StockSelector.com
  Research, Select, & Monitor Sunday, October 25, 2020 6:18:14 AM ET  
Trade Ideas The Market Industries Stocks Portfolio

 
Ticker Lookup
Old National Bancorp$14.73$.231.59%

  Quote | Ranking | Chart | Valuations | Sentiment | Industry | News | Earnings | Analysts | More...

Your Target?

 Old National reports 4th quarter net income of $47.5 million, or $0.28 earnings per share
   Tuesday, January 22, 2019 6:30:00 AM ET

EVANSVILLE, Ind., Jan. 22, 2019 (GLOBE NEWSWIRE) --

Old National Bancorp (NASDAQ: ONB) reports 4Q18 net income of $47.5 million, diluted EPS of $0.28.
Adjusted1 net income of $54.1 million, or $0.32 per diluted share.

2018 annual net income of $190.8 million, diluted EPS of $1.22.
Adjusted1 2018 annual net income of $201.8 million,  diluted EPS of $1.29.

CEO COMMENTARY:

“Old National’s strong 4th quarter – punctuated by the 2nd highest commercial loan production in our history - capped a year of outstanding performance that included $283.2 million in organic commercial loan growth, positive operating leverage and strong credit and capital ratios,” said Old National Chairman & CEO Bob Jones. “The 4th quarter also saw us continue to execute our growth strategy by closing on our KleinBank partnership, which effectively doubles our presence in the state of Minnesota.”

FOURTH-QUARTER HIGHLIGHTS2:

Net Income

  • Net income of $47.5 million
  • Earnings per share of $0.28

Net Interest Income/NIM

  • Net interest income on a fully taxable equivalent basis was $149.3 million, up 11.7%
  • Net interest margin on a fully taxable equivalent basis was 3.64% compared to 3.51%

Operating Performance

  • Pre-provision net revenue1 (“PPNR”) was $57.2 million
  • Adjusted PPNR1 was $67.0 million, up 16.0% over fourth quarter of 2017
  • Noninterest expense was $150.3 million
  • Adjusted noninterest expense1 was $126.9 million
  • Efficiency ratio1 was 70.33%
  • Adjusted efficiency ratio1 was 63.31%, a 27 basis point improvement from fourth quarter of 2017

Loans and Credit Quality

  • End-of-period total loans3 were $12,258.8 million compared to $11,314.0 million
  • End-of-period commercial and industrial loans were $3,233.0 million compared to $2,949.3 million
  • Fourth quarter total commercial production was $594.0 million; December 31 pipeline was $1.5 billion 
  • Provision for loan losses was $3.4 million compared to $0.8 million
  • Net charge-offs were $0.6 million, or 0.02% annualized, compared to net charge-offs of $1.7 million
  • Non-performing loans were 1.43% of total loans compared to 1.47%

Capital Returns

  • Return on average common equity was 7.59%
  • Return on average tangible common equity1 was 13.84%
  • Adjusted return on average tangible common equity1 was 15.62%

Notable Items

  • Closing of Klein partnership on November 1, 2018
  • Sale of 10 Wisconsin branches resulting in a $14.0 million net gain
  • $14.8 million in merger/integration charges and $7.5 million in ONB Foundation funding
  • $7.6 million in incentive compensation annual true-ups and benefit adjustments driven by higher hospitalization costs
  • $1.1 million in tax credit amortization

1 Non-GAAP financial measure that Management believes is useful in evaluating the financial results of the Company – please 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

RESULTS OF OPERATIONS

Old National Bancorp reported fourth-quarter 2018 net income of $47.5 million, or $0.28 per diluted share. 

Included in the fourth quarter were pre-tax charges of $14.8 million for merger and integration and $7.5 million in ONB Foundation funding.  The current quarter also included a $14.0 million net gain resulting from the sale of 10 Wisconsin branches.  Excluding these items from the current quarter and netting out securities gains, Old National would have reported net income of $54.1 million, or $0.32 per share. The fourth quarter also included $7.6 million in incentive compensation annual true-ups and benefit adjustments driven by higher hospitalization costs.

As was previously disclosed, Old National closed on its partnership with Minnesota-based Klein Financial, Inc. (Klein) as of November 1, 2018

LOANS
Pipeline and production remain strong with paydowns impacting outstandings; quarterly balances benefitted from the Klein partnership.

  • Period-end total loans increased to $12,258.8 million at December 31, 2018 from $11,314.0 million at September 30, 2018.
  • Total loans acquired though the partnership with Klein were $1,049.1 million as of the date of closing.
  • Fourth quarter commercial loan production was $594.0 million, second highest in company history, while period-end pipeline totaled $1.5 billion.
  • On average, total loans in the fourth quarter were $11,972.6 million, up from $11,291.7 million in the third quarter of 2018.
  • For the full-year 2018, total loans grew $1,122.8 million. Excluding the $1,049.1 million in loans acquired from Klein and the $64.9 million in student loans sold in the second quarter, organic loan growth for the full year was $138.6 million
  • For the full-year 2018, total commercial loans increased to $8,191.8 million.  Excluding the $836.8 million in commercial loans acquired from Klein, organic commercial loan growth was $283.2 million.

DEPOSITS
A low-cost core deposit franchise continues to be one of Old National’s strengths.

  • Period-end total deposits increased to $14,349.9 million at December 31, 2018, from $12,598.2 million at September 30, 2018.
  • Total deposits assumed from Klein were $1,713.1 million.  Total deposits sold during the fourth quarter (as part of the Wisconsin branch sale) totaled $230.6 million.  Excluding these transactions, organic deposit growth for the quarter was $269.3 million, or 8.5% annualized.
  • On average, total deposits in the fourth quarter were $13,620.6 million, compared to $12,597.8 million in the third quarter of 2018. 
  • For the full-year 2018, total deposits grew $1,744.2 million.  Excluding the deposits assumed and the deposits sold (as noted above), organic deposit growth was $261.7 million, or 2.1%, for the year.

