Old National Bancorp (NASDAQ: ONB) reports 1Q24 net income applicable to common shares of $116.3 million, diluted EPS of $0.40; $130.8 million and $0.45 on an adjusted1 basis, respectively.

CEO COMMENTARY:

  "Old National's positive quarterly results were highlighted by continued growth in our granular, peer-leading deposit franchise, disciplined loan growth, a year-over-year tangible book value increase, and stable credit quality," said Chairman and CEO Jim Ryan. "We accomplished these strong results while driving toward a successful close (on April 1) of our partnership with Nashville-based CapStar Bank."  

FIRST QUARTER HIGHLIGHTS2:

Net Income
  • Net income applicable to common shares of $116.3 million; adjusted net income applicable to common shares1 of $130.8 million
  • Earnings per diluted common share ("EPS") of $0.40; adjusted EPS1 of $0.45
   
Net Interest Income/NIM
  • Net interest income on a fully taxable equivalent basis1 of $362.7 million
  • Net interest margin on a fully taxable equivalent basis1 ("NIM") of 3.28%, down 11 basis points ("bps")
   
Operating Performance
  • Pre-provision net revenue1 (“PPNR”) of $177.9 million; adjusted PPNR1 of $197.2 million
  • Noninterest expense of $262.3 million; adjusted noninterest expense1 of $243.1 million
  • Efficiency ratio1 of 58.3%; adjusted efficiency ratio1 of 53.4%
   
Deposits and Funding
  • Period-end total deposits of $37.7 billion, up 5.0% annualized; core deposits up 3.2% annualized
  • Granular low-cost deposit franchise; total deposit costs of 201 bps and a cycle to date (2Q22-1Q24) total deposit beta of 38% (interest-bearing deposit beta of 50%)
   
Loans and Credit Quality
  • End-of-period total loans3 of $33.6 billion, up 7.5% annualized
  • Provision for credit losses4 ("provision") of $18.9 million
  • Net charge-offs of $11.8 million, or 14 bps of average loans; 7 bps excluding purchased credit deteriorated ("PCD") loans that had an allowance at acquisition
  • 30+ day delinquencies of 0.16% and non-performing loans of 0.98% of total loans
   
Return Profile & Capital
  • Return on average tangible common equity1 of 14.9%; adjusted return on average tangible common equity1 of 16.7%
   
Notable Items
  • $13.3 million pre-tax distribution of excess legacy First Midwest pension plan assets5
  • $3.0 million pre-tax FDIC special assessment6
  • $2.9 million of pre-tax merger-related charges

1 Non-GAAP financial measure that management believes is useful in evaluating the financial results of the Company – refer to the Non-GAAP reconciliations contained in this release 2 Comparisons are on a linked-quarter basis, unless otherwise noted 3 Includes loans held-for-sale 4 Includes the provision for unfunded commitments 5 Includes non-cash expense associated with the distribution of excess pension assets with the resolution of the legacy First Midwest Bancorp, Inc. plan 6 Represents the Company's estimate of its FDIC special assessment using the FDIC's updated estimate of losses to its Deposit Insurance Fund

RESULTS OF OPERATIONS2Old National Bancorp ("Old National") reported first quarter 2024 net income applicable to common shares of $116.3 million, or $0.40 per diluted common share.

Included in first quarter results was a $13.3 million non-cash, pre-tax expense associated with the distribution of excess pension assets with the resolution of the legacy First Midwest plan, as well as pre-tax charges of $3.0 million for the FDIC special assessment and $2.9 million of merger-related charges. Excluding these transactions and realized debt securities losses from the current quarter, adjusted net income1 was $130.8 million, or $0.45 per diluted common share.

DEPOSITS AND FUNDINGGrowth in deposits including normal seasonal patterns in business checking and public funds.

  • Period-end total deposits were $37.7 billion, up $464.2 million, or 5.0% annualized; core deposits increased 3.2% annualized; includes normal seasonal patterns in business checking and public funds.
  • On average, total deposits for the first quarter were $37.1 billion, a decrease of 1.2%.
  • Granular low-cost deposit franchise; total deposit costs of 201 bps and a cycle to date total deposit beta of 38% (interest-bearing deposit beta of 50%).
  • A loan to deposit ratio of 89%, combined with existing funding sources, provides strong liquidity.

LOANSBroad-based disciplined commercial loan growth.

  • Period-end total loans3 were $33.6 billion, up 7.5% annualized.
  • Total commercial loan production in the first quarter was $1.1 billion; period-end commercial pipeline totaled $2.7 billion.
  • Average total loans in the first quarter were $33.2 billion, an increase of $480.3 million.

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

  • Provision4 expense was $18.9 million, compared to $11.6 million, reflecting net charge-offs and loan growth, as well as economic factors.
  • Net charge-offs were $11.8 million, or 14 bps of average loans compared to net charge-offs of 12 bps of average loans.
    • Excluding PCD loans that had an allowance for credit losses established at acquisition, net charge-offs to average loans were 7 bps.
  • 30+ day delinquencies as a percentage of loans were 0.16%, compared to 0.22%.
  • Non-performing loans as a percentage of total loans were 0.98% compared to 0.83%.
  • Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. The remaining discount on these acquired loans was $75.0 million.
  • The allowance for credit losses, including the allowance for credit losses on unfunded commitments, stood at $346.0 million, or 1.03% of total loans, compared to $338.8 million, or 1.03% of total loans.

NET INTEREST INCOME AND MARGINLower net interest income and margin compression reflective of the rate environment.

  • Net interest income on a fully taxable equivalent basis1 decreased to $362.7 million compared to $370.5 million, driven by higher funding costs and fewer days in the quarter, partly offset by loan growth.
  • Net interest margin on a fully taxable equivalent basis1 decreased 11 bps to 3.28%.
  • Accretion income on loans and borrowings was $5.1 million, or 5 bps of net interest margin1, compared to $6.2 million, or 6 bps of net interest margin1.
  • Cost of total deposits was 2.01%, increasing 16 bps and the cost of total interest-bearing deposits increased 15 bps to 2.68%.

