Exhibit 99.1

 

For further information:

Media Contact:

Amy Yuhn

312-564-1378

ayuhn@theprivatebank.com

Investor Relations Contact:

Sarah Lewensohn

312-564-3894

slewensohn@theprivatebank.com

For Immediate Release

PrivateBancorp Reports First Quarter Earnings Per Share of $0.15

Continued asset quality improvement and loan growth lead to increased earnings

CHICAGO, April 24, 2012—PrivateBancorp, Inc. (NASDAQ: PVTB) today reported net income available to common shareholders of $10.8 million, or $0.15 per diluted share, for the first quarter 2012, compared to $7.5 million, or $0.10 per diluted share, for the first quarter 2011, and $7.6 million, or $0.11 per diluted share for the fourth quarter 2011.

“In the first quarter, we saw solid quarter-over-quarter improvement, with a 42 percent increase in net income from the fourth quarter and a 45 percent increase year over year,” said Larry D. Richman, President and Chief Executive Officer, PrivateBancorp, Inc. “Our results were driven by continued success in client development and ongoing improvement in asset quality. I was pleased by the increase in total loans and fee income, and by the continued reduction in problem assets, as we build on the strength of our core commercial middle market bank.

“Our pipeline is strong and we are positioned to benefit as middle market companies resume investing in their own businesses. We believe our strategy will continue to generate opportunities that will translate into improved earnings, a stronger balance sheet and improved shareholder value.”

Highlights

 

•

Net income was $10.8 million, up 42 percent from the fourth quarter 2011, largely as a result of lower provision costs as well as growth in average loan balances and fee income.

 

•

Net revenue increased 3 percent from the fourth quarter 2011.

 

•

Non-interest income grew 8 percent from the prior quarter, primarily driven by increased fees from capital markets, treasury management, and syndication activity.

---

•

Total loans grew $213.7 million this quarter to $9.2 billion at March 31, 2012, largely driven by growth of commercial and industrial loans with new and existing clients.

 

•

Improvement in asset quality continued with non-performing assets down 7 percent and special mention and potential problem loans down 14 percent from year-end 2011.

Operating Performance

Net revenue was $132.6 million in the first quarter 2012, compared to $127.0 million in the first quarter 2011 and $129.0 million in the fourth quarter 2011. Net revenue increased 4 percent compared to the same period prior year and 3 percent compared to the prior quarter. Operating profit was $52.3 million in the first quarter 2012, compared to $51.6 million in the same period prior year and $52.8 million in the prior quarter. Higher compensation costs and elevated net foreclosed property expense reduced the impact of revenue growth.

Net interest income was $104.4 million for the first quarter 2012, up from $102.6 million for the first quarter 2011 and $103.0 million for the fourth quarter 2011. An increase in average loan balances and lower funding costs continued to mitigate declining yields within the investment portfolio in comparison to the fourth quarter 2011. Net interest margin increased to 3.53 percent for the first quarter 2012, up from 3.46 percent in the same period prior year and 3.48 percent in the prior quarter. Net interest margin primarily benefited from a reduction in short-term investments and continued reductions in cost of funds.

Non-interest income was $27.5 million in the first quarter 2012, compared to $23.6 million in the first quarter 2011 and $25.4 million in the fourth quarter 2011. Non-interest income increased 16 percent compared to the same period prior year and 8 percent compared to the prior quarter. Capital markets revenue benefited in the first quarter 2012 from steady origination activity, deeper cross-sell across the business lines, and some larger transactions. Treasury management revenue was 19 percent higher in comparison to the same period prior year and up 7 percent from the prior quarter. Loan and credit-related fees increased 11 percent from the same period prior year and 16 percent from the prior quarter due largely to an increase in syndications revenue.

Expenses

Non-interest expense was $80.2 million for the first quarter 2012, compared to $75.3 million for the first quarter 2011 and $76.2 million for the fourth quarter 2011. The increase in non-interest expense was primarily due to higher compensation expenses and credit-related operating costs. Compared to the same period prior year, salary and benefit expense was higher in the first quarter 2012, primarily due to an increase in incentive-based compensation. Compared to the prior quarter, salary and benefit expense was up due to seasonally higher payroll taxes and 401(k) benefit payments. Net foreclosed property expense remained elevated, reflecting the current level of other real estate owned. The increase of other expense during first quarter 2012 was primarily due to additional provision for unfunded commitments.

 

2

---

The efficiency ratio was 60.5 percent in the first quarter 2012, compared to 59.3 percent in the first quarter 2011 and 59.1 percent in the fourth quarter 2011.

The effective tax rate for the quarter was 40.5 percent and continues to be impacted by the non-deductibility of certain compensation expense as well as a reduction in tax benefits of previously awarded stock-based compensation due to the impact of current share price valuation.

Credit Quality

During the first quarter 2012, the Company continued to make meaningful progress in reducing problem assets and improving asset quality. Non-performing assets declined to $356.7 million at March 31, 2012, down 21 percent from $450.7 million at March 31, 2011, and down 7 percent from $385.6 million at December 31, 2011. Non-performing assets to total assets were 2.83 percent at March 31, 2012, compared to 3.61 percent a year ago, and 3.11 percent at year-end 2011. Non-performing loans were $233.2 million at the end of the first quarter 2012, a 35 percent decline from $356.9 million a year ago, and a 10 percent decline from $259.9 million at year-end 2011. Non-performing loan inflows were $69.6 million during the first quarter 2012 and special mention and potential problem loans declined 14 percent from year-end 2011.

The Company disposed of $67.4 million of problem assets in the first quarter 2012, with an incremental charge of 14 percent based on the carrying value net of specific reserves at the time of disposition. During the quarter, the Company used a series of resolution strategies including asset sales and loan restructurings. Restructured loans accruing interest were $136.5 million at the end of first quarter 2012, compared to $100.9 million a year ago and $100.9 million at year-end 2011. As problem loan indicators continue to trend positively and problem loan resolutions continue, the Company expects further improvement in the credit quality of the portfolio.

The allowance for loan losses in the first quarter 2012 reflects the improvement in asset quality, the reduced requirement for specific reserves, and additions to reserves supporting loan growth. The allowance for loan losses at March 31, 2012, was $183.8 million, or 1.99 percent of total loans, compared to $218.2 million, or 2.41 percent of total loans, at March 31, 2011, and $191.6 million, or 2.13 percent of total loans at December 31, 2011. As a percentage of non-performing loans the allowance for loan losses was 79 percent at the end of the first quarter 2012, compared to 61 percent a year ago, and 74 percent at year-end 2011. The first quarter 2012 provision for loan losses was $27.6 million, excluding covered loan provision, down from $36.7 million in the same period prior year and $29.8 million in the prior quarter. Net charge-offs declined to $35.4 million for the first quarter 2012, from $41.3 million for the same period prior year and $38.2 million for the prior quarter.

 

3

---

Credit quality results exclude $276.5 million in covered assets as of the end of the first quarter 2012, referring to certain assets acquired through an FDIC-assisted transaction that are subject to a loss-sharing agreement, compared to $364.4 million in the first quarter 2011 and $306.8 million in the fourth quarter 2011.

Balance Sheet

Total loans were $9.2 billion at March 31, 2012, up from $9.0 billion at December 31, 2011. The Company continued to build the loan portfolio, primarily in commercial and industrial loans, through growth in new relationships and increases in existing facilities. Commercial and industrial loans grew 3 percent from year-end 2011. Total assets were $12.6 billion at March 31, 2012, up from $12.4 billion at year-end 2011.

Total deposits were $10.4 billion at March 31, 2012, flat compared to $10.4 billion at December 31, 2011. Non-interest bearing deposits comprised 29 percent of total deposits at March 31, 2012, compared to 31 percent of total deposits at year-end 2011. Short-term borrowings were $355.0 million at March 31, 2012, as the Company increased short-term FHLB advances by $199.0 million during the quarter.

