PRIVATEBANCORP, INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - PRIVATEBANCORP, INC	pvtb06302013form8-ker.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

PrivateBancorp Reports Second Quarter Earnings

Earnings per share of $0.37, up 6 percent from first quarter 2013 and 95 percent from

second quarter 2012

CHICAGO, July 18, 2013 - PrivateBancorp, Inc. (NASDAQ: PVTB) today reported net income available to common shareholders of $28.9 million, or $0.37 per diluted share, for the second quarter 2013, compared to $27.3 million, or $0.35 per diluted share, for the first quarter 2013 and $14.1 million, or $0.19 per diluted share, for the second quarter 2012. For the six months ended June 30, 2013, the Company had net income available to common shareholders of $56.2 million, or $0.72 per diluted share, as compared to $24.9 million, or $0.34 per diluted share, for the six months ended June 30, 2012.

“This was another quarter of strong performance for us. Our consistent focus on client development, the continued benefit of improving credit quality and our commitment to managing costs and increasing efficiencies drove second quarter net income to $28.9 million, a 6 percent increase from the first quarter and doubled from a year ago,” said Larry D. Richman, President and Chief Executive Officer, PrivateBancorp, Inc. “We continued to add new clients who are consistent with our strategy and most of our growth was in commercial and industrial loans, although loan demand remained low and the environment is competitive. We remain selective and disciplined in business development, with a focus on clients who want a full banking relationship with us. We believe this approach will benefit us as we position our business for greater returns as the economy continues to improve.”

Second Quarter 2013 Highlights


•	Net income of $28.9 million, or $0.37 per share, increased 6 percent as compared to the first quarter 2013 as a result of lower provision for loan losses and non-interest expenses.


•	Operating profit increased to $56.3 million, as compared to $55.3 million for the previous quarter, and included $3.0 million of non-recurring expenses and a $1.9 million positive credit valuation adjustment.


•	Total loans as of June 30, 2013, were $10.1 billion, an increase of $60.8 million from the previous quarter end, with the majority of growth in commercial and industrial loan balances.


•	Net interest margin was 3.22 percent, an increase of 3 basis points as compared to the previous quarter from lower deposit costs and higher loan yields.


•	Nonperforming assets declined 12 percent to $178.9 million from the prior quarter, benefiting from sales of non-performing loans and other real estate owned. Nonperforming assets to total assets were 1.33 percent at June 30, 2013, compared to 1.51 percent at March 31, 2013, and 2.47 percent at June 30, 2012.

Operating Performance

Net revenue was $133.5 million in the second quarter 2013, compared to $134.3 million in the first quarter 2013 and $132.3 million in the second quarter 2012. Operating profit was $56.3 million in the second quarter 2013, compared to $55.3 million in the first quarter 2013 and $48.4 million in the second quarter 2012. The results for the second quarter 2013 reflected a $692,000 increase of net interest income, a $954,000 decline of fee revenue and the benefit of a $1.9 million positive credit valuation adjustment (“CVA”), as compared to a positive $246,000 CVA in the previous quarter. Operating profit for the second quarter 2013 included $2.0 million of restructuring charges and a $1.0 million write-down on repurchased loans.

Net interest income was $103.7 million in the second quarter 2013, compared to $103.0 million in the first quarter 2013 and $105.3 million for the second quarter 2012. Net interest margin was 3.22 percent in the second quarter 2013, compared to 3.19 percent in the first quarter 2013 and 3.46 percent in the second quarter 2012. The increase of net interest margin as compared to the previous quarter was the result of lower rates paid on deposits and the positive impact of higher loan yields.

Non-interest income was $29.0 million in the second quarter 2013, compared to $30.5 million in the first quarter 2013 and $26.2 million in the second quarter 2012. Trust and investments fees increased $406,000, or 9 percent, to $4.8 million, supported by the growth of assets under management and administration in the first half 2013. Treasury management benefited from continued cross-sell success and increased $285,000, or 5 percent, to $6.2 million as compared to the previous quarter. Mortgage banking revenue was $3.2 million, a 23 percent reduction from the previous quarter, reflecting an industry-wide slowdown in refinancing activity. Syndication revenue declined from the record level achieved in the first quarter 2013 to $3.1 million on lower transaction volume in the quarter. Deposit service charges and fees and other income, which in the previous quarter benefited from a $1.1 million gain on loan sale, declined by $1.2 million.

Capital markets revenue of $6.0 million in the second quarter was up from $5.0 million in the previous quarter. Excluding CVA, capital markets revenue declined $627,000 from the previous quarter, reflecting clients' outlook on interest rates.

Net securities gains were $136,000 for the second quarter as compared to $641,000 for the previous quarter.

Expenses

Non-interest expense was $77.3 million in the second quarter 2013, compared to $79.0 million in the first quarter 2013 and $83.9 million in the second quarter 2012, and benefited from active expense management. Compensation expense declined $3.3 million, or 8 percent, from the previous quarter, as the first quarter 2013 experienced seasonally higher payroll taxes and 401k contributions. Net foreclosed property expense benefited from less OREO and decreased 16 percent from the first quarter 2013.

Other expenses in the second quarter 2013 were $7.5 million, as compared to $6.2 million in the previous quarter, and included $2.0 million of restructuring costs associated with the vacating of underutilized space in Michigan and changes to the Atlanta operations. Second quarter 2013 other expenses also included a $1 million write-down on repurchased loans.

The effective tax rate was 38 percent for the second quarter 2013, unchanged from the first quarter 2013 and down from 43 percent for the second quarter 2012, due to the restoration of tax benefits for executive compensation subsequent to the repayment of TARP and the absence of tax charges associated with stock-based compensation.

Credit Quality

Overall asset quality continued to improve during the second quarter 2013. Nonperforming loans were $121.8 million at June 30, 2013, declining 5 percent from March 31, 2013, and 42 percent from June 30, 2012. OREO declined 23 percent from March 31, 2013, and 48 percent from June 30, 2012, as a result of increased property sales and reduced foreclosure activity. Nonperforming assets to total assets were 1.33 percent at June 30, 2013, compared to 1.51 percent at March 31, 2013, and 2.47 percent at June 30, 2012.

The improvement in asset quality resulted in a lower allowance for loan losses. As of June 30, 2013, the allowance for loan losses was $148.2 million as compared to $154.0 million at March 31, 2013, and $174.3 million at June 30, 2012. As a percent of total loans, the allowance for loan losses at June 30, 2013, was 1.47 percent down from 1.53 percent at March 31, 2013, and 1.85 percent at June 30, 2012. Net charge-offs of $14.1 million for the second quarter 2013 were down 20 percent as compared to the previous quarter and 48 percent as compared to second quarter 2012. The provision for loan losses was $8.3 million for the second quarter 2013, a decline of 18 percent from the previous quarter and 52 percent from the second quarter 2012.

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 $13.5 billion at June 30, 2013, compared to $13.4 billion at March 31, 2013. Total loans increased 1 percent or $60.8 million to $10.1 billion from the previous quarter end. Financings to new and existing commercial and industrial clients grew 1 percent and comprised 66 percent of the loan portfolio at quarter end.

Total deposits were $11.3 billion at June 30, 2013, a 1 percent decline in comparison to total deposits at March 31, 2013. At June 30, 2013, client deposits comprised 95 percent of total deposits, and the loan to deposit ratio was 89 percent.

The Company's investment securities portfolio was $2.5 billion at June 30, 2013, compared to $2.4 billion at March 31, 2013. The securities portfolio is primarily composed of U.S. government agency backed mortgage securities, U.S. Treasuries, agency backed collateralized mortgage obligations, and investment grade municipal bonds.

Capital

As of June 30, 2013, the total risk-based capital ratio was 13.70 percent, the Tier 1 risk-based capital ratio was 11.04 percent, and the leverage ratio was 10.21 percent. The Tier 1 common capital ratio was 9.05 percent (without giving effect to the final Basel III capital rules adopted and issued by the Federal Reserve Board on July 2, 2013) and tangible common equity ratio was 8.43 percent at the end of the second quarter 2013.

Quarterly Conference Call and Webcast Presentation

PrivateBancorp will host a conference call on Thursday, July 18, 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 #13164843. 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 August 1, 2013, by calling (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (International) and entering passcode #13164843.

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 June 30, 2013, the Company had 36 offices in 10 states and $13.5 billion in assets. The Company website is www.theprivatebank.com.

Forward-Looking Statements

Statements made 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:


•	continued uncertainty regarding U.S. and global economic outlook that may impact market conditions and credit quality or prolong weakness in demand for loans or other banking products and services;


•	unanticipated developments in pending or prospective loan transactions or greater than expected paydowns or payoffs of existing loans;


•	unanticipated changes in interest rates;


•	competitive trends in our markets;


•	unforeseen credit quality problems 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 or declines in real estate values which may negatively impact foreclosed property expense;


•	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;


•	potential impact of recently adopted capital rules;


•	greater than anticipated impact on costs, revenues and offered products and services associated with the implementation of other regulatory changes;


•	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.

