PRIVATEBANCORP, INC - FORM 8-K - EX-99.1 - FOURTH QUARTER 2012 EARNINGS RELEASE

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8-K - FORM 8-K - PRIVATEBANCORP, INC	d470742d8k.htm

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 Fourth Quarter and Full Year 2012 Results

•

Fourth quarter earnings per share of $0.26

•

Loan growth of 5 percent during the quarter

•

Full year 2012 diluted earnings per share of $0.88, compared to $0.43 per share in 2011

CHICAGO, January 22, 2013 – PrivateBancorp, Inc. (NASDAQ: PVTB) today reported net income available to common shareholders of $20.0 million, or $0.26 per diluted share, for the fourth quarter 2012, compared to $7.6 million, or $0.11 per diluted share, for the fourth quarter 2011. For the 12 months ended December 31, 2012, the Company had net income available to common shareholders of $64.5 million, or $0.88 per diluted share, compared to $30.7 million, or $0.43 per diluted share, for the prior year.

“Our 2012 performance demonstrates our commitment to improved earnings and a stronger balance sheet as we more than doubled net income, grew our business and strengthened asset quality,” said Larry D. Richman, President and Chief Executive Officer, PrivateBancorp, Inc.

“We continued our earnings momentum in the fourth quarter and leveraged our client relationship development capabilities to generate solid loan and deposit growth, including significant year-end activity, and increased fee income,” Richman continued. “Non-performing assets declined again this quarter as disposition activity continued. Despite continued pressure on net interest margin from the competitive environment, we succeeded in growing both net revenue and net income.

“As we move into 2013, our clients are telling us they are generally feeling better about their business performance even though their economic outlook is impacted by the continued uncertainty over fiscal policy,” Richman concluded. “We will remain focused on developing profitable new relationships, to do more for our existing clients and to manage expenses in order to continue to drive improved profitability and shareholder return.”

Fourth Quarter Results

•

Net income was $20.0 million, or $0.26 per share, for the fourth quarter and included a charge of $2.2 million, or $0.03 per share, associated with the redemption of the TARP preferred shares.

•

Net interest income of $104.8 million for the fourth quarter was relatively unchanged from the third quarter 2012 as higher loan balances offset the impact of lower loan and investment yields.

•

Total loans grew 5 percent in the fourth quarter to $10.1 billion, primarily from commercial and industrial loans.

•

Total deposits increased 7 percent during the fourth quarter to $12.2 billion at December 31, 2012, including a 12 percent increase in noninterest bearing deposits.

•

Asset quality continued to improve in the fourth quarter with a 21 percent reduction in non-performing assets from September 30, 2012. Non-performing assets to total assets were 1.57 percent at December 31, 2012, compared to 2.09 percent at September 30, 2012.

Operating Performance

Net revenue was $135.0 million in the fourth quarter 2012, compared to $129.0 million in the fourth quarter 2011 and $134.0 million in the third quarter 2012. Operating profit was $53.7 million in the fourth quarter 2012, compared to $52.8 million in the fourth quarter 2011 and $52.2 million in the third quarter 2012. Increased revenue from fee income and loan growth contributed to a 3 percent increase in operating profit compared to the previous quarter. For the full year 2012, net revenue increased 5 percent to $533.8 million compared to 2011. For the full year, operating profit was $206.7 million, compared to $206.0 million in 2011. The full year results include net securities losses of $205,000 for 2012 and net securities gains of $5.8 million for 2011.

Net interest income was $104.8 million in the fourth quarter 2012, compared to $103.0 million for the fourth quarter 2011 and $105.4 million in the third quarter 2012. For the full year 2012, net interest income increased 3 percent to $419.9 million, from $407.1 million for full year 2011. Growth in average loans offset the impact of lower loan and investment yields during the fourth quarter; however, net interest income was impacted by $1.8 million of interest expense associated with $125 million of subordinated debt issued in mid-October to refinance a portion of the TARP preferred stock redemption.

Net interest margin was 3.16 percent for the fourth quarter 2012, compared to 3.48 percent in the fourth quarter 2011 and 3.35 percent for the third quarter 2012. Net interest margin this quarter was impacted by a number of items including a reduction of 9 basis points attributable to the Company’s decision to have higher cash balances on deposit at the Federal Reserve, 7 basis points attributable to the subordinated debt issued as part of the redemption of TARP, and the remaining 3 basis points attributable to declining asset yields offset by improved deposit costs and mix.

Non-interest income was $29.5 million in the fourth quarter 2012, compared to $25.4 million in the fourth quarter 2011 and $27.8 million in the third quarter 2012. Growth in mortgage banking, and treasury management fees contributed to the increase in non-interest income in the fourth quarter. Mortgage banking benefited from growth in the mortgage banking team during the year and continued demand for refinancing during the quarter. The fourth quarter 2012 capital markets revenue included a positive credit valuation adjustment of $854,000 compared to $244,000 in the fourth quarter 2011, and $5,000 in the third quarter 2012. For the full year 2012, non-interest income, excluding net securities gains, increased 20 percent to $111.2 million compared to $92.5 million in the prior year.

Expenses

Non-interest expense was $81.3 million in the fourth quarter 2012, compared to $76.2 million in the fourth quarter 2011 and $81.7 million in the third quarter 2012. Non-interest expense for the full year 2012 was $327.1 million, compared to $302.3 million for the full year 2011. Net foreclosed property expense was higher in the fourth quarter 2012 and reflects greater losses on a higher volume of OREO sales and increased property ownership costs, while valuation impairments remained elevated. The efficiency ratio for the fourth quarter 2012 was 60.2 percent, compared to 59.1 percent for the fourth quarter 2011, and 61.0 percent for the third quarter 2012.

The effective tax rate for the fourth quarter was 42 percent and was largely impacted by reduced tax benefits relating to previously awarded stock-based compensation. Based on current statutory tax rates, the Company estimates an effective tax rate for 2013 in the range of 38 to 39 percent.

Credit Quality

The 2012 results reflect continued progress in improving overall asset quality. Non-performing assets declined 43 percent from December 31, 2011 and 21 percent from the third quarter 2012. Non-performing assets to total assets were 1.57 percent at December 31, 2012, compared to 3.11 percent at December 31, 2011, and 2.09 percent at September 30, 2012. Non-performing assets declined meaningfully again this quarter driven by a 26 percent reduction to inflows and ongoing disposition activity. Disposition of problem loans and OREO together remain in line with prior quarter activity levels. Special mention and potential problem loans were $204.7 million at the end of the fourth quarter, down 46 percent from a year ago and 6 percent from the third quarter 2012. The Company continues to focus on improving asset quality, and expects lower nonperforming assets as it moves through the next several quarters.

The allowance for loan losses at December 31, 2012 was 1.59 percent of total loans, down from 2.13 percent at December 31, 2011 and 1.73 percent at September 30, 2012. The allowance for loan losses as a percentage of non-performing loans was 116 percent at December 31, 2012, compared to 74 percent at December 31, 2011, and 93 percent at September 30, 2012. While the general allocated reserve remained relatively flat from last quarter as a function of higher loan growth and improved portfolio mix and overall asset quality, the amount of specific reserves declined as a result of the decreasing impaired loan population. Charge-offs were down 49 percent compared to the fourth quarter 2011, and down 8 percent compared to the previous quarter.

Credit quality results exclude covered assets acquired through an FDIC-assisted transaction that are subject to a loss-sharing agreement.

Balance Sheet

Total assets were $14.1 billion at December 31, 2012, compared to $12.4 billion at December 31, 2011, and $13.3 billion at September 30, 2012. Total loans were $10.1 billion at December 31, 2012, an increase of 13 percent from December 31, 2011, and an increase of 5 percent from September 30, 2012. The loan growth was primarily in commercial and industrial loans, which is 64 percent of our total loan portfolio. A portion of the loan growth, which was elevated relative to prior quarters in 2012, included client borrowings in response to potential changes in the future tax rates, of which a portion may be repaid or syndicated in the first half of 2013.

Total deposits were $12.2 billion at December 31, 2012, compared to $10.4 billion at December 31, 2011, and $11.4 billion at September 30, 2012. This quarter the Company saw increased deposit inflows that resulted in a higher level of cash on deposit at the Federal Reserve. The Company built higher levels of liquid assets in the second half of the year in part due to uncertainty relating to the potential impact on deposit activity from the expiration at year-end of the unlimited FDIC deposit insurance on non-interest bearing transaction accounts. Consistent with the activity seen last year, the Company expects some deposit outflows to occur in the first quarter 2013. The Company will pursue appropriate opportunities to manage balance sheet movements and reduce excess funds.

The Company’s investment securities portfolio was $2.3 billion at December 31, 2012, flat compared to December 31, 2011, and September 30, 2012. The securities portfolio is primarily composed of U.S. government agency backed mortgage securities, agency backed collateralized mortgage obligations, and investment grade municipal bonds.