NET INTEREST INCOME AND MARGIN
Controlled deposit costs and the Klein partnership benefited both net interest income and margin in the fourth quarter.

  • Net interest income increased to $146.2 million in the fourth quarter of 2018 from $130.8 million in the third quarter of 2018, benefitting primarily from the Klein partnership.
  • The net interest margin on a fully taxable equivalent basis increased 13 basis points to 3.64% compared to 3.51% in the third quarter of 2018.
  • Accretion income was $11.3 million, or 27 basis points of net interest margin, in the fourth quarter of 2018 compared to $7.3 million, or 19 basis points of net interest margin, in the third quarter of 2018.  In the fourth quarter of 2018, accretion income was 5.8% of adjusted total revenue.
  • Loan yields, excluding accretion income, increased 11 basis points to 4.42%.
  • The cost of total deposits rose 4 basis points to 0.40% in the fourth quarter of 2018 while the cost of total interest-bearing deposits rose 7 basis points to 0.56%.

CREDIT QUALITY
Strong credit quality remains a hallmark of the Old National franchise, with larger quarterly provision driven mostly by two specific reserves.

  • Asset quality remained strong with net charge-offs in the fourth quarter of $0.6 million, or 0.02% of total average loans, and 30-89 day delinquencies of 0.39%.
  • Provision expense for the fourth quarter was $3.4 million, driven primarily by two specific reserves.
  • Non-performing loans as a percentage of total loans was 1.43%. 
  • In accordance with current accounting practices, the loans acquired from recent acquisitions were recorded at fair value with no allowance recorded at the acquisition date.  As of December 31, 2018, the remaining discount on these acquired loans was $121.3 million.
  • The allowance for loan losses was $55.5 million, or 0.45% of total loans at December 31, 2018.

NONINTEREST INCOME
Noninterest income included a gain on sale of Wisconsin branches and demonstrated normal seasonal patterns in several fee income businesses.

  • Total noninterest income for the fourth quarter of 2018 was $58.2 million, an increase of $12.2 million from the third quarter of 2018.
  • Included in noninterest income in the fourth quarter was a net gain of $14.0 million from the sale of 10 Wisconsin branches.
  • Klein contributed $2.8 million to noninterest income during the quarter (for the two months since the closing of the partnership), which was offset by lower capital markets income (down $1.9 million) and the normal seasonal decline in mortgage banking revenue.
  • Securities losses were $0.4 million, compared to securities gains of $0.1 million in the third quarter of 2018.

NONINTEREST EXPENSE
Fourth quarter results demonstrated continued discipline with respect to expense management, helping to drive positive operating leverage1.

  • Noninterest expense for the fourth quarter of 2018 was $150.3 million and included $14.8 million in merger and integration charges, $7.5 million in ONB Foundation funding and $1.1 million in tax credit amortization.
  • Excluding these items, adjusted noninterest expense for the fourth quarter was $126.9 million, compared to the $108.4 million in adjusted noninterest expense in the third quarter of 2018. 
  • Klein noninterest expenses were $7.4 million during the fourth quarter (for the two months since the closing of the partnership).
  • The fourth quarter of 2018 also included $7.6 million in incentive compensation true-ups and benefit adjustments, which is included in adjusted noninterest expense defined above.
  • The fourth quarter efficiency ratio was 70.33%, while the adjusted efficiency ratio was 63.31%.
  • For the full year 2018, the efficiency ratio was 67.74%, while the adjusted efficiency ratio was 61.56%.
  • Adjusted operating leverage1 was +215 basis points in for the full-year 2018 as compared to 2017.

INCOME TAXES

  • On a fully taxable-equivalent basis, income tax expense in the fourth quarter was $6.3 million, resulting in a 11.7% FTE tax rate.

CAPITAL
Strong quarterly earnings drove capital ratios higher.

  • At the end of the fourth quarter, total risk-based capital was 12.3% and regulatory tier 1 capital was 11.4%.
  • Tangible common equity to tangible assets was 8.47% at the end of the fourth quarter compared to 8.08% in the third quarter of 2018.

NON-GAAP RECONCILIATIONS

 ($ in millions, except EPS, shares in 000s)4Q18Adjustments4Adjusted 4Q18
 Total Revenues (FTE)$207.5 $(13.6)$193.9 
 Less: Provision for Loan Losses (3.4) -  (3.4)
 Less: Noninterest Expenses (150.3) 22.3  (128.0)
 Income before Income Taxes (FTE)$53.8 $8.7 $62.5 
 Income Taxes (6.3) (2.1) (8.4)
 Net Income$47.5 $6.6 $54.1 
 Average Shares Outstanding 167,992  -  167,992 
 Earnings Per Share$0.28 $0.04 $0.32 

          4 Tax-effect calculations use the 2018 statutory FTE tax rates (federal + state)

 ($ in millions, except EPS, shares in 000s) 2018 Adjustments4Adjusted 2018
 Total Revenues (FTE)$744.3 $(18.7)$725.6 
 Less: Provision for Loan Losses (7.0) -  (7.0)
 Less: Noninterest Expenses (517.3) 33.3  (484.0)
 Income before Income Taxes (FTE)$220.0 $14.6 $234.6 
 Income Taxes (29.2) (3.6) (32.8)
 Net Income$190.8 $11.0 $201.8 
 Average Shares Outstanding 156,539  -  156,539 
 Earnings Per Share$1.22 $0.07 $1.29 

