Exhibit 99.1

For further information:

Media Contact:

Amy Yuhn

312-564-1378

ayuhn@theprivatebank.com

Investor Relations Contact:

Beth Coronelli

312-564-6052

bcoronelli@theprivatebank.com

For Immediate Release

PrivateBancorp Reports First Quarter 2011 Results

Net income of $0.10 per share; Commercial middle market strategy continues to reshape business

CHICAGO, April 26, 2011 – PrivateBancorp, Inc. (NASDAQ: PVTB) today reported net income available to common shareholders of $7.5 million, or $0.10 per diluted share, for the first quarter 2011, compared to a net loss available to common shareholders of $24.3 million, or $0.35 per diluted share, for the first quarter 2010, and net income available to common shareholders of $8.5 million, or $0.12 per diluted share for the fourth quarter 2010.

“Today we reported our third-consecutive profitable quarter and our core business is performing well, with 26 percent growth in operating profit compared to a year ago,” said Larry D. Richman, President & Chief Executive Officer, PrivateBancorp, Inc. “We have increased total commercial loans by 18 percent from first quarter 2010 and decreased commercial real estate and construction loans by 15 percent as we continue to reshape our portfolio. We are making steady progress in improving our overall credit quality as demonstrated by our ongoing reduction in non-performing loans. I am pleased by our success in attracting new clients as well as expanding existing relationships, as this contributes to our improving bottom line results.”

First Quarter Results

 

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Net revenue increased 11 percent to $127.0 million, compared to $114.3 million for the first quarter of 2010, and decreased 7 percent from $136.1 million in the fourth quarter 2010, which included $9.3 million of securities gains.

 

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Operating profit increased 26 percent to $51.6 million, compared to $40.9 million for the first quarter of 2010 and was down $2.3 million from $53.9 million in fourth quarter 2010.

 

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Net interest margin increased to 3.46 percent for the first quarter 2011, compared to 3.33 percent in the first and fourth quarters of 2010. Net interest income increased to $102.6 million in the first quarter.

 

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Non-performing assets at quarter-end were down slightly from year-end to $450.7 million. Non-performing loans decreased $8.9 million and other real estate owned (OREO) increased $5.0 million. The allowance for loan losses declined to $218.2 million at quarter-end, or 2.41 percent of total loans.

 

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Total loans at March 31, 2011, were $9.0 billion, up nearly 2 percent from a year ago and relatively flat compared to year-end. Commercial and industrial loans now comprise 56 percent of the loan portfolio.

 

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First quarter 2011 results included a $2.8 million, or $0.04 per share, positive one-time adjustment related to the revaluation of the deferred tax asset as a result of the increase in the Illinois corporate tax rate.

Operating Performance

The ongoing transformation to serve the commercial middle market has driven improved revenue and operating profit as the Company has added new clients, expanded relationships with existing clients through cross-sell and exited less profitable relationships that are no longer consistent with its strategy. The net interest margin has increased 13 basis points over the first and fourth quarters of 2010, benefiting from the effect of lower cost of funds and the changing loan mix. With a continued emphasis on building client relationships, there was steady growth in treasury management income, higher trust and investment fees and increased syndication revenues, offset by lower capital markets activity in the first quarter.

Net revenue was $127.0 million in the first quarter 2011, compared to $114.3 million in the first quarter 2010 and $136.1 million in the fourth quarter 2010. Operating profit was $51.6 million in the first quarter 2011, compared to $40.9 million in the first quarter 2010 and $53.9 million in the fourth quarter 2010. The fourth quarter 2010 results included net securities gains of $9.3 million, compared to $367,000 of net securities gains in the first quarter 2011 and $29,000 in the first quarter of 2010.

Net interest income was $102.6 million for the first quarter 2011, compared to $98.3 million for the first quarter 2010 and $100.3 million in the fourth quarter 2010. Net interest margin increased to 3.46 percent for the first quarter 2011, up from 3.33 percent in both the first quarter 2010 and the fourth quarter 2010. Excluding covered asset accretion, the net interest margin was 3.41 percent for the first quarter 2011, compared to 3.08 percent in the first quarter 2010 and 3.28 percent in the fourth quarter 2010.

 

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Non-interest income was $23.6 million in the first quarter 2011, compared to $15.1 million in the first quarter 2010 and $34.9 million in the fourth quarter 2010. Treasury management income was up 32 percent from the first quarter 2010 and 3 percent from the fourth quarter 2010, with increased volumes and strong demand deposit levels. Trust and investment fee income increased 5 percent from first quarter 2010 and was up 2 percent from the fourth quarter 2010, reflecting client acquisition. Capital markets revenue, including the credit valuation adjustment, was $4.5 million in the first quarter, up from $278,000 in the first quarter 2010, and down from $6.8 million in the fourth quarter 2010. Capital markets demand, which was higher in the fourth quarter 2010, fluctuates depending on clients’ interest rate outlook. Loan and credit-related fees in the first quarter increased to $5.9 million, with growth in syndication revenue.

Mortgage banking income was $1.4 million for the first quarter 2011, compared to $2.1 million for the first quarter 2010 and $3.5 million for the fourth quarter 2010. First quarter mortgage origination volumes were down from 2010 levels due to prevailing market conditions.

Expenses

Non-interest expense decreased 8 percent in first quarter 2011, as compared to fourth quarter 2010, primarily due to a lower loan and collection expense, provision for unfunded commitments, deposit insurance costs, and professional fees. Non-interest expense was $75.3 million in the first quarter 2011, compared to $73.4 million in the first quarter 2010 and $82.1 million in the fourth quarter 2010.

Income tax expense for the quarter ended March 31, 2011, includes a positive one-time adjustment of $2.8 million relating to the revaluation of the Company’s deferred tax asset. The revaluation was the result of an increase in the Illinois corporate income tax rate that became effective during the quarter.

The efficiency ratio improved to 59.3 percent in the first quarter 2011, compared to 64.2 percent in the first quarter 2010 and 60.4 percent in the fourth quarter 2010.

Credit Quality

Ongoing portfolio management and workout efforts continued to drive improvement in overall credit quality. Special mention loans were down from the fourth quarter. Non-performing assets and non-performing loans declined as non-performing loan inflows were again less than the prior quarter. Consistent with moving problem loans through the workout process, OREO and restructured loans increased in the quarter. The decline in OREO and loan sales compared to the fourth quarter reflects the timing of resolution activity.

The first quarter 2011 provision for loan losses was $36.7 million, excluding covered loan provision, compared to $72.1 million in the first quarter 2010 and $34.5 million in the fourth quarter

 

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2010. The allowance for loan losses as a percentage of total loans was 2.41 percent at March 31, 2011, compared to 2.66 percent at March 31, 2010, and 2.44 percent at December 31, 2010. The allowance for loan losses as a percentage of non-performing loans was 61 percent at March 31, 2011, compared to 62 percent at March 31, 2010, and 61 percent at December 31, 2010.

Net charge-offs were $41.3 million for the quarter ended March 31, 2011, compared to $56.9 million for the first quarter 2010 and $35.1 million for the fourth quarter 2010.

Non-performing assets totaled $450.7 million at March 31, 2011, compared to $442.0 million at March 31, 2010, and $454.6 million at December 31, 2010. Non-performing assets to total assets were 3.61 percent at March 31, 2011, compared to 3.46 percent at March 31, 2010, and 3.65 percent at December 31, 2010. Non-performing loans were $356.9 million at quarter-end, compared to $381.2 million at the end of first quarter 2010, and $365.9 million at year-end 2010. OREO totaled $93.8 million at March 31, 2011, compared to $60.8 million at March 31, 2010, and $88.7 million at year-end 2010.

Restructured loans accruing interest were $100.9 million at the end of first quarter 2011, compared to $3.8 million at the end of the first quarter 2010 and $87.6 million at the end of fourth quarter 2010. The Company continues to utilize loan restructuring to maximize economic recovery.

Credit quality results exclude $364.4 million in covered assets as of the end of the first quarter, referring to certain assets acquired through an FDIC-assisted transaction that are subject to a loss-sharing agreement, compared to $468.9 million in the first quarter 2010 and $397.2 million in the fourth quarter 2010.

Balance Sheet

The Company continued to reshape the portfolio as commercial and industrial loans increased 18 percent from first quarter 2010 and commercial real estate and construction balances decreased 15 percent. This trend continued in the first quarter 2011 with a $157.3 million increase from the fourth quarter in commercial and industrial loans, and a $183.7 million decrease in commercial real estate and construction loans. Commercial and industrial loans now comprise 56 percent of the total portfolio, compared to 48 percent a year ago. Total loans were relatively flat from year-end with $210.5 million in loans from new relationships offset by payoffs, paydowns, charge-offs and loan sales.

Total loans were $9.0 billion at quarter-end, compared to $8.9 billion at March 31, 2010 and $9.1 billion at December 31, 2010. Total assets were $12.5 billion at March 31, 2011, compared to $12.8 billion at March 31, 2010, and $12.5 billion at December 31, 2010.