Capital

On October 24, 2012, the Company used the net proceeds from subordinated debt and common stock offerings in October 2012, plus additional cash on its balance sheet to redeem the $243.8 million of preferred stock issued under TARP. In connection with the transaction in the fourth quarter, the Company accelerated accretion of the remaining $2.2 million discount on the preferred stock and paid $813,000 of preferred dividends upon redemption. Going forward, the TARP repayment eliminates approximately $3.4 million of quarterly preferred dividends and discount accretion. Subordinated debt issued in October 2012 will add approximately $2.2 million, or $1.4 million after tax, of incremental, quarterly interest expense.

As of December 31, 2012, the total risk-based capital ratio was 13.13 percent, the Tier 1 risk-based capital ratio was 10.48 percent, and the leverage ratio was 9.50 percent. Tier 1 common capital ratio was 8.50 percent and tangible common equity ratio was 7.88 percent at the end of the fourth quarter 2012.

Quarterly Conference Call and Webcast Presentation

PrivateBancorp will host a conference call on Tuesday, January 22, 2013, 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 # 85400469. 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 February 5, 2013, by calling (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (International) and entering passcode # 85400469.

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 December 31, 2012, the Company had 35 offices in 10 states and $14.1 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 loans that could result in charge-offs greater than we have anticipated in our allowance for loan losses; slower than anticipated dispositions of other real estate owned which may result in increased losses and ongoing elevated foreclosed property expense; 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 changes in interest rates; competitive pricing trends; lack of sufficient or cost-effective sources of liquidity or funding as and when needed; loss of key personnel or an inability to recruit and retain appropriate talent; uncertainty relating to recently proposed regulatory capital rules that could, depending on the nature of our assets, require us to maintain higher levels of regulatory capital; uncertainty regarding implications of other changes in regulatory requirements relating to implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act 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; changes in monetary or fiscal policies of the U.S. Government; or failures or disruptions to our data processing or other information or operational systems, including the potential impact of disruptions or breaches at our third party service providers. Forward-looking statements are subject to risks, assumptions and uncertainties and could be significantly 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 light of new information, future events or otherwise, 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.

Consolidated Income Statements

(Amounts in thousands except per share data)


	Three Months Ended December 31,				Years Ended December 31,
	2012		2011		2012			2011
	unaudited		unaudited		unaudited			audited
Interest Income
Loans, including fees	$	108,172	$	102,897	$	423,211		$	413,109
Federal funds sold and other short-term investments		452		215		965			1,181
Securities:
Taxable		12,938		15,173		56,826			61,026
Exempt from Federal income taxes		1,462		1,273		5,487			5,439
Other interest income		168		90		547			391

Total interest income		123,192		119,648		487,036			481,146

Interest Expense
Interest-bearing demand deposits		985		585		3,378			2,439
Savings deposits and money market accounts		4,531		4,857		17,604			22,957
Brokered and time deposits		5,561		5,561		21,832			24,676
Short-term borrowings		77		152		443			2,011
Long-term debt		7,235		5,511		23,846			21,936

Total interest expense		18,389		16,666		67,103			74,019

Net interest income		104,803		102,982		419,933			407,127
Provision for loan and covered loan losses		13,177		31,611		71,425			132,897

Net interest income after provision for loan and covered loan losses		91,626		71,371		348,508			274,230

Non-interest Income
Trust and Investments		4,232		3,992		17,017			17,826
Mortgage banking		4,197		3,032		13,460			6,703
Capital markets products		6,744		5,471		25,958			19,341
Treasury management		5,606		4,813		21,510			18,181
Loan and credit-related fees		6,902		5,606		27,280			22,207
Deposit service charges and fees and other income		1,582		2,115		6,021			8,218
Net securities (losses) gains		191		364		(205	)		5,771

Total non-interest income		29,454		25,393		111,041			98,247

Non-interest Expense
Salaries and employee benefits		45,253		40,729		174,948			156,763
Net occupancy expense		7,762		7,394		30,571			29,986
Technology and related costs		3,249		3,142		13,250			11,388
Marketing		2,448		2,250		10,311			8,911
Professional services		1,998		2,126		8,353			9,206
Outsourced servicing costs		1,814		2,077		7,419			8,001
Net foreclosed property expenses		9,571		6,862		38,296			27,782
Postage, telephone, and delivery		909		953		3,497			3,716
Insurance		3,290		3,462		15,186			21,287
Loan and collection expense		2,227		3,840		11,631			13,571
Other expenses		2,794		3,395		13,670			11,666

Total non-interest expense		81,315		76,230		327,132			302,277

Income before income taxes		39,765		20,534		132,417			70,200
Income tax provision		16,682		9,468		54,521			25,660

Net income		23,083		11,066		77,896			44,540
Net income attributable to noncontrolling interests		—		7		—			170

Net income attributable to controlling interests		23,083		11,059		77,896			44,370
Preferred stock dividends and discount accretion		3,043		3,430		13,368			13,690

Net income available to common stockholders	$	20,040	$	7,629	$	64,528		$	30,680


Per Common Share Data
Basic earnings per share	$	0.26	$	0.11	$	0.88		$	0.43
Diluted earnings per share	$	0.26	$	0.11	$	0.88		$	0.43
Cash dividends declared	$	0.01	$	0.01	$	0.04		$	0.04
Weighted-average common shares outstanding		75,035		70,540		71,951			70,449
Weighted-average diluted common shares outstanding		75,374		70,713		72,174			70,642

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

Quarterly Consolidated Income Statements

Unaudited

(Amounts in thousands except per share data)


	4Q12		3Q12			2Q12			1Q12		4Q11
Interest Income
Loans, including fees	$	108,172	$	106,358		$	105,142		$	103,539	$	102,897
Federal funds sold and other short-term investments		452		248			133			132		215
Securities:
Taxable		12,938		13,907			14,723			15,258		15,173
Exempt from Federal income taxes		1,462		1,389			1,336			1,300		1,273
Other interest income		168		126			131			122		90

Total interest income		123,192		122,028			121,465			120,351		119,648

Interest Expense
Interest-bearing demand deposits		985		958			799			636		585
Savings deposits and money market accounts		4,531		4,206			4,265			4,602		4,857
Brokered and time deposits		5,561		5,860			5,394			5,017		5,561
Short-term borrowings		77		101			123			142		152
Long-term debt		7,235		5,495			5,538			5,578		5,511

Total interest expense		18,389		16,620			16,119			15,975		16,666

Net interest income		104,803		105,408			105,346			104,376		102,982
Provision for loan and covered loan losses		13,177		13,509			17,038			27,701		31,611

Net interest income after provision for loan and covered loan losses		91,626		91,899			88,308			76,675		71,371


Non-interest Income
Trust and Investments		4,232		4,254			4,312			4,219		3,992
Mortgage banking		4,197		3,685			2,915			2,663		3,032
Capital markets products		6,744		5,832			6,033			7,349		5,471
Treasury management		5,606		5,490			5,260			5,154		4,813
Loan and credit-related fees		6,902		7,479			6,372			6,527		5,606
Deposit service charges and fees and other income		1,582		1,308			1,644			1,487		2,115
Net securities (losses) gains		191		(211	)		(290	)		105		364

Total non-interest income		29,454		27,837			26,246			27,504		25,393


Non-interest Expense
Salaries and employee benefits		45,253		44,820			42,177			42,698		40,729
Net occupancy expense		7,762		7,477			7,653			7,679		7,394
Technology and related costs		3,249		3,432			3,273			3,296		3,142
Marketing		2,448		2,645			3,058			2,160		2,250
Professional services		1,998		2,151			2,247			1,957		2,126
Outsourced servicing costs		1,814		1,802			2,093			1,710		2,077
Net foreclosed property expenses		9,571		8,596			11,894			8,235		6,862
Postage, telephone, and delivery		909		837			882			869		953
Insurance		3,290		3,352			4,239			4,305		3,462
Loan and collection expense		2,227		3,329			2,918			3,157		3,840
Other expenses		2,794		3,289			3,424			4,163		3,395

Total non-interest expense		81,315		81,730			83,858			80,229		76,230

Income before income taxes		39,765		38,006			30,696			23,950		20,534
Income tax provision		16,682		14,952			13,192			9,695		9,468

Net income		23,083		23,054			17,504			14,255		11,066
Net income attributable to noncontrolling interests		—		—			—			—		7

Net income attributable to controlling interests		23,083		23,054			17,504			14,255		11,059
Preferred stock dividends and discount accretion		3,043		3,447			3,442			3,436		3,430

Net income available to common stockholders	$	20,040	$	19,607		$	14,062		$	10,819	$	7,629


Per Common Share Data
Basic earnings per share	$	0.26	$	0.27		$	0.19		$	0.15	$	0.11
Diluted earnings per share	$	0.26	$	0.27		$	0.19		$	0.15	$	0.11
Cash dividends declared	$	0.01	$	0.01		$	0.01		$	0.01	$	0.01
Weighted-average common shares outstanding		75,035		71,010			70,956			70,780		70,540
Weighted-average diluted common shares outstanding		75,374		71,274			71,147			70,932		70,713