The Company’s investment securities portfolio was $2.3 billion at March 31, 2012, flat compared to $2.3 billion at December 31, 2011. The securities portfolio is primarily comprised of U.S. government agency backed mortgage pools, agency collateralized mortgage obligations, and investment grade municipal bonds.

Capital

As of March 31, 2012, the Company’s total risk-based capital ratio was 14.20 percent, the Tier 1 risk-based capital ratio was 12.31 percent, and the leverage ratio was 11.35 percent. Tier 1 common capital ratio was 8.04 percent and tangible common equity ratio was 7.69 percent at the end of the first quarter 2012.

Quarterly Conference Call and Webcast Presentation

PrivateBancorp will host a conference call on Tuesday, April 24, 2012, 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 #65265700. 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 26, 2012, by calling (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (International) and entering passcode # 65265700.

 

4

---

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, 2012, the Company had 34 offices in 9 states and $12.6 billion in assets. The Company website is www.theprivatebank.com.

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 problem assets 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 real estate values in our market areas, particularly in the Chicago area; difficulties in resolving problem credits or slower than anticipated dispositions of other real estate owned which may result in increased losses or higher credit-related operating costs; continued uncertainty regarding U.S. and global economic recovery and economic outlook, and ongoing volatility in market conditions, that may impact credit quality or prolong weakness in demand for loans or other banking products and services; 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 preferred stock or otherwise; loss of key personnel or an inability to recruit and retain appropriate talent; unanticipated changes in interest rates or significant tightening of credit spreads; competitive pricing pressures; uncertainty regarding implications of the Dodd-Frank Act, including evolving regulatory capital standards, and the rules and regulations to be adopted in connection with implementation of the legislation that may negatively affect our revenues or profitability; other legislative, regulatory or accounting changes affecting financial services companies and/or the products and services offered by financial services companies; or failures or disruptions to our data processing or other information or operational systems. These forward-looking statements are subject to significant risks, assumptions and uncertainties and could be affected by many factors, including those set forth in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2011 as well as those set forth in our subsequent periodic and current reports filed with the SEC. 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 we assume no obligation to update any of these statements in public filings in light of future events unless required under the federal securities laws.

 

5

---

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.

 

6

---

Exhibit 99.1

 

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

 

		1Q12				4Q11				3Q11				2Q11				1Q11
Interest Income
Loans, including fees		$	103,539			$	102,897			$	102,174			$	102,391			$	105,647
Federal funds sold and other short-term investments			132				215				231				399				336
Securities:
Taxable			15,380				15,263				15,196				15,568				15,390
Exempt from Federal income taxes			1,300				1,273				1,293				1,387				1,486
Total interest income			120,351				119,648				118,894				119,745				122,859
Interest Expense
Interest-bearing demand deposits			636				585				625				587				642
Savings deposits and money market accounts			4,602				4,857				5,356				6,082				6,662
Brokered and time deposits			5,017				5,561				5,895				6,528				6,692
Short-term borrowings			142				152				466				566				827
Long-term debt			5,578				5,511				5,463				5,479				5,483
Total interest expense			15,975				16,666				17,805				19,242				20,306
Net interest income			104,376				102,982				101,089				100,503				102,553
Provision for loan and covered loan losses			27,701				31,611				32,615				31,093				37,578
Net interest income after provision for loan and covered loan losses			76,675				71,371				68,474				69,410				64,975
Non-interest Income
Trust and Investments			4,219				3,992				4,452				4,720				4,662
Mortgage banking			2,663				3,032				1,565				704				1,402
Capital markets products			7,349				5,471				5,510				3,871				4,489
Treasury management			5,154				4,813				4,590				4,453				4,325
Loan and credit related fees			6,527				5,606				5,413				5,290				5,898
Deposit service charges and fees and other income			1,487				2,115				1,735				1,884				2,484
Net securities gains			105				364				4,370				670				367
Total non-interest income			27,504				25,393				27,635				21,592				23,627
Non-interest Expense
Salaries and employee benefits			42,698				40,729				38,841				38,636				38,557
Net occupancy expense			7,679				7,394				7,515				7,545				7,532
Technology and related costs			3,296				3,142				2,856				2,729				2,661
Marketing			2,160				2,250				2,218				2,500				1,943
Professional services			1,957				2,126				2,434				2,312				2,334
Outsourced servicing costs			1,710				2,077				1,918				1,852				2,154
Net foreclosed property expenses			8,235				6,862				7,129				7,485				6,306
Postage, telephone, and delivery			869				953				944				931				888
Insurance			4,305				3,462				5,393				5,092				7,340
Loan and collection expense			3,157				3,840				2,931				4,247				2,553
Other expenses			4,163				3,395				2,855				2,335				3,081
Total non-interest expense			80,229				76,230				75,034				75,664				75,349
Income before income taxes			23,950				20,534				21,075				15,338				13,253
Income tax provision			9,695				9,468				7,593				6,320				2,279
Net income			14,255				11,066				13,482				9,018				10,974
Net income attributable to noncontrolling interests			—				7				33				58				72
Net income attributable to controlling interests			14,255				11,059				13,449				8,960				10,902
Preferred stock dividends and discount accretion			3,436				3,430				3,426				3,419				3,415
Net income available to common stockholders		$	10,819			$	7,629			$	10,023			$	5,541			$	7,487
Per Common Share Data
Basic earnings per share		$	0.15			$	0.11			$	0.14			$	0.08			$	0.10
Diluted earnings per share		$	0.15			$	0.11			$	0.14			$	0.08			$	0.10
Cash dividends declared		$	0.01			$	0.01			$	0.01			$	0.01			$	0.01
Weighted-average common shares outstanding			70,780				70,540				70,479				70,428				70,347
Weighted-average diluted common shares outstanding			70,932				70,713				70,621				70,663				70,396

Note 1: Certain reclassifications have been made to prior period financial statements to place them on a basis comparable with the current period financial statements.

---

Consolidated Balance Sheets
(Dollars in thousands)

 