These factors should be considered in evaluating forward-looking statements and undue reliance should not be placed on our forward-looking statements. Readers should also consider the risks, assumptions and uncertainties set forth in the "Risk Factors" section of our Form 10-K for the year ended December 31, 2012 as well as those set forth in our subsequent periodic reports filed with the SEC. 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-U.S. GAAP Financial Measures

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. The Company believes that these non-U.S. 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-U.S. GAAP financial measures are used, the comparable U.S. GAAP financial measure, as well as the reconciliation to the comparable U.S. 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 U.S. GAAP, nor are they necessarily comparable to non-U.S. GAAP performance measures that may be presented by other companies.

Editor's Note: Financial highlights attached. Full financial supplement available on Company's website at www.theprivatebank.com.



Consolidated Income Statements
(Amounts in thousands, except per share data)
(Unaudited)
	Quarters Ended June 30,					Six Months Ended June 30,
	2013		2012			2013		2012
Interest Income
Loans, including fees	$	107,407	$	105,142		$	214,194	$	208,681
Federal funds sold and interest-bearing deposits in banks	112		133			320		265
Securities:
Taxable	12,519		14,723			25,341		29,981
Exempt from Federal income taxes	1,532		1,336			3,034		2,636
Other interest income	62		131			152		253
Total interest income	121,632		121,465			243,041		241,816
Interest Expense
Interest-bearing demand deposits	1,034		799			2,149		1,435
Savings deposits and money market accounts	3,887		4,265			8,286		8,867
Brokered and time deposits	4,956		5,394			10,085		10,411
Short-term and secured borrowings	410		123			528		265
Long-term debt	7,613		5,538			15,221		11,116
Total interest expense	17,900		16,119			36,269		32,094
Net interest income	103,732		105,346			206,772		209,722
Provision for loan and covered loan losses	8,843		17,038			19,200		44,739
Net interest income after provision for loan and covered loan losses	94,889		88,308			187,572		164,983
Non-interest Income
Trust and Investments	4,800		4,312			9,194		8,531
Mortgage banking	3,198		2,915			7,368		5,578
Capital markets products	6,048		6,033			11,087		13,382
Treasury management	6,209		5,260			12,133		10,414
Loan, letter of credit and commitment fees	4,282		4,359			8,359		8,723
Syndication fees	3,140		2,013			6,972		4,176
Deposit service charges and fees and other income	1,196		1,644			3,587		3,131
Net securities gains (losses)	136		(290		)	777		(185		)
Total non-interest income	29,009		26,246			59,477		53,750
Non-interest Expense
Salaries and employee benefits	39,854		42,177			82,994		84,875
Net occupancy expense	7,387		7,653			14,921		15,332
Technology and related costs	3,476		3,273			6,940		6,569
Marketing	3,695		3,058			6,012		5,218
Professional services	1,782		2,247			3,681		4,204
Outsourced servicing costs	1,964		2,093			3,598		3,803
Net foreclosed property expenses	5,555		11,894			12,198		20,129
Postage, telephone, and delivery	981		882			1,824		1,751
Insurance	2,804		4,239			5,343		8,544
Loan and collection expense	2,280		2,918			5,057		6,075
Other expenses	7,477		3,424			13,650		7,587
Total non-interest expense	77,255		83,858			156,218		164,087
Income before income taxes	46,643		30,696			90,831		54,646
Income tax provision	17,728		13,192			34,646		22,887
Net income	28,915		17,504			56,185		31,759
Preferred stock dividends and discount accretion	—		3,442			—		6,878
Net income available to common stockholders	$	28,915	$	14,062		$	56,185	$	24,881
Per Common Share Data
Basic earnings per share	$	0.37	$	0.19		$	0.72	$	0.35
Diluted earnings per share	$	0.37	$	0.19		$	0.72	$	0.34
Cash dividends declared	$	0.01	$	0.01		$	0.02	$	0.02
Weighted-average common shares outstanding	76,415		70,956			76,280		70,868
Weighted-average diluted common shares outstanding	76,581		71,147			76,393		71,041

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 Income Statements
(Amounts in thousands, except per share data)
(Unaudited)
	2Q13		1Q13		4Q12		3Q12			2Q12
Interest Income
Loans, including fees	$	107,407	$	106,787	$	108,172	$	106,358		$	105,142
Federal funds sold and interest-bearing deposits in banks	112		208		452		248			133
Securities:
Taxable	12,519		12,822		12,938		13,907			14,723
Exempt from Federal income taxes	1,532		1,502		1,462		1,389			1,336
Other interest income	62		90		168		126			131
Total interest income	121,632		121,409		123,192		122,028			121,465
Interest Expense
Interest-bearing demand deposits	1,034		1,115		985		958			799
Savings deposits and money market accounts	3,887		4,399		4,531		4,206			4,265
Brokered and time deposits	4,956		5,129		5,561		5,860			5,394
Short-term and secured borrowings	410		118		77		101			123
Long-term debt	7,613		7,608		7,235		5,495			5,538
Total interest expense	17,900		18,369		18,389		16,620			16,119
Net interest income	103,732		103,040		104,803		105,408			105,346
Provision for loan and covered loan losses	8,843		10,357		13,177		13,509			17,038
Net interest income after provision for loan and covered loan losses	94,889		92,683		91,626		91,899			88,308
Non-interest Income
Trust and Investments	4,800		4,394		4,232		4,254			4,312
Mortgage banking	3,198		4,170		4,197		3,685			2,915
Capital markets products	6,048		5,039		6,744		5,832			6,033
Treasury management	6,209		5,924		5,606		5,490			5,260
Loan, letter of credit and commitment fees	4,282		4,077		4,671		4,779			4,359
Syndication fees	3,140		3,832		2,231		2,700			2,013
Deposit service charges and fees and other income	1,196		2,391		1,582		1,308			1,644
Net securities gains (losses)	136		641		191		(211		)	(290		)
Total non-interest income	29,009		30,468		29,454		27,837			26,246
Non-interest Expense
Salaries and employee benefits	39,854		43,140		45,253		44,820			42,177
Net occupancy expense	7,387		7,534		7,762		7,477			7,653
Technology and related costs	3,476		3,464		3,249		3,432			3,273
Marketing	3,695		2,317		2,448		2,645			3,058
Professional services	1,782		1,899		1,998		2,151			2,247
Outsourced servicing costs	1,964		1,634		1,814		1,802			2,093
Net foreclosed property expenses	5,555		6,643		9,571		8,596			11,894
Postage, telephone, and delivery	981		843		909		837			882
Insurance	2,804		2,539		3,290		3,352			4,239
Loan and collection expense	2,280		2,777		2,227		3,329			2,918
Other expenses	7,477		6,173		2,794		3,289			3,424
Total non-interest expense	77,255		78,963		81,315		81,730			83,858
Income before income taxes	46,643		44,188		39,765		38,006			30,696
Income tax provision	17,728		16,918		16,682		14,952			13,192
Net income	28,915		27,270		23,083		23,054			17,504
Preferred stock dividends and discount accretion	—		—		3,043		3,447			3,442
Net income available to common stockholders	$	28,915	$	27,270	$	20,040	$	19,607		$	14,062
Per Common Share Data
Basic earnings per share	$	0.37	$	0.35	$	0.26	$	0.27		$	0.19
Diluted earnings per share	$	0.37	$	0.35	$	0.26	$	0.27		$	0.19
Cash dividends declared	$	0.01	$	0.01	$	0.01	$	0.01		$	0.01
Weighted-average common shares outstanding	76,415		76,143		75,035		71,010			70,956
Weighted-average diluted common shares outstanding	76,581		76,203		75,374		71,274			71,147