Total deposits were $10.6 billion at March 31, 2011, compared to $10.6 billion at March 31, 2010, and $10.5 billion at December 31, 2010. Client deposits were $10.0 billion at the end of the first quarter 2011, compared to $9.9 billion at the end of first quarter 2010 and at December 31, 2010.

 

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Client deposits at March 31, 2011, included $2.4 billion in non-interest bearing deposits. Overall cost of funds has benefited from favorable changes in the deposit mix, improved pricing and the increase of demand deposits.

The Company’s investment securities portfolio was $1.9 billion at March 31, 2011, compared to $1.8 billion at March 31, 2010, and $1.9 billion at December 31, 2010. Net unrealized gains were $30.5 million, compared to $53.7 million at the end of the first quarter 2010 and $32.0 million at the end of the fourth quarter 2010. The securities portfolio is primarily composed of U.S. government agency backed mortgage pools, agency collateralized mortgage obligations, and investment grade municipal bonds.

Federal funds sold and other short-term investments, primarily cash on deposit with the Federal Reserve, were $621.2 million at the end of the first quarter 2011, compared to $1.1 billion at the end of first quarter 2010 and $541.3 million in the fourth quarter 2010. These levels fluctuate based on the anticipated liquidity needs of our commercial clients.

Capital

As of March 31, 2011, the Company’s total risk-based capital ratio was 14.55 percent, the Tier 1 risk-based capital ratio was 12.41 percent, and the leverage ratio was 10.91 percent. Tier 1 common capital ratio was 7.97 percent and tangible common equity ratio was 7.17 percent at the end of the first quarter 2011.

Quarterly Conference Call and Webcast Presentation

PrivateBancorp will host a conference call on Tuesday, April 26, 2011, at 10 a.m. CT. The call may be accessed by telephone at (888) 782-9127 (U.S. and Canada) or (706) 634-5643 (International) and entering passcode #54077150. A live webcast of the call can be accessed on the Company website at www.theprivatebank.com by visiting the Investor Relations tab under the About Us section. A rebroadcast will be available beginning approximately two hours after the call until midnight on April 30, 2011, by calling (800) 642-1687 (U.S. and Canada) or (706) 645-9291 (International) and entering passcode #54077150.

About PrivateBancorp, Inc.

PrivateBancorp, Inc., through its subsidiaries, delivers customized business and personal financial services to middle-market companies, as well as business owners, executives, entrepreneurs and families in all of the markets and communities we serve. As of March 31, 2011, the Company had 34 offices in 10 states and $12.5 billion in assets. The Company website is www.theprivatebank.com.

 

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Forward-Looking Statements

Statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of federal securities laws. Our ability to predict results or the actual effects of future plans, strategies or events is inherently uncertain. Factors which could cause actual results to differ from those reflected in forward-looking statements include, but are not limited to: unforeseen credit quality problems or further deterioration in asset quality that could result in charge-offs greater than we have anticipated in our allowance for loan losses; adverse developments impacting one or more large credits; the extent of further deterioration in commercial real estate values in our market areas, particularly in Chicago; difficulties in resolving problem credits or slower than anticipated dispositions of OREO which may result in increased losses or significantly higher credit costs; slower than anticipated economic recovery or further deterioration in economic conditions; weakness in the commercial and industrial sector; unanticipated withdrawals of significant client deposits; lack of sufficient or cost-effective sources of liquidity or funding; the terms and availability of capital when and to the extent necessary or required to repay TARP or otherwise; loss of key personnel or an inability to recruit and retain appropriate talent; potential for significant charges if our deferred tax or goodwill assets suffer impairment; unanticipated changes in interest rates or significant tightening of credit spreads; competitive pricing pressures; uncertainty regarding implications of the Dodd-Frank Act and the rules and regulations to be adopted in connection with implementation of the legislation, including evolving regulatory capital standards; other legislative, regulatory or accounting changes affecting financial services companies and/or the products and services offered by financial services companies; uncertainties related to potential costs associated with pending litigation; or failures or disruptions to our data processing or other information or operational systems. These factors should be considered in evaluating forward-looking statements and undue reliance should not be placed on our forward-looking statements. Forward-looking statements speak only as of the date they are made, and the Company assumes no obligation to update publicly any of these statements in light of future events unless required under the federal securities laws.

Non-GAAP Measures

This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures. The Company believes that these non-GAAP financial measures provide information useful to investors in understanding the underlying operational performance of the Company, its business, and performance trends and facilitates comparisons with the performance of others in the banking industry. If non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconcilement to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Editor’s Note: Financial highlights attached.

 

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Quarterly Consolidated Income Statements   Unaudited   (Amounts in thousands except per share data)

 

		1Q11				4Q10				3Q10				2Q10				1Q10
Interest Income
Loans, including fees		$	105,647			$	105,375			$	105,608			$	112,839			$	111,062
Federal funds sold and other short-term investments			336				366				376				664				544
Securities:
Taxable			15,390				15,453				16,996				16,417				15,450
Exempt from Federal income taxes			1,486				1,644				1,661				1,752				1,718
Total interest income			122,859				122,838				124,641				131,672				128,774
Interest Expense
Interest-bearing demand deposits			642				702				675				805				966
Savings deposits and money market accounts			6,662				7,437				8,512				9,368				9,114
Brokered and time deposits			6,692				7,367				8,130				9,537				11,424
Short-term borrowings			827				962				1,297				1,383				1,446
Long-term debt			5,483				6,023				7,068				7,247				7,505
Total interest expense			20,306				22,491				25,682				28,340				30,455
Net interest income			102,553				100,347				98,959				103,332				98,319
Provision for loan and covered loan losses			37,578				35,166				41,435				45,392				72,548
Net interest income after provision for loan and covered loan losses			64,975				65,181				57,524				57,940				25,771
Non-interest Income
Trust and investments			4,662				4,574				4,306				4,836				4,424
Mortgage banking			1,402				3,479				2,790				1,797				2,121
Capital markets products			4,489				6,791				3,104				4,113				278
Treasury management			4,751				4,625				4,406				4,281				3,608
Loan and credit related fees			5,898				4,710				4,234				4,128				3,453
Other income, service charges, and fees			2,058				1,377				1,491				983				1,155
Net securities gains (losses)			367				9,309				3,029				(185	)			29
Total non-interest income			23,627				34,865				23,360				19,953				15,068
Non-interest Expense
Salaries and employee benefits			38,557				38,577				34,412				37,485				39,389
Net occupancy expense			7,532				7,385				7,508				7,747				7,295
Technology and related costs			2,661				2,447				2,310				2,424				3,043
Marketing			1,943				1,997				2,039				2,363				2,102
Professional services			2,334				3,020				2,708				3,000				4,203
Outsourced servicing costs			2,154				1,950				2,038				2,298				1,521
Net foreclosed property expenses			6,306				7,028				3,075				3,686				1,403
Postage, telephone, and delivery			888				1,049				779				866				965
Insurance			7,340				8,348				7,113				5,654				5,419
Loan and collection expense			2,553				4,029				3,405				4,610				2,579
Other expenses			3,081				6,318				2,690				5,869				5,452
Total non-interest expense			75,349				82,148				68,077				76,002				73,371
Income (loss) before income taxes			13,253				17,898				12,807				1,891				(32,532	)
Income tax provision (benefit)			2,279				5,919				4,786				(766	)			(11,676	)
Net income (loss)			10,974				11,979				8,021				2,657				(20,856	)
Net income (loss) attributable to noncontrolling interests			72				67				71				76				70
Net income (loss) attributable to controlling interests			10,902				11,912				7,950				2,581				(20,926	)
Preferred stock dividends and discount accretion			3,415				3,409				3,405				3,399				3,394
Net income (loss) available to common stockholders		$	7,487			$	8,503			$	4,545			$	(818	)		$	(24,320	)
Per Common Share Data
Basic		$	0.10			$	0.12			$	0.06			$	(0.01	)		$	(0.35	)
Diluted		$	0.10			$	0.12			$	0.06			$	(0.01	)		$	(0.35	)
Common dividends per share		$	0.01			$	0.01			$	0.01			$	0.01			$	0.01
Weighted-average shares outstanding			70,347				70,098				70,067				69,995				69,933
Weighted-average diluted shares outstanding			70,670				70,135				70,097				69,995				69,933

Note 1: Due to the net loss available to common stockholders reported for the first and second quarters 2010, all potentially dilutive common stock equivalents were excluded from the diluted net loss per share computation as their inclusion would have been antidilutive.

Note 2: Certain reclassifications have been made to prior period financial statements to place them on a basis comparable with the current period financial statements.