		03/31/12				12/31/11				09/30/11				06/30/11				03/31/11
		unaudited				audited				unaudited				unaudited				unaudited
Assets
Cash and due from banks		$	166,062			$	156,131			$	171,268			$	160,289			$	181,738
Fed funds sold and other short-term investments			193,571				205,610				248,559				457,422				621,206
Loans held for sale			29,185				32,049				24,126				13,503				22,611
Securities available-for-sale, at fair value			1,705,649				1,783,465				1,872,587				2,057,290				1,892,304
Securities held-to-maturity, at amortized cost			598,066				490,143				273,200				—				—
Non-marketable equity investments			43,882				43,604				43,894				20,406				23,490
Loans—excluding covered assets, net of unearned fees			9,222,253				9,008,561				8,674,955				8,672,642				9,037,067
Allowance for loan losses			(183,844	)			(191,594	)			(200,041	)			(206,286	)			(218,237	)
Loans, net of allowance for loan losses and unearned fees			9,038,409				8,816,967				8,474,914				8,466,356				8,818,830
Covered assets			276,534				306,807				318,973				346,452				364,372
Allowance for covered loan losses			(26,323	)			(25,939	)			(16,689	)			(16,904	)			(19,738	)
Covered assets, net of allowance for covered loan losses			250,211				280,868				302,284				329,548				344,634
Other real estate owned, excluding covered assets			123,498				125,729				116,364				123,997				93,770
Premises, furniture, and equipment, net			37,462				38,633				39,069				38,171				39,019
Accrued interest receivable			36,033				35,732				32,686				32,128				33,960
Investment in bank owned life insurance			51,356				50,966				50,565				50,183				49,799
Goodwill			94,559				94,571				94,584				94,596				94,609
Other intangible assets			14,683				15,353				15,715				16,089				16,464
Capital markets derivative assets			97,805				101,676				111,248				93,453				87,273
Other assets			142,733				145,373				148,798				161,946				177,735
Total assets		$	12,623,164			$	12,416,870			$	12,019,861			$	12,115,377			$	12,497,442
Liabilities
Demand deposits:
Noninterest-bearing		$	3,054,536			$	3,244,307			$	2,832,481			$	2,527,230			$	2,438,709
Interest-bearing			714,522				595,238				611,293				531,107				540,215
Savings deposits and money market accounts			4,347,832				4,378,220				4,392,697				4,497,297				4,831,253
Brokered deposits			961,481				815,951				902,002				1,342,422				1,467,196
Time deposits			1,344,341				1,359,138				1,370,190				1,336,212				1,348,603
Total deposits			10,422,712				10,392,854				10,108,663				10,234,268				10,625,976
Short-term borrowings			355,000				156,000				59,154				63,311				88,468
Long-term debt			379,793				379,793				379,793				409,793				409,793
Accrued interest payable			5,425				5,567				5,841				5,767				5,529
Capital markets derivative liabilities			100,109				104,140				113,968				95,043				88,351
Other liabilities			47,971				81,764				66,266				46,547				41,193
Total liabilities			11,311,010				11,120,118				10,733,685				10,854,729				11,259,310
Equity
Preferred stock—Series B			240,791				240,403				240,020				239,642				239,270
Common stock			71,611				71,483				71,220				71,155				71,036
Treasury stock			(21,749	)			(21,454	)			(20,680	)			(20,615	)			(20,312	)
Additional paid-in capital			973,417				968,787				965,640				963,156				959,135
Retained earnings/(accumulated deficit)			932				(9,164	)			(16,075	)			(25,388	)			(30,223	)
Accumulated other comprehensive income, net of tax			47,152				46,697				46,051				32,535				19,121
Total stockholders' equity			1,312,154				1,296,752				1,286,176				1,260,485				1,238,027
Noncontrolling interests			—				—				—				163				105
Total equity			1,312,154				1,296,752				1,286,176				1,260,648				1,238,132
Total liabilities and equity		$	12,623,164			$	12,416,870			$	12,019,861			$	12,115,377			$	12,497,442

---

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

 

		1Q12				4Q11				3Q11				2Q11				1Q11
Selected Statement of Income Data:
Net interest income		$	104,376			$	102,982			$	101,089			$	100,503			$	102,553
Net revenue (1) (2)		$	132,560			$	129,046			$	129,404			$	122,811			$	126,970
Operating profit (1) (2)		$	52,331			$	52,816			$	54,370			$	47,147			$	51,621
Provision for loan and covered loan losses		$	27,701			$	31,611			$	32,615			$	31,093			$	37,578
Income before taxes		$	23,950			$	20,534			$	21,075			$	15,338			$	13,253
Net income available to common stockholders		$	10,819			$	7,629			$	10,023			$	5,541			$	7,487
Per Common Share Data:
Basic earnings per share		$	0.15			$	0.11			$	0.14			$	0.08			$	0.10
Diluted earnings per share		$	0.15			$	0.11			$	0.14			$	0.08			$	0.10
Dividends declared		$	0.01			$	0.01			$	0.01			$	0.01			$	0.01
Book value (period end) (1)		$	14.79			$	14.72			$	14.57			$	14.22			$	13.98
Tangible book value (period end) (1) (2)		$	13.29			$	13.19			$	13.04			$	12.68			$	12.43
Market value (close)		$	15.17			$	10.98			$	7.52			$	13.80			$	15.29
Book value multiple			1.03	x			0.75	x			0.52	x			0.97	x			1.09	x
Share Data:
Weighted average common shares outstanding			70,780				70,540				70,479				70,428				70,347
Diluted average common shares outstanding			70,932				70,713				70,621				70,663				70,396
Common shares issued (at period end)			73,205				72,514				72,491				72,497				72,096
Common shares outstanding (at period end)			72,415				71,745				71,789				71,808				71,428
Performance Ratios:
Return on average assets			0.46	%			0.36	%			0.44	%			0.29	%			0.35	%
Return on average common equity			4.05	%			2.86	%			3.80	%			2.18	%			3.03	%
Net interest margin (1) (2)			3.53	%			3.48	%			3.49	%			3.36	%			3.46	%
Covered asset accretion impact on net interest margin			-0.03	%			0.00	%			0.03	%			0.03	%			0.05	%
Net interest margin, excluding impact of covered asset accretion			3.56	%			3.48	%			3.46	%			3.33	%			3.41	%
Fee revenue as a percent of total revenue (1)			20.79	%			19.55	%			18.71	%			17.23	%			18.49	%
Non-interest income to average assets			0.89	%			0.82	%			0.91	%			0.69	%			0.77	%
Non-interest expense to average assets			2.59	%			2.45	%			2.46	%			2.43	%			2.44	%
Net overhead ratio (1)			1.70	%			1.64	%			1.56	%			1.74	%			1.68	%
Efficiency ratio (1) (2)			60.52	%			59.07	%			57.98	%			61.61	%			59.34	%
Selected Information:
Assets under management and administration (AUMA) (1)		$	4,879,947			$	4,303,547			$	4,161,614			$	4,395,516			$	4,313,843
Custody assets included in AUMA		$	2,060,455			$	1,599,528			$	1,525,001			$	1,623,190			$	1,724,589
Credit valuation adjustment on capital markets derivatives (1)		$	19			$	244			$	(1,207	)		$	(573	)		$	817
Balance Sheet Ratios:
Loans to Deposits (period end) (3)			88.48	%			86.68	%			85.82	%			84.74	%			85.05	%
Average interest-earning assets to average interest- bearing liabilities			149.68	%			150.70	%			145.30	%			139.77	%			134.88	%
Capital Ratios (period end):
Total risk-based capital (1)			14.20	%			14.28	%			14.82	%			15.12	%			14.55	%
Tier 1 risk-based capital (1)			12.31	%			12.38	%			12.89	%			12.95	%			12.41	%
Leverage (1)			11.35	%			11.33	%			11.48	%			11.00	%			10.91	%
Tier 1 common capital (1) (2)			8.04	%			8.04	%			8.34	%			8.34	%			7.97	%
Tangible common equity to tangible assets (1) (2)			7.69	%			7.69	%			7.86	%			7.58	%			7.17	%
Total equity to total assets			10.39	%			10.44	%			10.70	%			10.41	%			9.91	%

 

 

(1)	Refer to Glossary of Terms for definition.

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

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

---

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

 

						% of								% of								% of								% of								% of
		03/31/12				Total				12/31/11				Total				09/30/11				Total				06/30/11				Total				03/31/11				Total
		unaudited								audited								unaudited								unaudited								unaudited
Commercial and industrial		$	4,325,558				47	%		$	4,192,842				46	%		$	3,959,153				45	%		$	3,886,555				46	%		$	3,970,213				45	%
Commercial—owner-occupied CRE			1,175,729				13	%			1,130,932				13	%			1,070,340				12	%			986,602				11	%			988,375				11	%
Total commercial			5,501,287				60	%			5,323,774				59	%			5,029,493				57	%			4,873,157				57	%			4,958,588				56	%
Commercial real estate			2,378,640				26	%			2,233,851				25	%			2,156,621				25	%			2,280,961				26	%			2,380,592				26	%
Commercial real estate—multi-family			493,218				5	%			452,595				5	%			445,908				5	%			416,459				5	%			471,980				5	%
Total commercial real estate			2,871,858				31	%			2,686,446				30	%			2,602,529				30	%			2,697,420				31	%			2,852,572				31	%
Construction			127,837				1	%			287,002				3	%			315,858				4	%			366,061				4	%			464,253				5	%
Residential real estate			308,880				3	%			297,229				3	%			307,705				4	%			301,250				3	%			314,082				3	%
Home equity			175,972				2	%			181,158				2	%			186,914				2	%			190,691				2	%			188,900				2	%
Personal			236,419				3	%			232,952				3	%			232,456				3	%			244,063				3	%			258,672				3	%
Total loans		$	9,222,253				100	%		$	9,008,561				100	%		$	8,674,955				100	%		$	8,672,642				100	%		$	9,037,067				100	%

 

 

 

(1)	Refer to Glossary of Terms for definition.