      4 Tax-effect calculations use the 2018 statutory FTE tax rates (federal + state)

 ($ in millions)4Q183Q18
 Net Interest Income$146.2 $130.8 
 FTE Adjustment 3.1  2.8 
 Net Interest Income (FTE)$149.3 $133.6 
 Average Earning Assets$16,398.3 $15,213.4 
 Net Interest Margin (FTE) 3.64% 3.51%



 ($ in millions)4Q183Q18
 Net Interest Income$146.2 $130.8 
 FTE Adjustment 3.1  2.8 
 Net Interest Income (FTE)$149.3 $133.6 
 Total Noninterest Income$58.2 $46.0 
 Noninterest Expense 150.3  119.4 
 Pre-Provision Net Revenue$57.2 $60.2 
 Less: Securities Gains/Losses 0.4  (0.1)
 Less: Gain on Branch Actions (14.0) (0.2)
 Add: Merger and Integration Charges 14.8  1.7 
 Add: Branch Action Charges and Severance -  0.1 
 Add: ONB Foundation Funding 7.5  - 
 Add: Amortization of Tax Credit Investments 1.1  9.2 
 Adjusted Pre-Provision Net Revenue$67.0 $70.9 


 ($ in millions)4Q183Q184Q17 2018  2017 
 Noninterest Expense$150.3 $119.4 $140.4 $517.3 $448.8 
 Less: Merger and Integration Charges (14.8) (1.7) (11.9) (21.3) (12.3)
 Less: Branch Action Charges, Severance, ONB
 Foundation Funding and Client Experience
 Initiative Charges
 
(7.5


)
 
(0.1
)  
(6.6
) (12.0) (14.0)
 Noninterest Expense less Charges$128.0 $117.6 $121.9 $484.0 $422.5 
 Less: Amortization of Tax Credit Investments (1.1) (9.2) (11.7) (22.9) (11.7)
 Adjusted Noninterest Expense$126.9 $108.4 $110.2 $461.1 $410.8 
 Less: Intangible Amortization (4.1) (3.3) (3.4) (14.4) (11.8)
 Adjusted Noninterest Expense Less Intangible
 Amortization
$122.8 $105.1 $106.8 $446.7 
$
399.0 
 Net Interest Income$146.2 $130.8 $118.6 $537.5 $437.2 
 FTE Adjustment 3.1  2.8  6.1  11.5  23.1 
 Net Interest Income (FTE)$149.3 $133.6 $124.7 $549.0 $460.3 
 Total Noninterest Income$58.2 $46.0 $44.8 $195.3 $183.3 
 Total Revenue (FTE)$207.5 $179.6 $169.5 $744.3 $643.6 
 Less: Securities Gains/Losses 0.4  (0.1) (1.6) (2.0) (9.1)
 Less: Gain on Student Loan Sale -  -  -  (2.2) - 
 Less: Gain on Branch Actions (14.0) (0.2) -  (14.5) (0.2)
 Adjusted Total Revenue (FTE)$193.9 $179.3 $167.9 $725.6 $634.3 
 Efficiency Ratio 70.33% 64.71% 81.60% 67.74% 68.87%
 Adjusted Efficiency Ratio 63.31% 58.67% 63.58% 61.56% 62.90%
      
 Operating Leverage5 (basis points) 1,536    40  
 Adjusted Operating Leverage6 (basis points) 30    215  

                                  5 Year-over-year basis point change in noninterest expenses plus change in total revenue
                                  6 Year-over-year basis point change in adjusted noninterest expense plus change in adjusted total revenue

 ($ in millions)4Q183Q18
 Net Income (Loss)$47.5 $51.3 
 Add: Intangible Amortization (net of tax7) 3.3  2.6 
 Tangible Net Income (Loss)$50.8 $53.9 
 Less: Securities Gains/Losses (net of tax7) 0.3  (0.1)
 Less: Gain on Branch Sale (net of tax7) (10.6) - 
 Add: Merger & Integration Charges (net of tax7) 11.2  1.3 
 Add: Branch Action Charges (net of gains) and Severance
 (net of tax7)
 -  (0.1
)
 Add: ONB Foundation Funding (net of tax7) 5.7  - 
 Adjusted Tangible Net Income (Loss)$57.4 $55.0 
 Average Total Shareholders’ Equity$2,503.8 $2,212.7 
 Less: Average Goodwill (969.4) (828.8)
 Less: Average Intangibles (66.9) (43.7)
 Average Tangible Shareholders’ Equity$1,467.5 $1,340.2 
 Return on Average Tangible Common Equity 13.84% 16.10%
 Adjusted Return on Average Tangible Common Equity 15.62% 16.42%

         7Tax-effect calculations use the 2018 statutory FTE tax rates (federal + state)

CONFERENCE CALL AND WEBCAST

Old National will host a conference call and live webcast at 7:00 a.m. Central Time on Tuesday, January 22, 2019, to review fourth-quarter and full-year 2018 financial results.  The live audio web cast of the call, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at oldnational.com and will be archived there for 12 months.  A replay of the call will also be available from 10:00 a.m. Central Time on January 22 through February 5.  To access the replay, dial 1-855-859-2056, Conference ID Code 5499497.

ABOUT OLD NATIONAL
Old National Bancorp (NASDAQ: ONB) is the holding company of Old National Bank. Headquartered in Evansville with $19.7 billion in assets, it is a top 100 U.S. bank, the largest Indiana-based bank and has been recognized as a World’s Most Ethical Company by the Ethisphere Institute for seven consecutive years. For nearly 185 years, Old National has been a community bank committed to building long-term, highly valued relationships with clients. With locations in Indiana, Kentucky, Michigan, Minnesota and Wisconsin, Old National provides retail and commercial banking services along with comprehensive wealth management, investment and capital markets services. For information and financial data, please visit Investor Relations at oldnational.com .

