue to position Old National to pursue our growth strategy while focusing intently on serving our clients and strengthening the communities we serve."

THIRD QUARTER HIGHLIGHTS²:

Net Income	Net income applicable to common shares of $143.8 million; adjusted net income applicable to common shares¹ of $149.3 million
Net Income	Earnings per diluted common share ("EPS") of $0.49; adjusted EPS¹ of $0.51

Net Interest Income/NIM	Net interest income on a fully taxable equivalent basis¹ of $380.9 million
Net Interest Income/NIM	Net interest margin on a fully taxable equivalent basis¹ ("NIM") of 3.49%, down 11 basis points ("bps")

Operating Performance	Pre-provision net revenue¹ (“PPNR”) of $217.1 million; adjusted PPNR¹ of $223.6 million
	Noninterest expense of $244.8 million; adjusted noninterest expense¹ of $238.5 million
	Efficiency ratio¹ of 51.7%; adjusted efficiency ratio¹of 49.7%

Deposits and Funding	Period-end total deposits of $37.3 billion, up 2.8%; core deposits up 3.1%
Deposits and Funding	Granular low-cost deposit franchise; total deposit costs of 161 bps and a cycle to date (2Q22-3Q23) total deposit beta of 30% (interest-bearing deposit beta of 42%)

Loans and Credit Quality	End-of-period total loans³ of $32.7 billion, up 0.5%; up 1.7% excluding commercial loan sales
	Provision for credit losses⁴ ("provision") of $19.1 million
	Net charge-offs of $19.7 million, or 24 bps of average loans; includes $12 million, or 15 bps, related to an isolated commercial & industrial ("C&I") credit that is not indicative of broader credit concerns in the portfolio
	30+ day delinquencies of 0.18% and non-performing loans of 0.80% of total loans

Return Profile & Capital	Return on average tangible common equity¹ of 20.2%; adjusted return on average tangible common equity¹ of 20.9%

Notable Items	$6.3 million of merger-related charges

¹Non-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 ²Comparisons are on a linked-quarter basis, unless otherwise noted ³ Includes loans held-for-sale ⁴ Includes the provision for unfunded commitments ⁵Uninsured and uncollateralized deposits include the estimate of Old National Bank federally uninsured deposits for regulatory purposes, as adjusted for $1.5 billion of affiliate deposits and $4.5 billion of collateralized or otherwise insured deposits

RESULTS OF OPERATIONS
Old National reported third quarter 2023 net income applicable to common shares of $143.8 million, or $0.49 per diluted common share.

Included in the third quarter were pre-tax charges of $6.3 million related to the February 15, 2022 merger with First Midwest Bancorp, Inc. ("First Midwest"). Excluding these transactions and realized debt securities losses from the current quarter, adjusted net income was $149.3 million, or $0.51 per diluted common share.

DEPOSITS AND FUNDING
Growth in low-cost deposits including normal seasonal patterns in public funds.

Period-end total deposits were $37.3 billion at September 30, 2023, up $1.0 billion, or 2.8%; core deposits increased 3.1%
- Reflect continuing effective competition for new client relationships.
- Include normal seasonal patterns in public funds; increased $320 million.
On average, total deposits for the third quarter were $36.7 billion, an increase of 4.4%.
Granular low-cost deposit franchise; total deposit costs of 161 bps and a cycle to date total deposit beta of 30% (interest-bearing deposit beta of 42%).
Deposits that were either insured or collateralized⁵ at September 30, 2023 were more than 70% of total deposits.
A loan to deposit ratio of 88% at September 30, 2023, combined with existing funding sources provides strong liquidity.

LOANS
Broad-based disciplined commercial loan growth.

Period-end total loans³ were $32.7 billion at September 30, 2023, up 0.5% from June 30, 2023 and up 1.7% excluding commercial loan sales of $389 million.
Total commercial loan production in the third quarter was $1.5 billion; period-end commercial pipeline totaled $2.0 billion, down from $3.1 billion at June 30, 2023.
Average total loans in the third quarter were $32.7 billion, an increase of $394.6 million from the second quarter of 2023.

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

Provision⁴ expense in the third quarter of 2023 was $19.1 million, compared to $14.8 million in the second quarter of 2023, reflecting net charge-offs, loan growth, as well as economic factors.
Net charge-offs in the third quarter were $19.7 million, or 24 bps of average loans compared to net charge-offs of 13 bps of average loans in the second quarter of 2023; includes $12.2 million, or 15 bps, related to a single C&I credit that is not representative of broader credit concerns.
30+ day delinquencies as a percentage of loans were 0.18% at the end of the third quarter of 2023, compared to 0.12% at the end of the second quarter of 2023.
Non-performing loans as a percentage of total loans were 0.80% compared to 0.91% for the second quarter of 2023.
Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. As of September 30, 2023, the remaining discount on these acquired loans was $83.0 million.
The allowance for credit losses, including the allowance for credit losses on unfunded commitments, stood at $336.9 million, or 1.03% of total loans at September 30, 2023, compared to $337.6 million, or 1.04% of total loans at June 30, 2023.

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 basis decreased to $380.9 million in the third quarter of 2023 compared to $388.0 million in the second quarter of 2023, driven by higher funding costs, partly offset by loan growth and higher rates on interest-earning assets.
Net interest margin on a fully taxable equivalent basis decreased 11 bps to 3.49% compared to the second quarter of 2023.
Accretion income on loans and borrowings was $7.5 million, or 7 bps of net interest margin, in the third quarter of 2023 compared to $6.6 million, or 6 bps of net interest margin, in the second quarter of 2023.
Cost of total deposits was 1.61%, increasing 46 bps and the cost of total interest-bearing deposits increased 56 bps to 2.22% in the third quarter of 2023.

NONINTEREST INCOME
Increases in all fee income categories offset by lower company-owned life insurance and other income.

Total noninterest income for the third quarter of 2023 was $81.0 million.
Excluding realized debt securities gains/losses for both periods, adjusted noninterest income for the third quarter was down 1.0% compared to the second quarter of 2023, due to lower company-owned life insurance and other income partially offset by increases in all fee income categories.

NONINTEREST EXPENSE
Disciplined expense management.