Note: 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)


	12/31/12			09/30/12			06/30/12			03/31/12			12/31/11
	unaudited			unaudited			unaudited			unaudited			audited
Assets
Cash and due from banks	$	234,308		$	143,573		$	141,563		$	166,062		$	156,131
Fed funds sold and other short-term investments		707,143			470,984			315,378			193,571			205,610
Loans held for sale		49,696			49,209			35,342			29,185			32,049
Securities available-for-sale, at fair value		1,451,160			1,550,516			1,625,649			1,705,649			1,783,465
Securities held-to-maturity, at amortized cost		863,727			784,930			693,277			598,066			490,143
FHLB stock		43,387			43,387			43,467			40,695			40,695
Loans - excluding covered assets, net of unearned fees		10,139,982			9,625,421			9,436,235			9,222,253			9,008,561
Allowance for loan losses		(161,417	)		(166,859	)		(174,302	)		(183,844	)		(191,594	)

Loans, net of allowance for loan losses and unearned fees		9,978,565			9,458,562			9,261,933			9,038,409			8,816,967

Covered assets		194,216			208,979			244,782			276,534			306,807
Allowance for covered loan losses		(24,011	)		(21,500	)		(21,733	)		(26,323	)		(25,939	)

Covered assets, net of allowance for covered loan losses		170,205			187,479			223,049			250,211			280,868

Other real estate owned, excluding covered assets		81,880			97,833			109,836			123,498			125,729
Premises, furniture, and equipment, net		39,508			40,526			38,177			37,462			38,633
Accrued interest receivable		34,832			36,892			37,089			36,033			35,732
Investment in bank owned life insurance		52,513			52,134			51,751			51,356			50,966
Goodwill		94,521			94,534			94,546			94,559			94,571
Other intangible assets		12,828			13,500			14,152			14,683			15,353
Capital markets derivative assets		90,405			104,697			102,613			97,805			101,676
Other assets		152,837			149,798			154,354			145,920			148,282

Total assets	$	14,057,515		$	13,278,554		$	12,942,176		$	12,623,164		$	12,416,870


Liabilities
Demand deposits:
Noninterest-bearing	$	3,690,340		$	3,295,568		$	2,920,182		$	3,054,536		$	3,244,307
Interest-bearing		1,057,390			893,194			785,879			714,522			595,238
Savings deposits and money market accounts		4,912,820			4,381,595			4,146,022			4,347,832			4,378,220
Brokered time deposits		993,455			1,290,796			1,484,435			961,481			815,951
Time deposits		1,519,629			1,498,287			1,398,012			1,344,341			1,359,138

Total deposits		12,173,634			11,359,440			10,734,530			10,422,712			10,392,854
Short-term borrowings		5,000			5,000			335,000			355,000			156,000
Long-term debt		499,793			374,793			374,793			379,793			379,793
Accrued interest payable		7,141			5,287			5,855			5,425			5,567
Capital markets derivative liabilities		93,029			108,094			105,773			100,109			104,140
Other liabilities		71,752			62,500			52,071			47,971			81,764

Total liabilities		12,850,349			11,915,114			11,608,022			11,311,010			11,120,118


Equity
Preferred stock		—			241,585			241,185			240,791			240,403
Common stock		77,015			71,884			71,843			71,611			71,483
Treasury stock		(24,150	)		(22,736	)		(22,639	)		(21,749	)		(21,454	)
Additional paid-in capital		1,053,821			983,739			978,510			973,417			968,787
Retained earnings/(accumulated deficit)		52,416			33,150			14,268			932			(9,164	)
Accumulated other comprehensive income, net of tax		48,064			55,818			50,987			47,152			46,697

Total equity		1,207,166			1,363,440			1,334,154			1,312,154			1,296,752

Total liabilities and equity	$	14,057,515		$	13,278,554		$	12,942,176		$	12,623,164		$	12,416,870

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

Selected Financial Data

Unaudited

(Amounts in thousands except per share data)


	4Q12			3Q12			2Q12			1Q12			4Q11
Selected Statement of Income Data:
Net interest income	$	104,803		$	105,408		$	105,346		$	104,376		$	102,982
Net revenue ^{(1) (2)}	$	135,022		$	133,974		$	132,291		$	132,560		$	129,046
Operating profit ^{(1) (2)}	$	53,707		$	52,244		$	48,433		$	52,331		$	52,816
Provision for loan and covered loan losses	$	13,177		$	13,509		$	17,038		$	27,701		$	31,611
Income before taxes	$	39,765		$	38,006		$	30,696		$	23,950		$	20,534
Net income available to common stockholders	$	20,040		$	19,607		$	14,062		$	10,819		$	7,629

Per Common Share Data:
Basic earnings per share	$	0.26		$	0.27		$	0.19		$	0.15		$	0.11
Diluted earnings per share	$	0.26		$	0.27		$	0.19		$	0.15		$	0.11
Dividends declared	$	0.01		$	0.01		$	0.01		$	0.01		$	0.01
Book value (period end) ⁽¹⁾	$	15.65		$	15.49		$	15.09		$	14.79		$	14.72
Tangible book value (period end) ^{(1) (2)}	$	14.26		$	14.00		$	13.59		$	13.29		$	13.19
Market value (close)	$	15.32		$	15.99		$	14.76		$	15.17		$	10.98
Book value multiple		0.98x			1.03x			0.98x			1.03x			0.75x

Share Data:
Weighted-average common shares outstanding		75,035			71,010			70,956			70,780			70,540
Weighted-average diluted common shares outstanding		75,374			71,274			71,147			70,932			70,713
Common shares issued (at period end)		78,062			73,291			73,273			73,205			72,514
Common shares outstanding (at period end)		77,115			72,436			72,424			72,415			71,745

Performance Ratios:
Return on average assets		0.67	%		0.70	%		0.55	%		0.46	%		0.36	%
Return on average common equity		6.64	%		7.00	%		5.18	%		4.05	%		2.86	%
Net interest margin ^{(1) (2)}		3.16	%		3.35	%		3.46	%		3.53	%		3.48	%
Fee revenue as a percent of total revenue ⁽¹⁾		21.83	%		21.02	%		20.12	%		20.79	%		19.55	%
Non-interest income to average assets		0.85	%		0.85	%		0.83	%		0.89	%		0.82	%
Non-interest expense to average assets		2.35	%		2.49	%		2.64	%		2.59	%		2.45	%
Net overhead ratio ⁽¹⁾		1.50	%		1.64	%		1.81	%		1.70	%		1.64	%
Efficiency ratio ^{(1) (2)}		60.22	%		61.00	%		63.39	%		60.52	%		59.07	%

Selected Information:
Assets under management and administration (AUMA) ⁽¹⁾	$	5,196,094		$	5,007,235		$	4,738,973		$	4,879,947		$	4,303,547
Custody assets included in AUMA	$	2,345,410		$	2,192,530		$	2,073,777		$	2,060,455		$	1,599,528
Credit valuation adjustment on capital markets derivatives ⁽¹⁾	$	854		$	5		$	(830	)	$	19		$	244

Balance Sheet Ratios:
Loans to deposits (period end) ⁽³⁾		83.29	%		84.73	%		87.91	%		88.48	%		86.68	%
Average interest-earning assets to average interest-bearing liabilities		150.03	%		147.76	%		146.44	%		149.68	%		150.70	%

Capital Ratios (period end):
Total risk-based capital ⁽¹⁾		13.13	%		13.90	%		14.12	%		14.20	%		14.28	%
Tier 1 risk-based capital ⁽¹⁾		10.48	%		12.24	%		12.25	%		12.31	%		12.38	%
Tier 1 leverage ratio ⁽¹⁾		9.50	%		11.15	%		11.20	%		11.35	%		11.33	%
Tier 1 common equity to risk-weighted assets ^{(1) (2)}		8.50	%		8.12	%		8.05	%		8.04	%		8.04	%
Tangible common equity to tangible assets ^{(1) (2)}		7.88	%		7.70	%		7.67	%		7.69	%		7.69	%
Total equity to total assets		8.59	%		10.27	%		10.31	%		10.39	%		10.44	%

(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)


	12/31/12		% of Total			09/30/12		% of Total			06/30/12		% of Total			03/31/12		% of Total			12/31/11		% of Total
	unaudited					unaudited					unaudited					unaudited					audited
Commercial and industrial	$	4,901,210		48	%	$	4,666,375		48	%	$	4,523,780		48	%	$	4,325,558		47	%	$	4,192,842		46	%
Commercial - owner-occupied CRE		1,595,574		16	%		1,437,935		15	%		1,384,831		15	%		1,175,729		13	%		1,130,932		13	%

Total commercial		6,496,784		64	%		6,104,310		63	%		5,908,611		63	%		5,501,287		60	%		5,323,774		59	%

Commercial real estate		2,129,238		21	%		2,069,423		21	%		2,124,492		23	%		2,378,640		26	%		2,233,851		25	%
Commercial real estate - multi-family		546,447		5	%		544,775		6	%		499,250		5	%		493,218		5	%		452,595		5	%