NONINTEREST INCOMEIncreased mortgage fees, wealth fees, and other income, offset by lower capital markets income.

  • Total noninterest income was $77.5 million.
  • Excluding realized debt securities gains/losses for both periods and gain on sale of Visa Class B restricted shares for the fourth quarter of 2023, adjusted noninterest income was down 2.2% due to lower capital markets income, partially offset by an increase in mortgage fees, wealth fees, and other income.

NONINTEREST EXPENSEDisciplined expense management.

  • Noninterest expense was $262.3 million and included a $13.3 million non-cash expense associated with the distribution of excess pension assets with the resolution of the legacy First Midwest plan, as well as $3.0 million of FDIC special assessment charges and $2.9 million of merger-related charges.
  • Excluding these items, adjusted noninterest expense was $243.1 million, compared to $255.2 million; lower due to elevated performance-driven incentive accruals and higher amortization of tax credit investments for the fourth quarter of 2023, as well as lower professional fees and other expense for the first quarter of 2024, partially offset by payroll tax due to timing.
  • The efficiency ratio1 was 58.3%, while the adjusted efficiency ratio1 was 53.4% compared to 59.0% and 53.8%, respectively.

INCOME TAXES

  • Income tax expense was $32.5 million, resulting in an effective tax rate of 21.3% compared to 21.5%. On an adjusted fully taxable equivalent ("FTE") basis, the effective tax rate was 24.4% compared to 24.2%.
  • Income tax expense included $3.3 million of tax credit benefit.

CAPITALCapital ratios remain strong.

  • All regulatory capital ratios grew in the quarter with preliminary total risk-based capital up 10 bps to 12.74% and preliminary regulatory Tier 1 capital up 5 bps to 11.40%, driven by retained earnings, partly offset by strong loan growth.
  • Tangible common equity to tangible assets was 6.86% compared to 6.85%.

CAPSTAR TRANSACTIONOn April 1, 2024, Old National completed its acquisition of CapStar Financial Holdings, Inc. ("CapStar"), and its wholly-owned subsidiary, CapStar Bank. This partnership strengthens Old National’s Nashville, Tennessee presence and adds several new high-growth markets. At closing, CapStar had approximately $3.0 billion of total assets, $2.3 billion of total loans, and $2.6 billion of deposits. Old National expects system conversions related to the transaction to be completed in the third quarter of 2024.

CONFERENCE CALL AND WEBCASTOld National will host a conference call and live webcast at 9:00 a.m. Central Time on Tuesday, April 23, 2024, to review first quarter financial results. The live audio webcast link and corresponding presentation slides will be available on the Company’s Investor Relations website at oldnational.com and will be archived there for 12 months. To listen to the live conference call, dial U.S. (800) 715-9871 or International (646) 307-1963, access code 3992332. A replay of the call will also be available from approximately noon Central Time on April 23, 2024 through May 7, 2024. To access the replay, dial U.S. (800) 770-2030 or International (647) 362-9199; Access code 3992332.

ABOUT OLD NATIONALOld National Bancorp (NASDAQ: ONB) is the holding company of Old National Bank, which is the sixth largest commercial bank headquartered in the Midwest. With approximately $53 billion of assets and $29 billion of assets under management (including CapStar Financial Holdings, Inc. on a pro forma basis as of December 31, 2023), Old National ranks among the top 30 banking companies headquartered in the U.S. Tracing our roots to 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships with clients and in the communities it serves. In addition to providing extensive services in retail and commercial banking, Old National offers comprehensive wealth management, investment, and capital market services. For more information and financial data, please visit Investor Relations at oldnational.com.

USE OF NON-GAAP FINANCIAL MEASURESThe Company's accounting and reporting policies conform to U.S. generally accepted accounting principles ("GAAP") and general practices within the banking industry. As a supplement to GAAP, the Company provides non-GAAP performance results, which the Company believes are useful because they assist investors in assessing the Company's operating performance. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables at the end of this release.

The Company presents EPS, the efficiency ratio, return on average common equity, return on average tangible common equity, and net income applicable to common shares, all adjusted for certain notable items. These items include gain on sale of Visa Class B restricted shares, distribution of excess pension assets expense, FDIC special assessment expense, contract termination charges, merger-related charges associated with completed and pending acquisitions, debt securities gains/losses, expenses related to the tragic April 10, 2023 event at our downtown Louisville location ("Louisville expenses"), and property optimization charges. Management believes excluding these items from EPS, the efficiency ratio, return on average common equity, and return on average tangible common equity may be useful in assessing the Company's underlying operational performance since these items do not pertain to its core business operations and their exclusion may facilitate better comparability between periods. Management believes that excluding merger-related charges from these metrics may be useful to the Company, as well as analysts and investors, since these expenses can vary significantly based on the size, type, and structure of each acquisition. Additionally, management believes excluding these items from these metrics may enhance comparability for peer comparison purposes.

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

The Company presents adjusted noninterest expense, which excludes distribution of excess pension assets expense, FDIC special assessment expense, contract termination charges, merger-related charges, property optimization charges, Louisville expenses, as well as adjusted noninterest income, which excludes the gain on sale of Visa Class B restricted shares and debt securities gains/losses. Management believes that excluding these items from noninterest expense and noninterest income may be useful in assessing the Company’s underlying operational performance as these items either do not pertain to its core business operations or their exclusion may facilitate better comparability between periods and for peer comparison purposes.

The tax-equivalent adjustment to net interest income and net interest margin recognizes the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal income tax rate of 21%. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on a fully tax-equivalent basis and that it may enhance comparability for peer comparison purposes.