---

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

Commercial Loans Composition by Industry Segment

(Classified pursuant to the North American Industrial Classification System standard industry descriptions and represents our client's primary business activity)

 

		03/31/12								12/31/11
						% of								% of
		Amount				Total				Amount				Total
Manufacturing		$	1,301,681				24	%		$	1,257,973				24	%
Healthcare			1,343,017				24	%			1,218,205				23	%
Wholesale trade			506,840				9	%			482,386				9	%
Finance and insurance			493,103				9	%			454,830				8	%
Real estate, rental and leasing			269,647				5	%			342,860				6	%
Professional, scientific, and technical services			348,907				6	%			350,677				7	%
Administrative, support, waste management and remediation services			328,370				6	%			321,912				6	%
Architectural, engineering and construction			209,998				4	%			195,875				4	%
All other (2)			699,724				13	%			699,056				13	%
Total commercial (3)		$	5,501,287				100	%		$	5,323,774				100	%

Commercial Real Estate and Construction Loans Portfolio by Collateral Type

 

		03/31/12												12/31/11
						% of				%								% of				%
		Amount				Total				Nonperforming  (4)				Amount				Total				Nonperforming  (4)
Commercial Real Estate Portfolio
Land		$	238,326				8	%			13	%		$	230,579				9	%			6	%
Residential 1-4 family			119,772				4	%			14	%			105,919				4	%			23	%
Multi-family			493,218				17	%			1	%			452,595				17	%			1	%
Industrial/warehouse			370,200				13	%			2	%			350,282				13	%			3	%
Office			617,871				22	%			3	%			585,183				22	%			4	%
Retail			489,960				17	%			12	%			431,200				16	%			8	%
Healthcare			144,239				5	%			—				144,529				5	%			—
Mixed use/other			398,272				14	%			5	%			386,159				14	%			6	%
Total commercial real estate		$	2,871,858				100	%			6	%		$	2,686,446				100	%			5	%
Construction Portfolio
Land		$	39,735				31	%			1	%		$	23,422				8	%			2	%
Residential 1-4 family			19,033				15	%			6	%			21,906				8	%			14	%
Multi-family			10,793				8	%			—				64,892				23	%			—
Industrial/warehouse			2,861				2	%			—				15,216				5	%			—
Office			27,757				22	%			1	%			43,403				15	%			1	%
Retail			4,687				4	%			—				61,469				21	%			20	%
Mixed use/other			22,971				18	%			4	%			56,694				20	%			10	%
Total construction		$	127,837				100	%			2	%		$	287,002				100	%			8	%

 

 

 

(1)	Refer to Glossary of Terms for definition.

(2)	All other consists of numerous smaller balances across a variety of industries.

(3)	Includes owner-occupied commercial real estate of $1.2 billion and $1.1 billion at March 31, 2012 and December 31, 2011, respectively.

(4)	Calculated as nonperforming loans in the respective collateral type divided by total loans of the corresponding collateral type presented above.

---

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

 

		1Q12				4Q11				3Q11				2Q11				1Q11
Credit Quality Key Ratios
Net charge-offs (annualized) to average loans			1.57	%			1.72	%			1.76	%			1.95	%			1.83	%
Nonperforming loans to total loans			2.53	%			2.88	%			3.51	%			3.81	%			3.95	%
Nonperforming loans to total assets			1.85	%			2.09	%			2.54	%			2.73	%			2.86	%
Nonperforming assets to total assets			2.83	%			3.11	%			3.50	%			3.75	%			3.61	%
Allowance for loan losses to:
Total loans			1.99	%			2.13	%			2.31	%			2.38	%			2.41	%
Nonperforming loans			79	%			74	%			66	%			62	%			61	%
Nonperforming assets
Loans past due 90 days and accruing		$	—			$	—			$	—			$	—			$	—
Nonaccrual loans			233,222				259,852				304,747				330,448				356,932
OREO			123,498				125,729				116,364				123,997				93,770
Total nonperforming assets		$	356,720			$	385,581			$	421,111			$	454,445			$	450,702
Restructured loans accruing interest		$	136,521			$	100,909			$	106,330			$	124,614			$	100,895
Special mention loans		$	143,790			$	204,965			$	218,561			$	227,413			$	275,519
Potential problem loans		$	184,029			$	177,095			$	277,125			$	392,019			$	518,144
Nonperforming Loans Rollforward
Beginning balance		$	259,852			$	304,747			$	330,448			$	356,932			$	365,880
Additions:
New nonaccrual loans			69,581				67,512				68,298				110,438				95,275
Reductions:
Return to performing status			(14,291	)			(2,072	)			(1,608	)			(2,781	)			(11,059	)
Paydowns and payoffs, net of advances			(4,806	)			(8,950	)			(13,166	)			(8,258	)			(16,301	)
Net sales			(27,479	)			(27,178	)			(20,432	)			(38,129	)			(11,288	)
Transfer to OREO			(13,513	)			(33,695	)			(24,373	)			(49,667	)			(23,655	)
Charge-offs, net			(36,122	)			(40,512	)			(34,420	)			(38,087	)			(41,920	)
Total reductions			(96,211	)			(112,407	)			(93,999	)			(136,922	)			(104,223	)
Balance at end of period		$	233,222			$	259,852			$	304,747			$	330,448			$	356,932
OREO Rollforward
Beginning balance		$	125,729			$	116,364			$	123,997			$	93,770			$	88,728
New foreclosed properties			13,513				33,695				24,373				49,667				23,661
Valuation adjustments			(4,522	)			(3,999	)			(1,175	)			(5,483	)			(4,762	)
Disposals:
Sales proceeds			(9,078	)			(18,085	)			(25,921	)			(13,615	)			(12,277	)
Net loss on sale			(2,144	)			(2,246	)			(4,910	)			(342	)			(1,580	)
Balance at end of period		$	123,498			$	125,729			$	116,364			$	123,997			$	93,770
Restructured Loans Accruing Interest Rollforward
Beginning balance		$	100,909			$	106,330			$	124,614			$	100,895			$	87,576
Additions:
New restructured loans accruing interest			47,673				8,803				8,592				54,663				19,328
Return to performing status			—				1,099				1,029				—				—
Reductions:
Paydowns and payoffs, net of advances			(4,661	)			(3,334	)			(20,545	)			(7,915	)			(1,535	)
Move to nonperforming loans			(6,665	)			(5,735	)			(4,716	)			(9,930	)			(4,474	)
Net sales			—				—				(2,260	)			(9,600	)			—
Charge-offs, net			—				—				(44	)			(3,499	)			—
Removal of restructured loan status			(735	)			(6,254	)			(340	)			—				—
Balance at end of period		$	136,521			$	100,909			$	106,330			$	124,614			$	100,895

 

 

(1)	Refer to Glossary of Terms for definition.