 

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Consolidated Balance Sheets   (Dollars in thousands)

 

		03/31/11				12/31/10				09/30/10				06/30/10				03/31/10
		unaudited				audited				unaudited				unaudited				unaudited
Assets
Cash and due from banks		$	181,738			$	112,772			$	144,298			$	111,997			$	107,618
Fed funds sold and other short-term investments			621,206				541,316				532,637				769,803				1,146,814
Loans held for sale			22,611				30,758				44,271				20,762				16,224
Securities available-for-sale, at fair value			1,892,304				1,881,786				2,033,527				2,029,962				1,769,138
Non-marketable equity investments			23,490				23,537				25,587				33,825				29,475
Loans - excluding covered assets, net of unearned fees			9,037,067				9,114,357				8,992,129				8,851,439				8,898,228
Allowance for loan losses			(218,237	)			(222,821	)			(223,392	)			(232,411	)			(236,851	)
Loans, net of allowance for loan losses and unearned fees			8,818,830				8,891,536				8,768,737				8,619,028				8,661,377
Covered assets			364,372				397,210				419,865				434,828				468,939
Allowance for covered loan losses			(19,738	)			(15,334	)			(12,174	)			(5,176	)			(5,176	)
Covered assets, net of allowance for covered loan losses			344,634				381,876				407,691				429,652				463,763
Other real estate owned			93,770				88,728				90,944				68,693				60,755
Premises, furniture, and equipment, net			39,019				40,975				42,347				40,599				41,350
Accrued interest receivable			33,960				33,854				34,697				35,278				34,766
Investment in bank owned life insurance			49,799				49,408				48,950				48,521				48,101
Goodwill			94,609				94,621				94,633				94,646				94,658
Other intangible assets			16,464				16,840				17,242				17,655				18,070
Derivative assets			87,273				100,250				128,891				113,493				85,152
Other assets			177,735				177,364				169,513				177,126				202,975
Total assets		$	12,497,442			$	12,465,621			$	12,583,965			$	12,611,040			$	12,780,236
Liabilities
Demand deposits:
Non-interest-bearing		$	2,438,709			$	2,253,661			$	2,173,419			$	2,090,222			$	1,886,427
Interest-bearing			540,215				616,761				614,049				738,631				714,700
Savings deposits and money market accounts			4,831,253				4,821,823				5,039,970				5,066,653				4,691,170
Brokered deposits			1,467,196				1,450,827				1,241,366				1,236,589				1,831,306
Time deposits			1,348,603				1,392,357				1,461,668				1,437,204				1,498,322
Total deposits			10,625,976				10,535,429				10,530,472				10,569,299				10,621,925
Short-term borrowings			88,468				118,561				179,651				164,069				241,293
Long-term debt			409,793				414,793				439,566				473,720				498,874
Accrued interest payable			5,529				5,968				7,603				7,727				10,357
Derivative liabilities			88,351				102,018				132,594				116,599				86,873
Other liabilities			41,193				60,942				48,940				43,534				100,687
Total liabilities			11,259,310				11,237,711				11,338,826				11,374,948				11,560,009
Equity
Preferred stock			239,270				238,903				238,542				238,185				237,833
Common stock			71,036				70,972				70,657				70,630				70,500
Treasury stock			(20,312	)			(20,054	)			(19,023	)			(19,003	)			(18,595	)
Additional paid-in capital			959,135				954,977				950,721				946,981				944,095
Accumulated deficit			(30,223	)			(36,999	)			(44,784	)			(48,638	)			(47,112	)
Accumulated other comprehensive income, net of tax			19,121				20,078				48,776				47,758				33,403
Total stockholders’ equity			1,238,027				1,227,877				1,244,889				1,235,913				1,220,124
Noncontrolling interests			105				33				250				179				103
Total equity			1,238,132				1,227,910				1,245,139				1,236,092				1,220,227
Total liabilities and equity		$	12,497,442			$	12,465,621			$	12,583,965			$	12,611,040			$	12,780,236

 

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Selected Financial Data   Unaudited   (Amounts in thousands except per share data)

 

		1Q11				4Q10				3Q10				2Q10				1Q10
Selected Statement of Income Data:
Net interest income		$	102,553			$	100,347			$	98,959			$	103,332			$	98,319
Net revenue (1) (2)		$	126,970			$	136,088			$	123,210			$	124,209			$	114,273
Operating profit (1) (2)		$	51,621			$	53,940			$	55,133			$	48,207			$	40,902
Income (loss) before taxes		$	13,253			$	17,898			$	12,807			$	1,891			$	(32,532	)
Net income (loss) available to common stockholders		$	7,487			$	8,503			$	4,545			$	(818	)		$	(24,320	)
Per Common Share Data:
Basic earnings (loss) per share		$	0.10			$	0.12			$	0.06			$	(0.01	)		$	(0.35	)
Diluted earnings (loss) per share (3)		$	0.10			$	0.12			$	0.06			$	(0.01	)		$	(0.35	)
Dividends		$	0.01			$	0.01			$	0.01			$	0.01			$	0.01
Book value (period end) (1)		$	13.98			$	13.87			$	14.10			$	13.98			$	13.77
Tangible book value (period end) (1) (2)		$	12.43			$	12.30			$	12.53			$	12.40			$	12.19
Market value (close)		$	15.29			$	14.38			$	11.39			$	11.08			$	13.70
Book value multiple			1.09	x			1.04	x			0.81	x			0.79	x			0.99	x
Share Data:
Weighted average common shares outstanding			70,347				70,098				70,067				69,995				69,933
Diluted average common shares outstanding (3)			70,670				70,135				70,097				69,995				69,933
Common shares issued (at period end)			72,096				71,979				71,964				71,978				71,877
Common shares outstanding (at period end)			71,428				71,327				71,386				71,403				71,333
Performance Ratios:
Return on average assets			0.35	%			0.38	%			0.25	%			0.08	%			-0.68	%
Return on average common equity			3.03	%			3.31	%			1.77	%			-0.33	%			-9.86	%
Net interest margin - tax-equivalent (1) (2)			3.46	%			3.33	%			3.28	%			3.39	%			3.33	%
Covered asset accretion contribution to net interest margin			0.05	%			0.05	%			0.03	%			0.28	%			0.25	%
Net interest margin, excluding impact of covered asset accretion			3.41	%			3.28	%			3.25	%			3.11	%			3.08	%
Fee revenue as a percent of total revenue (1)			18.49	%			20.30	%			17.04	%			16.31	%			13.27	%
Non-interest income to average assets			0.77	%			1.11	%			0.74	%			0.63	%			0.49	%
Non-interest expense to average assets			2.44	%			2.61	%			2.16	%			2.39	%			2.39	%
Net overhead ratio (1)			1.68	%			1.50	%			1.42	%			1.76	%			1.90	%
Efficiency ratio (1) (2)			59.34	%			60.36	%			55.25	%			61.19	%			64.21	%
Selected Information:
Assets under management and administration (1)		$	4,313,843			$	4,271,602			$	4,023,821			$	3,746,934			$	3,983,066
Credit valuation adjustment (1)		$	817			$	1,826			$	(830	)		$	(1,271	)		$	(1,333	)
Balance Sheet Ratios:
Loans to Deposits (period end) (4)			85.05	%			86.51	%			85.39	%			83.75	%			83.77	%
Average interest-earning assets to average interest-bearing liabilities			134.88	%			134.76	%			133.96	%			130.58	%			129.96	%
Capital Ratios (period end):
Total risk-based (1)			14.55	%			14.18	%			14.40	%			14.83	%			14.91	%
Tier 1 risk-based (1)			12.41	%			12.06	%			12.25	%			12.43	%			12.49	%
Leverage (1)			10.91	%			10.78	%			10.71	%			10.39	%			10.57	%
Tier 1 common capital (1) (2)			7.97	%			7.69	%			7.79	%			7.86	%			7.86	%
Tangible common equity to tangible assets (1) (2)			7.17	%			7.10	%			7.17	%			7.09	%			6.87	%
Total equity to total assets			9.91	%			9.85	%			9.89	%			9.80	%			9.55	%

 

(1)	Refer to Glossary of Terms for definition.

(2)	This is a non-U.S. GAAP measure, refer to Non-U.S. GAAP Measures for a reconciliation from non-U.S. GAAP to U.S. GAAP.

(3)	For the first and second quarters 2010, diluted shares are equal to basic shares due to the net loss. The calculation of diluted earnings per share for those periods results in anti-dilution.

(4)	Excludes covered assets. Refer to Glossary of Terms for definition.

Note: Prior period net interest margin computations were modified to conform with the current period presentation.