Noninterest expense for the third quarter of 2023 was $244.8 million and included $6.3 million of merger-related charges.
Excluding these items, adjusted noninterest expense for the third quarter was $238.5 million, compared to $240.6 million for the second quarter of 2023; decrease was driven by higher salary and employee benefits for the second quarter of 2023 resulting from performance-driven incentive accruals; other expense higher due primarily to a single operational loss.
The efficiency ratio¹ was 51.7%, while the adjusted efficiency ratio¹ was 49.7% for the third quarter of 2023 compared to 51.2% and 49.4%, respectively, for the second quarter of 2023.

INCOME TAXES

Income tax expense in the third quarter of 2023 was $44.3 million, resulting in an effective tax rate of 23.1% compared to 23.4% in the second quarter of 2023. On an adjusted fully taxable equivalent ("FTE") basis, the effective tax rate was 25.3% in the third quarter compared to 25.2% in the second quarter.
Income tax expense included $3.0 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 18 bps to 12.32% and preliminary regulatory Tier 1 capital up 27 bps to 11.06%, driven by retained earnings.
Tangible common equity to tangible assets was 6.15% at the end of the third quarter compared to 6.33% in the second quarter of 2023.

CONFERENCE CALL AND WEBCAST
Old National will host a conference call and live webcast at 9:00 a.m. Central Time on Tuesday, October 24, 2023, to review third quarter 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. (888) 300-3045 or International (646) 568-1027, Access code 5258325. A replay of the call will also be available from approximately noon Central Time on October 24, 2023 through November 8, 2023. To access the replay, dial U.S. (800) 770-2030 or International (647) 362-9199, Access code 5258325.

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 $49 billion of assets and $28 billion of assets under management, 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, and return on average tangible common equity, all adjusted for certain notable items. These items include merger-related charges associated with completed acquisitions, gains/losses on sales of debt securities, expenses related to the tragic April 10 event at our downtown Louisville location ("Louisville expenses"), property optimization charges, gain on sale of health savings accounts and the current expected credit loss ("CECL") Day 1 non-PCD provision expense. Management believes excluding these items from EPS, the efficiency ratio, return on average common equity, and return on average tangible common equity may be useful in assessing the Company's underlying operational performance since these items do not pertain to its core business operations and their exclusion may facilitate better comparability between periods. Management believes that excluding merger-related charges and the CECL Day 1 non-PCD provision expense from these metrics may be useful to the Company, as well as analysts and investors, since these expenses can vary significantly based on the size, type, and structure of each acquisition. Additionally, management believes excluding these items from these metrics may enhance comparability for peer comparison purposes.