Total commercial real estate		2,675,685		26	%		2,614,198		27	%		2,623,742		28	%		2,871,858		31	%		2,686,446		30	%

Construction		190,496		2	%		162,724		2	%		171,014		2	%		127,837		1	%		287,002		3	%
Residential real estate		373,580		4	%		360,094		4	%		330,254		3	%		308,880		3	%		297,229		3	%
Home equity		167,760		2	%		170,068		2	%		174,131		2	%		175,972		2	%		181,158		2	%
Personal		235,677		2	%		214,027		2	%		228,483		2	%		236,419		3	%		232,952		3	%

Total loans	$	10,139,982		100	%	$	9,625,421		100	%	$	9,436,235		100	%	$	9,222,253		100	%	$	9,008,561		100	%

LOGO

(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)


	12/31/12										09/30/12										12/31/11
	Amount		% of Total			Amount Non- performing		% Non- performing ⁽²⁾			Amount		% of Total			Amount Non- performing		% Non- performing ⁽²⁾			Amount		% of Total
Manufacturing	$	1,496,719		23	%	$	—		—		$	1,361,831		22	%	$	—		—		$	1,257,973		24	%
Healthcare		1,514,496		23	%		322		*			1,346,520		22	%		—		—			1,218,205		23	%
Wholesale trade		635,477		10	%		—		—			641,077		10	%		1,829		*			482,386		9	%
Finance and insurance		584,763		9	%		194		*			489,261		8	%		201		*			454,830		8	%
Real estate, rental and leasing		359,947		6	%		16,550		5	%		349,763		6	%		16,327		5	%		342,860		6	%
Professional, scientific and technical services		391,976		6	%		10,805		3	%		408,461		7	%		38,673		9	%		350,677		7	%
Administrative, support, waste management and remediation services		426,960		7	%		—		—			411,977		7	%		—		—			321,912		6	%
Architectural, engineering and construction		225,199		3	%		629		*			262,524		4	%		1,318		1	%		195,875		4	%
All other ⁽³⁾		861,247		13	%		13,413		2	%		832,896		14	%		2,834		*			699,056		13	%

Total commercial ⁽⁴⁾	$	6,496,784		100	%	$	41,913		1	%	$	6,104,310		100	%	$	61,182		1	%	$	5,323,774		100	%


Commercial Real Estate and Construction Loans Portfolio by Collateral Type
	12/31/12										09/30/12										12/31/11
	Amount Outstanding		% of Total			Amount Non- performing		% Non- performing ⁽²⁾			Amount Outstanding		% of Total			Amount Non- performing		% Non- performing ⁽²⁾			Amount Outstanding		% of Total
Commercial Real Estate Portfolio
Land	$	240,503		9	%	$	19,747		8	%	$	244,306		9	%	$	19,664		8	%	$	230,579		9	%
Residential 1-4 family		58,704		2	%		13,213		23	%		58,410		2	%		12,523		21	%		105,919		4	%
Multi-family		543,622		20	%		6,553		1	%		544,775		21	%		8,619		2	%		452,595		17	%
Industrial/warehouse		272,535		10	%		8,902		3	%		317,593		12	%		10,390		3	%		350,282		13	%
Office		566,834		21	%		5,849		1	%		564,724		22	%		7,056		1	%		585,183		22	%
Retail		472,024		18	%		8,873		2	%		424,683		16	%		24,467		6	%		431,200		16	%
Healthcare		205,318		8	%		—		—			164,974		6	%		—		—			144,529		5	%
Mixed use/other		316,145		12	%		5,417		2	%		294,733		12	%		5,338		2	%		386,159		14	%

Total commercial real estate	$	2,675,685		100	%	$	68,554		3	%	$	2,614,198		100	%	$	88,057		3	%	$	2,686,446		100	%


Construction Portfolio ⁽⁵⁾
Land	$	—		—		$	—		—		$	—		—		$	—		—		$	—		—
Residential 1-4 family		14,160		7	%		—		—			13,269		8	%		—		—			32,903		11	%
Multi-family		36,129		19	%		—		—			24,388		15	%		—		—			64,892		23	%
Industrial/warehouse		29,633		16	%		—		—			21,573		13	%		—		—			18,911		7	%
Office		8,863		5	%		402		5	%		34,957		21	%		402		1	%		43,403		15	%
Retail		37,457		20	%		—		—			33,719		21	%		—		—			69,990		24	%
Healthcare		14,196		7	%		—		—			8,025		5	%							7,338		3	%
Mixed use/other		50,058		26	%		155		*			26,793		17	%		155		1	%		49,565		17	%

Total construction	$	190,496		100	%	$	557		*		$	162,724		100	%	$	557		*		$	287,002		100	%

LOGO

(1)

Refer to Glossary of Terms for definition.

(2)

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

(3)

All other consists of numerous smaller balances across a variety of industries with no category greater than 3%.

(4)

Includes loans secured by owner-occupied commercial real estate of $1.6 billion, $1.4 billion and $1.1 billion at December 31, 2012, September 30, 2012 and December 31, 2011, respectively.

(5)

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

*	Less than 1%.

Asset Quality (excluding covered assets⁽¹⁾)

Unaudited

(Dollars in thousands)


	4Q12			3Q12			2Q12			1Q12			4Q11
Credit Quality Key Ratios
Net charge-offs (annualized) to average loans		0.73	%		0.87	%		1.16	%		1.57	%		1.72	%
Nonperforming loans to total loans		1.37	%		1.87	%		2.22	%		2.53	%		2.88	%
Nonperforming loans to total assets		0.99	%		1.35	%		1.62	%		1.85	%		2.09	%
Nonperforming assets to total assets		1.57	%		2.09	%		2.47	%		2.83	%		3.11	%
Allowance for loan losses to:
Total loans		1.59	%		1.73	%		1.85	%		1.99	%		2.13	%
Nonperforming loans		116	%		93	%		83	%		79	%		74	%

Nonperforming assets
Loans past due 90 days and accruing	$	—		$	—		$	—		$	—		$	—
Nonaccrual loans		138,780			179,895			209,339			233,222			259,852
OREO		81,880			97,833			109,836			123,498			125,729

Total nonperforming assets	$	220,660		$	277,728		$	319,175		$	356,720		$	385,581


Restructured loans accruing interest	$	60,980		$	58,431		$	97,690		$	136,521		$	100,909

Special mention loans	$	96,794		$	104,706		$	108,052		$	143,790		$	204,965
Potential problem loans	$	107,876		$	112,929		$	164,077		$	184,029		$	177,095


Nonperforming Loans Rollforward
Beginning balance	$	179,895		$	209,339		$	233,222		$	259,852		$	304,747
Additions:
New nonaccrual loans		28,527			38,948			57,717			69,581			67,512
Reductions:
Return to performing status		(3,824	)		(236	)		(1,953	)		(14,291	)		(2,072	)
Paydowns and payoffs, net of advances		(21,454	)		(11,094	)		(9,961	)		(4,806	)		(8,950	)
Net sales		(20,544	)		(21,351	)		(25,954	)		(27,479	)		(27,178	)
Transfer to OREO		(2,826	)		(3,250	)		(9,968	)		(13,513	)		(33,695	)
Transfer to loans held for sale		—			(9,200	)		—			—			—
Charge-offs		(20,994	)		(23,261	)		(33,764	)		(36,122	)		(40,512	)

Total reductions		(69,642	)		(68,392	)		(81,600	)		(96,211	)		(112,407	)

Balance at end of period	$	138,780		$	179,895		$	209,339		$	233,222		$	259,852



OREO Rollforward
Beginning balance	$	97,833		$	109,836		$	123,498		$	125,729		$	116,364
New foreclosed properties		2,826			3,250			9,968			13,513			33,695
Valuation adjustments		(5,274	)		(6,245	)		(9,207	)		(4,522	)		(3,999	)
Disposals:
Sales proceeds		(11,526	)		(8,041	)		(13,517	)		(9,078	)		(18,085	)
Net loss on sale		(1,979	)		(967	)		(906	)		(2,144	)		(2,246	)

Balance at end of period	$	81,880		$	97,833		$	109,836		$	123,498		$	125,729



Restructured Loans Accruing Interest Rollforward
Beginning balance	$	58,431		$	97,690		$	136,521		$	100,909		$	106,330
Additions:
New restructured loans accruing interest		6,552			2,001			1,864			47,673			8,803
Restructured loans returned to accruing status		3,823			—			157			—			1,099
Reductions:
Paydowns and payoffs, net of advances		(3,995	)		(3,935	)		(14,593	)		(4,661	)		(3,334	)
Transferred to nonperforming loans		(2,988	)		(15,464	)		(25,688	)		(6,665	)		(5,735	)
Net sales		—			—			(170	)		—			—
Removal of restructured loan status		(843	)		(21,861	)		(401	)		(735	)		(6,254	)
Charge-offs, net		—			—			—			—			—

Balance at end of period	$	60,980		$	58,431		$	97,690		$	136,521		$	100,909

(1)

Refer to Glossary of Terms for definition.