USE OF NON-GAAP FINANCIAL MEASURES
This earnings release contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Old National’s results of operations or financial position.  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 of this release.

FORWARD-LOOKING STATEMENT

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements include, but are not limited to, descriptions of Old National Bancorp’s (“Old National’s”) financial condition, results of operations, asset and credit quality trends and profitability.  Forward-looking statements can be identified by the use of the words “anticipate,” “believe,” “expect,” “intend,” “could” and “should,” 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 to differ materially from those in such statements.  Factors that might cause such a difference include, but are not limited to: expected cost savings, synergies and other financial benefits from the merger with Klein that might not be realized within the expected timeframes and costs or difficulties relating to integration matters might be greater than expected; market, economic, operational, liquidity, credit and interest rate risks associated with Old National’s business; competition; government legislation and policies (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its related regulations); ability of Old National to execute its business plan; changes in the economy which could materially impact credit quality trends and the ability to generate loans and gather deposits; failure or circumvention of our internal controls; failure or disruption of our information systems; significant changes in accounting, tax or regulatory practices or requirements; new legal obligations or liabilities or unfavorable resolutions of litigations; disruptive technologies in payment systems and other services traditionally provided by banks; computer hacking and other cybersecurity threats; other matters discussed in this press release; and other factors identified in our Annual Report on Form 10-K and other periodic filings with the SEC.  These forward-looking statements are made only as of the date of this press release, and Old National does not undertake an obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this press release.

        
Financial Highlights (unaudited) 
($ and shares in thousands, except per share data) 
        
 Three Months Ended  Twelve Months Ended 
 December 31,September 30,December 31, December 31,December 31, 
  2018  2018  2017   2018  2017  
Income Statement       
Net interest income$  146,225 $  130,842 $  118,556  $  537,602 $  437,168  
Provision for loan losses 3,390  750  1,037   6,966  3,050  
Noninterest income 58,154  45,957  44,825   195,305  183,382  
Noninterest expense   150,268    119,376    140,432     517,261    448,836  
Net income (loss) 47,498  51,348  (18,493)  190,830  95,725  
        
        
Per Common Share Data (Diluted)       
Net income (loss) available to common shareholders$  0.28 $  0.34 $  (0.13) $  1.22 $  0.69  
Average diluted shares outstanding 167,992  152,784  146,875   156,539  138,513  
Book value 15.36  14.58  14.17   15.36  14.17  
Stock price 15.40  19.30  17.45   15.40  17.45  
Dividend payout ratio 46% 38%N/M  42% 75% 
Tangible common book value (1)   9.00    8.86    8.37     9.00    8.37  
        
        
Performance Ratios       
Return on average assets 1.01% 1.18% -0.45%  1.07% 0.63% 
Return on average common equity 7.59% 9.28% -3.51%  8.42% 4.98% 
Return on average tangible common equity (1) 13.84% 16.10% -5.05%  14.97% 8.59% 
Net interest margin (FTE) 3.64% 3.51% 3.47%  3.54% 3.48% 
Efficiency ratio (2) 70.33% 64.71% 81.60%  67.74% 68.87% 
Net charge-offs (recoveries) to average loans 0.02% 0.06% 0.03%  0.02% 0.03% 
Allowance for loan losses to ending loans 0.45% 0.47% 0.45%  0.45% 0.45% 
Non-performing loans to ending loans 1.43% 1.47% 1.30%  1.43% 1.30% 
        
        
Balance Sheet       
Total loans$  12,243,892 $  11,292,659 $  11,118,121  $  12,243,892 $  11,118,121  
Total assets 19,728,435  17,567,759  17,518,292   19,728,435  17,518,292  
Total deposits 14,349,949  12,598,200  12,605,764   14,349,949  12,605,764  
Total borrowed funds 2,493,793  2,576,039  2,578,204   2,493,793  2,578,204  
Total shareholders' equity 2,689,570  2,220,680  2,154,397   2,689,570  2,154,397  
        
        
Capital Ratios (1)       
Risk-based capital ratios (EOP):       
  Tier 1 common equity 11.4% 11.1% 10.5%  11.4% 10.5% 
  Tier 1 11.4% 11.1% 10.4%  11.4% 10.4% 
  Total 12.3% 12.1% 11.4%  12.3% 11.4% 
Leverage ratio (to average assets) 9.2% 8.6% 8.3%  9.2% 8.3% 
        
Total equity to assets (averages) 13.28% 12.69% 12.69%  12.74% 12.57% 
Tangible common equity to tangible assets 8.47% 8.08% 7.65%  8.47% 7.65% 
        
        
Nonfinancial Data       
Full-time equivalent employees  2,892  2,554  2,801   2,892  2,801  
Number of branches 191  182  191   191  191  
        
(1) See "Non-GAAP Measures" table.       
(2) Efficiency ratio is defined as noninterest expense before amortization of intangibles as a percent of FTE net interest income and  
  noninterest revenues, excluding net gains from securities transactions.  This presentation excludes amortization of intangibles 
  and net securities gains, as is common in other company releases, and better aligns with true operating performance.  
FTE - Fully taxable equivalent basis       EOP - End of period actual balances       N/M - Not meaningful  
        


        
 Income Statement (unaudited)
 ($ and shares in thousands, except per share data) 
        
 Three Months Ended  Twelve Months Ended  
 December 31,September 30,December 31, December 31,December 31, 
  2018 2018 2017  20182017 
Interest income$  175,234 $  155,369$  135,134  $  632,045$  495,336 
Less:  interest expense 29,009  24,527 16,578     94,443 58,168 
  Net interest income 146,225  130,842 118,556     537,602 437,168 
Provision for loan losses 3,390  750 1,037     6,966 3,050 
  Net interest income after provision for loan losses 142,835  130,092 117,519     530,636 434,118 
        