In management's view, tangible common equity measures are capital adequacy metrics that may be meaningful to the Company, as well as analysts and investors, in assessing the Company's use of equity and in facilitating comparisons with peers. These non-GAAP measures are valuable indicators of a financial institution's capital strength since they eliminate intangible assets from stockholders' equity and retain the effect of accumulated other comprehensive loss in stockholders' equity.

Although intended to enhance investors' understanding of the Company's business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. In addition, these non-GAAP financial measures may differ from those used by other financial institutions to assess their business and performance. See the previously provided tables and the following reconciliations in the "Non-GAAP Reconciliations" section for details on the calculation of these measures to the extent presented herein.

FORWARD-LOOKING STATEMENTS This communication contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”), notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the Securities and Exchange Commission ("SEC"), in press releases, and in oral and written statements made by us that are not statements of historical fact and constitute forward‐looking statements within the meaning of the Act. These statements include, but are not limited to, descriptions of Old National’s financial condition, results of operations, asset and credit quality trends, profitability and business plans or opportunities. Forward-looking statements can be identified by the use of words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "should," "would," and "will," and other words of similar meaning. These forward-looking statements express management’s current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those in such statements, including, but not limited to: competition; government legislation, regulations and policies; the ability of Old National to execute its business plan; unanticipated changes in our liquidity position, including but not limited to changes in our access to sources of liquidity and capital to address our liquidity needs; changes in economic conditions and economic and business uncertainty which could materially impact credit quality trends and the ability to generate loans and gather deposits; inflation and governmental responses to inflation, including increasing interest rates; market, economic, operational, liquidity, credit, and interest rate risks associated with our business; our ability to successfully manage our credit risk and the sufficiency of our allowance for credit losses; the expected cost savings, synergies and other financial benefits from the merger (the “Merger”) between Old National and CapStar Financial Holdings, Inc. not being realized within the expected time frames and costs or difficulties relating to integration matters being greater than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the Merger; the potential impact of future business combinations on our performance and financial condition, including our ability to successfully integrate the businesses and the success of revenue-generating and cost reduction initiatives; failure or circumvention of our internal controls; operational risks or risk management failures by us or critical third parties, including without limitation with respect to data processing, information systems, cybersecurity, technological changes, vendor issues, business interruption, and fraud risks; significant changes in accounting, tax or regulatory practices or requirements; new legal obligations or liabilities; disruptive technologies in payment systems and other services traditionally provided by banks; failure or disruption of our information systems; computer hacking and other cybersecurity threats; the effects of climate change on Old National and its customers, borrowers, or service providers; political and economic uncertainty and instability; the impacts of pandemics, epidemics and other infectious disease outbreaks; other matters discussed in this communication; and other factors identified in our Annual Report on Form 10-K for the year ended December 31, 2023 and other filings with the SEC. These forward-looking statements are made only as of the date of this communication and are not guarantees of future results, performance or outcomes, and Old National does not undertake an obligation to update these forward-looking statements to reflect events or conditions after the date of this communication.

CONTACTS:    
Media: Kathy Schoettlin   Investors: Lynell Durchholz
(812) 465-7269   (812) 464-1366
Kathy.Schoettlin@oldnational.com   Lynell.Durchholz@oldnational.com
     
         
Financial Highlights (unaudited)
($ and shares in thousands, except per share data)
           
  Three Months Ended
  March 31, December 31, September 30, June 30, March 31,
    2024     2023     2023     2023     2023  
Income Statement          
Net interest income $ 356,458   $ 364,408   $ 375,086   $ 382,171   $ 381,488  
FTE adjustment1,3   6,253     6,100     5,837     5,825     5,666  
Net interest income - tax equivalent basis3   362,711     370,508     380,923     387,996     387,154  
Provision for credit losses   18,891     11,595     19,068     14,787     13,437  
Noninterest income   77,522     100,094     80,938     81,629     70,681  
Noninterest expense   262,317     284,235     244,776     246,584     250,711  
Net income available to common shareholders $ 116,250   $ 128,446   $ 143,842   $ 151,003   $ 142,566  
Per Common Share Data          
Weighted average diluted shares   292,207     292,029     291,717     291,266     292,756  
EPS, diluted $ 0.40   $ 0.44   $ 0.49   $ 0.52   $ 0.49  
Cash dividends   0.14     0.14     0.14     0.14     0.14  
Dividend payout ratio2   35 %   32 %   29 %   27 %   29 %
Book value $ 18.24   $ 18.18   $ 17.07   $ 17.25   $ 17.24  
Stock price   17.41     16.89     14.54     13.94     14.42  
Tangible book value3   11.10     11.00     9.87     10.03     9.98  
Performance Ratios          
ROAA   0.98 %   1.09 %   1.22 %   1.29 %   1.25 %
ROAE   8.7 %   10.2 %   11.4 %   12.0 %   11.6 %
ROATCE3   14.9 %   18.1 %   20.2 %   21.4 %   21.0 %
NIM (FTE)   3.28 %   3.39 %   3.49 %   3.60 %   3.69 %
Efficiency ratio3   58.3 %   59.0 %   51.7 %   51.2 %   52.8 %
NCOs to average loans   0.14 %   0.12 %   0.24 %   0.13 %   0.21 %
ACL on loans to EOP loans   0.95 %   0.93 %   0.93 %   0.93 %   0.94 %
ACL4 to EOP loans   1.03 %   1.03 %   1.03 %   1.04 %   1.05 %
NPLs to EOP loans   0.98 %   0.83 %   0.80 %   0.91 %   0.74 %
Balance Sheet (EOP)          
Total loans $ 33,623,319   $ 32,991,927   $ 32,577,834   $ 32,432,473   $ 31,822,374  
Total assets   49,534,918     49,089,836     49,059,448     48,496,755     47,842,644  
Total deposits   37,699,418     37,235,180     37,252,676     36,231,315     34,917,792  
Total borrowed funds   5,331,161     5,331,147     5,556,010     6,034,008     6,740,454  
Total shareholders' equity   5,595,408     5,562,900     5,239,537     5,292,095     5,277,426  
Capital Ratios          
Risk-based capital ratios (EOP):          
Tier 1 common equity   10.76 %   10.70 %   10.41 %   10.14 %   9.98 %
Tier 1 capital   11.40 %   11.35 %   11.06 %   10.79 %   10.64 %
Total capital   12.74 %   12.64 %   12.32 %   12.14 %   11.96 %
Leverage ratio (average assets)   8.96 %   8.83 %   8.70 %   8.59 %   8.53 %
Equity to assets (averages)3   11.32 %   10.81 %   10.88 %   10.96 %   11.00 %
TCE to TA3   6.86 %   6.85 %   6.15 %   6.33 %   6.37 %
Nonfinancial Data          
Full-time equivalent employees   3,955     3,940     3,981     4,021     4,023  
Banking centers   258     258     257     256     256  
1 Calculated using the federal statutory tax rate in effect of 21% for all periods.
2 Cash dividends per common share divided by net income per common share (basic).
3 Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures.    March 31, 2024 capital ratios are preliminary.
4 Includes the allowance for credit losses on loans and unfunded loan commitments.
           