---

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

Credit Quality Indicators ⁽¹⁾

 

										Potential								Non-
		Special				% of				Problem				% of				Performing				% of				Total
		Mention				Loan Type				Loans				Loan Type				Loans				Loan Type				Loans
As of March 31, 2012
Transformational (1)
Commercial		$	61,382				1.2	%		$	49,229				1.0	%		$	22,765				0.4	%		$	5,065,103
Commercial real estate			26,466				1.5	%			33,251				1.9	%			87,228				4.9	%			1,782,434
Construction			7,272				6.1	%			—				—				—				—				118,394
Residential real estate			4,309				2.9	%			5,983				4.0	%			1,057				0.7	%			149,639
Home equity			—				—				1,659				2.8	%			424				0.7	%			59,946
Personal			—				—				765				0.5	%			311				0.2	%			149,951
Total transformational		$	99,429				1.4	%		$	90,887				1.2	%		$	111,785				1.5	%		$	7,325,467
Legacy (1)
Commercial		$	11,198				2.6	%		$	8,557				2.0	%		$	17,421				4.0	%		$	436,184
Commercial real estate			30,355				2.8	%			62,880				5.8	%			72,027				6.6	%			1,089,424
Construction			—				—				—				—				2,781				29.5	%			9,443
Residential real estate			2,384				1.5	%			15,027				9.4	%			11,012				6.9	%			159,241
Home equity			420				0.4	%			5,613				4.8	%			9,954				8.6	%			116,026
Personal			4				*				1,065				1.2	%			8,242				9.5	%			86,468
Total legacy			44,361				2.3	%			93,142				4.9	%			121,437				6.4	%			1,896,786
Total		$	143,790				1.6	%		$	184,029				2.0	%		$	233,222				2.5	%		$	9,222,253
As of December 31, 2011
Transformational (1)
Commercial		$	41,995				0.9	%		$	66,279				1.4	%		$	49,220				1.0	%		$	4,889,734
Commercial real estate			59,031				3.8	%			1,769				0.1	%			49,031				3.2	%			1,549,862
Construction			7,272				3.6	%			9,283				4.6	%			12,489				6.2	%			201,879
Residential real estate			4,490				3.5	%			5,450				4.2	%			2,844				2.2	%			129,161
Home equity			—				—				381				0.7	%			78				0.1	%			54,530
Personal			—				—				866				0.6	%			330				0.2	%			139,643
Total transformational		$	112,788				1.6	%		$	84,028				1.2	%		$	113,992				1.6	%		$	6,964,809
Legacy (1)
Commercial		$	12,331				2.8	%		$	13,049				3.0	%		$	16,738				3.9	%		$	434,040
Commercial real estate			73,884				6.5	%			60,424				5.3	%			84,226				7.4	%			1,136,584
Construction			—				—				—				—				9,390				11.0	%			85,123
Residential real estate			4,854				2.9	%			12,481				7.4	%			11,745				7.0	%			168,068
Home equity			758				0.6	%			6,003				4.7	%			11,525				9.1	%			126,628
Personal			350				0.4	%			1,110				1.2	%			12,236				13.1	%			93,309
Total legacy			92,177				4.5	%			93,067				4.6	%			145,860				7.1	%			2,043,752
Total		$	204,965				2.3	%		$	177,095				2.0	%		$	259,852				2.9	%		$	9,008,561

 

 

(1)	Refer to Glossary of Terms for definition.

*	Less than 0.01%.

---

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, 2012
Loan balances:
Commercial		$	5,453,922			$	3,216			$	3,963			$	—			$	40,186			$	5,501,287
Commercial real estate			2,703,932				6,590				2,081				—				159,255				2,871,858
Construction			124,988				—				68				—				2,781				127,837
Residential real estate			290,716				4,960				1,135				—				12,069				308,880
Personal and home equity			391,453				1,754				253				—				18,931				412,391
Total loans		$	8,965,011			$	16,520			$	7,500			$	—			$	233,222			$	9,222,253
Aging as a percent of loan balance:
Commercial			99.14	%			0.06	%			0.07	%			—				0.73	%			100.00	%
Commercial real estate			94.15	%			0.23	%			0.07	%			—				5.55	%			100.00	%
Construction			97.77	%			—				0.05	%			—				2.18	%			100.00	%
Residential real estate			94.11	%			1.61	%			0.37	%			—				3.91	%			100.00	%
Personal and home equity			94.92	%			0.43	%			0.06	%			—				4.59	%			100.00	%
Total loans			97.21	%			0.18	%			0.08	%			—				2.53	%			100.00	%

 

		1Q12				4Q11				3Q11				2Q11				1Q11
Nonaccrual loans:
Commercial		$	40,186			$	65,958			$	61,399			$	51,634			$	66,529
Commercial real estate			159,255				133,257				168,078				192,778				202,836
Construction			2,781				21,879				29,997				37,140				41,643
Residential real estate			12,069				14,589				18,007				18,496				16,869
Personal and home equity			18,931				24,169				27,266				30,400				29,055
Total		$	233,222			$	259,852			$	304,747			$	330,448			$	356,932
Nonaccrual loans as a percent of total loan type:
Commercial			0.73	%			1.24	%			1.22	%			1.06	%			1.34	%
Commercial real estate			5.55	%			4.96	%			6.46	%			7.15	%			7.11	%
Construction			2.18	%			7.62	%			9.50	%			10.15	%			8.97	%
Residential real estate			3.91	%			4.91	%			5.85	%			6.14	%			5.37	%
Personal and home equity			4.59	%			5.84	%			6.50	%			6.99	%			6.49	%
Total			2.53	%			2.88	%			3.51	%			3.81	%			3.95	%
Loans past due 60-89 days and still accruing:
Commercial		$	3,963			$	923			$	101			$	3,978			$	139
Commercial real estate			2,081				9,777				8,801				10,292				6,782
Construction			68				2,381				—				—				—
Residential real estate			1,135				645				2,864				1,000				396
Personal and home equity			253				809				1,016				1,288				2,935
Total		$	7,500			$	14,535			$	12,782			$	16,558			$	10,252
Loans past due 60-89 days and still accruing as a percent of total loan type:
Commercial			0.07	%			0.02	%			*				0.08	%			*
Commercial real estate			0.07	%			0.36	%			0.34	%			0.39	%			0.24	%
Construction			0.05	%			0.83	%			—				—				—
Residential real estate			0.37	%			0.22	%			0.93	%			0.33	%			0.13	%
Personal and home equity			0.06	%			0.20	%			0.24	%			0.30	%			0.66	%
Total			0.08	%			0.16	%			0.15	%			0.19	%			0.11	%
Loans past due 30-59 days and still accruing:
Commercial		$	3,216			$	6,018			$	3,529			$	1,723			$	3,997
Commercial real estate			6,590				3,523				5,884				3,384				23,409
Construction			—				—				342				—				4,835
Residential real estate			4,960				3,800				7				392				753
Personal and home equity			1,754				446				776				2,803				1,921
Total		$	16,520			$	13,787			$	10,538			$	8,302			$	34,915
Loans past due 30-59 days and still accruing as a percent of total loan type:
Commercial			0.06	%			0.11	%			0.07	%			0.03	%			0.08	%
Commercial real estate			0.23	%			0.13	%			0.23	%			0.13	%			0.82	%
Construction			—				—				0.11	%			—				1.04	%
Residential real estate			1.61	%			1.28	%			*				0.13	%			0.24	%
Personal and home equity			0.43	%			0.11	%			0.19	%			0.64	%			0.43	%
Total			0.18	%			0.15	%			0.12	%			0.10	%			0.39	%

 

 

(1)	Refer to Glossary of Terms for definition.

*	Less than 0.01%.