 

9

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Loan Composition (excluding covered assets(1))   (Dollars in thousands)

 

		03/31/11				% of Total				12/31/10				% of Total				09/30/10				% of Total				06/30/10				% of Total				03/31/10				% of Total
		unaudited								audited								unaudited								unaudited								unaudited
Commercial and industrial		$	4,079,874				45	%		$	4,015,257				44	%		$	3,850,498				43	%		$	3,564,504				40	%		$	3,504,531				39	%
Commercial - owner-occupied CRE			990,342				11	%			897,620				10	%			774,678				9	%			790,629				9	%			783,671				9	%
Total commercial			5,070,216				56	%			4,912,877				54	%			4,625,176				52	%			4,355,133				49	%			4,288,202				48	%
Commercial real estate			2,289,259				25	%			2,400,923				26	%			2,534,600				28	%			2,604,977				30	%			2,657,357				30	%
Commercial real estate - multi-family			451,685				5	%			457,246				5	%			471,989				5	%			502,708				6	%			520,186				6	%
Total commercial real estate			2,740,944				30	%			2,858,169				31	%			3,006,589				33	%			3,107,685				36	%			3,177,543				36	%
Construction			464,253				5	%			530,733				6	%			556,960				6	%			571,437				7	%			600,226				7	%
Residential real estate			314,082				4	%			319,146				4	%			324,434				4	%			309,001				3	%			316,012				4	%
Home equity			188,900				2	%			197,179				2	%			197,977				2	%			203,053				2	%			212,421				2	%
Personal			258,672				3	%			296,253				3	%			280,993				3	%			305,130				3	%			303,824				3	%
Total loans		$	9,037,067				100	%		$	9,114,357				100	%		$	8,992,129				100	%		$	8,851,439				100	%		$	8,898,228				100	%

Commercial Real Estate and Construction Loans Portfolio by Collateral Type

Unaudited

 

		03/31/11								12/31/10
		Amount				% of Total				Amount				% of Total
Commercial Real Estate Portfolio
Land		$	297,373				11	%		$	311,464				11	%
Residential 1-4 family			136,632				5	%			139,689				5	%
Multi-family			451,685				16	%			457,246				16	%
Industrial/warehouse			384,127				14	%			391,694				14	%
Office			525,013				19	%			531,193				18	%
Retail			420,766				15	%			450,135				16	%
Health care			79,854				3	%			114,545				4	%
Mixed use/other			445,494				17	%			462,203				16	%
Total commercial real estate		$	2,740,944				100	%		$	2,858,169				100	%
Construction Portfolio
Land		$	51,681				11	%		$	46,036				9	%
Residential 1-4 family			24,588				5	%			30,698				6	%
Multi-family			77,117				17	%			77,685				15	%
Industrial/warehouse			34,505				7	%			34,703				7	%
Office			83,629				18	%			92,369				17	%
Retail			78,155				17	%			92,268				17	%
Mixed use/other			114,578				25	%			156,974				29	%
Total construction		$	464,253				100	%		$	530,733				100	%

 

(1)	Refer to Glossary of Terms for definition.

 

10

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Asset Quality (excluding covered assets(1))   Unaudited   (Dollars in thousands)

 

		1Q11				4Q10				3Q10				2Q10				1Q10
Credit Quality Key Ratios
Net charge-offs to average loans			1.83	%			1.54	%			2.17	%			2.24	%			2.55	%
Total nonperforming loans to total loans			3.95	%			4.01	%			4.13	%			4.18	%			4.28	%
Total nonperforming assets to total assets			3.61	%			3.65	%			3.67	%			3.48	%			3.46	%
Nonaccrual loans to:
total loans			3.95	%			4.01	%			4.13	%			4.18	%			4.28	%
total assets			2.86	%			2.94	%			2.95	%			2.94	%			2.98	%
Allowance for loan losses to:
total loans			2.41	%			2.44	%			2.48	%			2.63	%			2.66	%
nonperforming loans			61	%			61	%			60	%			63	%			62	%
nonaccrual loans			61	%			61	%			60	%			63	%			62	%
Nonperforming assets
Loans past due 90 days and accruing		$	—			$	—			$	—			$	—			$	—
Nonaccrual loans			356,932				365,880				371,156				370,179				381,207
OREO			93,770				88,728				90,944				68,693				60,755
Total nonperforming assets		$	450,702			$	454,608			$	462,100			$	438,872			$	441,962
Restructured loans accruing interest		$	100,895			$	87,576			$	53,397			$	4,030			$	3,840
Nonperforming Loans Rollforward
Beginning balance		$	365,880			$	371,156			$	370,179			$	381,207			$	395,447
Additions:
New nonaccrual loans			95,275				108,526				123,557				130,400				84,919
Reductions:
Return to performing status			(11,059	)			(6,564	)			(5,969	)			(17,984	)			(12,383	)
Paydowns and payoffs, net			(16,301	)			(18,852	)			(18,208	)			(33,733	)			(5,708	)
Net sales			(11,288	)			(10,595	)			(3,200	)			(8,043	)			—
Transfer to OREO			(23,655	)			(39,795	)			(44,979	)			(31,480	)			(23,996	)
Charge-offs, net			(41,920	)			(37,996	)			(50,224	)			(50,188	)			(57,072	)
Total reductions			(104,223	)			(113,802	)			(122,580	)			(141,428	)			(99,159	)
Balance at end of period		$	356,932			$	365,880			$	371,156			$	370,179			$	381,207
OREO Rollforward
Beginning balance		$	88,728			$	90,944			$	68,693			$	60,755			$	41,497
New foreclosed property			23,661				40,178				44,979				31,688				24,135
Valuation adjustments			(4,762	)			(1,994	)			(1,385	)			(2,108	)			(1,101	)
Disposals:
Sales proceeds			(12,277	)			(40,076	)			(20,277	)			(21,514	)			(3,942	)
Net (loss) gain on sale			(1,580	)			(324	)			(1,066	)			(128	)			166
Balance at end of period		$	93,770			$	88,728			$	90,944			$	68,693			$	60,755
Restructured Loans Accruing Interest Rollforward
Beginning balance		$	87,576			$	53,397			$	4,030			$	3,840			$	—
Additions:
New restructured loans accruing interest			19,328				45,582				49,404				—				3,840
Advances			—				1,215				—				190				—
Reductions:
Paydowns and payoffs			(1,535	)			(181	)			(37	)			—				—
Move to nonperforming loans			(4,474	)			(12,437	)			—				—				—
Balance at end of period		$	100,895			$	87,576			$	53,397			$	4,030			$	3,840

 

(1)	Refer to Glossary of Terms for definition.

 

11

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Asset Quality (excluding covered assets(1))   Unaudited   (Dollars in thousands)

Credit Quality Indicators

 

		Special Mention				% of Loan Type				Potential Problem Loans				% of Loan Type				Non- Performing Loans				% of Loan Type				Total Loans
As of March 31, 2011
Transformational
Commercial		$	29,991				0.7	%		$	150,452				3.4	%		$	58,013				1.3	%		$	4,471,032
Commercial real estate			84,403				6.7	%			121,080				9.7	%			7,272				0.6	%			1,253,286
Construction			21,611				6.8	%			21,774				6.9	%			15,308				4.8	%			317,317
Residential real estate			1,219				1.2	%			5,723				5.7	%			272				0.3	%			100,137
Home equity			—				—				346				1.1	%			—				—				31,390
Personal			—				—				934				0.7	%			—				—				125,599
Total transformational		$	137,224				2.2	%		$	300,309				4.8	%		$	80,865				1.3	%		$	6,298,761
Legacy
Commercial		$	28,107				4.7	%		$	34,719				5.8	%		$	20,018				3.3	%		$	599,184
Commercial real estate			81,614				5.5	%			152,548				10.3	%			184,062				12.4	%			1,487,658
Construction			15,453				10.5	%			10,378				7.1	%			26,335				17.9	%			146,936
Residential real estate			8,917				4.2	%			9,469				4.4	%			16,597				7.8	%			213,945
Home equity			3,121				2.0	%			8,410				5.3	%			11,397				7.2	%			157,510
Personal			1,083				0.8	%			2,311				1.7	%			17,658				13.3	%			133,073
Total legacy		$	138,295				5.1	%		$	217,835				8.0	%		$	276,067				10.1	%		$	2,738,306
Total		$	275,519				3.0	%		$	518,144				5.7	%		$	356,932				3.9	%		$	9,037,067
As of December 31, 2010
Transformational
Commercial		$	85,039				2.0	%		$	121,816				2.8	%		$	51,097				1.2	%		$	4,280,467
Commercial real estate			87,495				6.8	%			125,497				9.7	%			10,309				0.8	%			1,295,380
Construction			37,590				11.7	%			21,774				6.8	%			105				*				320,151
Residential real estate			1,214				1.4	%			5,888				6.8	%			35				*				86,473
Home equity			—				—				346				1.2	%			—				—				28,356
Personal			—				—				1,280				1.0	%			—				—				132,813
Total transformational		$	211,338				3.4	%		$	276,601				4.5	%		$	61,546				1.0	%		$	6,143,640
Legacy
Commercial		$	26,891				4.3	%		$	52,013				8.2	%		$	31,049				4.9	%		$	632,410
Commercial real estate			115,577				7.4	%			134,545				8.6	%			192,415				12.3	%			1,562,789
Construction			30,325				14.4	%			23,345				11.1	%			33,298				15.8	%			210,582
Residential real estate			8,748				3.8	%			9,213				4.0	%			14,806				6.4	%			232,673
Home equity			3,757				2.2	%			10,926				6.5	%			8,195				4.9	%			168,823
Personal			2,198				1.3	%			947				0.6	%			24,571				15.0	%			163,440
Total legacy		$	187,496				6.3	%		$	230,989				7.8	%		$	304,334				10.2	%		$	2,970,717
Total		$	398,834				4.4	%		$	507,590				5.6	%		$	365,880				4.0	%		$	9,114,357

 

(1)	Refer to Glossary of Terms for definition.

*	Less than 0.1%.