Consolidated Balance Sheets
(Dollars in thousands)
	6/30/13			3/31/13			12/31/12			9/30/12			6/30/12
	(Unaudited)			(Unaudited)			(Audited)			(Unaudited)			(Unaudited)
Assets
Cash and due from banks	$	150,683		$	118,583		$	234,308		$	143,573		$	141,563
Federal funds sold and interest-bearing deposits in banks	147,699			203,647			707,143			470,984			315,378
Loans held-for-sale	34,803			38,091			49,696			49,209			35,342
Securities available-for-sale, at fair value	1,580,179			1,457,433			1,451,160			1,550,516			1,625,649
Securities held-to-maturity, at amortized cost	955,688			959,994			863,727			784,930			693,277
Federal Home Loan Bank ("FHLB") stock	34,063			34,288			43,387			43,387			43,467
Loans – excluding covered assets, net of unearned fees	10,094,636			10,033,803			10,139,982			9,625,421			9,436,235
Allowance for loan losses	(148,183		)	(153,992		)	(161,417		)	(166,859		)	(174,302		)
Loans, net of allowance for loan losses and unearned fees	9,946,453			9,879,811			9,978,565			9,458,562			9,261,933
Covered assets	158,326			176,855			194,216			208,979			244,782
Allowance for covered loan losses	(24,995		)	(24,089		)	(24,011		)	(21,500		)	(21,733		)
Covered assets, net of allowance for covered loan losses	133,331			152,766			170,205			187,479			223,049
Other real estate owned, excluding covered assets	57,134			73,857			81,880			97,833			109,836
Premises, furniture, and equipment, net	37,025			38,373			39,508			40,526			38,177
Accrued interest receivable	38,325			39,205			34,832			36,892			37,089
Investment in bank owned life insurance	53,216			52,873			52,513			52,134			51,751
Goodwill	94,496			94,509			94,521			94,534			94,546
Other intangible assets	11,266			12,047			12,828			13,500			14,152
Derivative assets	57,361			90,303			99,261			114,777			109,539
Other assets	144,771			126,450			143,981			139,718			147,428
Total assets	$	13,476,493		$	13,372,230		$	14,057,515		$	13,278,554		$	12,942,176
Liabilities
Demand deposits:
Noninterest-bearing	$	2,736,868		$	2,756,879		$	3,690,340		$	3,295,568		$	2,920,182
Interest-bearing	1,234,134			1,390,955			1,057,390			893,194			785,879
Savings deposits and money market accounts	4,654,930			4,741,864			4,912,820			4,381,595			4,146,022
Brokered time deposits	1,190,796			983,625			993,455			1,290,796			1,484,435
Time deposits	1,491,604			1,518,980			1,519,629			1,498,287			1,398,012
Total deposits	11,308,332			11,392,303			12,173,634			11,359,440			10,734,530
Short-term and secured borrowings	308,700			107,775			5,000			5,000			335,000
Long-term debt	499,793			499,793			499,793			374,793			374,793
Accrued interest payable	5,963			6,787			7,141			5,287			5,855
Derivative liabilities	62,014			84,370			93,276			108,678			106,064
Other liabilities	58,651			49,137			71,505			61,916			51,780
Total liabilities	12,243,453			12,140,165			12,850,349			11,915,114			11,608,022
Equity
Preferred stock	—			—			—			241,585			241,185
Common stock:
Voting	75,238			73,144			73,479			68,348			68,307
Nonvoting	1,585			3,536			3,536			3,536			3,536
Treasury stock	(9,001		)	(9,631		)	(24,150		)	(22,736		)	(22,639		)
Additional paid-in capital	1,016,615			1,014,443			1,026,438			956,356			951,127
Retained earnings	134,423			106,288			79,799			60,533			41,651
Accumulated other comprehensive income, net of tax	14,180			44,285			48,064			55,818			50,987
Total equity	1,233,040			1,232,065			1,207,166			1,363,440			1,334,154
Total liabilities and equity	$	13,476,493		$	13,372,230		$	14,057,515		$	13,278,554		$	12,942,176

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
(Amounts in thousands, except per share data)
(Unaudited)
	2Q13				1Q13				4Q12				3Q12				2Q12
Selected Statement of Income Data:
Net interest income	$	103,732			$	103,040			$	104,803			$	105,408			$	105,346
Net revenue ⁽¹⁾⁽²⁾	$	133,546			$	134,292			$	135,022			$	133,974			$	132,291
Operating profit ⁽¹⁾⁽²⁾	$	56,291			$	55,329			$	53,707			$	52,244			$	48,433
Provision for loan and covered loan losses	$	8,843			$	10,357			$	13,177			$	13,509			$	17,038
Income before income taxes	$	46,643			$	44,188			$	39,765			$	38,006			$	30,696
Net income available to common stockholders	$	28,915			$	27,270			$	20,040			$	19,607			$	14,062

Per Common Share Data:
Basic earnings per share	$	0.37			$	0.35			$	0.26			$	0.27			$	0.19
Diluted earnings per share	$	0.37			$	0.35			$	0.26			$	0.27			$	0.19
Dividends declared	$	0.01			$	0.01			$	0.01			$	0.01			$	0.01
Book value (period end)⁽¹⁾	$	15.88			$	15.87			$	15.65			$	15.49			$	15.09
Tangible book value (period end) ⁽¹⁾⁽²⁾	$	14.52			$	14.49			$	14.26			$	14.00			$	13.59
Market value (close)	$	21.22			$	18.89			$	15.32			$	15.99			$	14.76
Book value multiple	1.34			x	1.19			x	0.98			x	1.03			x	0.98			x

Share Data:
Weighted-average common shares outstanding	76,415				76,143				75,035				71,010				70,956
Weighted-average diluted common shares outstanding	76,581				76,203				75,374				71,274				71,147
Common shares issued (at period end)	78,015				78,050				78,062				73,291				73,273
Common shares outstanding (at period end)	77,630				77,649				77,115				72,436				72,424

Performance Ratio:
Return on average assets	0.86		%		0.81		%		0.67		%		0.70		%		0.55		%
Return on average common equity	9.28		%		9.01		%		6.64		%		7.00		%		5.18		%
Return on average tangible common equity ⁽¹⁾⁽²⁾	10.30		%		10.04		%		7.45		%		7.91		%		5.92		%
Net interest margin ⁽¹⁾⁽²⁾	3.22		%		3.19		%		3.16		%		3.35		%		3.46		%
Fee revenue as a percent of total revenue⁽¹⁾	21.77		%		22.45		%		21.83		%		21.02		%		20.12		%
Non-interest income to average assets	0.87		%		0.91		%		0.85		%		0.85		%		0.83		%
Non-interest expense to average assets	2.31		%		2.35		%		2.35		%		2.49		%		2.64		%
Net overhead ratio⁽¹⁾	1.44		%		1.44		%		1.50		%		1.64		%		1.81		%
Efficiency ratio ^{(1) (2)}	57.85		%		58.80		%		60.22		%		61.00		%		63.39		%

Balance Sheet Ratios:
Loans to deposits (period end)⁽³⁾	89.27		%		88.08		%		83.29		%		84.73		%		87.91		%
Average interest-earning assets to average interest-bearing liabilities	139.76		%		141.21		%		150.03		%		147.76		%		146.44		%

Capital Ratios (period end):
Total risk-based capital⁽¹⁾	13.70		%		13.58		%		13.17		%		13.90		%		14.12		%
Tier 1 risk-based capital ⁽¹⁾	11.04		%		10.90		%		10.51		%		12.24		%		12.25		%
Tier 1 leverage ratio⁽¹⁾	10.21		%		9.81		%		9.50		%		11.15		%		11.20		%
Tier 1 common equity to risk-weighted assets^(1)(2)(4)	9.05		%		8.89		%		8.52		%		8.12		%		8.05		%
Tangible common equity to tangible assets⁽¹⁾⁽²⁾	8.43		%		8.48		%		7.88		%		7.70		%		7.67		%
Total equity to total assets	9.15		%		9.21		%		8.59		%		10.27		%		10.31		%


⁽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.


⁽⁴⁾	Does not give effect to the final Basel III capital rules adopted and issued by the Federal Reserve Board on July 2, 2013.



Selected Financial Data (continued)
(Dollars in thousands)
(Unaudited)

	2Q13		1Q13		4Q12			3Q12		2Q12
Additional Selected Information:
Credit valuation adjustment on capital markets derivatives ⁽¹⁾	$	1,882	$	246	$	854		$	5	$	(830	)
Salaries and employee benefits:
Salaries and wages	$	23,397	$	24,015	$	24,333		$	24,373	$	23,728
Share-based costs	3,236		2,863		5,665			5,181		5,239
Incentive compensation, retirement costs and other employee benefits	13,221		16,262		15,255			15,266		13,210
Total salaries and employee benefits	$	39,854	$	43,140	$	45,253		$	44,820	$	42,177

Provision for unfunded commitments	$	467	$	1,723	$	(867	)	$	—	$	—

Assets under management and administration (AUMA) ⁽¹⁾	$	5,427,498	$	5,515,199	$	5,196,094		$	5,007,235	$	4,738,973
Custody assets included in AUMA	$	2,351,163	$	2,438,600	$	2,345,410		$	2,192,530	$	2,073,777



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

	6/30/13		% of Total		3/31/13		% of Total		12/31/12		% of Total		9/30/12		% of Total		6/30/12		% of Total
	(Unaudited)				(Unaudited)				(Audited)				(Unaudited)				(Unaudited)
Commercial and industrial	$	5,019,494	50	%	$	4,951,951	49	%	$	4,901,210	48	%	$	4,666,375	48	%	$	4,523,780	48	%
Commercial - owner-occupied CRE	1,641,973		16	%	1,640,064		16	%	1,595,574		16	%	1,437,935		15	%	1,384,831		15	%
Total commercial	6,661,467		66	%	6,592,015		65	%	6,496,784		64	%	6,104,310		63	%	5,908,611		63	%
Commercial real estate	1,981,541		20	%	2,002,833		20	%	2,132,063		21	%	2,069,423		21	%	2,124,492		23	%
Commercial real estate - multi-family	520,160		5	%	517,418		5	%	543,622		5	%	544,775		6	%	499,250		5	%
Total commercial real estate	2,501,701		25	%	2,520,251		25	%	2,675,685		26	%	2,614,198		27	%	2,623,742		28	%
Construction	211,976		2	%	174,077		2	%	190,496		2	%	162,724		2	%	171,014		2	%
Residential real estate	347,629		3	%	368,569		4	%	373,580		4	%	360,094		4	%	330,254		3	%
Home equity	159,958		2	%	162,035		2	%	167,760		2	%	170,068		2	%	174,131		2	%
Personal	211,905		2	%	216,856		2	%	235,677		2	%	214,027		2	%	228,483		2	%
Total loans	$	10,094,636	100	%	$	10,033,803	100	%	$	10,139,982	100	%	$	9,625,421	100	%	$	9,436,235	100	%