Wealth management fees 9,069  9,022 9,801     36,863 37,316 
Service charges on deposit accounts 11,474  11,028 10,913     44,026 41,331 
Debit card and ATM fees 5,565  4,706 4,756     20,216 17,676 
Mortgage banking revenue 3,928  4,348 3,933     17,657 18,449 
Investment product fees 5,369  5,073 5,791     20,539 20,977 
Capital markets income 840  2,700 923     4,934 6,544 
Company-owned life insurance 2,591  2,958 2,366     10,584 8,654 
Other income 5,700  5,986 4,676     24,402 23,083 
Net gain on branch divestitures 13,989    -    -      13,989   -  
Gains (losses) on sales of securities (357) 135 1,588     2,060 9,135 
Gains (losses) on derivatives (14) 1 78     35 217 
  Total noninterest income 58,154  45,957 44,825     195,305 183,382 
        
Salaries and employee benefits 87,346  63,158 74,785     281,275 246,738 
Occupancy 13,210  12,578 12,168     51,941 46,511 
Equipment 3,916  3,652 3,498     14,861 13,560 
Marketing 4,782  3,406 3,803     15,847 13,172 
Data processing  9,418  8,628 8,776     36,170 32,306 
Communication 2,537  2,473 2,419     10,846 9,284 
Professional fees 5,615  3,235 5,523     14,503 16,840 
Loan expenses 1,877  1,564 1,730     7,028 6,596 
Supplies 705  707 686     3,037 2,406 
FDIC assessment 2,110  2,722 2,666     10,638 9,480 
Other real estate owned expense 176  157 741     878 3,376 
Amortization of intangibles 4,134  3,283 3,399     14,442 11,841 
Amortization of tax credit investments 1,142    9,233   11,733     22,949   11,733 
Other expense   13,300    4,580   8,505     32,846   24,993 
  Total noninterest expense   150,268    119,376   140,432     517,261   448,836 
        
  Income before income taxes   50,721    56,673   21,912     208,680   168,664 
  Income tax expense 3,223  5,325 40,405     17,850   72,939 
  Net income (loss)$  47,498 $  51,348$  (18,493) $  190,830$  95,725 
        
Diluted Earnings Per Share        
Net income (loss)$  0.28 $  0.34$  (0.13) $  1.22$  0.69 
        
Average Common Shares Outstanding       
  Basic   167,044    151,930   146,073     155,675   137,821 
  Diluted   167,992    152,784   146,875     156,539   138,513 
        
Common shares outstanding at end of period   175,141    152,352   152,040     175,141   152,040 
        
        


  
Balance Sheet (unaudited) 
($ in thousands) 
        
 December 31, September 30, December 31,  
  2018   2018   2017   
Assets       
Federal Reserve Bank account$  26,182  $  65,878  $  54,361   
Money market investments   6,980     5,859     13,318   
Investments:       
Treasury and government-sponsored agencies   707,438     690,709     669,838   
Mortgage-backed securities   2,336,415     1,640,254     1,674,584   
States and political subdivisions   1,245,657     1,099,535     1,207,353   
Other securities   488,802     496,199     453,765   
Total investments   4,778,312     3,926,697     4,005,540   
Loans held for sale, at fair value   14,911     21,384     17,930   
Loans:       
Commercial   3,232,970     2,949,277     2,717,269   
Commercial and agriculture real estate   4,958,851     4,481,554     4,354,552   
Consumer:        
Home equity   589,322     498,325     507,507   
Other consumer loans   1,214,345     1,197,300     1,371,740   
Subtotal of commercial and consumer loans   9,995,488     9,126,456     8,951,068   
Residential real estate   2,248,404     2,166,203     2,167,053   
Total loans   12,243,892     11,292,659     11,118,121   
Total earning assets   17,070,277     15,312,477     15,209,270   
        
Allowance for loan losses   (55,461)    (52,713)    (50,381)  
Non-earning Assets:       
Cash and due from banks   284,003     215,024     222,753   
Premises and equipment, net   485,912     450,253     458,074   
Goodwill and other intangible assets   1,113,274     870,938     881,147   
Company-owned life insurance   444,224     405,245     403,753   
Net deferred tax assets   87,048     94,667     110,857   
Loan servicing rights   24,497     24,336     24,661   
Other real estate owned and repossessed personal property   3,232     3,563     8,810   
Other assets    271,429     243,969     249,348   
Total non-earning assets   2,713,619     2,307,995     2,359,403   
Total assets$  19,728,435  $  17,567,759  $  17,518,292   
        
Liabilities and Equity       
Noninterest-bearing demand deposits$  3,965,380  $  3,588,370  $  3,680,807   
Interest-bearing:       
Checking and NOW accounts   3,788,339     3,011,544     3,115,822   
Savings accounts   2,944,092     2,920,712     3,035,622   
Money market accounts   1,627,882     1,185,439     1,139,077   
Other time deposits   1,845,149     1,667,055     1,470,118   
Total core deposits   14,170,842     12,373,120     12,441,446   
Brokered CD's   179,107     225,080     164,318   
Total deposits   14,349,949     12,598,200     12,605,764   
        
Federal funds purchased and interbank borrowings   270,135     450,031     335,033   
Securities sold under agreements to repurchase   362,294     319,831     384,810   
Federal Home Loan Bank advances   1,613,481     1,554,515     1,609,579   
Other borrowings   247,883     251,662     248,782   
Total borrowed funds   2,493,793     2,576,039     2,578,204   
Accrued expenses and other liabilities   195,123     172,840     179,927   
Total liabilities   17,038,865     15,347,079     15,363,895   
        