FTE - Fully taxable equivalent basis ROAA - Return on average assets ROAE - Return on average equity ROATCE - Return on average tangible common equity
NCOs - Net Charge-offs ALL - Allowance for loan losses ACL - Allowance for Credit Losses EOP - End of period actual balances NPLs - Non-performing Loans TCE - Tangible common equity TA - Tangible assets
           
Income Statement (unaudited)
($ and shares in thousands, except per share data)
  Three Months Ended
  March 31, December 31, September 30, June 30, March 31,
    2024     2023     2023     2023     2023  
Interest income $ 595,981   $ 589,751   $ 576,519   $ 544,902   $ 495,649  
Less: interest expense   239,523     225,343     201,433     162,731     114,161  
Net interest income   356,458     364,408     375,086     382,171     381,488  
Provision for credit losses   18,891     11,595     19,068     14,787     13,437  
Net interest income after provision for credit losses   337,567     352,813     356,018     367,384     368,051  
Wealth and investment services fees   28,304     27,656     26,687     26,521     26,920  
Service charges on deposit accounts   17,898     18,667     18,524     17,751     17,003  
Debit card and ATM fees   10,054     10,700     10,818     10,653     9,982  
Mortgage banking revenue   4,478     3,691     5,063     4,165     3,400  
Capital markets income   2,900     5,416     5,891     6,173     6,939  
Company-owned life insurance   3,434     3,773     3,740     4,698     3,186  
Gain on sale of Visa Class B restricted shares       21,635              
Other income   10,470     9,381     10,456     11,651     8,467  
Debt securities gains (losses), net   (16 )   (825 )   (241 )   17     (5,216 )
Total noninterest income   77,522     100,094     80,938     81,629     70,681  
Salaries and employee benefits   149,803     141,649     131,541     135,810     137,364  
Occupancy   27,019     26,514     25,795     26,085     28,282  
Equipment   8,671     8,769     8,284     7,721     7,389  
Marketing   10,634     10,813     9,448     9,833     9,417  
Technology   20,023     20,493     20,592     20,056     19,202  
Communication   4,000     4,212     4,075     4,232     4,461  
Professional fees   6,406     8,250     5,956     6,397     6,732  
FDIC assessment   11,313     27,702     9,000     9,624     10,404  
Amortization of intangibles   5,455     5,869     6,040     6,060     6,186  
Amortization of tax credit investments   2,749     7,200     2,644     2,762     2,761  
Other expense   16,244     22,764     21,401     18,004     18,513  
Total noninterest expense   262,317     284,235     244,776     246,584     250,711  
Income before income taxes   152,772     168,672     192,180     202,429     188,021  
Income tax expense   32,488     36,192     44,304     47,393     41,421  
Net income $ 120,284   $ 132,480   $ 147,876   $ 155,036   $ 146,600  
Preferred dividends   (4,034 )   (4,034 )   (4,034 )   (4,033 )   (4,034 )
Net income applicable to common shares $ 116,250   $ 128,446   $ 143,842   $ 151,003   $ 142,566  
           
EPS, diluted $ 0.40   $ 0.44   $ 0.49   $ 0.52   $ 0.49  
Weighted Average Common Shares Outstanding          
Basic   290,980     290,701     290,648     290,559     291,088  
Diluted   292,207     292,029     291,717     291,266     292,756  
Common shares outstanding (EOP)   293,330     292,655     292,586     292,597     291,922  
           
 
End of Period Balance Sheet (unaudited)
($ in thousands)
  March 31, December 31, September 30, June 30, March 31,
    2024     2023     2023     2023     2023  
Assets          
Cash and due from banks $ 350,990   $ 430,866   $ 381,343   $ 473,023   $ 386,879  
Money market and other interest-earning investments   588,509     744,192     1,282,087     724,863     727,056  
Investments:          
Treasury and government-sponsored agencies   2,243,754     2,453,950     2,515,249     2,309,285     2,236,412  
Mortgage-backed securities   5,566,881     5,245,691     4,906,290     5,168,458     5,395,680  
States and political subdivisions   1,672,061     1,693,819     1,705,200     1,760,725     1,785,073  
Other securities   760,847     779,048     751,404     802,323     826,575  
Total investments   10,243,543     10,172,508     9,878,143     10,040,791     10,243,740  
Loans held-for-sale, at fair value   19,418     32,006     122,033     114,369     10,584  
Loans:          
Commercial   9,648,269     9,512,230     9,333,448     9,698,241     9,751,875  
Commercial and agriculture real estate   14,653,958     14,140,629     13,916,221     13,450,209     12,908,380  
Residential real estate   6,661,379     6,699,443     6,696,288     6,684,480     6,568,666  
Consumer   2,659,713     2,639,625     2,631,877     2,599,543     2,593,453  
Total loans   33,623,319     32,991,927     32,577,834     32,432,473     31,822,374  
Allowance for credit losses on loans   (319,713 )   (307,610 )   (303,982 )   (300,555 )   (298,711 )
Premises and equipment, net   564,007     565,396     565,607     564,299     566,758  
Goodwill and other intangible assets   2,095,511     2,100,966     2,106,835     2,112,875     2,118,935  
Company-owned life insurance   767,423     767,902     774,517     771,753     770,471  
Accrued interest receivable and other assets   1,601,911     1,591,683     1,675,031     1,562,864     1,494,558  
Total assets $ 49,534,918   $ 49,089,836   $ 49,059,448   $ 48,496,755   $ 47,842,644  
           