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)
	June 30, 2013								March 31, 2013								December 31, 2012
	Amount		% of Total		Amount Non-performing		% Non-perform-ing⁽²⁾		Amount		% of Total		Amount Non-performing		% Non-perform-ing⁽²⁾		Amount		% of Total
Manufacturing	$	1,523,128	23	%	$	2,710	*		$	1,599,688	24	%	$	—	—	%	$	1,496,719	23	%
Healthcare	1,562,779		23	%	309		*		1,565,431		24	%	314		*		1,514,496		23	%
Wholesale trade	700,064		11	%	133		*		684,791		10	%	—		—	%	635,477		10	%
Finance and insurance	555,911		8	%	529		*		504,311		8	%	186		*		584,763		9	%
Real estate, rental and leasing	347,961		6	%	1,793		1	%	362,060		6	%	512		*		359,947		6	%
Professional, scientific and technical services	471,099		7	%	3,392		1	%	434,650		7	%	5,525		1	%	391,976		6	%
Administrative, support, waste management and remediation services	420,386		6	%	11,461		3	%	398,024		6	%	—		—	%	426,960		7	%
Architecture, engineering and construction	255,808		4	%	10,749		4	%	229,797		3	%	9,415		4	%	225,199		3	%
All other⁽³⁾	824,331		12	%	16,706		2	%	813,263		12	%	15,371		2	%	861,247		13	%
Total commercial ⁽⁴⁾	$	6,661,467	100	%	$	47,782	1	%	$	6,592,015	100	%	$	31,323	*		$	6,496,784	100	%



Commercial Real Estate and Construction Loan Portfolio by Collateral Type

	June 30, 2013								March 31, 2013								December 31, 2012
	Amount		% of Total		Amount Non-performing		% Non-perform-ing⁽²⁾		Amount		% of Total		Amount Non-performing		% Non-perform-ing⁽²⁾		Amount		% of Total
Commercial Real Estate Portfolio
Land	$	196,839	8	%	$	18,349	9	%	$	223,880	9	%	$	23,335	10	%	240,503		9	%
Residential 1-4 family	40,589		2	%	3,433		8	%	48,100		2	%	6,148		13	%	58,704		2	%
Multi-family	520,160		21	%	2,654		1	%	517,418		20	%	9,704		2	%	543,622		20	%
Industrial/warehouse	273,044		11	%	6,955		3	%	273,017		11	%	7,674		3	%	272,535		10	%
Office	538,892		21	%	6,088		1	%	542,737		22	%	2,715		1	%	566,834		21	%
Retail	473,709		19	%	2,902		1	%	463,915		18	%	7,452		2	%	472,024		18	%
Healthcare	198,548		8	%	—		—	%	183,359		7	%	—		—	%	205,318		8	%
Mixed use/other	259,920		10	%	5,378		2	%	267,825		11	%	6,615		2	%	316,145		12	%
Total commercial real estate	$	2,501,701	100	%	$	45,759	2	%	$	2,520,251	100	%	$	63,643	3	%	$	2,675,685	100	%
Construction Portfolio
Residential 1-4 family	$	13,868	7	%	$	—	—	%	$	11,796	7	%	$	—	—	%	14,160		7	%
Multi-family	42,409		20	%	—		—	%	22,230		13	%	—		—	%	36,129		19	%
Industrial/warehouse	8,395		4	%	—		—	%	2,800		1	%	—		—	%	29,633		16	%
Office	19,487		9	%	—		—	%	14,212		8	%	402		3	%	8,863		5	%
Retail	63,957		30	%	—		—	%	51,846		30	%	—		—	%	37,457		20	%
Healthcare	24,362		11	%	—		—	%	27,005		16	%	—		—	%	14,196		7	%
Mixed use/other	39,498		19	%	—		—	%	44,188		25	%	—		—	%	50,058		26	%
Total construction	$	211,976	100	%	$	—	—	%	$	174,077	100	%	$	402	*		$	190,496	100	%


⁽¹⁾	Refer to Glossary of Terms for definition.


⁽²⁾	Calculated as nonperforming loans in the respective industry segment or collateral type divided by total loans of the corresponding industry segment or 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 owner-occupied commercial real estate of $1.6 billion at June 30, 2013 and March 31, 2013.


*	Less than 1%.



Asset Quality (excluding covered assets ⁽¹⁾)
(Dollars in thousands)
(Unaudited)
	2Q13			1Q13			4Q12			3Q12			2Q12
Credit Quality Key Ratios
Net charge-offs (annualized) to average loans	0.56		%	0.70		%	0.73		%	0.87		%	1.16		%
Nonperforming loans to total loans	1.21		%	1.28		%	1.37		%	1.87		%	2.22		%
Nonperforming loans to total assets	0.90		%	0.96		%	0.99		%	1.35		%	1.62		%
Nonperforming assets to total assets	1.33		%	1.51		%	1.57		%	2.09		%	2.47		%
Allowance for loan losses to:
Total loans	1.47		%	1.53		%	1.59		%	1.73		%	1.85		%
Nonperforming loans	122		%	120		%	116		%	93		%	83		%

Nonperforming assets
Loans past due 90 days and accruing	$	—		$	—		$	—		$	—		$	—
Nonaccrual loans	121,759			128,657			138,780			179,895			209,339
OREO	57,134			73,857			81,880			97,833			109,836
Total nonperforming assets	$	178,893		$	202,514		$	220,660		$	277,728		$	319,175

Restructured loans accruing interest	$	48,281		$	46,591		$	60,980		$	58,431		$	97,690

Special mention loans	$	92,880		$	106,446		$	96,794		$	104,706		$	108,052
Potential problem loans	$	97,196		$	78,185		$	107,876		$	112,929		$	164,077


Nonperforming Loans Rollforward
Beginning balance	$	128,657		$	138,780		$	179,895		$	209,339		$	233,222
Additions:
New nonaccrual loans	26,190			31,331			28,527			38,948			57,717
Reductions:
Return to performing status	(2,288		)	—			(3,824		)	(236		)	(1,953		)
Paydowns and payoffs, net of advances	(246		)	(885		)	(21,454		)	(11,094		)	(9,961		)
Net sales	(12,601		)	(12,809		)	(20,544		)	(21,351		)	(25,954		)
Transfer to OREO	(3,366		)	(6,266		)	(2,826		)	(3,250		)	(9,968		)
Transfer to loans held for sale	—			(2,240		)	—			(9,200		)	—
Charge-offs	(14,587		)	(19,254		)	(20,994		)	(23,261		)	(33,764		)
Total reductions	(33,088		)	(41,454		)	(69,642		)	(68,392		)	(81,600		)
Balance at end of period	$	121,759		$	128,657		$	138,780		$	179,895		$	209,339


OREO Rollforward
Beginning balance	$	73,857		$	81,880		$	97,833		$	109,836		$	123,498
New foreclosed properties	3,366			6,266			2,826			3,250			9,968
Valuation adjustments	(6,128		)	(4,458		)	(5,274		)	(6,245		)	(9,207		)
Disposals:
Sales proceeds	(14,677		)	(9,067		)	(11,526		)	(8,041		)	(13,517		)
Net gain (loss) on sale	716			(764		)	(1,979		)	(967		)	(906		)
Balance at end of period	$	57,134		$	73,857		$	81,880		$	97,833		$	109,836


Restructured Loans Accruing Interest Rollforward
Beginning balance	$	46,591		$	60,980		$	58,431		$	97,690		$	136,521
Additions:
New restructured loans accruing interest	4,219			458			6,552			2,001			1,864
Restructured loans returned to accruing status	—			—			3,823			—			157
Reductions:
Paydowns and payoffs, net of advances	(2,347		)	36			(3,995		)	(3,935		)	(14,593		)
Transfers to nonperforming loans	—			(14,883		)	(2,988		)	(15,464		)	(25,688		)
Net sales	—			—			—			—			(170		)
Removal of restructured loan status	(182		)	—			(843		)	(21,861		)	(401		)
Balance at end of period	$	48,281		$	46,591		$	60,980		$	58,431		$	97,690


⁽¹⁾	Refer to Glossary of Terms for definition.



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

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
June 30, 2013
Commercial	$	83,485	1.3	%	$	59,748	0.9	%	$	47,782	0.7	%	$	6,661,467
Commercial real estate	1,072		*		27,489		1.1	%	45,759		1.8	%	2,501,701
Construction	—		—	%	—		—	%	—		—	%	211,976
Residential real estate	6,187		1.8	%	6,755		1.9	%	12,812		3.7	%	347,629
Home equity	2,001		1.3	%	3,106		1.9	%	13,655		8.5	%	159,958
Personal	135		0.1	%	98		*		1,751		0.8	%	211,905
Total	$	92,880	0.9	%	$	97,196	1.0	%	$	121,759	1.2	%	$	10,094,636

March 31, 2013
Commercial	$	87,966	1.3	%	$	31,198	0.5	%	$	31,323	0.5	%	$	6,592,015
Commercial real estate	11,412		0.5	%	33,462		1.3	%	63,643		2.5	%	2,520,251
Construction	—		—	%	—		—	%	402		0.2	%	174,077
Residential real estate	5,739		1.6	%	9,109		2.5	%	14,966		4.1	%	368,569
Home equity	1,325		0.8	%	4,312		2.7	%	13,615		8.4	%	162,035
Personal	4		*		104		*		4,708		2.2	%	216,856
Total	$	106,446	1.1	%	$	78,185	0.8	%	$	128,657	1.3	%	$	10,033,803


⁽¹⁾	Refer to Glossary of Terms for definition.