 

12

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Asset Quality (excluding covered assets(1))   Unaudited   (Dollars in thousands)

Nonaccrual Loans Stratification

 

		$5.0 Million or More				$3.0 to $4.9 Million				$1.5 to $2.9 Million				Under $1.5 Million				Total
As of March 31, 2011
Amount:
Commercial		$	51,468			$	7,950			$	5,113			$	13,500			$	78,031
Commercial real estate			75,416				28,384				38,306				49,228				191,334
Construction			20,397				4,551				8,654				8,041				41,643
Residential real estate			—				7,789				—				9,080				16,869
Personal and home equity			11,049				—				3,766				14,240				29,055
Total		$	158,330			$	48,674			$	55,839			$	94,089			$	356,932
Number of borrowers:
Commercial			4				2				2				43				51
Commercial real estate			10				7				18				85				120
Construction			2				1				4				13				20
Residential real estate			—				2				—				16				18
Personal and home equity			1				—				2				35				38
Total			17				12				26				192				247
As of December 31, 2010
Amount:
Commercial		$	50,300			$	8,420			$	7,861			$	15,565			$	82,146
Commercial real estate			61,718				52,856				33,912				54,238				202,724
Construction			11,733				4,434				8,383				8,853				33,403
Residential real estate			—				4,790				—				10,051				14,841
Personal and home equity			15,491				4,419				1,932				10,924				32,766
Total		$	139,242			$	74,919			$	52,088			$	99,631			$	365,880
Number of borrowers:
Commercial			4				2				3				50				59
Commercial real estate			9				13				16				92				130
Construction			2				1				4				14				21
Residential real estate			—				1				—				17				18
Personal and home equity			1				1				1				28				31
Total			16				18				24				201				259
Restructured Loans Accruing Interest Stratification
		$5.0 Million or More				$3.0 to $4.9 Million				$1.5 to $2.9 Million				Under $1.5 Million				Total
As of March 31, 2011
Amount:
Commercial		$	5,265			$	3,342			$	1,774			$	4,669			$	15,050
Commercial real estate			41,479				10,048				8,724				7,169				67,420
Construction			—				3,094				—				—				3,094
Residential real estate			—				—				—				796				796
Personal and home equity			12,984				—				—				1,551				14,535
Total		$	59,728			$	16,484			$	10,498			$	14,185			$	100,895
Number of borrowers:
Commercial			1				1				1				10				13
Commercial real estate			3				3				4				10				20
Construction			—				1				—				—				1
Residential real estate			—				—				—				1				1
Personal and home equity			1				—				—				4				5
Total			5				5				5				25				40
As of December 31, 2010
Amount:
Commercial		$	—			$	—			$	4,553			$	3,464			$	8,017
Commercial real estate			41,659				7,064				4,662				6,634				60,019
Construction			—				3,112				—				1,236				4,348
Residential real estate			—				—				—				798				798
Personal and home equity			13,114				—				—				1,280				14,394
Total		$	54,773			$	10,176			$	9,215			$	13,412			$	87,576
Number of borrowers:
Commercial			—				—				2				7				9
Commercial real estate			3				2				2				9				16
Construction			—				1				—				1				2
Residential real estate			—				—				—				1				1
Personal and home equity			1				—				—				1				2
Total			4				3				4				19				30

 

(1)	Refer to Glossary of Terms for definition.

 

 

13

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Loan Portfolio Aging (excluding covered assets(1))   Unaudited   (Dollars in thousands)

 

		Current				30-59 Days Past Due				60-89 Days Past Due				90 Days Past Due and Accruing				Nonaccrual				Total Loans
As of March 31, 2011
Loan balances:
Commercial		$	4,988,049			$	3,997			$	139			$	—			$	78,031			$	5,070,216
Commercial real estate			2,519,419				23,409				6,782				—				191,334				2,740,944
Construction			417,775				4,835				—				—				41,643				464,253
Residential real estate			296,064				753				396				—				16,869				314,082
Personal and home equity			413,661				1,921				2,935				—				29,055				447,572
Total loans		$	8,634,968			$	34,915			$	10,252			$	—			$	356,932			$	9,037,067
Aging as a percent of loan balance:
Commercial			98.38	%			0.08	%			—				—				1.54	%			100.00	%
Commercial real estate			91.92	%			0.85	%			0.25	%			—				6.98	%			100.00	%
Construction			89.99	%			1.04	%			—				—				8.97	%			100.00	%
Residential real estate			94.26	%			0.24	%			0.13	%			—				5.37	%			100.00	%
Personal and home equity			92.42	%			0.43	%			0.66	%			—				6.49	%			100.00	%
Total loans			95.55	%			0.39	%			0.11	%			—				3.95	%			100.00	%

 

		1Q11				4Q10				3Q10				2Q10				1Q10
Nonaccrual loans:
Commercial		$	78,031			$	82,146			$	87,800			$	90,364			$	68,509
Commercial real estate			191,334				202,724				213,975				214,365				212,758
Construction			41,643				33,403				33,589				37,859				59,335
Residential real estate			16,869				14,841				9,101				9,717				16,776
Personal and home equity			29,055				32,766				26,691				17,874				23,829
Total		$	356,932			$	365,880			$	371,156			$	370,179			$	381,207
Nonaccrual loans as a percent of total loan type:
Commercial			1.54	%			1.67	%			1.90	%			2.07	%			1.60	%
Commercial real estate			6.98	%			7.09	%			7.12	%			6.90	%			6.70	%
Construction			8.97	%			6.29	%			6.03	%			6.63	%			9.89	%
Residential real estate			5.37	%			4.65	%			2.81	%			3.14	%			5.31	%
Personal and home equity			6.49	%			6.64	%			5.57	%			3.52	%			4.62	%
Total			3.95	%			4.01	%			4.13	%			4.18	%			4.28	%
Loans past due 60-89 days and still accruing:
Commercial		$	139			$	759			$	435			$	3,620			$	4,245
Commercial real estate			6,782				12,346				8,864				14,884				35,454
Construction			—				1,895				6,200				—				6,400
Residential real estate			396				4,098				2,767				1,347				170
Personal and home equity			2,935				4,033				1,104				1,147				2,112
Total		$	10,252			$	23,131			$	19,370			$	20,998			$	48,381
Loans past due 60-89 days and still accruing as a percent of total loan type:
Commercial			—				0.02	%			0.01	%			0.08	%			0.10	%
Commercial real estate			0.25	%			0.43	%			0.29	%			0.48	%			1.12	%
Construction			—				0.36	%			1.11	%			—				1.07	%
Residential real estate			0.13	%			1.28	%			0.85	%			0.44	%			0.05	%
Personal and home equity			0.66	%			0.80	%			0.23	%			0.23	%			0.41	%
Total			0.11	%			0.27	%			0.22	%			0.24	%			0.54	%
Loans past due 30-59 days and still accruing:
Commercial		$	3,997			$	1,024			$	2,772			$	2,741			$	11,641
Commercial real estate			23,409				10,264				18,869				26,073				36,740
Construction			4,835				—				3,327				258				3,252
Residential real estate			753				180				1,174				—				6,656
Personal and home equity			1,921				14,098				2,188				2,065				2,189
Total		$	34,915			$	25,566			$	28,330			$	31,137			$	60,478
Loans past due 30-59 days and still accruing as a percent of total loan type:
Commercial			0.08	%			0.02	%			0.06	%			0.06	%			0.27	%
Commercial real estate			0.85	%			0.36	%			0.63	%			0.84	%			1.16	%
Construction			1.04	%			—				0.60	%			0.05	%			0.54	%
Residential real estate			0.24	%			0.06	%			0.36	%			—				2.11	%
Personal and home equity			0.43	%			2.86	%			0.46	%			0.41	%			0.42	%
Total			0.39	%			0.28	%			0.32	%			0.35	%			0.68	%

 

(1)	Refer to Glossary of Terms for definition.

 

 

14

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Foreclosed Real Estate (OREO), excluding covered assets(1)   Unaudited   (Dollars in thousands)

OREO Properties by Type

 

		March 31, 2011								December 31, 2010
		Number of Properties				Amount				Number of Properties				Amount
Single family homes			24			$	18,219				24			$	21,534
Land parcels			322				37,079				320				34,122
Multi-family			13				8,464				14				6,061
Office/industrial			24				25,544				20				26,511
Retail			4				4,464				1				500
Total			387			$	93,770				379			$	88,728

OREO Property Location

 

		Illinois				Georgia				Michigan				South Eastern(2)				Other				Total
March 31, 2011
Single family homes		$	16,054			$	139			$	1,954			$	—			$	72			$	18,219
Land parcels			12,325				5,706				4,531				10,396				4,121				37,079
Multi-family			5,854				—				2,610				—				—				8,464
Office/industrial			14,613				1,044				2,193				3,864				3,830				25,544
Retail			1,259				892				2,313				—				—				4,464
Total		$	50,105			$	7,781			$	13,601			$	14,260			$	8,023			$	93,770
December 31, 2010
Single family homes		$	14,943			$	139			$	6,194			$	—			$	258			$	21,534
Land parcels			10,874				4,772				3,626				10,396				4,454				34,122
Multi-family			5,166				—				895				—				—				6,061
Office/industrial			13,505				1,104				3,787				4,573				3,542				26,511
Retail			500				—				—				—				—				500
Total		$	44,988			$	6,015			$	14,502			$	14,969			$	8,254			$	88,728

 

(1)	Refer to Glossary of Terms for definition.