Asset Quality (excluding covered assets⁽¹⁾)

Unaudited

(Dollars in thousands)

Credit Quality Indicators ⁽¹⁾


	Special Mention Loans		% of Portfolio Loan Type			Potential Problem Loans		% of Portfolio Loan Type			Non- Performing Loans		% of Portfolio Loan Type			Total Loans
As of December 31, 2012
Transformational ⁽¹⁾
Commercial	$	71,706		1.2	%	$	34,745		0.6	%	$	23,620		0.4	%	$	6,067,220
Commercial real estate		6,310		0.3	%		6,836		0.4	%		25,344		1.3	%		1,937,913
Construction		—		—			—		—			—		—			187,819
Residential real estate		—		—			3,532		1.4	%		1,655		0.7	%		249,569
Home equity		136		0.2	%		1,490		2.0	%		876		1.2	%		75,619
Personal		—		—			47		*			539		0.3	%		184,953

Total transformational	$	78,152		0.9	%	$	46,650		0.5	%	$	52,034		0.6	%	$	8,703,093
Legacy ⁽¹⁾
Commercial	$	945		0.2	%	$	5,750		1.3	%	$	18,293		4.3	%	$	429,564
Commercial real estate		14,899		2.0	%		42,061		5.7	%		43,210		5.9	%		737,772
Construction		—		—			—		—			557		20.8	%		2,677
Residential real estate		2,364		1.9	%		10,312		8.3	%		9,569		7.7	%		124,011
Home equity		426		0.5	%		2,861		3.1	%		10,834		11.8	%		92,141
Personal		8		*			242		0.5	%		4,283		8.4	%		50,724

Total legacy		18,642		1.3	%		61,226		4.3	%		86,746		6.0	%		1,436,889

Total	$	96,794		1.0	%	$	107,876		1.1	%	$	138,780		1.4	%	$	10,139,982

As of September 30, 2012
Transformational ⁽¹⁾
Commercial	$	38,369		0.7	%	$	37,792		0.7	%	$	52,845		0.9	%	$	5,669,595
Commercial real estate		33,333		1.9	%		1,250		0.1	%		40,072		2.3	%		1,768,955
Construction		—		—			—		—			—		—			159,696
Residential real estate		—		—			4,323		2.0	%		1,439		0.7	%		220,066
Home equity		—		—			1,528		2.2	%		794		1.1	%		69,700
Personal		—		—			49		*			600		0.4	%		162,658

Total transformational	$	71,702		0.9	%	$	44,942		0.6	%	$	95,750		1.2	%	$	8,050,670
Legacy ⁽¹⁾
Commercial	$	17,078		3.9	%	$	4,950		1.1	%	$	8,337		1.9	%	$	434,715
Commercial real estate		13,241		1.6	%		45,901		5.4	%		47,985		5.7	%		845,243
Construction		—		—			—		—			557		18.4	%		3,028
Residential real estate		2,371		1.7	%		13,018		9.3	%		11,063		7.9	%		140,028
Home equity		312		0.3	%		3,836		3.8	%		11,614		11.6	%		100,368
Personal		2		*			282		0.5	%		4,589		8.9	%		51,369

Total legacy		33,004		2.1	%		67,987		4.3	%		84,145		5.3	%		1,574,751

Total	$	104,706		1.1	%	$	112,929		1.2	%	$	179,895		1.9	%	$	9,625,421

LOGO

(1)	Refer to Glossary of Terms for definition.

*	Less than 0.1%.

Loan Portfolio Aging (excluding covered assets⁽¹⁾)

Unaudited

(Dollars in thousands)


As of December 31, 2012	Current			30-59 Days Past Due			60-89 Days Past Due			90 Days Past Due and Accruing			Nonaccrual			Total Loans
Loan balances:
Commercial	$	6,451,311		$	2,195		$	1,365		$	—		$	41,913		$	6,496,784
Commercial real estate		2,597,780			4,073			5,278			—			68,554			2,675,685
Construction		189,939			—			—			—			557			190,496
Residential real estate		359,096			3,260			—			—			11,224			373,580
Personal and home equity		384,606			1,837			462			—			16,532			403,437

Total loans	$	9,982,732		$	11,365		$	7,105		$	—		$	138,780		$	10,139,982


Aging as a percent of loan balance:
Commercial		99.30	%		0.03	%		0.02	%		—			0.65	%		100.00	%
Commercial real estate		97.09	%		0.15	%		0.20	%		—			2.56	%		100.00	%
Construction		99.71	%		—			—			—			0.29	%		100.00	%
Residential real estate		96.13	%		0.87	%		—			—			3.00	%		100.00	%
Personal and home equity		95.33	%		0.46	%		0.11	%		—			4.10	%		100.00	%

Total loans		98.45	%		0.11	%		0.07	%		—			1.37	%		100.00	%


	4Q12			3Q12			2Q12			1Q12			4Q11
Nonaccrual loans:
Commercial	$	41,913		$	61,182		$	59,841		$	40,186		$	65,958
Commercial real estate		68,554			88,057			119,444			159,255			133,257
Construction		557			557			555			2,781			21,879
Residential real estate		11,224			12,502			11,028			12,069			14,589
Personal and home equity		16,532			17,597			18,471			18,931			24,169

Total	$	138,780		$	179,895		$	209,339		$	233,222		$	259,852


Nonaccrual loans as a percent of total loan type:
Commercial		0.65	%		1.00	%		1.01	%		0.73	%		1.24	%
Commercial real estate		2.56	%		3.37	%		4.55	%		5.55	%		4.96	%
Construction		0.29	%		0.34	%		0.32	%		2.18	%		7.62	%
Residential real estate		3.00	%		3.47	%		3.34	%		3.91	%		4.91	%
Personal and home equity		4.10	%		4.58	%		4.59	%		4.59	%		5.84	%

Total		1.37	%		1.87	%		2.22	%		2.53	%		2.88	%

Loans past due 60-89 days and still accruing:
Commercial	$	1,365		$	1,129		$	5,064		$	3,963		$	923
Commercial real estate		5,278			3,588			2,543			2,081			9,777
Construction		—			—			—			68			2,381
Residential real estate		—			655			21			1,135			645
Personal and home equity		462			1,569			1,017			253			809

Total	$	7,105		$	6,941		$	8,645		$	7,500		$	14,535


Loans past due 60-89 days and still accruing as a percent of total loan type:
Commercial		0.02	%		0.02	%		0.09	%		0.07	%		0.02	%
Commercial real estate		0.20	%		0.14	%		0.10	%		0.07	%		0.36	%
Construction		—			—			—			0.05	%		0.83	%
Residential real estate		—			0.18	%		0.01	%		0.37	%		0.22	%
Personal and home equity		0.11	%		0.41	%		0.25	%		0.06	%		0.20	%

Total		0.07	%		0.07	%		0.09	%		0.08	%		0.16	%

Loans past due 30-59 days and still accruing:
Commercial	$	2,195		$	6,141		$	901		$	3,216		$	6,018
Commercial real estate		4,073			5,232			1,314			6,590			3,523
Construction		—			—			—			—			—
Residential real estate		3,260			240			341			4,960			3,800
Personal and home equity		1,837			2,072			1,983			1,754			446

Total	$	11,365		$	13,685		$	4,539		$	16,520		$	13,787


Loans past due 30-59 days and still accruing as a percent of total loan type:
Commercial		0.03	%		0.10	%		0.01	%		0.06	%		0.11	%
Commercial real estate		0.15	%		0.20	%		0.05	%		0.23	%		0.13	%
Construction		—			—			—			—			—
Residential real estate		0.87	%		0.07	%		0.10	%		1.61	%		1.28	%
Personal and home equity		0.46	%		0.54	%		0.49	%		0.43	%		0.11	%

Total		0.11	%		0.14	%		0.05	%		0.18	%		0.15	%

(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 December 31, 2012
Amount:
Commercial	$	26,756	$	—	$	7,709	$	2,869	$	4,579	$	41,913
Commercial real estate		15,890		12,425		4,274		15,473		20,492		68,554
Construction		—		—		—		—		557		557
Residential real estate		—		—		4,789		—		6,435		11,224
Personal and home equity		—		—		3,760		—		12,772		16,532

Total	$	42,646	$	12,425	$	20,532	$	18,342	$	44,835	$	138,780


Number of borrowers:
Commercial		2		—		2		1		26		31
Commercial real estate		1		2		1		7		38		49
Construction		—		—		—		—		2		2
Residential real estate		—		—		1		—		26		27
Personal and home equity		—		—		1		—		39		40

Total		3		2		5		8		131		149


As of September 30, 2012
Amount:
Commercial	$	45,603	$	—	$	7,535	$	3,107	$	4,937	$	61,182
Commercial real estate		31,426		12,528		7,371		19,549		17,183		88,057
Construction		—		—		—		—		557		557
Residential real estate		—		—		4,789		—		7,713		12,502
Personal and home equity		—		—		3,848		—		13,749		17,597