*	Less than 0.1%.



Loan Portfolio Aging
	Current			30-59 Days Past Due			60-89 Days Past Due			90 Days Past Due and Accruing			Nonaccrual			Total Loans
June 30, 2013
Loan balances:
Commercial	$	6,613,146		$	539		$	—		$	—		$	47,782		$	6,661,467
Commercial real estate	2,446,365			6,690			2,887			—			45,759			2,501,701
Construction	211,976			—			—			—			—			211,976
Residential real estate	334,423			265			129			—			12,812			347,629
Personal and home equity	356,201			256			—			—			15,406			371,863
Total loans	$	9,962,111		$	7,750		$	3,016		$	—		$	121,759		$	10,094,636

% of loan balance:
Commercial	99.27		%	0.01		%	—		%	—		%	0.72		%	100.00		%
Commercial real estate	97.78		%	0.27		%	0.12		%	—		%	1.83		%	100.00		%
Construction	100.00		%	—		%	—		%	—		%	—		%	100.00		%
Residential real estate	96.19		%	0.08		%	0.04		%	—		%	3.69		%	100.00		%
Personal and home equity	95.79		%	0.07		%	—		%	—		%	4.14		%	100.00		%
Total loans	98.69		%	0.08		%	0.03		%	—		%	1.20		%	100.00		%



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

	2Q13			1Q13			4Q12			3Q12			2Q12
Nonaccrual loans
Commercial	$	47,782		$	31,323		$	41,913		$	61,182		$	59,841
Commercial real estate	45,759			63,643			68,554			88,057			119,444
Construction	—			402			557			557			555
Residential real estate	12,812			14,966			11,224			12,502			11,028
Personal and home equity	15,406			18,323			16,532			17,597			18,471
Total	$	121,759		$	128,657		$	138,780		$	179,895		$	209,339

Nonaccrual loans as a percent of total loan type:
Commercial	0.72		%	0.48		%	0.65		%	1.00		%	1.01		%
Commercial real estate	1.83		%	2.53		%	2.56		%	3.37		%	4.55		%
Construction	—		%	0.23		%	0.29		%	0.34		%	0.32		%
Residential real estate	3.69		%	4.06		%	3.00		%	3.47		%	3.34		%
Personal and home equity	4.14		%	4.84		%	4.10		%	4.58		%	4.59		%
Total	1.20		%	1.28		%	1.37		%	1.87		%	2.22		%

Loans past due 60-89 days and still accruing:
Commercial	$	—		$	3,725		$	1,365		$	1,129		$	5,064
Commercial real estate	2,887			2,365			5,278			3,588			2,543
Construction	—			—			—			—			—
Residential real estate	129			485			—			655			21
Personal and home equity	—			461			462			1,569			1,017
Total	$	3,016		$	7,036		$	7,105		$	6,941		$	8,645

Loans past due 60-89 days and still accruing as a percent of total loan type:
Commercial	—		%	0.06		%	0.02		%	0.02		%	0.09		%
Commercial real estate	0.12		%	0.09		%	0.20		%	0.14		%	0.10		%
Construction	—		%	—		%	—		%	—		%	—		%
Residential real estate	0.04		%	0.13		%	—		%	0.18		%	0.01		%
Personal and home equity	—		%	0.12		%	0.11		%	0.41		%	0.25		%
Total	0.03		%	0.07		%	0.07		%	0.07		%	0.09		%

Loans past due 30-59 days and still accruing:
Commercial	$	539		$	5,647		$	2,195		$	6,141		$	901
Commercial real estate	6,690			5,666			4,073			5,232			1,314
Construction	—			—			—			—			—
Residential real estate	265			2,175			3,260			240			341
Personal and home equity	256			647			1,837			2,072			1,983
Total	$	7,750		$	14,135		$	11,365		$	13,685		$	4,539

Loans past due 30-59 days and still accruing as a percent of total loan type:
Commercial	0.01		%	0.09		%	0.03		%	0.10		%	0.01		%
Commercial real estate	0.27		%	0.22		%	0.15		%	0.20		%	0.05		%
Construction	—		%	—		%	—		%	—		%	—		%
Residential real estate	0.08		%	0.59		%	0.87		%	0.07		%	0.10		%
Personal and home equity	0.07		%	0.17		%	0.46		%	0.54		%	0.49		%
Total	0.08		%	0.14		%	0.11		%	0.14		%	0.05		%


⁽¹⁾	Refer to Glossary of Terms for definition.


*	Less than 0.01%.



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

Nonaccrual Loan 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
June 30, 2013
Amount:
Commercial	$	33,593	$	—	$	3,107	$	5,010	$	6,072	$	47,782
Commercial real estate	11,306		5,864		3,932		3,859		20,798		45,759
Residential real estate	—		—		4,789		—		8,023		12,812
Personal and home equity	—		—		—		—		15,406		15,406
Total	$	44,899	$	5,864	$	11,828	$	8,869	$	50,299	$	121,759

Number of borrowers:
Commercial	3		—		1		2		29		35
Commercial real estate	1		1		1		2		35		40
Residential real estate	—		—		1		—		33		34
Personal and home equity	—		—		—		—		47		47
Total	4		1		3		4		144		156

March 31, 2013
Amount:
Commercial	$	12,074	$	8,769	$	3,082	$	4,733	$	2,665	$	31,323
Commercial real estate	15,890		5,915		8,313		14,977		18,548		63,643
Construction	—		—		—		—		402		402
Residential real estate	—		—		4,789		2,417		7,760		14,966
Personal and home equity	—		—		3,760		—		14,563		18,323
Total	$	27,964	$	14,684	$	19,944	$	22,127	$	43,938	$	128,657

Number of borrowers:
Commercial	1		1		1		2		22		27
Commercial real estate	1		1		2		7		37		48
Construction	—		—		—		—		1		1
Residential real estate	—		—		1		1		29		31
Personal and home equity	—		—		1		—		44		45
Total	2		2		5		10		133		152


⁽¹⁾	Refer to Glossary of Terms for definition.



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

Restructured Loan 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
June 30, 2013
Amount:
Commercial	$	25,412	$	14,067	$	3,969	$	—	$	425	$	43,873
Commercial real estate	—		—		—		2,126		677		2,803
Personal and home equity	—		—		—		—		1,605		1,605
Total	$	25,412	$	14,067	$	3,969	$	2,126	$	2,707	$	48,281

Number of borrowers:
Commercial	2		2		1		—		2		7
Commercial real estate	—		—		—		1		2		3
Personal and home equity	—		—		—		—		2		2
Total	2		2		1		1		6		12

March 31, 2013
Amount:
Commercial	$	22,145	$	13,919	$	—	$	—	$	783	$	36,847
Commercial real estate	—		5,090		—		2,159		877		8,126
Personal and home equity	—		—		—		—		1,618		1,618
Total	$	22,145	$	19,009	$	—	$	2,159	$	3,278	$	46,591

Number of borrowers:
Commercial	2		2		—		—		3		7
Commercial real estate	—		1		—		1		3		5
Personal and home equity	—		—		—		—		2		2
Total	2		3		—		1		8		14


⁽¹⁾	Refer to Glossary of Terms for definition.



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

OREO Properties by Type

	June 30, 2013									March 31, 2013									December 31, 2012
	Number of Properties			Amount			% of Total			Number of Properties			Amount			% of Total			Number of Properties			Amount		% of Total
Single-family homes	17			$	3,677		6		%	21			$	1,861		2		%	50			$	6,337	8	%
Land parcels	143			24,907			44		%	151			30,875			42		%	170			33,072		40	%
Multi-family	5			8,014			14		%	6			8,089			11		%	6			8,111		10	%
Office/industrial	23			15,144			27		%	31			21,263			29		%	40			27,585		34	%
Retail	7			5,392			9		%	8			6,709			9		%	8			6,775		8	%
Mixed use	—			—			—		%	2			5,060			7		%	—			—		—	%
Total	195			$	57,134		100		%	219			$	73,857		100		%	274			$	81,880	100	%


OREO Property Type by Location

	Illinois			Colorado			Wisconsin			South Eastern⁽²⁾			Mid Western⁽³⁾			Other			Total
June 30, 2013
Single-family homes	$	1,121		$	—		$	322		$	—		$	2,234		$	—		$	3,677
Land parcels	14,359			—			—			7,904			2,644			—			24,907
Multi-family	774			7,240			—			—			—			—			8,014
Office/industrial	11,462			—			1,633			—			2,049			—			15,144
Retail	4,743			—			—			580			69			—			5,392
Total	$	32,459		$	7,240		$	1,955		$	8,484		$	6,996		$	—		$	57,134
% of Total	57		%	13		%	3		%	15		%	12		%	—		%	100		%
March 31, 2013
Single-family homes	$	1,642		$	—		$	—		$	—		$	219		$	—		$	1,861
Land parcels	18,700			—			—			9,250			2,925			—			30,875
Multi-family	939			7,150			—			—			—			—			8,089
Office/industrial	15,152			—			2,070			501			3,540			—			21,263
Retail	5,583			—			—			1,126			—			—			6,709
Mixed use	—			—			5,060			—			—			—			5,060
Total	$	42,016		$	7,150		$	7,130		$	10,877		$	6,684		$	—		$	73,857
% of Total	56		%	10		%	10		%	15		%	9		%	—		%	100		%
December 31, 2012
Single-family homes	$	4,301		$	—		$	—		$	—		$	1,866		$	170		$	6,337
Land parcels	18,913			—			—			10,446			3,713			—			33,072
Multi-family	1,178			6,933			—			—			—			—			8,111
Office/industrial	17,960			—			2,300			3,450			3,875			—			27,585
Retail	5,584			—			—			1,191			—			—			6,775
Total	$	47,936		$	6,933		$	2,300		$	15,087		$	9,454		$	170		$	81,880
% of Total	59		%	8		%	3		%	18		%	12		%	*			100		%


⁽¹⁾	Refer to Glossary of Terms for definition.