Liabilities and Equity          
Noninterest-bearing demand deposits $ 9,257,709   $ 9,664,247   $ 10,091,352   $ 10,532,838   $ 10,995,083  
Interest-bearing:          
Checking and NOW accounts   7,236,667     7,331,487     7,495,417     7,654,202     7,903,520  
Savings accounts   5,020,095     5,099,186     5,296,985     5,578,323     6,030,255  
Money market accounts   10,234,113     9,561,116     8,793,218     7,200,288     5,867,239  
Other time deposits   4,760,659     4,565,137     4,398,182     4,012,813     3,361,979  
Total core deposits   36,509,243     36,221,173     36,075,154     34,978,464     34,158,076  
Brokered deposits   1,190,175     1,014,007     1,177,522     1,252,851     759,716  
Total deposits   37,699,418     37,235,180     37,252,676     36,231,315     34,917,792  
           
Federal funds purchased and interbank borrowings   50,416     390     918     136,060     618,955  
Securities sold under agreements to repurchase   274,493     285,206     279,061     311,447     393,018  
Federal Home Loan Bank advances   4,193,039     4,280,681     4,412,576     4,771,183     4,981,612  
Other borrowings   813,213     764,870     863,455     815,318     746,869  
Total borrowed funds   5,331,161     5,331,147     5,556,010     6,034,008     6,740,454  
Accrued expenses and other liabilities   908,931     960,609     1,011,225     939,337     906,972  
Total liabilities   43,939,510     43,526,936     43,819,911     43,204,660     42,565,218  
Preferred stock, common stock, surplus, and retained earnings   6,375,036     6,301,709     6,208,352     6,100,728     5,985,784  
Accumulated other comprehensive income (loss), net of tax   (779,628 )   (738,809 )   (968,815 )   (808,633 )   (708,358 )
Total shareholders' equity   5,595,408     5,562,900     5,239,537     5,292,095     5,277,426  
Total liabilities and shareholders' equity $ 49,534,918   $ 49,089,836   $ 49,059,448   $ 48,496,755   $ 47,842,644  
 
                         
Average Balance Sheet and Interest Rates (unaudited)
($ in thousands)
                         
    Three Months Ended   Three Months Ended   Three Months Ended
    March 31, 2024   December 31, 2023   March 31, 2023
    Average Income1/ Yield/   Average Income1/ Yield/   Average Income1/ Yield/
Earning Assets:   Balance Expense Rate   Balance Expense Rate   Balance Expense Rate
Money market and other interest-earning investments   $ 757,244   $ 9,985 5.30 %   $ 1,094,196   $ 14,425 5.23 %   $ 497,953   $ 3,098 2.52 %
Investments:                        
Treasury and government-sponsored agencies     2,362,477     23,266 3.94 %     2,490,793     25,848 4.15 %     2,197,426     16,531 3.01 %
Mortgage-backed securities     5,357,085     38,888 2.90 %     4,913,151     34,209 2.79 %     5,429,200     35,090 2.59 %
States and political subdivisions     1,680,175     13,976 3.33 %     1,686,119     14,541 3.45 %     1,808,316     14,690 3.25 %
Other securities     770,438     12,173 6.32 %     749,697     10,440 5.57 %     738,139     8,604 4.66 %
Total investments     10,170,175     88,303 3.47 %     9,839,760     85,038 3.46 %     10,173,081     74,915 2.95 %
Loans:2                        
Commercial     9,540,385     167,263 7.01 %     9,351,344     163,921 7.01 %     9,457,089     147,620 6.24 %
Commercial and agriculture real estate     14,368,370     230,086 6.41 %     14,074,908     226,716 6.44 %     12,654,366     179,475 5.67 %
Residential real estate loans     6,693,814     63,003 3.76 %     6,706,425     62,054 3.70 %     6,523,074     58,099 3.56 %
Consumer     2,645,091     43,594 6.63 %     2,634,650     43,697 6.58 %     2,636,350     38,108 5.86 %
Total loans     33,247,660     503,946 6.07 %     32,767,327     496,388 6.06 %     31,270,879     423,302 5.42 %
                         
Total earning assets   $ 44,175,079   $ 602,234 5.46 %   $ 43,701,283   $ 595,851 5.45 %   $ 41,941,913   $ 501,315 4.79 %
                         
Less: Allowance for credit losses on loans     (313,470 )         (304,195 )         (304,393 )    
                         
Non-earning Assets:                        
Cash and due from banks   $ 362,676         $ 415,266         $ 437,872      
Other assets     4,961,595           5,027,892           4,907,115      
                         