Total	$	77,029	$	12,528	$	23,543	$	22,656	$	44,139	$	179,895


Number of borrowers:
Commercial		3		—		2		2		29		36
Commercial real estate		2		2		2		9		35		50
Construction		—		—		—		—		2		2
Residential real estate		—		—		1		—		28		29
Personal and home equity		—		—		1		—		46		47

Total		5		2		6		11		140		164



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 December 31, 2012
Amount:
Commercial	$	25,073	$	13,661	$	4,460	$	—	$	1,073	$	44,267
Commercial real estate		—		11,667		—		2,193		898		14,758
Construction		—		—		—		—		—		—
Residential real estate		—		—		—		—		465		465
Personal and home equity		—		—		—		—		1,490		1,490

Total	$	25,073	$	25,328	$	4,460	$	2,193	$	3,926	$	60,980


Number of borrowers:
Commercial		2		2		1		—		3		8
Commercial real estate		—		2		—		1		3		6
Construction		—		—		—		—		—		—
Residential real estate		—		—		—		—		1		1
Personal and home equity		—		—		—		—		1		1

Total		2		4		1		1		8		16


As of September 30, 2012
Amount:
Commercial	$	24,992	$	14,700	$	—	$	—	$	4,629	$	44,321
Commercial real estate		—		5,136		—		4,169		2,641		11,946
Construction		—		—		—		—		—		—
Residential real estate		—		—		—		—		670		670
Personal and home equity		—		—		—		—		1,494		1,494

Total	$	24,992	$	19,836	$	—	$	4,169	$	9,434	$	58,431


Number of borrowers:
Commercial		2		2		—		—		5		9
Commercial real estate		—		1		—		2		6		9
Construction		—		—		—		—		—		—
Residential real estate		—		—		—		—		2		2
Personal and home equity		—		—		—		—		1		1

Total		2		3		—		2		14		21

(1)

Refer to Glossary of Terms for definition.

Foreclosed Real Estate (OREO), excluding covered assets⁽¹⁾

Unaudited

(Dollars in thousands)

OREO Properties by Type


	December 31, 2012									September 30, 2012									December 31, 2011
	Number of Properties			Amount			% of Total			Number of Properties			Amount			% of Total			Number of Properties			Amount		% of Total
Single-family homes		50		$	6,337			8	%		53		$	6,636			7	%		70		$	17,602		14	%
Land parcels		170			33,072			40	%		244			40,443			41	%		262			51,465		41	%
Multi-family		6			8,111			10	%		11			8,960			9	%		15			12,591		10	%
Office/industrial		40			27,585			34	%		42			33,044			34	%		44			37,019		29	%
Retail		8			6,775			8	%		8			8,750			9	%		9			7,052		6	%

Total		274		$	81,880			100	%		358		$	97,833			100	%		400		$	125,729		100	%



OREO Property Type by Location

	Illinois			Georgia			Michigan			South Eastern ⁽²⁾			Mid Western ⁽³⁾			Other			Total
December 31, 2012
Single-family homes	$	4,301		$	—		$	1,610		$	—		$	256		$	170		$	6,337
Land parcels		18,913			2,626			616			7,820			3,097			—			33,072
Multi-family		1,178			—			—			—			—			6,933			8,111
Office/industrial		17,960			598			403			2,852			5,772			—			27,585
Retail		5,584			1,191			—			—			—			—			6,775

Total	$	47,936		$	4,415		$	2,629		$	10,672		$	9,125		$	7,103		$	81,880

% of Total		59	%		5	%		3	%		13	%		11	%		9	%		100	%

September 30, 2012
Single-family homes	$	6,249		$	—		$	—		$	—		$	146		$	241		$	6,636
Land parcels		22,997			2,830			1,757			7,820			5,039			—			40,443
Multi-family		1,835			—			—			—			193			6,932			8,960
Office/industrial		19,755			598			839			2,852			7,321			1,679			33,044
Retail		7,273			1,477			—			—			—			—			8,750

Total	$	58,109		$	4,905		$	2,596		$	10,672		$	12,699		$	8,852		$	97,833

% of Total		59	%		5	%		3	%		11	%		13	%		9	%		100	%

December 31, 2011
Single family homes	$	14,013		$	385		$	1,718		$	—		$	608		$	878		$	17,602
Land parcels		29,370			2,898			3,171			9,568			6,458			—			51,465
Multi-family		3,327			—			—			—			—			9,264			12,591
Office/industrial		18,430			1,656			548			3,762			9,228			3,395			37,019
Retail		4,501			1,615			936			—			—			—			7,052

Total	$	69,641		$	6,554		$	6,373		$	13,330		$	16,294		$	13,537		$	125,729

% of Total		55	%		5	%		5	%		11	%		13	%		11	%		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)


	4Q12			3Q12			2Q12			1Q12			4Q11
Change in allowance for loan losses:
Balance at beginning of period	$	166,859		$	174,302		$	183,844		$	191,594		$	200,041
Loans charged-off:
Commercial		(10,388	)		(4,062	)		(7,769	)		(9,549	)		(12,991	)
Commercial real estate		(8,105	)		(16,790	)		(17,924	)		(25,280	)		(24,083	)
Construction		30			64			(828	)		(1,245	)		(1,526	)
Residential real estate		(621	)		(299	)		(1,006	)		(1,084	)		(1,203	)
Home equity		(1,640	)		(1,001	)		(4	)		(483	)		(1,340	)
Personal		(612	)		(1,006	)		(6,341	)		(2,085	)		(290	)

Total charge-offs		(21,336	)		(23,094	)		(33,872	)		(39,726	)		(41,433	)

Recoveries on loans previously charged-off:
Commercial		947			919			634			1,679			830
Commercial real estate		2,133			544			4,150			1,882			1,410
Construction		16			594			1,664			41			109
Residential real estate		106			7			2			11			10
Home equity		52			117			314			26			300
Personal		43			229			163			702			544

Total recoveries		3,297			2,410			6,927			4,341			3,203

Net charge-offs		(18,039	)		(20,684	)		(26,945	)		(35,385	)		(38,230	)
Provisions charged to operating expense		12,597			13,241			17,403			27,635			29,783

Balance at end of period	$	161,417		$	166,859		$	174,302		$	183,844		$	191,594


Allocation of allowance for loan losses:
General allocated reserve:
Commercial	$	50,450		$	49,115		$	47,210		$	45,850		$	46,500
Commercial real estate		52,700			54,500			53,700			57,750			56,000
Construction		2,317			2,200			2,635			1,900			7,650
Residential real estate		5,700			5,100			5,200			5,400			5,400
Home equity		4,000			3,980			4,200			4,700			2,750
Personal		2,860			2,800			3,260			3,295			3,350

Total allocated		118,027			117,695			116,205			118,895			121,650
Specific reserve		43,390			49,164			58,097			64,949			69,944

Total	$	161,417		$	166,859		$	174,302		$	183,844		$	191,594


Allocation of reserve by a percent of total allowance for loan losses:
General allocated reserve:
Commercial		31	%		29	%		27	%		25	%		24	%
Commercial real estate		33	%		33	%		31	%		31	%		29	%
Construction		1	%		1	%		2	%		1	%		4	%
Residential real estate		4	%		3	%		3	%		3	%		3	%
Home equity		2	%		2	%		2	%		3	%		1	%
Personal		2	%		2	%		2	%		2	%		2	%

Total allocated		73	%		70	%		67	%		65	%		63	%
Specific reserve		27	%		30	%		33	%		35	%		37	%

Total		100	%		100	%		100	%		100	%		100	%


Allowance for loan losses to:
Total loans		1.59	%		1.73	%		1.85	%		1.99	%		2.13	%
Nonperforming loans		116	%		93	%		83	%		79	%		74	%

(1) Refer to Glossary of Terms for definition.

Deposits

(Dollars in thousands)


	12/31/12		% of Total			09/30/12		% of Total			06/30/12		% of Total			03/31/12		% of Total			12/31/11		% of Total
	unaudited					unaudited					unaudited					unaudited					audited
Noninterest-bearing deposits	$	3,690,340		30	%	$	3,295,568		29	%	$	2,920,182		27	%	$	3,054,536		29	%	$	3,244,307		31	%
Interest-bearing demand deposits		1,057,390		9	%		893,194		8	%		785,879		7	%		714,522		7	%		595,238		6	%
Savings deposits		310,188		3	%		245,906		2	%		221,816		2	%		225,300		2	%		210,138		2	%
Money market accounts		4,602,632		38	%		4,135,689		37	%		3,924,206		37	%		4,122,532		40	%		4,168,082		40	%
Brokered time deposits:
Traditional		382,833		3	%		562,717		5	%		667,454		6	%		191,023		2	%		20,499		*
Client CDARS (1)		610,622		5	%		728,079		6	%		762,231		7	%		695,458		6	%		795,452		8	%
Non-client CDARS (1)		—		—			—		—			54,750		1	%		75,000		1	%		—		—

Total brokered time deposits		993,455		8	%		1,290,796		11	%		1,484,435		14	%		961,481		9	%		815,951		8	%
Time deposits		1,519,629		12	%		1,498,287		13	%		1,398,012		13	%		1,344,341		13	%		1,359,138		13	%

Total deposits	$	12,173,634		100	%	$	11,359,440		100	%	$	10,734,530		100	%	$	10,422,712		100	%	$	10,392,854		100	%


Client deposits (1)	$	11,790,801		97	%	$	10,796,723		95	%	$	10,012,326		93	%	$	10,156,689		97	%	$	10,372,355		100	%

LOGO

(1) Refer to Glossary of Terms for definition.