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


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


*	Less than 1%.



Allowance for Loan Losses (excluding covered assets ⁽¹⁾)
(Dollars in thousands)
(Unaudited)
	2Q13			1Q13			4Q12			3Q12			2Q12
Change in allowance for loan losses:
Balance at beginning of period	$	153,992		$	161,417		$	166,859		$	174,302		$	183,844
Loans charged-off:
Commercial	(2,372		)	(11,146		)	(10,388		)	(4,062		)	(7,769		)
Commercial real estate	(8,725		)	(7,566		)	(8,105		)	(16,790		)	(17,924		)
Construction	—			70			30			64			(828		)
Residential real estate	(783		)	(436		)	(621		)	(299		)	(1,006		)
Home equity	(334		)	(374		)	(1,640		)	(1,001		)	(4		)
Personal	(2,776		)	(5		)	(612		)	(1,006		)	(6,341		)
Total charge-offs	(14,990		)	(19,457		)	(21,336		)	(23,094		)	(33,872		)
Recoveries on loans previously charged-off:
Commercial	459			396			947			919			634
Commercial real estate	141			1,364			2,133			544			4,150
Construction	25			9			16			594			1,664
Residential real estate	2			2			106			7			2
Home equity	199			61			52			117			314
Personal	46			52			43			229			163
Total recoveries	872			1,884			3,297			2,410			6,927
Net charge-offs	(14,118		)	(17,573		)	(18,039		)	(20,684		)	(26,945		)
Provisions charged to operating expenses	8,309			10,148			12,597			13,241			17,403
Balance at end of period	$	148,183		$	153,992		$	161,417		$	166,859		$	174,302

Allocation of allowance for loan losses:
General allocated reserve:
Commercial	$	64,868		$	57,280		$	50,450		$	49,115		$	47,210
Commercial real estate	36,820			45,030			52,700			54,500			53,700
Construction	2,626			2,011			2,317			2,200			2,635
Residential real estate	4,945			5,800			5,700			5,100			5,200
Home equity	3,070			3,700			4,000			3,980			4,200
Personal	3,130			2,900			2,860			2,800			3,260
Total allocated	115,459			116,721			118,027			117,695			116,205
Specific reserve	32,724			37,271			43,390			49,164			58,097
Total	$	148,183		$	153,992		$	161,417		$	166,859		$	174,302

Allocation of reserve by a percent of total allowance for loan losses:
General allocated reserve:
Commercial	44		%	37		%	31		%	29		%	27		%
Commercial real estate	25		%	29		%	33		%	33		%	31		%
Construction	2		%	1		%	1		%	1		%	2		%
Residential real estate	3		%	4		%	4		%	3		%	3		%
Home equity	2		%	3		%	2		%	2		%	2		%
Personal	2		%	2		%	2		%	2		%	2		%
Total allocated	78		%	76		%	73		%	70		%	67		%
Specific reserve	22		%	24		%	27		%	30		%	33		%
Total	100		%	100		%	100		%	100		%	100		%

Allowance for loan losses to:
Total loans	1.47		%	1.53		%	1.59		%	1.73		%	1.85		%
Nonperforming loans	122		%	120		%	116		%	93		%	83		%


⁽¹⁾	Refer to Glossary of Terms for definition.



Deposits
(Dollars in thousands)

	6/30/13		% of Total		3/31/13		% of Total		12/31/12		% of Total		9/30/12		% of Total		6/30/12		% of Total
	(Unaudited)				(Unaudited)				(Audited)				(Unaudited)				(Unaudited)
Noninterest-bearing deposits	$	2,736,868	24	%	$	2,756,879	24	%	$	3,690,340	30	%	$	3,295,568	29	%	$	2,920,182	27	%
Interest-bearing demand deposits	1,234,134		11	%	1,390,955		12	%	1,057,390		9	%	893,194		8	%	785,879		7	%
Savings deposits	245,133		2	%	245,762		2	%	310,188		3	%	245,906		2	%	221,816		2	%
Money market accounts	4,409,797		39	%	4,496,102		40	%	4,602,632		38	%	4,135,689		37	%	3,924,206		37	%
Brokered time deposits:
Traditional	445,666		4	%	330,851		3	%	382,833		3	%	562,717		5	%	667,454		6	%
Client CDARS⁽¹⁾	695,130		6	%	652,774		6	%	610,622		5	%	728,079		6	%	762,231		7	%
Non-client CDARS⁽¹⁾	50,000		1	%	—		—	%	—		—	%	—		—	%	54,750		1	%
Total brokered time deposits	1,190,796		11	%	983,625		9	%	993,455		8	%	1,290,796		11	%	1,484,435		14	%
Time deposits	1,491,604		13	%	1,518,980		13	%	1,519,629		12	%	1,498,287		13	%	1,398,012		13	%
Total deposits	$	11,308,332	100	%	$	11,392,303	100	%	$	12,173,634	100	%	$	11,359,440	100	%	$	10,734,530	100	%
Client deposits⁽¹⁾	$	10,812,666	95	%	$	11,061,452	97	%	$	11,790,801	97	%	$	10,796,723	95	%	$	10,012,326	93	%


⁽¹⁾	Refer to Glossary of Terms for definition.



Net Interest Margin
(Dollars in thousands)
(Unaudited)
	Quarters Ended June 30,
	2013							2012
	Average Balance			Interest ⁽¹⁾		Yield / Rate		Average Balance			Interest ⁽¹⁾		Yield / Rate
Assets:
Federal funds sold and interest-bearing deposits in banks	$	181,823		$	112	0.24	%	$	210,756		$	133	0.25	%
Securities:
Taxable	2,149,465			12,519		2.33	%	2,083,002			14,723		2.83	%
Tax-exempt ⁽²⁾	239,851			2,337		3.90	%	171,426			2,035		4.75	%
Total securities	2,389,316			14,856		2.49	%	2,254,428			16,758		2.97	%
FHLB stock	34,270			62		0.72	%	43,444			131		1.19	%
Loans, excluding covered assets:
Commercial	6,635,679			74,150		4.42	%	5,704,843			65,535		4.54	%
Commercial real estate	2,502,503			23,920		3.78	%	2,778,787			28,586		4.07	%
Construction	194,958			2,051		4.16	%	152,891			1,536		3.97	%
Residential	395,196			3,633		3.68	%	347,922			3,630		4.17	%
Personal and home equity	376,955			3,031		3.22	%	417,427			3,666		3.53	%
Total loans, excluding covered assets⁽³⁾	10,105,291			106,785		4.18	%	9,401,870			102,953		4.34	%
Total interest-earning assets before covered assets ⁽²⁾	12,710,700			121,815		3.80	%	11,910,498			119,975		3.99	%
Covered assets ⁽⁴⁾	148,242			621		1.66	%	237,781			2,189		3.66	%
Total interest-earning assets ⁽²⁾	12,858,942			$	122,436	3.77	%	12,148,279			$	122,164	3.99	%
Cash and due from banks	143,973							148,174
Allowance for loan and covered loan losses	(181,235		)					(218,798		)
Other assets	588,082							702,533
Total assets	$	13,409,762						$	12,780,188
Liabilities and Equity:
Interest-bearing demand deposits	$	1,250,305		$	1,034	0.33	%	$	795,833		$	799	0.40	%
Savings deposits	246,928			126		0.21	%	225,335			161		0.29	%
Money market accounts	4,383,915			3,760		0.34	%	3,920,627			4,104		0.42	%
Time deposits	1,494,380			3,772		1.01	%	1,341,312			3,862		1.16	%
Brokered time deposits	1,152,635			1,184		0.41	%	1,382,207			1,532		0.45	%
Total interest-bearing deposits	8,528,163			9,876		0.46	%	7,665,314			10,458		0.55	%
Short-term and secured borrowings	173,089			410		0.94	%	250,774			123		0.19	%
Long-term debt	499,793			7,613		6.08	%	379,463			5,538		5.82	%
Total interest-bearing liabilities	9,201,045			$	17,899	0.78	%	8,295,551			$	16,119	0.78	%
Noninterest-bearing demand deposits	2,816,783							2,995,802
Other liabilities	141,793							156,656
Equity	1,250,141							1,332,179
Total liabilities and equity	$	13,409,762						$	12,780,188
Net interest spread ⁽²⁾⁽⁵⁾						2.99	%						3.21	%
Effect of noninterest-bearing funds						0.23	%						0.25	%
Net interest income/margin ⁽²⁾⁽⁵⁾				$	104,537	3.22	%				$	106,045	3.46	%


⁽¹⁾	Interest income included $6.3 million in loan fees for the quarters ended June 30, 2013 and 2012.