Total assets   $ 49,185,880         $ 48,840,246         $ 46,982,507      
                         
Interest-Bearing Liabilities:                        
Checking and NOW accounts   $ 7,141,201   $ 25,252 1.42 %   $ 7,280,268   $ 25,015 1.36 %   $ 7,988,579   $ 19,359 0.98 %
Savings accounts     5,025,400     5,017 0.40 %     5,184,712     5,196 0.40 %     6,183,409     2,230 0.15 %
Money market accounts     9,917,572     94,213 3.82 %     9,244,117     85,717 3.68 %     5,641,288     20,010 1.44 %
Other time deposits     4,689,136     47,432 4.07 %     4,516,432     44,397 3.90 %     3,057,870     15,289 2.03 %
Total interest-bearing core deposits     26,773,309     171,914 2.58 %     26,225,529     160,325 2.43 %     22,871,146     56,888 1.01 %
Brokered deposits     1,047,140     13,525 5.19 %     1,012,647     13,040 5.11 %     500,530     5,705 4.62 %
Total interest-bearing deposits     27,820,449     185,439 2.68 %     27,238,176     173,365 2.53 %     23,371,676     62,593 1.09 %
                         
Federal funds purchased and interbank borrowings     69,090     961 5.59 %     620     8 5.12 %     419,291     4,839 4.68 %
Securities sold under agreements to repurchase     296,236     917 1.25 %     277,927     910 1.30 %     412,819     779 0.77 %
Federal Home Loan Bank advances     4,386,492     41,167 3.77 %     4,182,877     38,394 3.64 %     4,273,343     37,996 3.61 %
Other borrowings     825,846     11,039 5.38 %     869,644     12,666 5.78 %     781,221     7,954 4.13 %
Total borrowed funds     5,577,664     54,084 3.90 %     5,331,068     51,978 3.87 %     5,886,674     51,568 3.55 %
                         
Total interest-bearing liabilities   $ 33,398,113   $ 239,523 2.88 %   $ 32,569,244   $ 225,343 2.74 %   $ 29,258,350   $ 114,161 1.58 %
                         
Noninterest-Bearing Liabilities and Shareholders' Equity                      
Demand deposits   $ 9,258,136         $ 9,949,616         $ 11,526,267      
Other liabilities     964,089           1,039,899           1,031,702      
Shareholders' equity     5,565,542           5,281,487           5,166,188      
                         
Total liabilities and shareholders' equity   $ 49,185,880         $ 48,840,246         $ 46,982,507      
                         
Net interest rate spread       2.58 %       2.71 %       3.21 %
                         
Net interest margin (GAAP)       3.23 %       3.34 %       3.64 %
                         
Net interest margin (FTE)3       3.28 %       3.39 %       3.69 %
                         
FTE adjustment     $ 6,253       $ 6,100       $ 5,666  
                         
1 Interest income is reflected on a FTE basis.  
2 Includes loans held-for-sale.  
3 Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures.  
 
           
Asset Quality (EOP) (unaudited)
($ in thousands)
           
  Three Months Ended
  March 31, December 31, September 30, June 30, March 31,
    2024     2023     2023     2023     2023  
Allowance for credit losses:          
Beginning allowance for credit losses on loans $ 307,610   $ 303,982   $ 300,555   $ 298,711   $ 303,671  
Provision for credit losses on loans   23,853     13,329     23,115     11,936     11,469  
Gross charge-offs   (14,020 )   (13,202 )   (22,750 )   (14,331 )   (18,180 )
Gross recoveries   2,270     3,501     3,062     4,239     1,751  
NCOs   (11,750 )   (9,701 )   (19,688 )   (10,092 )   (16,429 )
Ending allowance for credit losses on loans $ 319,713   $ 307,610   $ 303,982   $ 300,555   $ 298,711  
Beginning allowance for credit losses on unfunded commitments $ 31,226   $ 32,960   $ 37,007   $ 34,156   $ 32,188  
Provision (release) for credit losses on unfunded commitments   (4,962 )   (1,734 )   (4,047 )   2,851     1,968  
Ending allowance for credit losses on unfunded commitments $ 26,264   $ 31,226   $ 32,960   $ 37,007   $ 34,156  
Allowance for credit losses $ 345,977   $ 338,836   $ 336,942   $ 337,562   $ 332,867  
Provision for credit losses on loans $ 23,853   $ 13,329   $ 23,115   $ 11,936   $ 11,469  
Provision (release) for credit losses on unfunded commitments   (4,962 )   (1,734 )   (4,047 )   2,851     1,968  
Provision for credit losses $ 18,891   $ 11,595   $ 19,068   $ 14,787   $ 13,437  
NCOs / average loans1   0.14 %   0.12 %   0.24 %   0.13 %   0.21 %
Average loans1 $ 33,242,739   $ 32,752,406   $ 32,639,812   $ 32,251,242   $ 31,267,836  
EOP loans1   33,623,319     32,991,927     32,577,834     32,432,473     31,822,374  
ACL on loans / EOP loans1   0.95 %   0.93 %   0.93 %   0.93 %   0.94 %
ACL / EOP loans1   1.03 %   1.03 %   1.03 %   1.04 %   1.05 %
Underperforming Assets:          
Loans 90 days and over (still accruing) $ 2,172   $ 961   $ 1,192   $ 303   $ 1,231  
Nonaccrual loans   328,645     274,821     261,346     295,509     234,337  
Foreclosed assets   9,344     9,434     9,761     9,824     10,817  
Total underperforming assets $ 340,161   $ 285,216   $ 272,299   $ 305,636   $ 246,385  
Classified and Criticized Assets:          
Nonaccrual loans $ 328,645   $ 274,821   $ 261,346   $ 295,509   $ 234,337  
Substandard loans (still accruing)   626,157     599,358     563,427     524,709     570,229  
Loans 90 days and over (still accruing)   2,172     961     1,192     303     1,231  
Total classified loans - "problem loans"   956,974     875,140     825,965     820,521     805,797  
Other classified assets   54,392     48,930     48,998     40,942     26,441  
Criticized loans - "special mention loans"   827,419     843,920     775,526     614,547     593,307  
Total classified and criticized assets $ 1,838,785   $ 1,767,990   $ 1,650,489   $ 1,476,010   $ 1,425,545  
Loans 30-89 days past due (still accruing) $ 53,112   $ 71,868   $ 56,772   $ 39,748   $ 42,071  
Nonaccrual loans / EOP loans1   0.98 %   0.83 %   0.80 %   0.91 %   0.74 %
ACL / nonaccrual loans   105 %   123 %   129 %   114 %   142 %
Under-performing assets/EOP loans1   1.01 %   0.86 %   0.84 %   0.94 %   0.77 %
Under-performing assets/EOP assets   0.69 %   0.58 %   0.56 %   0.63 %   0.51 %
30+ day delinquencies/EOP loans1   0.16 %   0.22 %   0.18 %   0.12 %   0.14 %
           