---

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

Nonaccrual Loans Stratification

 

		$10.0 Million or More				$5.0 to $9.9 Million				$3.0 to $4.9 Million				$1.5 to $2.9 Million				Under $1.5 Million				Total
As of March 31, 2012
Amount:
Commercial		$	—			$	14,164			$	7,737			$	5,751			$	12,534			$	40,186
Commercial real estate			77,770				19,374				11,493				25,689				24,929				159,255
Construction			—				—				—				—				2,781				2,781
Residential real estate			—				—				4,789				—				7,280				12,069
Personal and home equity			—				5,827				—				1,615				11,489				18,931
Total		$	77,770			$	39,365			$	24,019			$	33,055			$	59,013			$	233,222
Number of borrowers:
Commercial			—				2				2				3				35				42
Commercial real estate			5				3				3				12				48				71
Construction			—				—				—				—				6				6
Residential real estate			—				—				1				—				20				21
Personal and home equity			—				1				—				1				31				33
Total			5				6				6				16				140				173
As of December 31, 2011
Amount:
Commercial		$	30,226			$	16,820			$	3,448			$	3,434			$	12,030			$	65,958
Commercial real estate			56,969				10,257				15,740				21,549				28,742				133,257
Construction			12,490				—				4,760				1,547				3,082				21,879
Residential real estate			—				—				4,789				2,473				7,327				14,589
Personal and home equity			—				7,108				—				3,795				13,266				24,169
Total		$	99,685			$	34,185			$	28,737			$	32,798			$	64,447			$	259,852
Number of borrowers:
Commercial			2				2				1				2				39				46
Commercial real estate			4				2				4				10				56				76
Construction			1				—				1				1				5				8
Residential real estate			—				—				1				1				19				21
Personal and home equity			—				1				—				2				37				40
Total			7				5				7				16				156				191

Restructured Loans Accruing Interest Stratification

 

		$10.0 Million or More				$5.0 to $9.9 Million				$3.0 to $4.9 Million				$1.5 to $2.9 Million				Under $1.5 Million				Total
As of March 31, 2012
Amount:
Commercial		$	55,205			$	20,050			$	3,259			$	—			$	4,155			$	82,669
Commercial real estate			20,576				5,178				—				7,217				4,586				37,557
Construction			—				—				—				—				—				—
Residential real estate			—				—				—				—				1,115				1,115
Personal and home equity			12,593				—				—				—				2,587				15,180
Total		$	88,374			$	25,228			$	3,259			$	7,217			$	12,443			$	136,521
Number of borrowers:
Commercial			4				3				1				—				10				18
Commercial real estate			1				1				—				3				9				14
Construction			—				—				—				—				—				—
Residential real estate			—				—				—				—				4				4
Personal and home equity			1				—				—				—				4				5
Total			6				4				1				3				27				41
As of December 31, 2011
Amount:
Commercial		$	15,279			$	19,065			$	4,331			$	—			$	3,894			$	42,569
Commercial real estate			21,273				10,364				—				4,944				4,767				41,348
Construction			—				—				—				—				—				—
Residential real estate			—				—				—				2,213				1,025				3,238
Personal and home equity			12,691				—				—				—				1,063				13,754
Total		$	49,243			$	29,429			$	4,331			$	7,157			$	10,749			$	100,909
Number of borrowers:
Commercial			1				3				1				—				10				15
Commercial real estate			1				2				—				2				10				15
Construction			—				—				—				—				—				—
Residential real estate			—				—				—				1				2				3
Personal and home equity			1				—				—				—				2				3
Total			3				5				1				3				24				36

 

 

(1)	Refer to Glossary of Terms for definition.

---

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

OREO Properties by Type

 

		March 31, 2012												December 31, 2011
		Number of								% of				Number of								% of
		Properties				Amount				Total				Properties				Amount				Total
Single-family homes			69			$	21,074				17	%			71			$	26,866				21	%
Land parcels			260				49,706				40	%			262				51,465				41	%
Multi-family			13				4,665				4	%			14				3,327				3	%
Office/industrial			47				39,983				32	%			44				37,019				29	%
Retail			11				8,070				7	%			9				7,052				6	%
Total			400			$	123,498				100	%			400			$	125,729				100	%

OREO Property Type by Location

 

														South				Mid
		Illinois				Georgia				Michigan				Eastern (2)				Western (3)				Other				Total
March 31, 2012
Single-family homes		$	18,497			$	—			$	1,718			$	—			$	618			$	241			$	21,074
Land parcels			27,487				3,438				2,137				9,568				7,076				—				49,706
Multi-family			1,335				—				—				460				2,870				—				4,665
Office/industrial			19,670				1,058				1,197				6,411				8,253				3,394				39,983
Retail			4,872				2,262				936				—				—				—				8,070
Total		$	71,861			$	6,758			$	5,988			$	16,439			$	18,817			$	3,635			$	123,498
% of Total			58	%			6	%			5	%			13	%			15	%			3	%			100	%
December 31, 2011
Single-family homes		$	23,277			$	385			$	1,718			$	—			$	608			$	878			$	26,866
Land parcels			29,370				2,898				3,171				9,568				6,458				—				51,465
Multi-family			3,327				—				—				—				—				—				3,327
Office/industrial			18,430				1,656				548				3,762				9,228				3,395				37,019
Retail			4,501				1,615				936				—				—				—				7,052
Total		$	78,905			$	6,554			$	6,373			$	13,330			$	16,294			$	4,273			$	125,729
% of Total			63	%			5	%			5	%			11	%			13	%			3	%			100	%

 

 

(1)	Refer to Glossary of Terms for definition.

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

(3)	Represents the midwestern states of Kansas, Missouri, Wisconsin, Indiana and Ohio.

---

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

 

		1Q12				4Q11				3Q11				2Q11				1Q11
Change in allowance for loan losses:
Balance at beginning of period		$	191,594			$	200,041			$	206,286			$	218,237			$	222,821
Loans charged-off:
Commercial		$	(9,549	)		$	(12,991	)		$	(5,039	)		$	(10,512	)		$	(4,200	)
Commercial real estate			(25,280	)			(24,083	)			(29,920	)			(25,402	)			(29,409	)
Construction			(1,245	)			(1,526	)			(1,419	)			(8,275	)			(62	)
Residential real estate			(1,084	)			(1,203	)			(234	)			(186	)			(386	)
Home equity			(483	)			(1,340	)			(3,291	)			(508	)			(1,447	)
Personal			(2,085	)			(290	)			(2,083	)			(434	)			(6,787	)
Total charge-offs			(39,726	)			(41,433	)			(41,986	)			(45,317	)			(42,291	)
Recoveries on loans previously charged-off:
Commercial		$	1,679			$	830			$	2,278			$	707			$	465
Commercial real estate			1,882				1,410				969				511				272
Construction			41				109				29				56				97
Residential real estate			11				10				9				40				2
Home equity			26				300				12				15				10
Personal			702				544				103				312				155
Total recoveries			4,341				3,203				3,400				1,641				1,001
Net charge-offs			(35,385	)			(38,230	)			(38,586	)			(43,676	)			(41,290	)
Provisions charged to operating expense			27,635				29,783				32,341				31,725				36,706
Balance at end of period		$	183,844			$	191,594			$	200,041			$	206,286			$	218,237
Allocation of allowance for loan losses:
General allocated reserve:
Commercial		$	45,850			$	46,500			$	45,000			$	46,000			$	50,250
Commercial real estate			57,750				56,000				60,000				67,000				75,500
Construction			1,900				7,650				10,450				9,600				12,900
Residential real estate			5,400				5,400				5,800				5,400				4,425
Home equity			4,700				2,750				3,500				3,500				3,425
Personal			3,295				3,350				3,100				3,100				3,325
Total allocated		$	118,895			$	121,650			$	127,850			$	134,600			$	149,825
Specific reserve			64,949				69,944				72,191				71,686				68,412
Total		$	183,844			$	191,594			$	200,041			$	206,286			$	218,237
Allocation of reserve by a percent of total allowance for loan losses:
General allocated reserve:
Commercial			25	%			24	%			22	%			22	%			23	%
Commercial real estate			31	%			29	%			30	%			32	%			35	%
Construction			1	%			4	%			5	%			5	%			6	%
Residential real estate			3	%			3	%			3	%			3	%			2	%
Home equity			3	%			1	%			2	%			2	%			2	%
Personal			2	%			2	%			2	%			2	%			2	%
Total allocated			65	%			63	%			64	%			66	%			70	%
Specific reserve			35	%			37	%			36	%			34	%			30	%
Total			100	%			100	%			100	%			100	%			100	%
Allowance for loan losses to:
Total loans			1.99	%			2.13	%			2.31	%			2.38	%			2.41	%
Nonperforming loans			79	%			74	%			66	%			62	%			61	%

 

 

(1)	Refer to Glossary of Terms for definition.