Common stock, surplus, and retained earnings   2,734,520     2,300,610     2,204,669   
Accumulated other comprehensive income (loss), net of tax   (44,950)    (79,930)    (50,272)  
Total shareholders' equity   2,689,570     2,220,680     2,154,397   
Total liabilities and shareholders' equity$  19,728,435  $  17,567,759  $  17,518,292   
          


              
              
Average Balance Sheet and Interest Rates (unaudited)  
($ in thousands)  
              
              
 Three Months Ended Three Months Ended Three Months Ended  
 December 31, 2018 September 30, 2018 December 31, 2017  
 AverageIncome (1)/Yield/ AverageIncome (1)/Yield/ AverageIncome (1)/Yield/  
Earning Assets:BalanceExpenseRate BalanceExpenseRate BalanceExpenseRate  
Money market and other interest-earning             
investments$  39,207 $  2052.07% $  35,928 $  1401.54% $  54,611 $  870.63%  
Investments:             
Treasury and government-sponsored agencies   694,409    3,8742.23%    685,919    3,7482.19%    611,982    3,0311.98%  
Mortgage-backed securities   2,011,275    13,6882.72%    1,595,630    9,3812.35%    1,573,578    8,1392.07%  
States and political subdivisions   1,187,404    11,1473.76%    1,103,347    10,1103.67%    1,178,113    13,3124.52%  
Other securities   493,426    4,0173.26%    500,837    4,1163.29%    454,824    3,1262.75%  
Total investments   4,386,514    32,7262.98%    3,885,733    27,3552.82%    3,818,497    27,6082.89%  
Loans: (2)             
Commercial   3,133,153    37,3584.67%    2,928,744    33,3814.46%    2,480,987    26,5774.19%  
Commercial and agriculture real estate   4,834,589    65,4615.30%    4,465,105    57,3775.03%    3,989,684    47,6834.68%  
Consumer:             
Home equity   562,801    7,1595.05%    495,161    6,0704.86%    502,837    5,4424.29%  
Other consumer loans   1,203,436    11,7023.86%    1,215,583    11,2633.68%    1,371,986    12,2483.54%  
Subtotal commercial and consumer loans   9,733,979    121,6804.96%    9,104,593    108,0914.71%    8,345,494    91,9504.37%  
Residential real estate loans   2,238,588    23,6724.23%    2,187,130    22,5364.12%    2,170,900    21,6283.99%  
              
Total loans   11,972,567    145,3524.78%    11,291,723    130,6274.56%    10,516,394    113,5784.26%  
              
Total earning assets$  16,398,288 $  178,2834.30% $  15,213,384 $  158,1224.11% $  14,389,502 $  141,2733.88%  
              
Less: Allowance for loan losses   (53,045)      (53,734)      (50,601)    
              
Non-earning Assets:             
Cash and due from banks$  232,360    $  205,446    $  201,520     
Other assets   2,275,907       2,068,469       2,046,544     
              
Total assets$  18,853,510    $  17,433,565    $  16,586,965     
              
Interest-Bearing Liabilities:             
Checking and NOW accounts$  3,391,630 $  2,0040.23% $  3,026,289 $  1,1800.15% $  2,905,440 $  7140.10%  
Savings accounts   2,919,900    2,2250.30%    2,974,147    2,1190.28%    3,010,761    1,3240.17%  
Money market accounts   1,482,022    1,9220.51%    1,153,906    1,2540.43%    994,574    3940.16%  
Other time deposits   1,769,243    6,5191.46%    1,669,039    5,7801.37%    1,443,050    3,2030.88%  
Total interest-bearing deposits   9,562,795    12,6700.53%    8,823,381    10,3330.46%    8,353,825    5,6350.27%  
Brokered CD's    193,455    1,0242.10%    178,283    8561.90%    154,521    4891.26%  
Total interest-bearing deposits and CD's   9,756,250    13,6940.56%    9,001,664    11,1890.49%    8,508,346    6,1240.29%  
              
Federal funds purchased and interbank borrowings   312,730    1,9382.46%    238,514    1,1911.98%    172,838    5331.22%  
Securities sold under agreements to repurchase   351,392    6340.72%    352,998    5350.60%    370,095    4000.43%  
Federal Home Loan Bank advances    1,649,304    9,4412.27%    1,624,661    8,8802.17%    1,543,690    6,8711.77%  
Other borrowings    250,926    3,3025.26%    250,255    2,7324.37%    241,695    2,6504.39%  
Total borrowed funds   2,564,352    15,3152.37%    2,466,428    13,3382.15%    2,328,318    10,4541.78%  
              
Total interest-bearing liabilities$  12,320,602 $  29,0090.93% $  11,468,092 $  24,5270.85% $  10,836,664 $  16,5780.61%  
              
Noninterest-Bearing Liabilities             
Demand deposits$  3,864,302    $  3,596,159    $  3,486,412     
Other liabilities   164,771       156,614       159,243     
Shareholders' equity   2,503,835       2,212,700       2,104,646     
              
Total liabilities and shareholders' equity$  18,853,510    $  17,433,565    $  16,586,965     
              
Net interest rate spread  3.37%   3.26%   3.27%  
              
Net interest margin (FTE)  3.64%   3.51%   3.47%  
              
FTE adjustment $  3,049   $  2,753   $  6,139   
              
(1) Interest income is reflected on a fully taxable equivalent basis (FTE).           
(2) Includes loans held for sale.             
              