(2)	Represents the southeastern states of Arkansas and Florida.

 

15

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Allowance for Loan Losses (excluding covered assets(1))   Unaudited   (Dollars in thousands)

 

		1Q11				4Q10				3Q10				2Q10				1Q10
Change in allowance for loan losses:
Balance at beginning of period		$	222,821			$	223,392			$	232,411			$	236,851			$	221,688
Loans charged-off:
Commercial		$	(4,200	)		$	(3,050	)		$	(2,541	)		$	(8,440	)		$	(18,129	)
Commercial real estate			(29,409	)			(21,909	)			(31,809	)			(24,956	)			(21,793	)
Construction			(62	)			(1,709	)			(4,882	)			(10,644	)			(10,264	)
Residential real estate			(386	)			(544	)			(1,715	)			(886	)			(1,590	)
Home equity			(1,447	)			(1,234	)			(736	)			(651	)			(1,087	)
Personal			(6,787	)			(8,602	)			(8,939	)			(6,346	)			(4,584	)
Total charge-offs			(42,291	)			(37,048	)			(50,622	)			(51,923	)			(57,447	)
Recoveries on loans previously charged-off:
Commercial		$	465			$	1,243			$	730			$	664			$	330
Commercial real estate			272				75				304				896				53
Construction			97				274				131				444				134
Residential real estate			2				12				4				11				6
Home equity			10				79				9				3				4
Personal			155				259				394				73				17
Total recoveries			1,001				1,942				1,572				2,091				544
Net charge-offs			(41,290	)			(35,106	)			(49,050	)			(49,832	)			(56,903	)
Provisions charged to operating expense			36,706				34,535				40,031				45,392				72,066
Balance at end of period		$	218,237			$	222,821			$	223,392			$	232,411			$	236,851
Allocation of allowance for loan losses:
General allocated reserve:
Commercial		$	50,250			$	52,100			$	50,863			$	55,408			$	55,324
Commercial real estate			75,500				72,850				75,701				76,193				77,698
Construction			12,900				16,000				17,048				17,869				18,479
Residential real estate			4,425				4,275				3,842				3,999				3,658
Home equity			3,425				3,150				2,312				2,552				2,664
Personal			3,325				3,475				4,910				5,602				5,909
Total allocated		$	149,825			$	151,850			$	154,676			$	161,623			$	163,732
Specific reserve			68,412				70,971				68,716				70,788				73,119
Unallocated reserve			—				—				—				—				—
Total		$	218,237			$	222,821			$	223,392			$	232,411			$	236,851
Allocation of reserve by a percent of total allowance for loan losses:
General allocated reserve:
Commercial			23	%			23	%			23	%			24	%			23	%
Commercial real estate			35	%			33	%			34	%			33	%			33	%
Construction			6	%			7	%			8	%			8	%			8	%
Residential real estate			2	%			2	%			2	%			2	%			2	%
Home equity			2	%			1	%			1	%			1	%			1	%
Personal			2	%			2	%			2	%			2	%			2	%
Total allocated			70	%			68	%			70	%			70	%			69	%
Specific reserve			30	%			32	%			30	%			30	%			31	%
Unallocated reserve			—				—				—				—				—
Total			100	%			100	%			100	%			100	%			100	%
Allowance for loan losses to:
total loans			2.41	%			2.44	%			2.48	%			2.63	%			2.66	%
nonperforming loans			61	%			61	%			60	%			63	%			62	%
nonaccrual loans			61	%			61	%			60	%			63	%			62	%

 

(1)	Refer to Glossary of Terms for definition.

 

 

16

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Deposits   (Dollars in thousands)

 

		03/31/11				% of Total				12/31/10				% of Total				09/30/10				% of Total				06/30/10				% of Total				03/31/10				% of Total
		unaudited								audited								unaudited								unaudited								unaudited
Non-interest bearing deposits		$	2,438,709				23	%		$	2,253,661				21	%		$	2,173,419				20	%		$	2,090,222				20	%		$	1,886,427				18	%
Interest-bearing deposits			540,215				5	%			616,761				6	%			614,049				6	%			738,631				7	%			714,700				7	%
Savings deposits			203,550				2	%			190,685				2	%			178,533				2	%			170,087				1	%			163,613				1	%
Money market accounts			4,627,703				44	%			4,631,138				44	%			4,861,437				46	%			4,896,566				46	%			4,527,557				43	%
Brokered deposits:
Traditional			455,473				4	%			329,107				3	%			150,183				1	%			103,774				1	%			294,346				3	%
Client CDARS (1)			888,676				8	%			852,458				8	%			828,508				8	%			1,013,115				10	%			1,129,471				10	%
Non-client CDARS (1)			123,047				1	%			269,262				3	%			262,675				3	%			119,700				1	%			407,489				4	%
Total brokered deposits			1,467,196				13	%			1,450,827				14	%			1,241,366				12	%			1,236,589				12	%			1,831,306				17	%
Time deposits			1,348,603				13	%			1,392,357				13	%			1,461,668				14	%			1,437,204				14	%			1,498,322				14	%
Total deposits		$	10,625,976				100	%		$	10,535,429				100	%		$	10,530,472				100	%		$	10,569,299				100	%		$	10,621,925				100	%
Client deposits (1)		$	10,047,456				95	%		$	9,937,060				94	%		$	10,117,614				96	%		$	10,345,825				98	%		$	9,920,090				93	%

 

(1)	Refer to Glossary of Terms for definition.

 

 

17

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Net Interest Margin
Unaudited
(Dollars in thousands)

 

		Three Months Ended March 31,
		2011												2010
		Average Balance				Interest (1)				Rate				Average Balance				Interest (1)				Rate
Assets:
Fed funds sold and other short-term investments		$	517,641			$	336				0.26	%		$	757,463			$	544				0.29	%
Securities:
Taxable			1,734,347				15,390				3.55	%			1,456,165				15,450				4.24	%
Tax-exempt (2)			149,260				2,276				6.10	%			161,507				2,604				6.45	%
Total securities			1,883,607				17,666				3.75	%			1,617,672				18,054				4.46	%
Loans, excluding covered assets:
Commercial			5,021,733				57,746				4.60	%			4,327,508				49,813				4.60	%
Commercial real estate			2,842,014				29,929				4.21	%			3,089,518				33,558				4.34	%
Construction			516,609				4,885				3.78	%			760,782				5,887				3.10	%
Residential			329,050				3,785				4.60	%			334,000				4,250				5.09	%
Personal and home equity			466,719				4,065				3.53	%			521,029				4,822				3.75	%
Total loans, excluding covered assets (3)			9,176,125				100,410				4.38	%			9,032,837				98,330				4.36	%
Total interest-earning assets before covered assets (2)			11,577,373				118,412				4.09	%			11,407,972				116,928				4.10	%
Covered assets (4)			353,378				5,237				5.94	%			481,566				12,732				10.60	%
Total interest-earning assets (2)		$	11,930,751			$	123,649				4.15	%		$	11,889,538			$	129,660				4.37	%
Cash and due from banks			171,007												181,539
Allowance for loan and covered loan losses			(250,067	)											(241,814	)
Other assets			656,053												614,154
Total assets		$	12,507,744											$	12,443,417
Liabilities and Equity:
Interest-bearing demand deposits		$	599,357			$	642				0.43	%		$	720,381			$	966				0.54	%
Savings deposits			197,501				200				0.41	%			150,357				286				0.77	%
Money market accounts			4,664,227				6,462				0.56	%			4,228,146				8,828				0.85	%
Time deposits			1,379,197				4,518				1.33	%			1,645,788				6,221				1.53	%
Brokered deposits			1,478,171				2,174				0.66	%			1,637,891				5,203				1.29	%
Total interest-bearing deposits			8,318,453				13,996				0.68	%			8,382,563				21,504				1.04	%
Short term borrowings			114,957				827				2.88	%			240,926				1,446				2.40	%
Long term debt			411,960				5,483				5.32	%			525,342				7,505				5.71	%
Total interest-bearing liabilities			8,845,370				20,306				0.93	%			9,148,831				30,455				1.34	%
Non-interest bearing demand deposits			2,264,100												1,902,720
Other liabilities			157,634												153,550
Equity			1,240,640												1,238,316
Total liabilities and equity		$	12,507,744											$	12,443,417
Net interest spread (5)											3.22	%											3.02	%
Effect of non interest-bearing funds											0.24	%											0.31	%
Net interest income/margin (2) (5) (6)						$	103,343				3.46	%						$	99,205				3.33	%

 

(1)	Interest income included $6.9 million and $6.2 million in loan fees for the three months ended March 31, 2011 and 2010, respectively.

(2)	Interest income and yields are presented on a tax-equivalent basis, assuming a federal income tax rate of 35%. This is a non-U.S. GAAP measure, refer to Non-U.S. GAAP Measures for a reconciliation of the effect of the tax-equivalent adjustment.

(3)

Average loans on a nonaccrual basis for the recognition of interest income totaled $377.3 million and $409.3 million at March 31, 2011 and 2010, respectively, and are included in loans for purposes of this analysis. Interest foregone on impaired loans was estimated to be approximately $4.0 million and $4.5 million for the three months ended March 31, 2011 and 2010, respectively, and was based on the average loan portfolio yield for the respective period.