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

The Company presents adjusted noninterest expense, which excludes merger-related charges and property optimization charges, Louisville expenses, as well as adjusted noninterest income, which excludes the gain on sale of health savings accounts and gains/losses on sales of debt securities. 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 SEC, in press releases, and in oral and written statements made by us or with our approval 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 the words "anticipate," "believe," "contemplate," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "should," and "will," and other words of similar meaning. These forward-looking statements express management’s current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those in such statements. Factors that might cause such a difference include, but are not limited to: 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; uncertainty about the discontinued use of LIBOR and the transition to an alternative rate; 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, 2022 and other filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date of this communication and are not guarantees of future results, 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															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2023			2023			2023			2022				2022		2023			2022
Income Statement
Net interest income	$	375,086		$	382,171		$	381,488		$	391,090		$	376,589		$	1,138,745		$	936,846
FTE adjustment^1,4		5,837			5,825			5,666			5,378			4,950			17,328			13,036
Net interest income - tax equivalent basis⁴		380,923			387,996			387,154			396,468			381,539			1,156,073			949,882
Provision for credit losses²		19,068			14,787			13,437			11,408			15,490			47,292			133,391
Noninterest income		80,938			81,629			70,681			165,037			80,385			233,248			234,742
Noninterest expense²		244,776			246,584			250,711			282,675			262,444			742,071			755,508
Net income available to common shareholders	$	143,842		$	151,003		$	142,566		$	196,701		$	136,119		$	437,411		$	217,468
Per Common Share Data
Weighted average diluted shares		291,717			291,266			292,756			293,131			292,483			291,809			271,123
EPS, diluted	$	0.49		$	0.52		$	0.49		$	0.67		$	0.47		$	1.50		$	0.80
Cash dividends		0.14			0.14			0.14			0.14			0.14			0.42			0.42
Dividend payout ratio³		29	%		27	%		29	%		21	%		30	%		28	%		53	%
Book value	$	17.07		$	17.25		$	17.24		$	16.68		$	16.05		$	17.07		$	16.05
Stock price		14.54			13.94			14.42			17.98			16.47			14.54			16.47
Tangible book value⁴		9.87			10.03			9.98			9.42			8.75			9.87			8.75
Performance Ratios
ROAA		1.22	%		1.29	%		1.25	%		1.74	%		1.22	%		1.25	%		0.72	%
ROAE		11.4	%		12.0	%		11.6	%		16.8	%		11.1	%		11.7	%		6.3	%
ROATCE⁴		20.2	%		21.4	%		21.0	%		31.5	%		20.5	%		20.8	%		11.5	%
NIM (FTE)		3.49	%		3.60	%		3.69	%		3.85	%		3.71	%		3.59	%		3.34	%
Efficiency ratio⁴		51.7	%		51.2	%		52.8	%		49.1	%		55.3	%		51.9	%		62.2	%
Efficiency ratio (prior presentation)⁵	N/A			N/A			N/A			N/A				56.2	%	N/A				63.5	%
NCOs to average loans		0.24	%		0.13	%		0.21	%		0.05	%		0.10	%		0.19	%		0.06	%
ACL on loans to EOP loans		0.93	%		0.93	%		0.94	%		0.98	%		0.99	%		0.93	%		0.99	%
ACL⁶ to EOP loans		1.03	%		1.04	%		1.05	%		1.08	%		1.08	%		1.03	%		1.08	%
NPLs to EOP loans		0.80	%		0.91	%		0.74	%		0.81	%		0.81	%		0.80	%		0.81	%
Balance Sheet (EOP)
Total loans	$	32,577,834		$	32,432,473		$	31,822,374		$	31,123,641		$	30,528,933		$	32,577,834		$	30,528,933
Total assets		49,059,448			48,496,755			47,842,644			46,763,372			46,215,526			49,059,448			46,215,526
Total deposits		37,252,676			36,231,315			34,917,792			35,000,830			36,053,663			37,252,676			36,053,663
Total borrowed funds		5,556,010			6,034,008			6,740,454			5,586,314			4,264,750			5,556,010			4,264,750
Total shareholders' equity		5,239,537			5,292,095			5,277,426			5,128,595			4,943,383			5,239,537			4,943,383
Capital Ratios
Risk-based capital ratios (EOP):
Tier 1 common equity		10.41	%		10.14	%		9.98	%		10.03	%		9.88	%		10.41	%		9.88	%
Tier 1 capital		11.06	%		10.79	%		10.64	%		10.71	%		10.58	%		11.06	%		10.58	%
Total capital		12.32	%		12.14	%		11.96	%		12.02	%		11.84	%		12.32	%		11.84	%
Leverage ratio (average assets)		8.70	%		8.59	%		8.53	%		8.52	%		8.26	%		8.70	%		8.26	%
Equity to assets (averages)⁴		10.88	%		10.96	%		11.00	%		10.70	%		11.18	%		10.95	%		11.43	%
TCE to TA⁴		6.15	%		6.33	%		6.37	%		6.18	%		5.82	%		6.15	%		5.82	%
Nonfinancial Data
Full-time equivalent employees		3,981			4,021			4,023			3,967			4,008			3,981			4,008
Banking centers		257			256			256			263			263			257			263
¹ Calculated using the federal statutory tax rate in effect of 21% for all periods.
² Provision for unfunded commitments is included in the provision for credit losses. The reclassification of the provision for unfunded commitments out of other expense as a component of noninterest expense was made to amounts prior to December 31, 2022 to conform to the current period presentation.
³ Cash dividends per common share divided by net income per common share (basic).
⁴Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures. September 30, 2023 capital ratios are preliminary.
⁵Presented as calculated prior to December 31, 2022, which included the provision for unfunded commitments in noninterest expense. Management believes that removing the provision for unfunded commitments from this metric enhances comparability for peer comparison purposes.
⁶ Includes the allowance for credit losses on loans and unfunded 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															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2023			2023			2023			2022			2022			2023			2022
Interest income	$	576,519		$	544,902		$	495,649		$	457,821		$	406,518		$	1,617,070		$	996,381
Less: interest expense		201,433			162,731			114,161			66,731			29,929			478,325			59,535
Net interest income		375,086			382,171			381,488			391,090			376,589			1,138,745			936,846
Provision for credit losses¹		19,068			14,787			13,437			11,408			15,490			47,292			133,391
Net interest income after provision for credit losses		356,018			367,384			368,051			379,682			361,099			1,091,453			803,455
Wealth and investment services fees		26,687			26,521			26,920			25,668			25,359			80,128			75,183
Service charges on deposit accounts		18,524			17,751			17,003			18,109			20,042			53,278			54,392
Debit card and ATM fees		10,818			10,653			9,982			10,798			10,608			31,453			29,429
Mortgage banking revenue		5,063			4,165			3,400			3,888			5,360			12,628			19,127
Capital markets income		5,891			6,173			6,939			5,377			8,906			19,003			20,609
Company-owned life insurance		3,740			4,698			3,186			3,108			3,361			11,624			11,456
Gain on sale of health savings accounts		—			—			—			90,673			—			—			—
Other income		10,456			11,651			8,467			7,589			6,921			30,574			24,461
Gains (losses) on sales of debt securities		(241	)		17			(5,216	)		(173	)		(172	)		(5,440	)		85
Total noninterest income		80,938			81,629			70,681			165,037			80,385			233,248			234,742
Salaries and employee benefits		131,541			135,810			137,364			142,459			147,203			404,715			433,167
Occupancy		25,795			26,085			28,282			26,488			26,418			80,162			73,933
Equipment		8,284			7,721			7,389			7,591			7,328			23,394			20,046
Marketing		9,448			9,833			9,417			8,508			10,361			28,698			23,756
Technology		20,592			20,056			19,202			19,951			20,269			59,850			64,914
Communication		4,075			4,232			4,461			4,159			5,392			12,768			14,687
Professional fees		5,956			6,397			6,732			6,360			6,559			19,085			32,686
FDIC assessment		9,000			9,624			10,404			5,809			6,249			29,028			13,523
Amortization of intangibles		6,040			6,060			6,186			6,787			7,089			18,286			19,070
Amortization of tax credit investments		2,644			2,762			2,761			5,258			2,662			8,167			5,703
Property optimization		—			242			1,317			26,818			—			1,559			—
Other expense¹		21,401			17,762			17,196			22,487			22,914			56,359			54,023
Total noninterest expense		244,776			246,584			250,711			282,675			262,444			742,071			755,508
Income before income taxes		192,180			202,429			188,021			262,044			179,040			582,630			282,689
Income tax expense		44,304			47,393			41,421			61,309			38,887			133,118			55,137
Net income	$	147,876		$	155,036		$	146,600		$	200,735		$	140,153		$	449,512		$	227,552
Preferred dividends		(4,034	)		(4,033	)		(4,034	)		(4,034	)		(4,034	)		(12,101	)		(10,084	)
Net income applicable to common shares	$	143,842		$	151,003		$	142,566		$	196,701		$	136,119		$	437,411		$	217,468

EPS, diluted	$	0.49		$	0.52		$	0.49		$	0.67		$	0.47		$	1.50		$	0.80
Weighted Average Common Shares Outstanding
Basic		290,648			290,559			291,088			291,012			290,961			290,763			269,843
Diluted		291,717			291,266			292,756			293,131			292,483			291,809			271,123
Common shares outstanding (EOP)		292,586			292,597			291,922			292,903			292,880			292,586			292,880

¹ Provision for unfunded commitments is included in the provision for credit losses. The reclassification of the provision for unfunded commitments out of other expense as a component of noninterest expense was made to amounts prior to December 31, 2022 to conform to the current period presentation.