* Less than 1%.

Net Interest Margin

Unaudited

(Dollars in thousands)


	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	$	709,369		$	452		0.25	%	$	334,758		$	215		0.25	%
Securities:
Taxable		2,055,358			12,938		2.52	%		2,023,240			15,173		3.00	%
Tax-exempt ⁽²⁾		205,525			2,227		4.33	%		141,405			1,944		5.49	%

Total securities		2,260,883			15,165		2.68	%		2,164,645			17,117		3.16	%

FHLB stock		43,387			168		1.51	%		40,804			90		0.86	%
Loans, excluding covered assets:
Commercial		6,266,388			71,128		4.44	%		5,320,119			62,775		4.62	%
Commercial real estate		2,684,361			26,586		3.88	%		2,493,296			27,224		4.27	%
Construction		185,804			1,803		3.80	%		302,632			2,920		3.78	%
Residential		401,581			4,037		4.02	%		344,002			3,450		4.01	%
Personal and home equity		389,235			3,300		3.37	%		416,873			3,784		3.60	%

Total loans, excluding covered assets ⁽³⁾		9,927,369			106,854		4.22	%		8,876,922			100,153		4.42	%

Total interest-earning assets before covered assets ⁽²⁾		12,941,008			122,639		3.72	%		11,417,129			117,575		4.05	%
Covered assets ⁽⁴⁾		174,679			1,318		2.97	%		279,612			2,744		3.85	%

Total interest-earning assets ⁽²⁾		13,115,687		$	123,957		3.71	%		11,696,741		$	120,319		4.04	%

Cash and due from banks		146,990								154,163
Allowance for loan and covered loan losses		(190,583	)							(220,356	)
Other assets		676,682								700,647

Total assets	$	13,748,776							$	12,331,195


Liabilities and Equity:
Interest-bearing demand deposits	$	970,026		$	985		0.40	%	$	599,273		$	585		0.39	%
Savings deposits		282,493			200		0.28	%		210,577			167		0.32	%
Money market accounts		4,382,023			4,331		0.39	%		4,253,934			4,690		0.44	%
Time deposits		1,507,824			4,139		1.09	%		1,369,150			4,054		1.17	%
Brokered deposits		1,102,772			1,422		0.51	%		893,860			1,507		0.67	%

Total interest-bearing deposits		8,245,138			11,077		0.53	%		7,326,794			11,003		0.60	%
Short-term borrowings		20,441			77		1.49	%		55,206			152		1.08	%
Long-term debt		476,695			7,235		6.00	%		379,793			5,511		5.76	%

Total interest-bearing liabilities		8,742,274			18,389		0.83	%		7,761,793			16,666		0.85	%

Noninterest-bearing demand deposits		3,567,785								3,101,145
Other liabilities		177,842								170,546
Equity		1,260,875								1,297,711

Total liabilities and equity	$	13,748,776							$	12,331,195

Net interest spread ^{(2) (5)}							2.88	%							3.19	%
Effect of noninterest-bearing funds							0.28	%							0.29	%

Net interest income/margin ^{(2) (5)}				$	105,568		3.16	%				$	103,653		3.48	%

(1) Interest income included $6.3 million and $6.5 million in loan fees for the three months ended December 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 $164.8 million and $291.1 million for the three months ended December 31, 2012 and 2011, respectively, and are included in loans for purposes of this analysis. Interest foregone on nonperforming loans was estimated to be approximately $1.7 million and $3.2 million for the three months ended December 31, 2012 and 2011, respectively, 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.

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 December 31, 2012								Three Months Ended September 30, 2012
	Average Balance			Interest ⁽¹⁾		Yield/ Rate			Average Balance			Interest ⁽¹⁾		Yield/ Rate
Assets:
Federal funds sold and other short-term investments	$	709,369		$	452		0.25	%	$	376,212		$	248		0.26	%
Securities:
Taxable		2,055,358			12,938		2.52	%		2,076,464			13,907		2.68	%
Tax-exempt ⁽²⁾		205,525			2,227		4.33	%		188,627			2,118		4.49	%

Total securities		2,260,883			15,165		2.68	%		2,265,091			16,025		2.83	%

FHLB stock		43,387			168		1.51	%		43,426			126		1.14	%
Loans, excluding covered assets:
Commercial		6,266,388			71,128		4.44	%		5,951,785			68,711		4.52	%
Commercial real estate		2,684,361			26,586		3.88	%		2,645,713			26,924		3.98	%
Construction		185,804			1,803		3.80	%		174,044			1,659		3.73	%
Residential		401,581			4,037		4.02	%		369,694			3,739		4.05	%
Personal and home equity		389,235			3,300		3.37	%		397,174			3,484		3.49	%

Total loans, excluding covered assets ⁽³⁾		9,927,369			106,854		4.22	%		9,538,410			104,517		4.29	%

Total interest-earning assets before covered assets ⁽²⁾		12,941,008			122,639		3.72	%		12,223,139			120,916		3.89	%
Covered assets ⁽⁴⁾		174,679			1,318		2.97	%		197,630			1,841		3.66	%

Total interest-earning assets ⁽²⁾		13,115,687		$	123,957		3.71	%		12,420,769		$	122,757		3.88	%

Cash and due from banks		146,990								144,442
Allowance for loan and covered loan losses		(190,583	)							(201,136	)
Other assets		676,682								696,676

Total assets	$	13,748,776							$	13,060,751


Liabilities and Equity:
Interest-bearing demand deposits	$	970,026		$	985		0.40	%	$	895,825		$	958		0.43	%
Savings deposits		282,493			200		0.28	%		226,355			163		0.29	%
Money market accounts		4,382,023			4,331		0.39	%		4,014,467			4,043		0.40	%
Time deposits		1,507,824			4,139		1.09	%		1,450,904			4,108		1.13	%
Brokered deposits		1,102,772			1,422		0.51	%		1,406,748			1,752		0.50	%

Total interest-bearing deposits		8,245,138			11,077		0.53	%		7,994,299			11,024		0.55	%
Short-term borrowings		20,441			77		1.49	%		36,967			101		1.06	%
Long-term debt		476,695			7,235		6.00	%		374,793			5,495		5.82	%

Total interest-bearing liabilities		8,742,274			18,389		0.83	%		8,406,059			16,620		0.79	%

Noninterest-bearing demand deposits		3,567,785								3,124,473
Other liabilities		177,842								173,975
Equity		1,260,875								1,356,244

Total liabilities and equity	$	13,748,776							$	13,060,751

Net interest spread ^{(2) (5)}							2.88	%							3.09	%
Effect of noninterest-bearing funds							0.28	%							0.26	%

Net interest income/margin ^{(2) (5)}				$	105,568		3.16	%				$	106,137		3.35	%

(1) Interest income included $6.3 million and $6.5 million in loan fees for the three months ended December 31, 2012 and September 30, 2012, respectively.

(3) Average loans on a nonaccrual basis for the recognition of interest income totaled $164.8 million and $201.6 million for the three months ended December 31, 2012 and September 30, 2012, respectively, and are included in loans for purposes of this analysis. Interest foregone on nonperforming loans was estimated to be approximately $1.7 million and $2.1 million for the three months ended December 31, 2012 and September 30, 2012, respectively, 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.