(4)	Covered interest-earning assets consist of loans acquired through an FDIC-assisted transaction that are subject to a loss share agreement and the related indemnification asset.

(5)	Refer to Glossary of Terms for definition.

(6)	For the three months ended March 31, 2011 and 2010, accretion related to covered assets contributed to net interest margin by 5 and 25 basis points, respectively.

Note: Prior period net interest margin computations were modified to conform with the current period presentation.

 

18

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Net Interest Margin   Unaudited   (Dollars in thousands)

 

		Three Months Ended March 31,												Three Months Ended December 31,
		2011												2010
		Average Balance				Interest (1)				Rate				Average Balance				Interest (1)				Rate
Assets:
Fed funds sold and other short-term investments		$	517,641			$	336				0.26	%		$	570,264			$	366				0.25	%
Securities:
Taxable			1,734,347				15,390				3.55	%			1,718,338				15,453				3.60	%
Tax-exempt (2)			149,260				2,276				6.10	%			164,241				2,520				6.14	%
Total securities			1,883,607				17,666				3.75	%			1,882,579				17,973				3.82	%
Loans, excluding covered assets:
Commercial			5,021,733				57,746				4.60	%			4,699,681				53,922				4.49	%
Commercial real estate			2,842,014				29,929				4.21	%			2,966,730				31,960				4.22	%
Construction			516,609				4,885				3.78	%			549,967				5,261				3.74	%
Residential			329,050				3,785				4.60	%			366,637				4,239				4.62	%
Personal and home equity			466,719				4,065				3.53	%			495,845				4,482				3.59	%
Total loans, excluding covered assets (3)			9,176,125				100,410				4.38	%			9,078,860				99,864				4.31	%
Total interest-earning assets before covered assets (2)			11,577,373				118,412				4.09	%			11,531,703				118,203				4.03	%
Covered assets (4)			353,378				5,237				5.94	%			387,146				5,511				5.57	%
Total interest-earning assets (2)		$	11,930,751			$	123,649				4.15	%		$	11,918,849			$	123,714				4.08	%
Cash and due from banks			171,007												143,504
Allowance for loan and covered loan losses			(250,067	)											(240,720	)
Other assets			656,053												692,026
Total assets		$	12,507,744											$	12,513,659
Liabilities and Equity:
Interest-bearing demand deposits		$	599,357			$	642				0.43	%		$	696,877			$	702				0.40	%
Savings deposits			197,501				200				0.41	%			184,704				206				0.44	%
Money market accounts			4,664,227				6,462				0.56	%			4,812,571				7,231				0.60	%
Time deposits			1,379,197				4,518				1.33	%			1,427,904				4,954				1.38	%
Brokered deposits			1,478,171				2,174				0.66	%			1,165,207				2,413				0.82	%
Total interest-bearing deposits			8,318,453				13,996				0.68	%			8,287,263				15,506				0.74	%
Short term borrowings			114,957				827				2.88	%			124,716				962				3.02	%
Long term debt			411,960				5,483				5.32	%			432,264				6,023				5.53	%
Total interest-bearing liabilities			8,845,370				20,306				0.93	%			8,844,243				22,491				1.01	%
Non-interest bearing demand deposits			2,264,100												2,224,807
Other liabilities			157,634												185,437
Equity			1,240,640												1,259,172
Total liabilities and equity		$	12,507,744											$	12,513,659
Net interest spread (5)											3.22	%											3.07	%
Effect of non interest-bearing funds											0.24	%											0.26	%
Net interest income/margin (2) (5) (6)						$	103,343				3.46	%						$	101,223				3.33	%

 

(1)	Interest income included $6.9 million and $6.1 million in loan fees for the three months ended March 31, 2011 and December 31, 2010, respectively.

(2)	Interest income and yields are presented on a tax-equivalent basis, assuming a federal income tax rate of 35%. This is a non-U.S. GAAP measure, refer to Non-U.S. GAAP Measures for a reconciliation of the effect of the tax-equivalent adjustment.

(3)

Average loans on a nonaccrual basis for the recognition of interest income totaled $377.3 million and $389.1 million at March 31, 2011 and December 31, 2010, respectively, and are included in loans for purposes of this analysis. Interest foregone on impaired loans was estimated to be approximately $4.0 million and $4.2 million for the three months ended March 31, 2011 and December 31, 2010, respectively, and was based on the average loan portfolio yield for the respective period.

(4)	Covered interest-earning assets consist of loans acquired through an FDIC-assisted transaction that are subject to a loss share agreement and the related indemnification asset.

(5)	Refer to Glossary of Terms for definition.

(6)	For the quarters ended March 31, 2011 and December 31, 2010, accretion related to covered assets contributed to net interest margin by 5 basis points, respectively.

Note: Prior period net interest margin computations were modified to conform with the current period presentation.

 

19

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Non-U.S. GAAP Measures
Unaudited
(Amounts in thousands except per share data)

This press release contains both financial measures based on accounting principles generally accepted in the United States (U.S. GAAP) and non-U.S. GAAP based financial measures. These non-U.S. GAAP measures include net interest income, net interest margin, net revenue, operating profit and efficiency ratio all on a fully taxable-equivalent basis; tier 1 common capital, tangible book value, and tangible common equity to tangible assets. We believe that presenting these non-U.S. GAAP financial measures will provide information useful to investors in understanding our underlying operational performance, our business, and performance trends and facilitates comparisons with the performance of others in the banking industry.

We use net interest income on a taxable-equivalent basis in calculating various performance measures by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments assuming a 35% tax rate. Management believes this measure to be the preferred industry measurement of net interest income as it enhances comparability to net interest income arising from taxable and tax-exempt sources, and accordingly believes that providing this measure may be useful for peer comparison purposes.

We also consider various measures when evaluating capital utilization and adequacy, including tier 1 common capital, tangible book value, and tangible common equity ratio, in addition to capital ratios defined by banking regulators. These calculations are intended to complement the capital ratios defined by banking regulators for both absolute and comparative purposes. Certain of these measures exclude the ending balances of goodwill and other intangibles and/or preferred capital components. Because U.S. GAAP does not include capital ratio measures, we believe there are no comparable U.S. GAAP financial measures to these ratios. We believe these non-U.S. GAAP measures are relevant because they reflect the level of capital available to withstand unexpected market conditions. Additionally, presentation of these measures allows readers to compare certain aspects of our capitalization to other companies. However, because there are no standardized definitions for these ratios, our calculations may not be comparable with other companies, and the usefulness of these measures to investors may be limited.

Non-U.S. GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-U.S. GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools, and should not be considered in isolation or as a substitute for analyses of results as reported under U.S. GAAP. As a result, we encourage readers to consider our Consolidated Financial Statements in their entirety and not to rely on any single financial measure. The following table reconciles Non-U.S. GAAP financial measures to U.S. GAAP:

 

		Quarters Ending
		1Q11				4Q10				3Q10				2Q10				1Q10
Taxable-equivalent interest income
U.S. GAAP net interest income		$	102,553			$	100,347			$	98,959			$	103,332			$	98,319
Taxable-equivalent adjustment			790				876				891				924				886
Taxable-equivalent net interest income (a)		$	103,343			$	101,223			$	99,850			$	104,256			$	99,205
Average Earning Assets (b)		$	11,930,751			$	11,918,849			$	11,938,905			$	12,182,872			$	11,889,538
Net Interest Margin ((a) annualized) / (b)			3.46	%			3.33	%			3.28	%			3.39	%			3.33	%
Net Revenue
Taxable-equivalent net interest income (a)		$	103,343			$	101,223			$	99,850			$	104,256			$	99,205
U.S. GAAP non-interest income			23,627				34,865				23,360				19,953				15,068
Net revenue		$	126,970			$	136,088			$	123,210			$	124,209			$	114,273
Operating Profit
Taxable-equivalent net interest income (a)		$	103,343			$	101,223			$	99,850			$	104,256			$	99,205
U.S. GAAP non-interest income			23,627				34,865				23,360				19,953				15,068
Less: U.S. GAAP non-interest expense			75,349				82,148				68,077				76,002				73,371
Operating profit		$	51,621			$	53,940			$	55,133			$	48,207			$	40,902
Efficiency Ratio
U.S. GAAP non-interest expense (c)		$	75,349			$	82,148			$	68,077			$	76,002			$	73,371
Taxable-equivalent net interest income (a)		$	103,343			$	101,223			$	99,850			$	104,256			$	99,205
U.S. GAAP non-interest income			23,627				34,865				23,360				19,953				15,068
Net revenue (d)		$	126,970			$	136,088			$	123,210			$	124,209			$	114,273
Efficiency ratio (c ) / (d)			59.34	%			60.36	%			55.25	%			61.19	%			64.21	%

Note: Prior period net interest margin computations were modified to conform with the current period presentation.