End of Period Balance Sheet (unaudited)
($ in thousands)
	September 30,			June 30,			March 31,			December 31,			September 30,
	2023			2023			2023			2022			2022
Assets
Cash and due from banks	$	381,343		$	473,023		$	386,879		$	453,432		$	466,846
Money market and other interest-earnings investments		1,282,087			724,863			727,056			274,980			334,765
Investments:
Treasury and government-sponsored agencies		2,515,249			2,309,285			2,236,412			2,195,175			2,186,551
Mortgage-backed securities		4,906,290			5,168,458			5,395,680			5,476,719			5,584,241
States and political subdivisions		1,705,200			1,760,725			1,785,073			1,827,164			1,829,561
Other securities		751,404			802,323			826,575			730,476			693,303
Total investments		9,878,143			10,040,791			10,243,740			10,229,534			10,293,656
Loans held-for-sale, at fair value		122,033			114,369			10,584			11,926			19,748
Loans:
Commercial		9,333,448			9,698,241			9,751,875			9,508,904			9,311,148
Commercial and agriculture real estate		13,916,221			13,450,209			12,908,380			12,457,070			12,227,888
Residential real estate		6,696,288			6,684,480			6,568,666			6,460,441			6,267,306
Consumer		2,631,877			2,599,543			2,593,453			2,697,226			2,722,591
Total loans		32,577,834			32,432,473			31,822,374			31,123,641			30,528,933
Allowance for credit losses on loans		(303,982	)		(300,555	)		(298,711	)		(303,671	)		(302,254	)
Premises and equipment, net		565,607			564,299			566,758			557,307			588,021
Operating lease right-of-use assets		179,284			184,700			183,687			189,714			187,626
Goodwill and other intangible assets		2,106,835			2,112,875			2,118,935			2,125,121			2,135,792
Company-owned life insurance		774,517			771,753			770,471			768,552			767,089
Other assets		1,495,747			1,378,164			1,310,871			1,332,836			1,195,304
Total assets	$	49,059,448		$	48,496,755		$	47,842,644		$	46,763,372		$	46,215,526

Liabilities and Equity
Noninterest-bearing demand deposits	$	10,091,352		$	10,532,838		$	10,995,083		$	11,930,798		$	12,400,077
Interest-bearing:
Checking and NOW accounts		7,495,417			7,654,202			7,903,520			8,340,955			8,963,014
Savings accounts		5,296,985			5,578,323			6,030,255			6,326,158			6,616,512
Money market accounts		8,793,218			7,200,288			5,867,239			5,389,139			5,602,729
Other time deposits		4,398,182			4,012,813			3,361,979			2,775,991			2,393,083
Total core deposits		36,075,154			34,978,464			34,158,076			34,763,041			35,975,415
Brokered deposits		1,177,522			1,252,851			759,716			237,789			78,248
Total deposits		37,252,676			36,231,315			34,917,792			35,000,830			36,053,663

Federal funds purchased and interbank borrowings		918			136,060			618,955			581,489			301,031
Securities sold under agreements to repurchase		279,061			311,447			393,018			432,804			438,053
Federal Home Loan Bank advances		4,412,576			4,771,183			4,981,612			3,829,018			2,804,617
Other borrowings		863,455			815,318			746,869			743,003			721,049
Total borrowed funds		5,556,010			6,034,008			6,740,454			5,586,314			4,264,750
Operating lease liabilities		199,937			206,178			205,249			211,964			207,725
Accrued expenses and other liabilities		811,288			733,159			701,723			835,669			746,005
Total liabilities		43,819,911			43,204,660			42,565,218			41,634,777			41,272,143
Preferred stock, common stock, surplus, and retained earnings		6,208,352			6,100,728			5,985,784			5,915,017			5,751,833
Accumulated other comprehensive income (loss), net of tax		(968,815	)		(808,633	)		(708,358	)		(786,422	)		(808,450	)
Total shareholders' equity		5,239,537			5,292,095			5,277,426			5,128,595			4,943,383
Total liabilities and shareholders' equity	$	49,059,448		$	48,496,755		$	47,842,644		$	46,763,372		$	46,215,526


Average Balance Sheet and Interest Rates (unaudited)
($ in thousands)

	Three Months Ended							Three Months Ended							Three Months Ended
	September 30, 2023							June 30, 2023							September 30, 2022
	Average			Income¹/		Yield/		Average			Income¹/		Yield/		Average			Income¹/		Yield/
Earning Assets:	Balance			Expense		Rate		Balance			Expense		Rate		Balance			Expense		Rate
Money market and other interest-earning investments	$	980,813		$	13,194	5.34	%	$	724,601		$	8,966	4.96	%	$	514,362		$	935	0.72	%
Investments:
Treasury and government-sponsored agencies		2,376,864			23,037	3.88	%		2,222,269			19,355	3.48	%		2,326,070			13,212	2.27	%
Mortgage-backed securities		5,079,091			33,237	2.62	%		5,301,084			34,291	2.59	%		5,891,283			36,157	2.45	%
States and political subdivisions		1,737,037			14,220	3.27	%		1,768,897			14,396	3.26	%		1,829,322			14,631	3.20	%
Other securities		793,196			10,127	5.11	%		824,482			9,995	4.85	%		718,735			6,781	3.77	%
Total investments		9,986,188			80,621	3.23	%		10,116,732			78,037	3.09	%		10,765,410			70,781	2.63	%
Loans:²
Commercial		9,612,102			163,869	6.82	%		9,862,728			163,721	6.64	%		9,045,009			113,491	5.02	%
Commercial and agriculture real estate		13,711,156			219,575	6.41	%		13,164,390			199,287	6.06	%		11,929,892			136,780	4.59	%
Residential real estate loans		6,712,269			62,775	3.74	%		6,643,254			60,718	3.66	%		6,189,503			56,432	3.65	%
Consumer		2,614,928			42,322	6.42	%		2,585,493			39,998	6.21	%		2,735,850			33,049	4.79	%
Total loans		32,650,455			488,541	5.98	%		32,255,865			463,724	5.75	%		29,900,254			339,752	4.54	%

Total earning assets	$	43,617,456		$	582,356	5.34	%	$	43,097,198		$	550,727	5.11	%	$	41,180,026		$	411,468	3.99	%