⁽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 $125.3 million and $222.1 million for the quarters ended June 30, 2013 and 2012, respectively, and are included in loans for purposes of this analysis. Interest foregone on nonperforming loans was estimated to be approximately $1.2 million and $2.3 million for the quarters ended June 30, 2013 and 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
(Dollars in thousands)
(Unaudited)
	Quarter Ended June 30,							Quarter Ended March 31,
	2013							2013
	Average Balance			Interest ⁽¹⁾		Yield / Rate		Average Balance			Interest ⁽¹⁾		Yield / Rate
Assets:
Federal funds sold and interest-bearing deposits in banks	$	181,823		$	112	0.24	%	$	335,916		$	208	0.25	%
Securities:
Taxable	2,149,465			12,519		2.33	%	2,106,304			12,822		2.44	%
Tax-exempt ⁽²⁾	239,851			2,337		3.90	%	220,522			2,286		4.15	%
Total securities	2,389,316			14,856		2.49	%	2,326,826			15,108		2.60	%
FHLB stock	34,270			62		0.72	%	38,129			90		0.94	%
Loans, excluding covered assets:
Commercial	6,635,679			74,150		4.42	%	6,529,029			71,256		4.37	%
Commercial real estate	2,502,503			23,920		3.78	%	2,651,132			25,392		3.83	%
Construction	194,958			2,051		4.16	%	188,211			1,953		4.15	%
Residential	395,196			3,633		3.68	%	406,091			3,762		3.71	%
Personal and home equity	376,955			3,031		3.22	%	389,395			3,206		3.34	%
Total loans, excluding covered assets⁽³⁾	10,105,291			106,785		4.18	%	10,163,858			105,569		4.16	%
Total interest-earning assets before covered assets ⁽²⁾	12,710,700			121,815		3.80	%	12,864,729			120,975		3.76	%
Covered assets ⁽⁴⁾	148,242			621		1.66	%	161,842			1,218		3.02	%
Total interest-earning assets ⁽²⁾	12,858,942			$	122,436	3.77	%	13,026,571			$	122,193	3.75	%
Cash and due from banks	143,973							142,925
Allowance for loan and covered loan losses	(181,235		)					(188,894		)
Other assets	588,082							636,726
Total assets	$	13,409,762						$	13,617,328
Liabilities and Equity:
Interest-bearing demand deposits	$	1,250,305		$	1,034	0.33	%	$	1,264,740		$	1,115	0.36	%
Savings deposits	246,928			126		0.21	%	274,310			164		0.24	%
Money market accounts	4,383,915			3,760		0.34	%	4,566,766			4,235		0.38	%
Time deposits	1,494,380			3,772		1.01	%	1,525,931			3,936		1.05	%
Brokered time deposits	1,152,635			1,184		0.41	%	1,000,613			1,193		0.48	%
Total interest-bearing deposits	8,528,163			9,876		0.46	%	8,632,360			10,643		0.50	%
Short-term and secured borrowings	173,089			410		0.94	%	92,906			118		0.51	%
Long-term debt	499,793			7,613		6.08	%	499,793			7,608		6.09	%
Total interest-bearing liabilities	9,201,045			$	17,899	0.78	%	9,225,059			$	18,369	0.80	%
Noninterest-bearing demand deposits	2,816,783							3,005,007
Other liabilities	141,793							159,634
Equity	1,250,141							1,227,628
Total liabilities and equity	$	13,409,762						$	13,617,328
Net interest spread ⁽²⁾⁽⁵⁾						2.99	%						2.95	%
Effect of noninterest-bearing funds						0.23	%						0.24	%
Net interest income/margin ⁽²⁾⁽⁵⁾				$	104,537	3.22	%				$	103,824	3.19	%


⁽¹⁾	Interest income included $6.3 million and $5.1 million in loan fees for the quarters ended June 30, 2013 and March 31, 2013, 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 $125.3 million and $137.0 million for the quarters ended June 30, 2013 and March 31, 2013, respectively, and are included in loans for purposes of this analysis. Interest foregone on nonperforming loans was estimated to be approximately $1.2 million and $1.4 million for the quarters ended June 30, 2013 and March 31, 2013, 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.



Net Interest Margin
(Dollars in thousands)
(Unaudited)
	Six Months Ended June 30,
	2013							2012
	Average Balance			Interest ⁽¹⁾		Yield / Rate		Average Balance			Interest ⁽¹⁾		Yield / Rate
Assets:
Federal funds sold and interest-bearing deposits in banks	$	258,444		$	320	0.25	%	$	211,050		$	265	0.25	%
Securities:
Taxable	2,128,004			25,341		2.38	%	2,069,864			29,981		2.90	%
Tax-exempt ⁽²⁾	230,240			4,623		4.02	%	161,919			4,015		4.96	%
Total securities	2,358,244			29,964		2.54	%	2,231,783			33,996		3.05	%
FHLB stock	36,189			152		0.83	%	42,070			253		1.19	%
Loans, excluding covered assets:
Commercial	6,582,441			145,406		4.39	%	5,573,826			129,444		4.59	%
Commercial real estate	2,576,407			49,312		3.81	%	2,688,545			56,301		4.14	%
Construction	191,604			4,004		4.16	%	228,601			4,147		3.59	%
Residential	400,805			7,395		3.69	%	333,940			7,249		4.34	%
Personal and home equity	383,155			6,237		3.28	%	412,269			7,398		3.61	%
Total loans, excluding covered assets⁽³⁾	10,134,412			212,354		4.17	%	9,237,181			204,539		4.38	%
Total interest-earning assets before covered assets ⁽²⁾	12,787,289			242,790		3.78	%	11,722,084			239,053		4.04	%
Covered assets ⁽⁴⁾	155,004			1,839		2.37	%	251,200			4,142		3.28	%
Total interest-earning assets ⁽²⁾	12,942,293			$	244,629	3.76	%	11,973,284			$	243,195	4.03	%
Cash and due from banks	143,443							144,741
Allowance for loan and covered loan losses	(185,043		)					(221,434		)
Other assets	612,269							705,779
Total assets	$	13,512,962						$	12,602,370
Liabilities and Equity:
Interest-bearing demand deposits	$	1,257,482		$	2,149	0.34	%	$	725,312		$	1,435	0.40	%
Savings deposits	260,543			291		0.23	%	221,740			317		0.29	%
Money market accounts	4,474,835			7,995		0.36	%	4,060,241			8,550		0.42	%
Time deposits	1,510,069			7,708		1.03	%	1,346,836			7,795		1.16	%
Brokered time deposits	1,077,044			2,376		0.44	%	1,096,638			2,616		0.48	%
Total interest-bearing deposits	8,579,973			20,519		0.48	%	7,450,767			20,713		0.56	%
Short-term and secured borrowings	133,219			528		0.79	%	257,990			265		0.20	%
Long-term debt	499,793			15,221		6.08	%	379,628			11,116		5.81	%
Total interest-bearing liabilities	9,212,985			$	36,268	0.79	%	8,088,385			$	32,094	0.79	%
Noninterest-bearing demand deposits	2,910,375							3,025,241
Other liabilities	150,654							164,977
Equity	1,238,948							1,323,767
Total liabilities and equity	$	13,512,962						$	12,602,370
Net interest spread ⁽²⁾⁽⁵⁾						2.97	%						3.24	%
Effect of noninterest-bearing funds						0.23	%						0.25	%
Net interest income/margin ⁽²⁾⁽⁵⁾				$	208,361	3.20	%				$	211,101	3.49	%


⁽¹⁾	Interest income included $11.5 million and $13.6 million in loan fees for the six months ended June 30, 2013 and 2012, 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 $131.5 million and $240.3 million for the six months ended June 30, 2013 and 2012, respectively, and are included in loans for purposes of this analysis. Interest foregone on nonperforming loans was estimated to be approximately $2.6 million and $5.1 million for the six months ended June 30, 2013 and 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.

NON-U.S. GAAP FINANCIAL MEASURES

This press release contains both U.S. GAAP and non-U.S. GAAP based financial measures. These non-U.S. GAAP financial measures include net interest income, net interest margin, net revenue, operating profit, and efficiency ratio all on a fully taxable-equivalent basis, return on average tangible common equity, 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.

In addition to capital ratios defined by banking regulators, we also consider various measures when evaluating capital utilization and adequacy, including return on average tangible common equity, 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 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 this may affect the usefulness of these measures to investors. Calculations of the Tier 1 common equity to risk-weighted assets ratio contained herein exclude the effect of the final Basel III capital rules adopted and issued by the Federal Reserve Board on July 2, 2013, which are not yet effective.

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.