          
Average Balance Sheet and Interest Rates (unaudited)  
($ in thousands)  
          
          
 Twelve Months Ended Twelve Months Ended  
 December 31, 2018 December 31, 2017  
 AverageIncome (1)/Yield/ AverageIncome (1)/Yield/  
Earning Assets:BalanceExpenseRate BalanceExpenseRate  
Money market and other interest-earning         
investments$  48,240 $  6301.31% $  35,584 $  2580.72%  
Investments:         
Treasury and government-sponsored agencies   673,171    14,4332.14%    578,640    11,4531.98%  
Mortgage-backed securities   1,707,646    41,4932.43%    1,506,677    30,7822.04%  
States and political subdivisions   1,153,315    42,3263.67%    1,134,532    53,3594.70%  
Other securities   490,464    15,6333.19%    450,127    11,8632.64%  
Total investments   4,024,596    113,8852.83%    3,669,976    107,4572.93%  
Loans: (2)         
Commercial   2,924,878    131,4714.49%    2,083,779    85,7474.11%  
Commercial and agriculture real estate   4,536,897    235,8765.20%    3,426,757    171,4835.00%  
Consumer:         
Home equity   513,111    25,0294.88%    483,310    20,0034.14%  
Other consumer loans   1,258,253    46,6603.71%    1,392,221    48,1393.46%  
Subtotal commercial and consumer loans   9,233,139    439,0364.76%    7,386,067    325,3724.41%  
Residential real estate loans   2,195,078    89,8884.09%    2,146,279    85,3403.98%  
          
Total loans   11,428,217    528,9244.63%    9,532,346    410,7124.31%  
          
Total earning assets$  15,501,053 $  643,4394.15% $  13,237,906 $  518,4273.92%  
          
Less: Allowance for loan losses   (52,316)      (50,845)    
          
Non-earning Assets:         
Cash and due from banks$  210,716    $  207,677     
Other assets   2,130,588       1,907,963     
          
Total assets$  17,790,041    $  15,302,701     
          
Interest-Bearing Liabilities:         
Checking and NOW accounts$  3,146,309 $  4,9730.16% $  2,676,760 $  2,2240.08%  
Savings accounts   2,995,484    7,4640.25%    2,964,875    4,9800.17%  
Money market accounts   1,225,220    4,4240.36%    762,540    8310.11%  
Other time deposits   1,654,548    21,0121.27%    1,363,529    10,9070.80%  
Total interest-bearing deposits   9,021,561    37,8730.42%    7,767,704    18,9420.24%  
Brokered CD's    185,426    3,4041.84%    123,548    1,4141.14%  
Total interest-bearing deposits and CD's   9,206,987    41,2770.45%    7,891,252    20,3560.26%  
          
Federal funds purchased and interbank borrowings   238,408    4,7932.01%    187,426    1,9661.05%  
Securities sold under agreements to repurchase   344,964    1,9620.57%    336,539    1,2700.38%  
Federal Home Loan Bank advances    1,665,689    34,9252.10%    1,481,314    24,8181.68%  
Other borrowings    249,832    11,4864.60%    224,793    9,7584.34%  
Total borrowed funds   2,498,893    53,1662.13%    2,230,072    37,8121.70%  
          
Total interest-bearing liabilities$  11,705,880 $  94,4430.81% $  10,121,324 $  58,1680.57%  
          
Noninterest-Bearing Liabilities         
Demand deposits$  3,657,234    $  3,111,672     
Other liabilities   159,600       146,060     
Shareholders' equity   2,267,327       1,923,645     
          
Total liabilities and shareholders' equity$  17,790,041    $  15,302,701     
          
Net interest rate spread  3.34%   3.35%  
          
Net interest margin (FTE)  3.54%   3.48%  
          
FTE adjustment $  11,394   $  23,091   
          
(1) Interest income is reflected on a fully taxable equivalent basis (FTE).        
(2) Includes loans held for sale.         
          


        
Asset Quality (EOP) (unaudited) 
($ in thousands) 
        
 Three Months Ended Twelve Months Ended 
 December 31,September 30,December 31, December 31,December 31, 
  2018  2018  2017   2018  2017  
        
Beginning allowance for loan losses$  52,713 $  53,660 $  50,169  $  50,381 $  49,808  
        
Provision for loan losses   3,390    750    1,037     6,966    3,050  
        
Gross charge-offs   (2,969)   (4,261)   (3,278)    (12,969)   (12,717) 
Gross recoveries   2,327    2,564    2,453     11,083    10,240  
Net (charge-offs) recoveries   (642)   (1,697)   (825)    (1,886)   (2,477) 
        
Ending allowance for loan losses$  55,461 $  52,713 $  50,381  $  55,461 $  50,381  
        
Net charge-offs (recoveries) / average loans (1) 0.02% 0.06% 0.03%  0.02% 0.03% 
        
Average loans outstanding (1)$  11,967,241 $  11,284,531 $  10,509,552  $  11,422,967 $  9,525,888  
        
EOP loans outstanding (1)   12,243,892 $  11,292,659 $  11,118,121  $  12,243,892 $  11,118,121  
        
Allowance for loan losses / EOP loans (1) 0.45% 0.47% 0.45%  0.45% 0.45% 
        
Underperforming Assets:       
Loans 90 Days and over (still accruing)$  1,353 $  980 $  894  $  1,353 $  894  
        
Non-performing loans:       
Nonaccrual loans (2)   157,484    148,816    124,927     157,484    124,927  
Renegotiated loans   17,356    17,547    19,589     17,356    19,589  
Total non-performing loans   174,840    166,363    144,516     174,840    144,516  
        
Foreclosed properties   3,232    3,563    8,810     3,232    8,810  
        
Total underperforming assets$  179,425 $  170,906 $  154,220  $  179,425 $  154,220  
        
Classified and Criticized Assets:       
Nonaccrual loans (2)   157,484    148,816    124,927     157,484    124,927  
Substandard accruing loans   175,948    107,257    100,762     175,948    100,762  
Loans 90 days and over (still accruing)   1,353    980    894     1,353    894  
Total classified loans - "problem loans"$  334,785 $  257,053 $  226,583  $  334,785 $  226,583  
        