Less: Allowance for credit losses on loans		(300,071	)						(301,311	)						(290,215	)

Non-earning Assets:
Cash and due from banks	$	382,755						$	418,972						$	503,841
Other assets		4,960,383							4,884,694							4,522,171

Total assets	$	48,660,523						$	48,099,553						$	45,915,823

Interest-Bearing Liabilities:
Checking and NOW accounts	$	7,515,439		$	25,531	1.35	%	$	7,881,863		$	24,358	1.24	%	$	8,681,392		$	5,751	0.26	%
Savings accounts		5,414,775			4,268	0.31	%		5,785,603			3,247	0.23	%		6,733,465			547	0.03	%
Money market accounts		7,979,999			65,549	3.26	%		6,084,963			35,358	2.33	%		5,344,567			2,072	0.15	%
Other time deposits		4,229,692			37,110	3.48	%		3,680,029			26,633	2.90	%		2,463,573			2,168	0.35	%
Total interest-bearing core deposits		25,139,905			132,458	2.09	%		23,432,458			89,596	1.53	%		23,222,997			10,538	0.18	%
Brokered deposits		1,183,228			14,970	5.02	%		948,397			11,378	4.81	%		44,579			282	2.51	%
Total interest-bearing deposits		26,323,133			147,428	2.22	%		24,380,855			100,974	1.66	%		23,267,576			10,820	0.18	%

Federal funds purchased and interbank borrowings		62,921			910	5.74	%		441,145			5,655	5.14	%		122,311			720	2.34	%
Securities sold under agreements to repurchase		302,305			710	0.93	%		340,178			900	1.06	%		436,225			106	0.10	%
Federal Home Loan Bank advances		4,537,250			40,382	3.53	%		5,283,728			45,088	3.42	%		3,025,844			13,027	1.71	%
Other borrowings		841,307			12,003	5.66	%		796,536			10,114	5.09	%		676,874			5,256	3.08	%
Total borrowed funds		5,743,783			54,005	3.73	%		6,861,587			61,757	3.61	%		4,261,254			19,109	1.78	%

Total interest-bearing liabilities	$	32,066,916		$	201,433	2.49	%	$	31,242,442		$	162,731	2.09	%	$	27,528,830		$	29,929	0.43	%

Noninterest-Bearing Liabilities and Shareholders' Equity
Demand deposits	$	10,338,267						$	10,741,646						$	12,575,011
Other liabilities		961,268							841,663							677,829
Shareholders' equity		5,294,072							5,273,802							5,134,153

Total liabilities and shareholders' equity	$	48,660,523						$	48,099,553						$	45,915,823

Net interest rate spread						2.85	%						3.02	%						3.56	%

Net interest margin (GAAP)						3.44	%						3.55	%						3.66	%

Net interest margin (FTE)³						3.49	%						3.60	%						3.71	%

FTE adjustment				$	5,837						$	5,825						$	4,950

¹ Interest income is reflected on a FTE.
² Includes loans held-for-sale.
³Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures.


Average Balance Sheet and Interest Rates (unaudited)
($ in thousands)

	Nine Months Ended							Nine Months Ended
	September 30, 2023							September 30, 2022
	Average			Income¹/		Yield/		Average			Income¹/		Yield/
Earning Assets:	Balance			Expense		Rate		Balance			Expense		Rate
Money market and other interest-earning investments	$	736,225		$	25,258	4.59	%	$	976,579		$	3,073	0.42	%
Investments:
Treasury and government-sponsored agencies		2,266,177			58,923	3.47	%		2,336,897			33,249	1.90	%
Mortgage-backed securities		5,268,509			102,618	2.60	%		5,593,341			94,067	2.24	%
States and political subdivisions		1,771,155			43,306	3.26	%		1,801,053			42,839	3.17	%
Other securities		785,474			28,726	4.88	%		682,937			16,392	3.20	%
Total investments	$	10,091,315		$	233,573	3.09	%	$	10,414,228		$	186,547	2.39	%
Loans:²
Commercial		9,644,541			475,210	6.57	%		7,888,730			264,517	4.47	%
Commercial and agriculture real estate		13,180,509			598,337	6.05	%		10,753,988			327,733	4.06	%
Residential real estate loans		6,626,551			181,592	3.65	%		5,369,844			142,105	3.53	%
Consumer		2,612,519			120,428	6.16	%		2,521,121			85,442	4.53	%
Total loans		32,064,120			1,375,567	5.72	%		26,533,683			819,797	4.12	%

Total earning assets	$	42,891,660		$	1,634,398	5.08	%	$	37,924,490		$	1,009,417	3.55	%

Less: Allowance for credit losses on loans		(301,909	)						(247,558	)

Non-earning Assets:
Cash and due from banks	$	412,998						$	350,848
Other assets		4,917,592							4,249,986

Total assets	$	47,920,341						$	42,277,766

Interest-Bearing Liabilities:
Checking and NOW accounts	$	7,793,561		$	69,248	1.19	%	$	7,977,524		$	8,133	0.14	%
Savings accounts		5,791,780			9,745	0.22	%		6,295,628			1,809	0.04	%
Money market accounts		6,577,317			120,917	2.46	%		4,819,252			3,791	0.11	%
Other time deposits		3,660,156			79,032	2.89	%		2,236,206			5,112	0.31	%
Total interest-bearing core deposits		23,822,814			278,942	1.57	%		21,328,610			18,845	0.12	%
Brokered deposits		879,886			32,053	4.87	%		17,505			356	2.72	%
Total interest-bearing deposits		24,702,700			310,995	1.68	%		21,346,115			19,201	0.12	%

Federal funds purchased and interbank borrowings		306,480			11,404	4.97	%		41,993			722	2.30	%
Securities sold under agreements to repurchase		351,362			2,389	0.91	%		450,966			287	0.09	%
Federal Home Loan Bank advances		4,699,074			123,466	3.51	%		2,891,347			25,915	1.20	%
Other borrowings		806,575			30,071	4.98	%		574,589			13,410	3.12	%
Total borrowed funds		6,163,491			167,330	3.63	%		3,958,895			40,334	1.36	%