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

(Amounts in thousands)

(Unaudited)

The following table reconciles non-U.S. GAAP financial measures to U.S. GAAP.



	Quarters Ended
	2013						2012
	June 30			March 31			December 31			September 30			June 30
Taxable-equivalent net interest income
U.S. GAAP net interest income	$	103,732		$	103,040		$	104,803		$	105,408		$	105,346
Taxable-equivalent adjustment	805			784			765			729			699
Taxable-equivalent net interest income (a)	$	104,537		$	103,824		$	105,568		$	106,137		$	106,045

Average Earning Assets (b)	$	12,858,942		$	13,026,571		$	13,115,687		$	12,420,769		$	12,148,279

Net Interest Margin ((a) annualized) / (b)	3.22		%	3.19		%	3.16		%	3.35		%	3.46		%

Net Revenue
Taxable-equivalent net interest income (a)	$	104,537		$	103,824		$	105,568		$	106,137		$	106,045
U.S. GAAP non-interest income	29,009			30,468			29,454			27,837			26,246
Net revenue (c)	$	133,546		$	134,292		$	135,022		$	133,974		$	132,291

Operating Profit
U.S. GAAP income before income taxes	$	46,643		$	44,188		$	39,765		$	38,006		$	30,696
Provision for loan and covered loan losses	8,843			10,357			13,177			13,509			17,038
Taxable-equivalent adjustment	805			784			765			729			699
Operating profit	$	56,291		$	55,329		$	53,707		$	52,244		$	48,433

Efficiency Ratio
U.S. GAAP non-interest expense (d)	$	77,255		$	78,963		$	81,315		$	81,730		$	83,858
Net revenue	$	133,546		$	134,292		$	135,022		$	133,974		$	132,291
Efficiency ratio (c) / (d)	57.85		%	58.80		%	60.22		%	61.00		%	63.39		%

Adjusted Net Income
U.S. GAAP net income available to common stockholders	$	28,915		$	27,270		$	20,040		$	19,607		$	14,062
Amortization of intangibles, net of tax	473			473			411			407			404
Adjusted net income (e)	$	29,388		$	27,743		$	20,451		$	20,014		$	14,466

Average Tangible Common Equity
U.S. GAAP average total equity	$	1,250,141		$	1,227,628		$	1,260,875		$	1,356,244		$	1,332,178
Less: average goodwill	94,506			94,519			94,531			94,544			94,556
Less: average other intangibles	11,644			12,426			13,152			13,820			14,341
Less: average preferred stock	—			—			60,409			241,389			240,993
Average tangible common equity (f)	$	1,143,991		$	1,120,683		$	1,092,783		$	1,006,491		$	982,288

Return on average tangible common equity ((e) annualized) / (f)	10.30		%	10.04		%	7.45		%	7.91		%	5.92		%

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

(Amounts in thousands)

(Unaudited)



	Six Months Ended June 30,
	2013			2012
Taxable-equivalent net interest income
U.S. GAAP net interest income	$	206,772		$	209,722
Taxable-equivalent adjustment	1,589			1,379
Taxable-equivalent net interest income (a)	$	208,361		$	211,101

Average Earning Assets (b)	$	12,942,293		$	11,973,284

Net Interest Margin ((a) annualized) / (b)	3.20		%	3.49		%

Net Revenue
Taxable-equivalent net interest income (a)	$	208,361		$	211,101
U.S. GAAP non-interest income	59,477			53,750
Net revenue (c)	$	267,838		$	264,851

Operating Profit
U.S. GAAP income before income taxes	$	90,831		$	54,646
Provision for loan and covered loan losses	19,200			44,739
Taxable-equivalent adjustment	1,589			1,379
Operating profit	$	111,620		$	100,764

Efficiency Ratio
U.S. GAAP non-interest expense (d)	$	156,218		$	164,087
Net revenue	$	267,838		$	264,851
Efficiency ratio (c) / (d)	58.33		%	61.95		%

Adjusted Net Income
U.S. GAAP net income available to common stockholders	$	56,185		$	24,881
Amortization of intangibles, net of tax	946			808
Adjusted net income (e)	$	57,131		$	25,689

Average Tangible Common Equity
U.S. GAAP average total equity	$	1,238,948		$	1,323,767
Less: average goodwill	94,513			94,562
Less: average other intangibles	12,033			14,674
Less: average preferred stock	—			240,797
Average tangible common equity (f)	$	1,132,402		$	973,734

Return on average tangible common equity ((e) annualized) / (f)	10.19		%	5.31		%

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

(Amounts in thousands)

(Unaudited)



	2013						2012
	June 30			March 31			December 31			September 30			June 30
Tier 1 Common Capital
U.S. GAAP total equity	$	1,233,040		$	1,232,065		$	1,207,166		$	1,363,440		$	1,334,154
Trust preferred securities	244,793			244,793			244,793			244,793			244,793
Less: accumulated other comprehensive income, net of tax	14,180			44,285			48,064			55,818			50,987
Less: goodwill	94,496			94,509			94,521			94,534			94,546
Less: other intangibles	11,266			12,047			12,828			13,500			14,152
Tier 1 risk-based capital	1,357,891			1,326,017			1,296,546			1,444,381			1,419,262
Less: preferred stock	—			—			—			241,585			241,185
Less: trust preferred securities	244,793			244,793			244,793			244,793			244,793
Tier 1 common capital (e)	$	1,113,098		$	1,081,224		$	1,051,753		$	958,003		$	933,284

Tangible Common Equity
U.S. GAAP total equity	$	1,233,040		$	1,232,065		$	1,207,166		$	1,363,440		$	1,334,154
Less: goodwill	94,496			94,509			94,521			94,534			94,546
Less: other intangibles	11,266			12,047			12,828			13,500			14,152
Tangible equity (f)	1,127,278			1,125,509			1,099,817			1,255,406			1,225,456
Less: preferred stock	—			—			—			241,585			241,185
Tangible common equity (g)	$	1,127,278		$	1,125,509		$	1,099,817		$	1,013,821		$	984,271

Tangible Assets
U.S. GAAP total assets	$	13,476,493		$	13,372,230		$	14,057,515		$	13,278,554		$	12,942,176
Less: goodwill	94,496			94,509			94,521			94,534			94,546
Less: other intangibles	11,266			12,047			12,828			13,500			14,152
Tangible assets (h)	$	13,370,731		$	13,265,674		$	13,950,166		$	13,170,520		$	12,833,478

Risk-weighted Assets (i)	$	12,296,092		$	12,164,677		$	12,337,398		$	11,804,578		$	11,588,371

Period-end Common Shares Outstanding (j)	77,630			77,649			77,115			72,436			72,424

Ratios:
Tier 1 common equity to risk-weighted assets (e) / (i)	9.05		%	8.89		%	8.52		%	8.12		%	8.05		%
Tangible equity to tangible assets (f) / (h)	8.43		%	8.48		%	7.88		%	9.53		%	9.55		%
Tangible equity to risk-weighted assets (f) / (i)	9.17		%	9.25		%	8.91		%	10.63		%	10.57		%
Tangible common equity to tangible assets (g) / (h)	8.43		%	8.48		%	7.88		%	7.70		%	7.67		%
Tangible book value (g) / (j)	$	14.52		$	14.49		$	14.26		$	14.00		$	13.59

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 time 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’ time deposits. We also participate in a non-client CDARS® program that is more like a traditional brokered time deposit program.

Client deposits - Total deposits, net of traditional brokered time 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. We attempt to mitigate risk by structure, collateral, monitoring, and other meaningful controls. Credits rated 6 are performing in accordance with contractual terms but are considered "special mention" as these credits demonstrate potential weakness 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. Loans rated 7 may be classified as either accruing ("potential problem") or nonaccrual ("nonperforming"). Potential problem loans, like special mention, are loans that are performing in accordance with contractual terms, but for which management has some level of concern (greater than that of special mention loans) about the ability of the borrowers to meet existing repayment terms in future periods. These loans continue to accrue interest but the ultimate collection of these loans in full is questionable due to the same conditions that characterize a 6-rated credit. These credits may also have somewhat increased risk profiles as a result of the current net worth and/or paying capacity of the obligor or guarantors or the value of the collateral pledged. These loans generally have a well-defined weakness that may jeopardize collection of the debt and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not resolved. Although these loans are generally identified as potential problem loans and require additional attention by management, they may never become nonperforming. 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 a minimum on a quarterly basis, while all other rated credits over a certain dollar threshold, depending on loan type, are reviewed annually or more frequently 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.

Glossary of Terms (continued)

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.

Return on average tangible common equity - Annualized net income available to common stockholders, adjusted for tax-affected amortization of intangibles, divided by average tangible common equity. Average tangible common equity equals average total equity less average goodwill, average intangible assets, and average preferred stock. 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 without giving effect to the final Basel III capital rules adopted and issued by the Federal Reserve Board on July 2, 2013 which are not yet effective) 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.

Taxable-equivalent net 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, as calculated under currently effective requirements and without giving effect to the final Basel III capital rules recently adopted and issued by the Federal Reserve Board on July 2, 2013.

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 currently effective requirements and not under the final Basel III capital rules adopted and issued by the Federal Reserve Board on July 2, 2013 which are not yet effective.

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.

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