---

Deposits   (Dollars in thousands)

 

						% of								% of								% of								% of								% of
		03/31/12				Total				12/31/11				Total				09/30/11				Total				06/30/11				Total				03/31/11				Total
		unaudited								audited								unaudited								unaudited								unaudited
Noninterest-bearing deposits		$	3,054,536				29	%		$	3,244,307				31	%		$	2,832,481				28	%		$	2,527,230				25	%		$	2,438,709				23	%
Interest-bearing demand deposits			714,522				7	%			595,238				6	%			611,293				6	%			531,107				5	%			540,215				5	%
Savings deposits			225,300				2	%			210,138				2	%			214,610				2	%			202,427				2	%			203,550				2	%
Money market accounts			4,122,532				40	%			4,168,082				40	%			4,178,087				41	%			4,294,870				42	%			4,627,703				44	%
Brokered deposits:
Traditional			191,023				2	%			20,499				*				60,665				1	%			277,628				3	%			455,473				4	%
Client CDARS (1)			695,458				6	%			795,452				8	%			841,337				8	%			956,094				9	%			888,676				8	%
Non-client CDARS (1)			75,000				1	%			—				—				—				—				108,700				1	%			123,047				1	%
Total brokered deposits			961,481				9	%			815,951				8	%			902,002				9	%			1,342,422				13	%			1,467,196				13	%
Time deposits			1,344,341				13	%			1,359,138				13	%			1,370,190				14	%			1,336,212				13	%			1,348,603				13	%
Total deposits		$	10,422,712				100	%		$	10,392,854				100	%		$	10,108,663				100	%		$	10,234,268				100	%		$	10,625,976				100	%
Client deposits (1)		$	10,156,689				97	%		$	10,372,355				100	%		$	10,047,998				99	%		$	9,847,940				96	%		$	10,047,456				95	%

 

 

*	Less than 1%.

 

		.

 

 

(1)	Refer to Glossary of Terms for definition.

---

Net Interest Margin   Unaudited   (Dollars in thousands)

 

		Three Months Ended March 31,
		2012												2011
		Average Balance				Interest (1)				Yield/ Rate				Average Balance				Interest (1)				Yield/ Rate
Assets:
Federal funds sold and other short-term investments		$	211,343			$	132				0.25	%		$	517,641			$	336				0.26	%
Securities:
Taxable			2,097,422				15,380				2.93	%			1,734,347				15,390				3.55	%
Tax-exempt (2)			152,412				1,980				5.20	%			149,260				2,276				6.10	%
Total securities			2,249,834				17,360				3.09	%			1,883,607				17,666				3.75	%
Loans, excluding covered assets:
Commercial			5,443,925				63,910				4.64	%			5,021,733				57,746				4.60	%
Commercial real estate			2,598,139				27,715				4.22	%			2,842,014				29,929				4.21	%
Construction			279,343				2,611				3.70	%			516,609				4,885				3.78	%
Residential			338,144				3,619				4.28	%			329,050				3,785				4.60	%
Personal and home equity			411,152				3,732				3.65	%			466,719				4,065				3.53	%
Total loans, excluding covered assets (3)			9,070,703				101,587				4.44	%			9,176,125				100,410				4.38	%
Total interest-earning assets before covered assets (2)			11,531,880				119,079				4.10	%			11,577,373				118,412				4.09	%
Covered assets (4)			264,619				1,952				2.93	%			353,378				5,237				5.94	%
Total interest-earning assets (2)			11,796,499			$	121,031				4.07	%			11,930,751			$	123,649				4.15	%
Cash and due from banks			141,317												171,007
Allowance for loan and covered loan losses			(224,071	)											(250,067	)
Other assets			731,771												656,053
Total assets		$	12,445,516											$	12,507,744
Liabilities and Equity:
Interest-bearing demand deposits		$	654,791			$	636				0.39	%		$	599,357			$	642				0.43	%
Savings deposits			218,145				156				0.29	%			197,501				200				0.41	%
Money market accounts			4,199,855				4,446				0.43	%			4,664,227				6,462				0.56	%
Time deposits			1,352,361				3,933				1.17	%			1,379,197				4,518				1.33	%
Brokered deposits			811,069				1,084				0.54	%			1,478,171				2,174				0.66	%
Total interest-bearing deposits			7,236,221				10,255				0.57	%			8,318,453				13,996				0.68	%
Short-term borrowings			265,205				142				0.21	%			114,957				827				2.88	%
Long-term debt			379,793				5,578				5.85	%			411,960				5,483				5.32	%
Total interest-bearing liabilities			7,881,219				15,975				0.81	%			8,845,370				20,306				0.93	%
Noninterest-bearing demand deposits			3,054,679												2,264,100
Other liabilities			194,262												157,634
Equity			1,315,356												1,240,640
Total liabilities and equity		$	12,445,516											$	12,507,744
Net interest spread (2) (5)											3.26	%											3.22	%
Effect of noninterest-bearing funds											0.27	%											0.24	%
Net interest income/margin (2) (5) (6)						$	105,056				3.53	%						$	103,343				3.46	%

 

 

(1)	Interest income included $7.2 million and $5.9 million in loan fees for the three months ended March 31, 2012 and 2011, 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 financial measure. Refer to Non-U.S. GAAP Financial 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 $256.8 million and $377.3 million for the three months ended March 31, 2012 and 2011, respectively, and are included in loans for purposes of this analysis. Interest foregone on impaired loans was estimated to be approximately $2.8 million and $4.0 million for the three months ended March 31, 2012 and 2011, 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, accretion related to covered assets contributed to net interest margin by 5 basis points. For the three months ended March 31, 2012 there was a 3 basis point negative impact.

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

---

Net Interest Margin   Unaudited   (Dollars in thousands)

 

		Three Months Ended March 31,												Three Months Ended December 31,
		2012												2011
		Average Balance				Interest (1)				Yield/ Rate				Average Balance				Interest (1)				Yield/ Rate
Assets:
Federal funds sold and other short-term investments		$	211,343			$	132				0.25	%		$	334,758			$	215				0.25	%
Securities:
Taxable			2,097,422				15,380				2.93	%			2,064,044				15,263				2.96	%
Tax-exempt (2)			152,412				1,980				5.20	%			141,405				1,944				5.49	%
Total securities			2,249,834				17,360				3.09	%			2,205,449				17,207				3.12	%
Loans, excluding covered assets:
Commercial			5,443,925				63,910				4.64	%			5,320,119				62,775				4.62	%
Commercial real estate			2,598,139				27,715				4.22	%			2,493,296				27,224				4.27	%
Construction			279,343				2,611				3.70	%			302,632				2,920				3.78	%
Residential			338,144				3,619				4.28	%			344,002				3,450				4.01	%
Personal and home equity			411,152				3,732				3.65	%			416,873				3,784				3.60	%
Total loans, excluding covered assets (3)			9,070,703				101,587				4.44	%			8,876,922				100,153				4.42	%
Total interest-earning assets before covered assets (2)			11,531,880				119,079				4.10	%			11,417,129				117,575				4.05	%
Covered assets (4)			264,619				1,952				2.93	%			279,612				2,744				3.85	%
Total interest-earning assets (2)			11,796,499			$	121,031				4.07	%			11,696,741			$	120,319				4.04	%
Cash and due from banks			141,317												154,163
Allowance for loan and covered loan losses			(224,071	)											(220,356	)
Other assets			731,771												700,647
Total assets		$	12,445,516											$	12,331,195
Liabilities and Equity:
Interest-bearing demand deposits		$	654,791			$	636				0.39	%		$	599,273			$	585				0.39	%
Savings deposits			218,145				156				0.29	%			210,577				167				0.32	%
Money market accounts			4,199,855				4,446				0.43	%			4,253,934				4,690				0.44	%
Time deposits			1,352,361				3,933				1.17	%			1,369,150				4,054				1.17	%
Brokered deposits			811,069				1,084				0.54	%			893,860				1,507				0.67	%
Total interest-bearing deposits			7,236,221				10,255				0.57	%			7,326,794				11,003				0.60	%
Short-term borrowings			265,205				142				0.21	%			55,206				152				1.08	%
Long-term debt			379,793				5,578				5.85	%			379,793				5,511				5.76	%
Total interest-bearing liabilities			7,881,219				15,975				0.81	%			7,761,793				16,666				0.85	%
Noninterest-bearing demand deposits			3,054,679												3,101,145
Other liabilities			194,262												170,546
Equity			1,315,356												1,297,711
Total liabilities and equity		$	12,445,516											$	12,331,195
Net interest spread (2) (5)											3.26	%											3.19	%
Effect of noninterest-bearing funds											0.27	%											0.29	%
Net interest income/margin (2) (5) (6)						$	105,056				3.53	%						$	103,653				3.48	%