Total interest-bearing liabilities		30,866,191			478,325	2.07	%		25,305,010			59,535	0.31	%

Noninterest-Bearing Liabilities and Shareholders' Equity
Demand deposits	$	10,864,375						$	11,540,293
Other liabilities		944,619							601,619
Shareholders' equity		5,245,156							4,830,844

Total liabilities and shareholders' equity	$	47,920,341						$	42,277,766

Net interest rate spread						3.01	%						3.24	%

Net interest margin (GAAP)						3.54	%						3.29	%

Net interest margin (FTE)³						3.59	%						3.34	%

FTE adjustment				$	17,328						$	13,036

¹ Interest income is reflected on a FTE.
² Includes loans held-for-sale.
³Represents 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															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2023			2023			2023			2022			2022			2023			2022
Allowance for credit losses:
Beginning allowance for credit losses on loans	$	300,555		$	298,711		$	303,671		$	302,254		$	288,003		$	303,671		$	107,341
Allowance established for acquired PCD loans		—			—			—			—			10,558			—			89,089
Provision for credit losses on loans		23,115			11,936			11,469			5,389			11,288			46,520			117,951
Gross charge-offs		(22,750	)		(14,331	)		(18,180	)		(7,081	)		(11,440	)		(55,261	)		(20,200	)
Gross recoveries		3,062			4,239			1,751			3,109			3,845			9,052			8,073
NCOs		(19,688	)		(10,092	)		(16,429	)		(3,972	)		(7,595	)		(46,209	)		(12,127	)
Ending allowance for credit losses on loans	$	303,982		$	300,555		$	298,711		$	303,671		$	302,254		$	303,982		$	302,254
Beginning allowance for credit losses on unfunded commitments	$	37,007		$	34,156		$	32,188		$	26,169		$	21,966		$	32,188		$	10,879
Provision (release) for credit losses on unfunded commitments		(4,047	)		2,851			1,968			6,019			4,203			772			15,290
Ending allowance for credit losses on unfunded commitments	$	32,960		$	37,007		$	34,156		$	32,188		$	26,169		$	32,960		$	26,169
Allowance for credit losses	$	336,942		$	337,562		$	332,867		$	335,859		$	328,423		$	336,942		$	328,423
Provision for credit losses on loans	$	23,115		$	11,936		$	11,469		$	5,389		$	11,288		$	46,520		$	117,951
Provision (release) for credit losses on unfunded commitments¹		(4,047	)		2,851			1,968			6,019			4,203			772			15,290
Provision for credit losses¹	$	19,068		$	14,787		$	13,437		$	11,408		$	15,491		$	47,292		$	133,241
NCOs / average loans²		0.24	%		0.13	%		0.21	%		0.05	%		0.10	%		0.19	%		0.06	%
Average loans²	$	32,639,812		$	32,251,242		$	31,267,836		$	30,732,473		$	29,890,008		$	32,057,989		$	26,521,011
EOP loans²		32,577,834			32,432,473			31,822,374			31,123,641			30,528,933			32,577,834			30,528,933
ACL on loans / EOP loans²		0.93	%		0.93	%		0.94	%		0.98	%		0.99	%		0.93	%		0.99	%
ACL / EOP loans²		1.03	%		1.04	%		1.05	%		1.08	%		1.08	%		1.03	%		1.08	%
Underperforming Assets:
Loans 90 days and over (still accruing)	$	1,192		$	303		$	1,231		$	2,650		$	767		$	1,192		$	767
NPLs:
Nonaccrual loans^3,4		261,346			295,509			234,337			238,178			233,659			261,346			233,659
TDRs still accruing⁴	N/A			N/A			N/A				15,313			13,674		N/A				13,674
Total NPLs		261,346			295,509			234,337			253,491			247,333			261,346			247,333
Foreclosed assets		9,761			9,824			10,817			10,845			11,967			9,761			11,967
Total underperforming assets	$	272,299		$	305,636		$	246,385		$	266,986		$	260,067		$	272,299		$	260,067
Classified and Criticized Assets:
Nonaccrual loans³	$	261,346		$	295,509		$	234,337		$	238,178		$	233,659		$	261,346		$	233,659
Substandard loans (still accruing)		563,427			524,709			570,229			504,657			476,724			563,427			476,724
Loans 90 days and over (still accruing)		1,192			303			1,231			2,650			767			1,192			767
Total classified loans - "problem loans"		825,965			820,521			805,797			745,485			711,150			825,965			711,150
Other classified assets		48,998			40,942			26,441			24,735			24,773			48,998			24,773
Criticized loans - "special mention loans"		775,526			614,547			593,307			636,069			549,994			775,526			549,994
Total classified and criticized assets	$	1,650,489		$	1,476,010		$	1,425,545		$	1,406,289		$	1,285,917		$	1,650,489		$	1,285,917
Loans 30-89 days past due	$	56,772		$	39,748		$	42,071		$	55,522		$	65,632		$	56,772		$	65,632
NPLs / EOP loans²		0.80	%		0.91	%		0.74	%		0.81	%		0.81	%		0.80	%		0.81	%
ACL to NPLs		129	%		114	%		142	%		132	%		133	%		129	%		133	%
Under-performing assets/EOP loans²		0.84	%		0.94	%		0.77	%		0.86	%		0.85	%		0.84	%		0.85	%
Under-performing assets/EOP assets		0.56	%		0.63	%		0.51	%		0.57	%		0.56	%		0.56	%		0.56	%
30+ day delinquencies/EOP loans²		0.18	%		0.12	%		0.14	%		0.19	%		0.22	%		0.18	%		0.22	%
¹ Excludes $0.2 million of expense to establish an allowance on held-to-maturity securities during the first quarter of 2022. Provision for unfunded commitments is included in the provision for credit losses. The reclassification of the provision for unfunded commitments out of other expense as a component of noninterest expense was made to amounts prior to December 31, 2022 to conform to the current period presentation.
² Excludes loans held-for-sale.
³ Includes non-accruing TDRs totaling $24.0 million at December 31, 2022 and $23.8 million at September 30, 2022.
⁴ As a result of accounting guidance adopted in 2023, the TDR classification is no longer applicable subsequent to December 31, 2022.
PCD - Purchased credit deteriorated TDR - Troubled debt restructuring