 

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Non-U.S. GAAP Measures (continued)
Unaudited
(Amounts in thousands except per share data)

 

		Quarters Ending
		1Q11				4Q10				3Q10				2Q10				1Q10
Tier 1 Common Capital
U.S. GAAP total equity		$	1,238,132			$	1,227,910			$	1,245,139			$	1,236,092			$	1,220,227
Trust preferred securities			244,793				244,793				244,793				244,793				244,793
Less: unrealized gains on available-for-sale securities			19,121				20,078				48,776				47,758				33,403
Less: disallowed deferred tax assets			—				5,377				—				6,360				17,267
Less: goodwill			94,609				94,621				94,633				94,646				94,658
Less: other intangibles			16,464				16,840				17,242				17,655				18,070
Tier 1 risk-based capital			1,352,731				1,335,787				1,329,281				1,314,466				1,301,622
Less: preferred stock			239,270				238,903				238,542				238,185				237,833
Less: trust preferred securities			244,793				244,793				244,793				244,793				244,793
Less: noncontrolling interests			105				33				250				179				103
Tier 1 common capital (e)		$	868,563			$	852,058			$	845,696			$	831,309			$	818,893
Tangible Common Equity
U.S. GAAP total equity		$	1,238,132			$	1,227,910			$	1,245,139			$	1,236,092			$	1,220,227
Less: goodwill			94,609				94,621				94,633				94,646				94,658
Less: other intangibles			16,464				16,840				17,242				17,655				18,070
Less: preferred stock			239,270				238,903				238,542				238,185				237,833
Tangible common equity (f)		$	887,789			$	877,546			$	894,722			$	885,606			$	869,666
Tangible Assets
U.S. GAAP total assets		$	12,497,442			$	12,465,621			$	12,583,965			$	12,611,040			$	12,780,236
Less: goodwill			94,609				94,621				94,633				94,646				94,658
Less: other intangibles			16,464				16,840				17,242				17,655				18,070
Tangible assets (g)		$	12,386,369			$	12,354,160			$	12,472,090			$	12,498,739			$	12,667,508
Period-end Shares Outstanding (h)			71,428				71,327				71,386				71,403				71,333
Risk-weighted Assets (i)		$	10,903,625			$	11,080,051			$	10,850,399			$	10,571,135			$	10,417,704
Ratios:
Tier 1 common capital (e) / (i)			7.97	%			7.69	%			7.79	%			7.86	%			7.86	%
Tangible book value (f) / (h)		$	12.43			$	12.30			$	12.53			$	12.40			$	12.19
Tangible common equity to tangible assets (f) / (g)			7.17	%			7.10	%			7.17	%			7.09	%			6.87	%

 

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Glossary of Terms

Assets under management and administration (“AUMA”) - Assets held in trust where we serve as trustee or in accounts where we make investment decisions on behalf of clients. AUMA also includes non-managed assets we hold in custody for clients or for which we receive fees for advisory or brokerage services. We do not include these assets on our Consolidated Balance Sheets.

Book value - Total common equity divided by outstanding shares of common stock at end of period.

CDARS^® deposit program - is a deposit services arrangement that effectively achieves FDIC deposit insurance for jumbo deposit relationships. These deposits are classified as brokered deposits for regulatory deposit purposes; however, we classify these deposits as client CDARS® due to the source being our existing and new client relationships and are, therefore, not traditional ‘brokered’ deposits. We also participate in a non-client CDARS® program that is more like a traditional brokered deposit program in that our relationship is with the underlying depositor.

Client deposits - Total deposits less brokered deposits plus client CDARS^TM.

Common equity - Total equity less preferred stock.

Covered assets - Assets acquired through an FDIC-assisted transaction that are subject to a loss share agreement and are presented separately on the Consolidated Balance Sheets.

Credit quality indicators - The Company has adopted an internal risk rating policy in which each loan is rated for credit quality with a numerical rating of 1 through 8. Loans rated 5 and better (1-5 ratings, inclusive) are credits that exhibit acceptable financial performance, cash flow, and leverage. If any risk exists, we attempt to mitigate by structure, collateral, monitoring, or other meaningful controls. Credits rated 6 are considered special mention as these credits demonstrate potential weakness and that if left unresolved, may result in deterioration in the Company’s credit position and/or the repayment prospects for the credit. Borrowers rated special mention may exhibit adverse operating trends, high leverage, tight liquidity or other credit concerns. Potential problem loans have a risk rating of 7 and are considered inadequately protected by the current net worth and paying capacity of the obligor, the collateral pledged, or guarantors. These loans generally have a well defined weakness or weaknesses that may jeopardize liquidation of the debt and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not resolved. Nonperforming loans include nonaccrual loans risk rated 7 or 8 and have all the weaknesses inherent in a 7 rated potential problem loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Special mention, potential problem and nonperforming loans are reviewed at minimum on a quarterly basis, while all other rated credits are reviewed as the situation warrants.

Credit valuation adjustment (“CVA”) - An adjustment may need to be incorporated into the valuation of derivative instruments for nonperformance risk to include the counterparty’s credit risk and the Company’s own credit risk. This adjustment is referred to as the CVA. The CVA represents the credit component of fair value with regard to both client-based trades and the related matched trades with interbank dealer counterparties.

Efficiency ratio - Total non-interest expense divided by the sum of net interest income on a tax equivalent basis and non-interest income. This is a non-U.S. GAAP financial measure.

Fee revenue as percent of total revenue ratio - Total non-interest income less acquisition related gains, net securities gains (losses), and early extinguishment of debt divided by the sum of net interest income and non-interest income less acquisition related gains, net securities gains (losses) and early extinguishment of debt.

U.S. GAAP - Accounting principles generally accepted in the United States of America.

Net interest margin - Expressed as a percentage, net interest margin is a ratio computed as annualized taxable-equivalent net interest income divided by average earning assets. This is a non-U.S. GAAP financial measure.

Net interest spread - The difference between the average yield earned on interest-earning assets on a taxable-equivalent basis and the average rate paid for interest-bearing liabilities.

Net overhead ratio - Total non-interest expense less non-interest income divided by average total assets.

Net revenue - The sum of taxable equivalent net interest income and non-interest income. This is a non-U.S. GAAP financial measure.

Non-U.S. GAAP - Certain financial measures within this document that are not formally defined by U.S. GAAP or codified in the federal banking regulations. A reconciliation of these non-U.S. GAAP measures may be found on the previous page.

Operating profit - The sum of taxable equivalent net interest income and non-interest income, less non-interest expense. This is a non-U.S. GAAP financial measure.

Risk-weighted assets - Computed by the assignment of specific risk-weights (as defined by the Board of Governors of the Federal Reserve System) to assets and off-balance sheet instruments.

Tangible book value - Total common equity less goodwill and other intangibles divided by outstanding shares of common stock at end of period. This is a non-U.S. GAAP financial measure.

Tangible common equity to tangible assets ratio - Tangible common equity divided by tangible assets, where tangible common equity equals total equity less preferred stock, goodwill and other intangible assets and tangible assets equals total assets less goodwill and other intangible assets. This is a non-U.S. GAAP financial measure.

 

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Glossary of Terms (continued)

 

Taxable-equivalent interest income - The interest income earned on certain assets is completely or partially exempt from Federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of yields and margins for all interest-earning assets, we use interest income on a taxable-equivalent basis in calculating average yields and net interest margins by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on other taxable investments. This adjustment is not permitted under U.S. GAAP on the Consolidated Income Statement.

Tier 1 common capital - Tier 1 risk-based capital, less preferred equity, less trust preferred capital securities, and less noncontrolling interests.

Tier 1 common capital ratio - Tier 1 common capital divided by period-end risk-weighted assets.

Tier 1 risk-based capital - Total equity, plus trust preferred capital securities, plus certain noncontrolling interests that are held by others; less goodwill and certain other intangible assets, less equity investments in nonfinancial companies, less ineligible servicing assets, less disallowed deferred tax assets and less net unrealized holding losses on available for sale equity securities. Net unrealized holding gains on available-for-sale equity securities, net unrealized holding gains (losses) on available for sale debt securities and net unrealized holding gains (losses) on cash flow hedge derivatives are excluded from total equity for Tier 1 capital purposes.

Tier 1 risk-based capital ratio - Tier 1 risk-based capital divided by period-end risk-weighted assets.

Leverage ratio - Tier 1 risk-based capital divided by adjusted average total assets.

Total risk-based capital - Tier 1 risk-based capital plus qualifying subordinated debt, other noncontrolling interest not qualified as Tier 1, eligible gains on available-for-sale equity securities and the allowance for loan and lease losses, subject to certain limitations.

Total risk-based capital ratio - Total risk-based capital divided by period-end risk-weighted assets.

Transformational and legacy portfolios - We aggregate loans by originating line of business for reserve purposes because of observable similarities in the performance experience of loans underwritten by the business units. Loans originated by the business units that existed prior to the strategic changes in 2007 are considered “legacy” loans. Loans originated by a business unit that was established in connection with or following the business transformation plan are considered “transformational” loans. Renewals or restructurings of legacy loans may continue to be evaluated as legacy loans depending on the structure or defining characteristics of the new transaction. The Company has implemented a line of business model that has reorganized the legacy business units so that after 2009, all new loan originations are considered transformational.

 

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