1 Excludes loans held-for-sale.      
           

          

      

           
Non-GAAP Measures (unaudited)
($ and shares in thousands, except per share data)
           
  Three Months Ended
  March 31, December 31, September 30, June 30, March 31,
    2024     2023     2023     2023     2023  
Earnings Per Share:          
Net income applicable to common shares $ 116,250   $ 128,446   $ 143,842   $ 151,003   $ 142,566  
Adjustments:          
Distribution of excess pension assets   13,318                  
Tax effect1   (3,250 )                
Distribution excess pension assets, net   10,068                  
FDIC special assessment   2,994     19,052              
Tax effect1   (731 )   (4,628 )            
FDIC special assessment, net   2,263     14,424              
Merger-related charges   2,908     5,529     6,257     2,372     14,558  
Tax effect1   (710 )   (1,343 )   (1,042 )   (277 )   (3,172 )
Merger-related charges, net   2,198     4,186     5,215     2,095     11,386  
Debt securities (gains) losses   16     825     241     (17 )   5,216  
Tax effect1   (4 )   (200 )   (40 )   2     (1,137 )
Debt securities (gains) losses, net   12     625     201     (15 )   4,079  
Gain on sale of Visa Class B restricted shares       (21,635 )            
Tax effect1       5,255              
Gain on sale of Visa Class B restricted shares, net       (16,380 )            
Contract termination charge       4,413              
Tax effect1       (1,072 )            
Contract termination charge, net       3,341              
Louisville expenses               3,361      
Tax effect1               (392 )    
Louisville expenses, net               2,969      
Property optimization charges               242     1,317  
Tax effect1               (28 )   (287 )
Property optimization charges, net               214     1,030  
Total adjustments, net   14,541     6,196     5,416     5,263     16,495  
Net income applicable to common shares, adjusted $ 130,791   $ 134,642   $ 149,258   $ 156,266   $ 159,061  
Weighted average diluted common shares outstanding   292,207     292,029     291,717     291,266     292,756  
EPS, diluted $ 0.40   $ 0.44   $ 0.49   $ 0.52   $ 0.49  
Adjusted EPS, diluted $ 0.45   $ 0.46   $ 0.51   $ 0.54   $ 0.54  
NIM:          
Net interest income $ 356,458   $ 364,408   $ 375,086   $ 382,171   $ 381,488  
Add: FTE adjustment2   6,253     6,100     5,837     5,825     5,666  
Net interest income (FTE) $ 362,711   $ 370,508   $ 380,923   $ 387,996   $ 387,154  
Average earning assets $ 44,175,079   $ 43,701,283   $ 43,617,456   $ 43,097,198   $ 41,941,913  
NIM (GAAP)   3.23 %   3.34 %   3.44 %   3.55 %   3.64 %
NIM (FTE)   3.28 %   3.39 %   3.49 %   3.60 %   3.69 %
           
Refer to last page of Non-GAAP reconciliations for footnotes.      
           
Non-GAAP Measures (unaudited)
($ in thousands)
           
  Three Months Ended
  March 31, December 31, September 30, June 30, March 31,
    2024     2023     2023     2023     2023  
PPNR:          
Net interest income (FTE)2 $ 362,711   $ 370,508   $ 380,923   $ 387,996   $ 387,154  
Add: Noninterest income   77,522     100,094     80,938     81,629     70,681  
Total revenue (FTE)   440,233     470,602     461,861     469,625     457,835  
Less: Noninterest expense   (262,317 )   (284,235 )   (244,776 )   (246,584 )   (250,711 )
PPNR $ 177,916   $ 186,367   $ 217,085   $ 223,041   $ 207,124  
Adjustments:          
Gain on sale of Visa Class B restricted shares $   $ (21,635 ) $   $   $  
Debt securities (gains) losses   16     825     241     (17 )   5,216  
Noninterest income adjustments   16     (20,810 )   241     (17 )   5,216  
Adjusted noninterest income   77,538     79,284     81,179     81,612     75,897  
Adjusted revenue $ 440,249   $ 449,792   $ 462,102   $ 469,608   $ 463,051  
Adjustments:          
Distribution of excess pension assets $ 13,318   $   $   $   $  
FDIC Special Assessment   2,994     19,052              
Merger-related charges   2,908     5,529     6,257     2,372     14,558  
Contract termination charges       4,413              
Louisville expenses               3,361      
Property optimization charges               242     1,317  
Noninterest expense adjustments   19,220     28,994     6,257     5,975     15,875  
Adjusted total noninterest expense   (243,097 )   (255,241 )   (238,519 )   (240,609 )   (234,836 )
Adjusted PPNR $ 197,152   $ 194,551   $ 223,583   $ 228,999   $ 228,215  
Efficiency Ratio:          
Noninterest expense $ 262,317   $ 284,235   $ 244,776   $ 246,584   $ 250,711  
Less: Amortization of intangibles   (5,455 )   (5,869 )   (6,040 )   (6,060 )   (6,186 )
Noninterest expense, excl. amortization of intangibles   256,862     278,366     238,736     240,524     244,525  
Less: Amortization of tax credit investments   (2,749 )   (7,200 )   (2,644 )   (2,762 )   (2,761 )
Less: Noninterest expense adjustments   (19,220 )   (28,994 )   (6,257 )   (5,975 )   (15,875 )
Adjusted noninterest expense, excluding amortization $ 234,893   $ 242,172   $ 229,835   $ 231,787   $ 225,889  
Total revenue (FTE)2 $ 440,233   $ 470,602   $ 461,861   $ 469,625   $ 457,835  
Less: Debt securities (gains) losses   16     825     241     (17 )   5,216  
Total revenue excl. debt securities (gains) losses   440,249     471,427     462,102     469,608     463,051  
Less: Gain on sale of Visa Class B restricted shares       (21,635 )            
Total adjusted revenue $ 440,249   $ 449,792   $ 462,102   $ 469,608   $ 463,051  
Efficiency Ratio   58.3 %   59.0 %   51.7 %   51.2 %   52.8 %
Adjusted Efficiency Ratio   53.4 %   53.8 %   49.7 %   49.4 %   48.8 %
           