Non-GAAP Measures (unaudited)
($ and shares in thousands, except per share data)

	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2023			2023			2023			2022			2022			2023			2022
Earnings Per Share:
Net income applicable to common shares	$	143,842		$	151,003		$	142,566		$	196,701		$	136,119		$	437,411		$	217,468
Adjustments:
Merger-related charges²		6,257			2,372			14,558			20,314			22,743			23,187			111,627
Tax effect¹		(1,042	)		(277	)		(3,172	)		(5,160	)		(8,529	)		(4,491	)		(31,120	)
Merger-related charges, net		5,215			2,095			11,386			15,154			14,214			18,696			80,507
Debt Securities (gains) losses		241			(17	)		5,216			173			172			5,440			(85	)
Tax effect¹		(40	)		2			(1,137	)		(44	)		(65	)		(1,175	)		(33	)
Debt securities (gains) losses, net		201			(15	)		4,079			129			107			4,265			(118	)
Louisville expenses		—			3,361			—			—			—			3,361			—
Tax effect¹		—			(392	)		—			—			—			(392	)		—
Louisville expenses, net		—			2,969			—			—			—			2,969			—
Property optimization charges		—			242			1,317			26,818			—			1,559			—
Tax effect¹		—			(28	)		(287	)		(6,812	)		—			(315	)		—
Property optimization charges, net		—			214			1,030			20,006			—			1,244			—
Gain on sale of health savings accounts		—			—			—			(90,673	)		—			—			—
Tax effect¹		—			—			—			23,031			—			—			—
Gain on sale of health savings accounts, net		—			—			—			(67,642	)		—			—			—
Day 1 non-PCD		—			—			—			—			—			—			96,270
Tax effect¹		—			—			—			—			—			—			(17,550	)
Day 1 non-PCD, net		—			—			—			—			—			—			78,720
Total adjustments, net		5,416			5,263			16,495			(32,353	)		14,321			27,174			159,109
Net income applicable to common shares, adjusted	$	149,258		$	156,266		$	159,061		$	164,348		$	150,440		$	464,585		$	376,577
Weighted average diluted common shares outstanding		291,717			291,266			292,756			293,131			292,483			291,809			271,123
EPS, diluted	$	0.49		$	0.52		$	0.49		$	0.67		$	0.47		$	1.50		$	0.80
Adjusted EPS, diluted	$	0.51		$	0.54		$	0.54		$	0.56		$	0.51		$	1.59		$	1.39
NIM:
Net interest income	$	375,086		$	382,171		$	381,488		$	391,090		$	376,589		$	1,138,745		$	936,846
Add: FTE adjustment³		5,837			5,825			5,666			5,378			4,950			17,328			13,036
Net interest income (FTE)	$	380,923		$	387,996		$	387,154		$	396,468		$	381,539		$	1,156,073		$	949,882
Average earning assets	$	43,617,456		$	43,097,198		$	41,941,913		$	41,206,695		$	41,180,026		$	42,891,660		$	37,924,490
NIM (GAAP)		3.44	%		3.55	%		3.64	%		3.80	%		3.66	%		3.54	%		3.29	%
NIM (FTE)		3.49	%		3.60	%		3.69	%		3.85	%		3.71	%		3.59	%		3.34	%

Refer to last page of Non-GAAP reconciliations for footnotes.


Non-GAAP Measures (unaudited)
($ in thousands)

	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2023			2023			2023			2022			2022			2023			2022
PPNR:
Net interest income (FTE)³	$	380,923		$	387,996		$	387,154		$	396,468		$	381,539		$	1,156,073		$	949,882
Add: Noninterest income		80,938			81,629			70,681			165,037			80,385			233,248			234,742
Total revenue (FTE)		461,861			469,625			457,835			561,505			461,924			1,389,321			1,184,624
Less: Noninterest expense		(244,776	)		(246,584	)		(250,711	)		(282,675	)		(262,444	)		(742,071	)		(755,508	)
PPNR	$	217,085		$	223,041		$	207,124		$	278,830		$	199,480		$	647,250		$	429,116
Adjustments:
Gain on sale of health savings accounts	$	—		$	—		$	—		$	(90,673	)	$	—		$	—		$	—
Debt securities (gains) losses		241			(17	)		5,216			173			172			5,440			(85	)
Noninterest income adjustments		241			(17	)		5,216			(90,500	)		172			5,440			(85	)
Adjusted noninterest income		81,179			81,612			75,897			74,537			80,557			238,688			234,657
Adjusted revenue	$	462,102		$	469,608		$	463,051		$	471,005		$	462,096		$	1,394,761		$	1,184,539
Adjustments:
Merger-related charges⁴	$	6,257		$	2,372		$	14,558		$	20,314		$	22,743		$	23,187		$	100,614
Louisville expenses		—			3,361			—			—			—			3,361			—
Property optimization charges		—			242			1,317			26,818			—			1,559			—
Noninterest expense adjustments		6,257			5,975			15,875			47,132			22,743			28,107			100,614
Adjusted total noninterest expense		(238,519	)		(240,609	)		(234,836	)		(235,543	)		(239,701	)		(713,964	)		(654,894	)
Adjusted PPNR	$	223,583		$	228,999		$	228,215		$	235,462		$	222,395		$	680,797		$	529,645
Efficiency Ratio:
Noninterest expense	$	244,776		$	246,584		$	250,711		$	282,675		$	262,444		$	742,071		$	755,508
Less: Amortization of intangibles		(6,040	)		(6,060	)		(6,186	)		(6,787	)		(7,089	)		(18,286	)		(19,070	)
Noninterest expense, excl. amortization of intangibles		238,736			240,524			244,525			275,888			255,355			723,785			736,438
Less: Amortization of tax credit investments		(2,644	)		(2,762	)		(2,761	)		(5,258	)		(2,662	)		(8,167	)		(5,703	)
Less: Noninterest expense adjustments		(6,257	)		(5,975	)		(15,875	)		(47,132	)		(22,743	)		(28,107	)		(100,614	)
Adjusted noninterest expense	$	229,835		$	231,787		$	225,889		$	223,498		$	229,950		$	687,511		$	630,121
Total revenue (FTE)³	$	461,861		$	469,625		$	457,835		$	561,505		$	461,924		$	1,389,321		$	1,184,624
Less: Debt securities (gains) losses		241			(17	)		5,216			173			172			5,440			(85	)
Total revenue excl. debt securities (gains) losses		462,102			469,608			463,051			561,678			462,096			1,394,761			1,184,539
Less: Gain on sale of health savings accounts		—			—			—			(90,673	)		—			—			—
Total adjusted revenue	$	462,102		$	469,608		$	463,051		$	471,005		$	462,096		$	1,394,761		$	1,184,539
Efficiency Ratio		51.7	%		51.2	%		52.8	%		49.1	%		55.3	%		51.9	%		62.2	%
Efficiency Ratio (prior presentation)⁵	N/A			N/A			N/A			N/A				56.2	%	N/A				63.5	%
Adjusted Efficiency Ratio		49.7	%		49.4	%		48.8	%		47.5	%		49.8	%		49.3	%		53.2	%
Adjusted Efficiency Ratio (prior presentation)⁵	N/A			N/A			N/A			N/A				50.7	%	N/A				53.6	%