 

 

(1)	Interest income included $7.2 million and $6.5 million in loan fees for the three months ended March 31, 2012 and December 31, 2011, 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 financial measure. Refer to Non-U.S. GAAP Financial 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 $256.8 million and $291.1 million for the three months ended March 31, 2012 and December 31, 2011, respectively, and are included in loans for purposes of this analysis. Interest foregone on impaired loans was estimated to be approximately $2.8 million and $3.2 million for the three months ended March 31, 2012 and December 31, 2011, 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, 2012, accretion related to covered assets decreased net interest margin by 3 basis points. There was no benefit to net interest margin for the three months ended December 31, 2011.

---

Non-U.S. GAAP Financial Measures   Unaudited   (Amounts in thousands)

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 equity to risk-weighted assets, tangible equity to tangible assets, tangible equity to risk-weighted assets, tangible common equity to tangible assets, and tangible book value. 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 equity to risk-weighted assets, tangible equity to tangible assets, tangible equity to risk-weighted assets, tangible common equity to tangible assets, and tangible book value. These calculations are intended to complement the capital ratios defined by banking regulators for both absolute and comparative purposes. All of these measures exclude from capital the ending balances of goodwill and other intangibles while certain of these ratios exclude 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 financial measures are relevant because they provide information that is helpful in assessing 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 Ended
		1Q12				4Q11				3Q11				2Q11				1Q11
Taxable-equivalent interest income
U.S. GAAP net interest income		$	104,376			$	102,982			$	101,089			$	100,503			$	102,553
Taxable-equivalent adjustment			680				671				680				716				790
Taxable-equivalent net interest income (a)		$	105,056			$	103,653			$	101,769			$	101,219			$	103,343
Average Earning Assets (b)		$	11,796,499			$	11,696,741			$	11,446,323			$	11,916,038			$	11,930,751
Net Interest Margin ((a) annualized) / (b)			3.53	%			3.48	%			3.49	%			3.36	%			3.46	%
Net Revenue
Taxable-equivalent net interest income (a)		$	105,056			$	103,653			$	101,769			$	101,219			$	103,343
U.S. GAAP non-interest income			27,504				25,393				27,635				21,592				23,627
Net revenue		$	132,560			$	129,046			$	129,404			$	122,811			$	126,970
Operating Profit
U.S. GAAP income before income taxes		$	23,950			$	20,534			$	21,075			$	15,338			$	13,253
Provision for loan and covered loan losses			27,701				31,611				32,615				31,093				37,578
Taxable-equivalent adjustment			680				671				680				716				790
Operating profit		$	52,331			$	52,816			$	54,370			$	47,147			$	51,621
Efficiency Ratio
U.S. GAAP non-interest expense (c)		$	80,229			$	76,230			$	75,034			$	75,664			$	75,349
Taxable-equivalent net interest income (a)		$	105,056			$	103,653			$	101,769			$	101,219			$	103,343
U.S. GAAP non-interest income			27,504				25,393				27,635				21,592				23,627
Net revenue (d)		$	132,560			$	129,046			$	129,404			$	122,811			$	126,970
Efficiency ratio (c)/ (d)			60.52	%			59.07	%			57.98	%			61.61	%			59.34	%

---

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

 

		Quarters Ended
		1Q12				4Q11				3Q11				2Q11				1Q11
Tier 1 Common Capital
U.S. GAAP total equity		$	1,312,154			$	1,296,752			$	1,286,176			$	1,260,648			$	1,238,132
Trust preferred securities			244,793				244,793				244,793				244,793				244,793
Less: accumulated other comprehensive income, net of tax			47,152				46,697				46,051				32,535				19,121
Less: disallowed deferred tax assets			—				—				—				—				—
Less: goodwill			94,559				94,571				94,584				94,596				94,609
Less: other intangibles			14,683				15,353				15,715				16,089				16,464
Tier 1 risk-based capital			1,400,553				1,384,924				1,374,619				1,362,221				1,352,731
Less: preferred stock			240,791				240,403				240,020				239,642				239,270
Less: trust preferred securities			244,793				244,793				244,793				244,793				244,793
Less: noncontrolling interests			—				—				—				163				105
Tier 1 common capital (e)		$	914,969			$	899,728			$	889,806			$	877,623			$	868,563
Tangible Common Equity
U.S. GAAP total equity		$	1,312,154			$	1,296,752			$	1,286,176			$	1,260,648			$	1,238,132
Less: goodwill			94,559				94,571				94,584				94,596				94,609
Less: other intangibles			14,683				15,353				15,715				16,089				16,464
Tangible equity (f)			1,202,912				1,186,828				1,175,877				1,149,963				1,127,059
Less: preferred stock			240,791				240,403				240,020				239,642				239,270
Tangible common equity (g)		$	962,121			$	946,425			$	935,857			$	910,321			$	887,789
Tangible Assets
U.S. GAAP total assets		$	12,623,164			$	12,416,870			$	12,019,861			$	12,115,377			$	12,497,442
Less: goodwill			94,559				94,571				94,584				94,596				94,609
Less: other intangibles			14,683				15,353				15,715				16,089				16,464
Tangible assets (h)		$	12,513,922			$	12,306,946			$	11,909,562			$	12,004,692			$	12,386,369
Risk-weighted Assets (i) (1)		$	11,374,212			$	11,191,298			$	10,665,256			$	10,518,850			$	10,903,625
Period-end Common Shares Outstanding (j)			72,415				71,745				71,789				71,808				71,428
Ratios:
Tier 1 common equity to risk-weighted assets (e) / (i) (1)			8.04	%			8.04	%			8.34	%			8.34	%			7.97	%
Tangible equity to tangible assets (f) / (h)			9.61	%			9.64	%			9.87	%			9.58	%			9.10	%
Tangible equity to risk-weighted assets (f) / (i) (1)			10.58	%			10.60	%			11.03	%			10.93	%			10.34	%
Tangible common equity to tangible assets (g) / (h)			7.69	%			7.69	%			7.86	%			7.58	%			7.17	%
Tangible book value (g) / (j)		$	13.29			$	13.19			$	13.04			$	12.68			$	12.43

---

 

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 reporting purposes; however, we classify these deposits as client CDARS^® due to the source being our 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 not with the underlying depositor.

Client deposits—Total deposits less brokered deposits plus client CDARS^®.

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 net securities gains (losses) divided by the sum of net interest income and non-interest income less net securities gains (losses).

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 interest-earning assets. The annualization of net interest income for the quarterly yield takes into consideration the interest payment convention at the product level. 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 financial measures may be found on the previous pages.

Operating profit—The sum of U.S. GAAP income before income taxes, provision for loan and covered loan losses and taxable-equivalent adjustment. 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.

---

 

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. This is a non-U.S. GAAP financial measure.

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 gains (losses) on available for sale equity securities, available for sale debt securities, and cash flow hedge derivatives.

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.