Refer to last page of Non-GAAP reconciliations for footnotes.      
           
Non-GAAP Measures (unaudited)
($ in thousands)
           
  Three Months Ended
  March 31, December 31, September 30, June 30, March 31,
    2024     2023     2023     2023     2023  
ROAE and ROATCE:          
Net income applicable to common shares $ 116,250   $ 128,446   $ 143,842   $ 151,003   $ 142,566  
Amortization of intangibles   5,455     5,869     6,040     6,060     6,186  
Tax effect1   (1,364 )   (1,467 )   (1,510 )   (1,515 )   (1,547 )
Amortization of intangibles, net   4,091     4,402     4,530     4,545     4,639  
Net income applicable to common shares, excluding intangibles amortization   120,341     132,848     148,372     155,548     147,205  
Total adjustments, net (see pg.12)   14,541     6,196     5,416     5,263     16,495  
Adjusted net income applicable to common shares, excluding intangibles amortization $ 134,882   $ 139,044   $ 153,788   $ 160,811   $ 163,700  
Average shareholders' equity $ 5,565,542   $ 5,281,487   $ 5,294,072   $ 5,273,802   $ 5,166,188  
Less: Average preferred equity   (243,719 )   (243,719 )   (243,719 )   (243,719 )   (243,719 )
Average shareholders' common equity $ 5,321,823   $ 5,037,768   $ 5,050,353   $ 5,030,083   $ 4,922,469  
Average goodwill and other intangible assets   (2,098,338 )   (2,103,935 )   (2,109,944 )   (2,115,894 )   (2,122,157 )
Average tangible shareholder's common equity $ 3,223,485   $ 2,933,833   $ 2,940,409   $ 2,914,189   $ 2,800,312  
ROAE   8.7 %   10.2 %   11.4 %   12.0 %   11.6 %
ROAE, adjusted   9.8 %   10.7 %   11.8 %   12.4 %   12.9 %
ROATCE   14.9 %   18.1 %   20.2 %   21.4 %   21.0 %
ROATCE, adjusted   16.7 %   19.0 %   20.9 %   22.1 %   23.4 %
           
Refer to last page of Non-GAAP reconciliations for footnotes.      
           
Non-GAAP Measures (unaudited)
($ in thousands)
           
  As of
  March 31, December 31, September 30, June 30, March 31,
    2024     2023     2023     2023     2023  
Tangible Common Equity:          
Shareholders' equity $ 5,595,408   $ 5,562,900   $ 5,239,537   $ 5,292,095   $ 5,277,426  
Less: Preferred equity   (243,719 )   (243,719 )   (243,719 )   (243,719 )   (243,719 )
Shareholders' common equity $ 5,351,689   $ 5,319,181   $ 4,995,818   $ 5,048,376   $ 5,033,707  
Less: Goodwill and other intangible assets   (2,095,511 )   (2,100,966 )   (2,106,835 )   (2,112,875 )   (2,118,935 )
Tangible shareholders' common equity $ 3,256,178   $ 3,218,215   $ 2,888,983   $ 2,935,501   $ 2,914,772  
           
Total assets $ 49,534,918   $ 49,089,836   $ 49,059,448   $ 48,496,755   $ 47,842,644  
Less: Goodwill and other intangible assets   (2,095,511 )   (2,100,966 )   (2,106,835 )   (2,112,875 )   (2,118,935 )
Tangible assets $ 47,439,407   $ 46,988,870   $ 46,952,613   $ 46,383,880   $ 45,723,709  
           
Risk-weighted assets3 $ 37,845,139   $ 37,407,347   $ 37,501,646   $ 37,414,177   $ 36,801,707  
           
Tangible common equity to tangible assets   6.86 %   6.85 %   6.15 %   6.33 %   6.37 %
Tangible common equity to risk-weighted assets3   8.60 %   8.60 %   7.70 %   7.85 %   7.92 %
Tangible Common Book Value:          
Common shares outstanding   293,330     292,655     292,586     292,597     291,922  
Tangible common book value $ 11.10   $ 11.00   $ 9.87   $ 10.03   $ 9.98  
           
1 Tax-effect calculations use management's estimate of the full year FTE tax rates (federal + state).
2 Calculated using the federal statutory tax rate in effect of 21% for all periods.
3 March 31, 2024 figures are preliminary.
Old National Bancorp (NASDAQ:ONB)
Historical Stock Chart
From Nov 2024 to Dec 2024 Click Here for more Old National Bancorp Charts.
Old National Bancorp (NASDAQ:ONB)
Historical Stock Chart
From Dec 2023 to Dec 2024 Click Here for more Old National Bancorp Charts.