Refer to last page of Non-GAAP reconciliations for footnotes.


Non-GAAP Measures (unaudited)
($ in thousands)

	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2023			2023			2023			2022			2022			2023			2022
ROAE and ROATCE:
Net income applicable to common shares	$	143,842		$	151,003		$	142,566		$	196,701		$	136,119		$	437,411		$	217,468
Amortization of intangibles		6,040			6,060			6,186			6,787			7,089			18,286			19,070
Tax effect¹		(1,510	)		(1,515	)		(1,547	)		(1,697	)		(1,772	)		(4,572	)		(4,768	)
Amortization of intangibles, net		4,530			4,545			4,639			5,090			5,317			13,714			14,302
Net income applicable to common shares, excluding intangible amortization		148,372			155,548			147,205			201,791			141,436			451,125			231,770
Total adjustments, net (see pg.12)		5,416			5,263			16,495			(32,353	)		14,321			27,174			159,109
Adjusted tangible net income applicable to common shares	$	153,788		$	160,811		$	163,700		$	169,438		$	155,757		$	478,299		$	390,879
Average shareholders' equity	$	5,294,072		$	5,273,802		$	5,166,188		$	4,936,582		$	5,134,153		$	5,245,156		$	4,830,844
Less: Average preferred equity		(243,719	)		(243,719	)		(243,719	)		(243,719	)		(243,719	)		(243,719	)		(202,013	)
Average shareholders' common equity	$	5,050,353		$	5,030,083		$	4,922,469		$	4,692,863		$	4,890,434		$	5,001,437		$	4,628,831
Average goodwill and other intangible assets		(2,109,944	)		(2,115,894	)		(2,122,157	)		(2,132,480	)		(2,129,858	)		(2,115,953	)		(1,941,270	)
Average tangible shareholder's common equity	$	2,940,409		$	2,914,189		$	2,800,312		$	2,560,383		$	2,760,576		$	2,885,484		$	2,687,561
ROAE		11.4	%		12.0	%		11.6	%		16.8	%		11.1	%		11.7	%		6.3	%
ROAE, adjusted		11.8	%		12.4	%		12.9	%		14.0	%		12.3	%		12.4	%		10.8	%
ROATCE		20.2	%		21.4	%		21.0	%		31.5	%		20.5	%		20.8	%		11.5	%
ROATCE, adjusted		20.9	%		22.1	%		23.4	%		26.5	%		22.6	%		22.1	%		19.4	%

Refer to last page of Non-GAAP reconciliations for footnotes.


Non-GAAP Measures (unaudited)
($ in thousands)

	As of
	September 30,			June 30,			March 31,			December 31,			September 30,
	2023			2023			2023			2022			2022
Tangible Common Equity:
Shareholders' equity	$	5,239,537		$	5,292,095		$	5,277,426		$	5,128,595		$	4,943,383
Less: Preferred equity		(243,719	)		(243,719	)		(243,719	)		(243,719	)		(243,719	)
Shareholders' common equity	$	4,995,818		$	5,048,376		$	5,033,707		$	4,884,876		$	4,699,664
Less: Goodwill and other intangible assets		(2,106,835	)		(2,112,875	)		(2,118,935	)		(2,125,121	)		(2,135,792	)
Tangible shareholders' common equity	$	2,888,983		$	2,935,501		$	2,914,772		$	2,759,755		$	2,563,872

Total assets	$	49,059,448		$	48,496,755		$	47,842,644		$	46,763,372		$	46,215,526
Less: Goodwill and other intangible assets		(2,106,835	)		(2,112,875	)		(2,118,935	)		(2,125,121	)		(2,135,792	)
Tangible assets	$	46,952,613		$	46,383,880		$	45,723,709		$	44,638,251		$	44,079,734

Risk-weighted assets⁶	$	37,505,361		$	37,414,177		$	36,801,707		$	35,950,900		$	34,741,765

Tangible common equity to tangible assets		6.15	%		6.33	%		6.37	%		6.18	%		5.82	%
Tangible common equity to risk-weighted assets⁶		7.70	%		7.85	%		7.92	%		7.68	%		7.38	%
Tangible Common Equity:
Common shares outstanding		292,586			292,597			291,922			292,903			292,880
Tangible common book value	$	9.87		$	10.03		$	9.98		$	9.42		$	8.75

¹Tax-effect calculations use management's estimate of the full year FTE tax rates (federal + state). ²Includes $11.0 million of provision for unfunded commitments for the nine months ended September 30, 2022. ³Calculated using the federal statutory tax rate in effect of 21% for all periods. ⁴Excludes $11.0 million of provision for unfunded commitments that is included in provision for credit losses for the nine months ended September 30, 2022. ⁵ Presented as calculated prior to December 31, 2022, which included the provision for unfunded commitments in noninterest expense. Management believes that removing the provision for unfunded commitments from this metric enhances comparability for peer comparison purposes. ⁶September 30, 2023 figures are preliminary.

Old National's 3rd Quarter Results Supported by Strong Deposit Franchise, Ample Capital, and Expense Discipline

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