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

Net Interest Margin

Unaudited

(Dollars in thousands)


	Years Ended December 31,
	2012								2011
	Average Balance			Interest ⁽¹⁾		Yield/ Rate			Average Balance			Interest ⁽¹⁾		Yield/ Rate
Assets:
Fed funds sold and other short-term investments	$	377,827		$	965		0.26	%	$	463,742		$	1,181		0.25	%
Securities:
Taxable		2,064,893			56,826		2.75	%		1,864,583			61,026		3.27	%
Tax-exempt ⁽²⁾		179,594			8,360		4.65	%		140,707			8,296		5.90	%

Total securities		2,244,487			65,186		2.90	%		2,005,290			69,322		3.46	%

FHLB stock		42,742			547		1.28	%		26,590			391		1.47	%
Loans, excluding covered assets:
Commercial		5,843,047			269,284		4.61	%		5,130,839			240,123		4.68	%
Commercial real estate		2,676,709			109,812		4.10	%		2,640,297			112,091		4.25	%
Construction		202,825			7,609		3.75	%		397,771			14,937		3.76	%
Residential		360,904			15,025		4.16	%		325,606			14,070		4.32	%
Personal and home equity		402,904			14,181		3.52	%		438,266			15,751		3.59	%

Total loans, excluding covered assets ⁽³⁾		9,486,389			415,911		4.38	%		8,932,779			396,972		4.44	%

Total interest-earning assets before covered assets ⁽²⁾		12,151,445			482,609		3.97	%		11,428,401			467,866		4.09	%
Covered assets ⁽⁴⁾		218,500			7,300		3.34	%		317,631			16,137		5.08	%

Total interest-earning assets ⁽²⁾		12,369,945		$	489,909		3.96	%		11,746,032		$	484,003		4.12	%

Cash and due from banks		145,200								158,655
Allowance for loan and covered loan losses		(208,577	)							(237,038	)
Other assets		699,159								685,475

Total assets	$	13,005,727							$	12,353,124


Liabilities and Equity:
Interest-bearing demand deposits	$	829,686		$	3,378		0.41	%	$	587,453		$	2,439		0.42	%
Savings deposits		238,171			680		0.29	%		205,814			786		0.38	%
Money market accounts		4,129,620			16,924		0.41	%		4,413,971			22,171		0.50	%
Time deposits		1,413,462			16,041		1.13	%		1,354,246			16,947		1.25	%
Brokered deposits		1,176,131			5,791		0.49	%		1,210,424			7,729		0.64	%

Total interest-bearing deposits		7,787,070			42,814		0.55	%		7,771,908			50,072		0.64	%
Short-term borrowings		142,720			443		0.31	%		74,918			2,011		2.68	%
Long-term debt		402,812			23,846		5.92	%		401,779			21,936		5.46	%

Total interest-bearing liabilities		8,332,602			67,103		0.81	%		8,248,605			74,019		0.90	%

Noninterest-bearing demand deposits		3,186,562								2,669,924
Other liabilities		170,442								163,756
Equity		1,316,121								1,270,839

Total liabilities and equity	$	13,005,727							$	12,353,124

Net interest spread ^{(2) (5)}							3.15	%							3.22	%
Effect of non interest-bearing funds							0.27	%							0.27	%

Net interest income/margin ^{(2) (5)}				$	422,806		3.42	%				$	409,984		3.49	%

(1) Interest income included $26.3 million and $24.4 million in loan fees for the year ended December 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 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 $212.2 million and $340.7 million for the year ended December 31, 2012 and 2011, respectively, and are included in loans for purposes of this analysis. Interest foregone on nonperforming loans was estimated to be approximately $8.9 million and $14.4 million for the year ended December 31, 2012 and 2011, respectively, 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.

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

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 common equity to tangible assets, tangible equity to risk-weighted assets, tangible 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.

In addition to capital ratios defined by banking regulators, we also consider various measures when evaluating capital utilization and adequacy, including Tier 1 common equity to risk-weighted assets, tangible common equity to tangible assets, tangible equity to risk-weighted assets, tangible 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
	4Q12			3Q12			2Q12			1Q12			4Q11
Taxable-equivalent interest income
U.S. GAAP net interest income	$	104,803		$	105,408		$	105,346		$	104,376		$	102,982
Taxable-equivalent adjustment		765			729			699			680			671

Taxable-equivalent net interest income (a)	$	105,568		$	106,137		$	106,045		$	105,056		$	103,653


Average Earning Assets (b)	$	13,115,687		$	12,420,769		$	12,148,279		$	11,796,499		$	11,696,741

Net Interest Margin ((a) annualized) / (b)		3.16	%		3.35	%		3.46	%		3.53	%		3.48	%

Net Revenue
Taxable-equivalent net interest income	$	105,568		$	106,137		$	106,045		$	105,056		$	103,653
U.S. GAAP non-interest income		29,454			27,837			26,246			27,504			25,393

Net revenue (c)	$	135,022		$	133,974		$	132,291		$	132,560		$	129,046


Operating Profit
U.S. GAAP income before income taxes	$	39,765		$	38,006		$	30,696		$	23,950		$	20,534
Provision for loan and covered loan losses		13,177			13,509			17,038			27,701			31,611
Taxable-equivalent adjustment		765			729			699			680			671

Operating profit	$	53,707		$	52,244		$	48,433		$	52,331		$	52,816


Efficiency Ratio
U.S. GAAP non-interest expense (d)	$	81,315		$	81,730		$	83,858		$	80,229		$	76,230
Net revenue (c)	$	135,022		$	133,974		$	132,291		$	132,560		$	129,046
Efficiency ratio (d) / (c)		60.22	%		61.00	%		63.39	%		60.52	%		59.07	%

Non-U.S. GAAP Financial Measures (continued)

Unaudited

(Amounts in thousands, except per share data)


	Years Ended December 31,
	2012			2011
Taxable-equivalent interest income
U.S. GAAP net interest income	$	419,933		$	407,127
Taxable-equivalent adjustment		2,873			2,857

Taxable-equivalent net interest income (a)	$	422,806		$	409,984

Average Earning Assets (b)	$	12,369,945		$	11,746,032

Net Interest Margin (a) / (b)		3.42	%		3.49	%

Net Revenue
Taxable-equivalent net interest income (a)	$	422,806		$	409,984
U.S. GAAP non-interest income		111,041			98,247

Net revenue (c)	$	533,847		$	508,231

Operating Profit
U.S. GAAP income before income taxes	$	132,417		$	70,200
Provision for loan and covered loan losses		71,425			132,897
Taxable-equivalent adjustment		2,873			2,857

Operating profit	$	206,715		$	205,954


Efficiency Ratio
U.S. GAAP non-interest expense (d)	$	327,132		$	302,277
Net revenue (c)	$	533,847		$	508,231
Efficiency ratio (d) / (c)		61.28	%		59.48	%

	Quarters Ended
	4Q12			3Q12			2Q12			1Q12			4Q11
Tier 1 Common Capital
U.S. GAAP total equity	$	1,207,166		$	1,363,440		$	1,334,154		$	1,312,154		$	1,296,752
Trust preferred securities		244,793			244,793			244,793			244,793			244,793
Less: accumulated other comprehensive income, net of tax		48,064			55,818			50,987			47,152			46,697
Less: goodwill		94,521			94,534			94,546			94,559			94,571
Less: other intangibles		12,828			13,500			14,152			14,683			15,353

Tier 1 risk-based capital		1,296,546			1,444,381			1,419,262			1,400,553			1,384,924
Less: preferred stock		—			241,585			241,185			240,791			240,403
Less: trust preferred securities		244,793			244,793			244,793			244,793			244,793

Tier 1 common capital (e)	$	1,051,753		$	958,003		$	933,284		$	914,969		$	899,728


Tangible Common Equity
U.S. GAAP total equity	$	1,207,166		$	1,363,440		$	1,334,154		$	1,312,154		$	1,296,752
Less: goodwill		94,521			94,534			94,546			94,559			94,571
Less: other intangibles		12,828			13,500			14,152			14,683			15,353

Tangible equity (f)		1,099,817			1,255,406			1,225,456			1,202,912			1,186,828
Less: preferred stock		—			241,585			241,185			240,791			240,403

Tangible common equity (g)	$	1,099,817		$	1,013,821		$	984,271		$	962,121		$	946,425

Tangible Assets
U.S. GAAP total assets	$	14,057,515		$	13,278,554		$	12,942,176		$	12,623,164		$	12,416,870
Less: goodwill		94,521			94,534			94,546			94,559			94,571
Less: other intangibles		12,828			13,500			14,152			14,683			15,353

Tangible assets (h)	$	13,950,166		$	13,170,520		$	12,833,478		$	12,513,922		$	12,306,946


Risk-weighted Assets (i)	$	12,375,367		$	11,804,578		$	11,588,371		$	11,374,212		$	11,191,298

Period-end Common Shares Outstanding (j)		77,115			72,436			72,424			72,415			71,745

Ratios:
Tier 1 common equity to risk-weighted assets (e) / (i)		8.50	%		8.12	%		8.05	%		8.04	%		8.04	%
Tangible equity to tangible assets (f) / (h)		7.88	%		9.53	%		9.55	%		9.61	%		9.64	%
Tangible equity to risk-weighted assets (f) / (i)		8.89	%		10.63	%		10.57	%		10.58	%		10.60	%
Tangible common equity to tangible assets (g) / (h)		7.88	%		7.70	%		7.67	%		7.69	%		7.69	%
Tangible book value (g) / (j)	$	14.26		$	14.00		$	13.59		$	13.29		$	13.19

LOGO

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 - 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 certain of 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.

Client deposits - Total deposits, net of traditional brokered deposits and non-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 currently 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.

LOGO

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 equity to risk-weighted assets ratio - Tier 1 common capital divided by period-end risk-weighted assets. This is a non-U.S. GAAP financial measure and for purposes of our presentation we calculate risk-weighted assets under current requirements and not under the recently proposed rules issued by banking regulators.

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

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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