Other classified assets   2,820    3,070    4,556     2,820    4,556  
Criticized loans - "special mention loans"   238,752    181,165    188,085     238,752    188,085  
        
Total classified and criticized assets$  576,357 $  441,288 $  419,224  $  576,357 $  419,224  
        
Non-performing loans / EOP loans (1) 1.43% 1.47% 1.30%  1.43% 1.30% 
        
Allowance to non-performing loans (3) 32% 32% 35%  32% 35% 
        
Under-performing assets / EOP loans (1) 1.47% 1.51% 1.39%  1.47% 1.39% 
        
EOP total assets$  19,728,435 $  17,567,759 $  17,518,292  $  19,728,435 $  17,518,292  
        
Under-performing assets / EOP assets 0.91% 0.97% 0.88%  0.91% 0.88% 
        
 EOP - End of period actual balances        
 (1) Excludes loans held for sale.        
 (2) Includes renegotiated loans totaling $26.3 million at December 31, 2018, $29.9 million at September 30, 2018, and $34.0 million  
  at December 31, 2017       
 (3) Includes acquired loans that were recorded at fair value in accordance with ASC 805 at the date of acquisition.  As such, the  
  credit risk was incorporated in the fair value recorded and no allowance for loan losses was recorded on the acquisition date.  
        
        


        
Non-GAAP Measures (unaudited) 
($ in thousands) 
        
 Three Months Ended  Twelve Months Ended  
 December 31,September 30,December 31, December 31,December 31, 
  2018  2018  2017   2018  2017  
        
Actual End of Period Balances       
GAAP shareholders' equity $  2,689,570 $  2,220,680 $  2,154,397  $  2,689,570 $  2,154,397  
        
Deduct:       
Goodwill    1,036,258    828,804    828,051     1,036,258    828,051  
Intangibles    77,016    42,134    53,096     77,016    53,096  
    1,113,274    870,938    881,147     1,113,274    881,147  
        
Tangible shareholders' equity $  1,576,296 $  1,349,742 $  1,273,250  $  1,576,296 $  1,273,250  
        
Average Balances       
GAAP shareholders' equity $  2,503,835 $  2,212,700 $  2,104,646  $  2,267,327 $  1,923,645  
        
Deduct:       
Goodwill    969,403    828,804    776,862     864,079    685,729  
Intangibles    66,927    43,685    37,802     52,209    34,392  
    1,036,330    872,489    814,664     916,288    720,121  
        
Average tangible shareholders' equity $  1,467,505 $  1,340,211 $  1,289,982  $  1,351,039 $  1,203,524  
        
Actual End of Period Balances       
GAAP assets $  19,728,435 $  17,567,759 $  17,518,292  $  19,728,435 $  17,518,292  
        
Add:       
Trust overdrafts   11    118    59     11    59  
        
Deduct:       
Goodwill    1,036,258    828,804    828,051     1,036,258    828,051  
Intangibles    77,016    42,134    53,096     77,016    53,096  
    1,113,274    870,938    881,147     1,113,274    881,147  
        
Tangible assets $  18,615,172 $  16,696,939 $  16,637,204  $  18,615,172 $  16,637,204  
        
Risk-weighted assets$  14,248,562 $  12,715,665 $  12,491,430  $  14,248,562 $  12,491,430  
        
GAAP net income (loss)$  47,498 $  51,348 $  (18,493) $  190,830 $  95,725  
        
Add:       
Amortization of intangibles (net of tax)   3,266    2,593    2,210     11,410    7,697  
        
Tangible net income (loss)$  50,764 $  53,941 $  (16,283) $  202,240 $  103,422  
        
Tangible Ratios       
Return on tangible common equity 12.88% 15.99% -5.12%  12.83% 8.12% 
Return on average tangible common equity 13.84% 16.10% -5.05%  14.97% 8.59% 
Return on tangible assets  1.09% 1.29% -0.39%  1.09% 0.62% 
Tangible common equity to tangible assets  8.47% 8.08% 7.65%  8.47% 7.65% 
Tangible common equity to risk-weighted assets  11.06% 10.61% 10.19%  11.06% 10.19% 
Tangible common book value (1)   9.00    8.86    8.37     9.00    8.37  
        
Tangible common equity presentation includes other comprehensive income as is common in other company releases.  
(1) Tangible common shareholders' equity divided by common shares issued and outstanding at period-end.  
        
Tier 1 capital$  1,617,936 $  1,409,775 $  1,298,327  $  1,617,936 $  1,298,327  
        
Deduct:       
Tier 1 capital adjustments   -     -     (10,000)    -     (10,000) 
    -     -     (10,000)    -     (10,000) 
        
Tier 1 common equity $  1,617,936 $  1,409,775 $  1,308,327  $  1,617,936 $  1,308,327  
        
Risk-weighted assets   14,248,562    12,715,665    12,491,430     14,248,562    12,491,430  
        
Tier 1 common equity to risk-weighted assets  11.36% 11.09% 10.47%  11.36% 10.47% 
        
        

Media: Kathy A. Schoettlin (812) 465-7269
Investors: Lynell J. Walton (812) 464-1366

Old National Bancorp Logo

Source: Old National Bancorp


Register |  Password |  Feedback |  Copyright |  Usage Agreement |  Privacy Policy |  Advertising |  About Us |  Contact Us |  FAQ 

Past performance is not indicative of future results

StockSelector.com, the StockSelector.com logo, and News Selects are trademarks of StockSelector.com.
Copyright © 1998 - 2020 StockSelector.com. All rights reserved.