Old National Bancorp · NASDAQ:ONB
Old National Bancorp — Investor Presentation (December 2010)
31 slides from Old National Bancorp's investor presentation, Dec 3, 2010
Slide 1: Investment Thesis
Investment Thesis Financial Data as of 9-30-2010 NYSE: ONB Old National Bancorp
Slide 2: Additional Information for Shareholders
Additional Information for Shareholders In connection with the proposed merger, Old National Bancorp has filed with the Securities and Exchange Commission a Registration Statement on Form S-4 that will include a Proxy Statement of Monroe Bancorp and a Prospectus of Old National, as well as other rel
Slide 3: Forward-Looking Statement
Forward-Looking Statement This presentation 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's financial condition, results of operations, asset and c
Slide 4: Non-GAAP Financial Measures
Non-GAAP Financial Measures These slides contain non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of the registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adj
Slide 5: The Old National Distinction
The Old National Distinction Through execution of a sound strategy, ONB is well positioned for the future Improve the risk profile Consistent application of conservative underwriting standards has lead to strong loan quality relative to peers 3Q10 NPL's/Loans of 1.89% vs. 3Q10 peer average of 2.99%
Slide 6: Corporate Summary
Corporate Summary MARKET STATISTICS AND SUMMARY OVERVIEW ($ in millions) MARKET STATISTICS AND SUMMARY OVERVIEW ($ in millions) MARKET STATISTICS AND SUMMARY OVERVIEW ($ in millions) MARKET STATISTICS AND SUMMARY OVERVIEW ($ in millions) MARKET STATISTICS AND SUMMARY OVERVIEW ($ in millions) MARKET
Slide 7: The Old National Footprint
The Old National Footprint The Old National Footprint ONB Headquarters
Slide 8: Local Unemployment
Local Unemployment Local Unemployment 50.9% / 7.8% 2.2% / 9.7% 3.2% / 10.9% 0% / 10.1% 43.6% / 8.8% ..1% / 9.3% % of ONB's Indiana deposits* / Regional unemployment Unemployment data provided by Indiana Department of Workforce Development and Bureau of Labor Statistics October 2010 Unemployment: Ind
Slide 9: Asset/Liability Composition
Asset/Liability Composition Investments Commercial Loans Commercial Real Estate Loans Consumer Loans* Residential Real Estate Other Asset 0.3749 0.18253 0.13689 0.14116 0.05432 0.1102 NOW & Savings Demand Deposits Money Markets Other Time Borrowings Brokered CDs Other Liability 0.334 0.192 0.052 0.2
Slide 10: Loan Concentrations
Loan Concentrations At September 30, 2010 Commercial Commercial Real Estate
Slide 11: Conservative Lending Limits
Conservative Lending Limits Borrower* Asset Quality Rating In-House Lending Limit* ($ in millions) 0 $25 1, 2, or 3 $20 4 $15 5 $10 6 (Watch) $7.5 7 (Special Mention) $5 In-house lending limits conservative relative to legal lending limit ONB's legal lending limit at 9-30-2010 = $91.7 million per bo
Slide 12: Proactive Risk Management
Proactive Risk Management No subprime business line Conservative stance on commercial real estate Starting mid-year 2006 Reduction in higher-risk residential loans Sold $405.6 million in 2004 Sale of credit card portfolio June 2000 Minimal construction and land loan exposure 3Q10 at 3.10% vs. 3Q10 p
Slide 13: Credit Metrics
Credit Metrics 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Problem Loans 0.0371 0.0378 0.0432 0.0461 0.0433 0.0409 0.0432 0.0423 0.0461 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Criticized Loans 0.0244 0.0262 0.0187 0.0243 0.0234 0.027 0.0282 0.027 0.0203 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
Slide 14: Credit Metrics
Credit Metrics 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 As a % of end of period total loans 0.0066 0.0084 0.0073 0.0082 0.0094 0.0089 0.0055 0.0076 0.0076 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 As a % of end of period total loans 0.0007 0.0006 0.0015 0.0011 0.001 0.0021 0.0026 0.0019 0.001
Slide 15: Investment Portfolio
Investment Portfolio ($ in millions) Book Value June 30, 2010 Book Value Sept. 30, 2010 Market Value* June 30, 2010 Market Value* Sept. 30, 2010 Market Value $ Change Federal National Mortgage Association $790.3 $676.4 Federal Home Loan Mortgage Corporation 141.9 195.5 Federal Home Loan Bank 183.6 8
Slide 16: Municipal Bond Portfolio by State
Municipal Bond Portfolio by State IN TX PA KY MO All Other 0.352 0.077 0.076 0.056 0.066 0.373 Based on book value at 9-30-2010
Slide 17: Monthly Net Interest Margin
Monthly Net Interest Margin* 10/1/2009 11/1/2009 12/1/2009 1/1/2010 2/1/2010 3/1/2010 4/1/2010 5/1/2010 6/1/2010 7/1/2010 8/1/2010 9/1/2010 ONB 0.0328 0.0323 0.0333 0.0339 0.0327 0.0333 0.0341 0.0343 0.0336 0.0344 0.0342 0.0341 *Fully taxable-equivalent basis 1Q10 = 3.33% 2Q10 = 3.40% 3Q10 = 3.42%
Slide 18: Focus on Capital Management
Focus on Capital Management Common stock offering completed September, 2009 Issued 20.7 million shares, including over-allotment Net proceeds of $196 million Significantly improved capital ratios - at 9-30-2010 Tangible common equity to 9.58% Tier 1 to 15.4% Total risk-based capital to 17.3% Allows
Slide 19: Tangible Common Equity
3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 ONB 0.0606 0.0581 0.0523 0.0551 0.0853 0.0825 0.0862 0.0903 0.0958 Peer Group Average 0.0679 0.0668 0.0672 0.0694 0.0715 0.0715 0.0782 0.079 0.0799 The Company's calculation of tangible common equity includes other comprehensive income. See Appendix for N
Slide 20: M&A Strategy
M&A Strategy Branch acquisition FDIC assisted transaction Whole bank purchase Must enhance Old National's mission of being a true "community bank" Must align both strategically and culturally Must meet/exceed financial targets Must pass rigorous due diligence process
Slide 21: M&A Strategy
M&A Strategy Focus on community banking, client relationships and consistent quality earnings Target geographic markets Mid-sized markets within or near existing franchise with average to above average growth rates In market community banks where significant cost saves could be achieved
Slide 22: ONB to Acquire Monroe Bancorp
ONB to Acquire Monroe Bancorp Deal announced October 6, 2010 Targeted to close 1-1-2011 $845 million total assets* $790 million total liabilities* $336 million in trust assets* 15 branch locations *At June 30, 2010 Data per SNL Financial and Company Reports
Slide 23: Appendix
APPENDIX
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Total Shareholders' Equity $635.4 $730.9 $631.8 $634.6 $865.4 $843.8 $855.5 $874.7 $895.7 Deduct: Goodwill and Intangible Assets (187.8) (186.8) (205.6) (204.0) (202.4) (200.2) (198.6) (197.1) (195.6) Tangible Shareholders' Equity
Slide 25: The Old National Peer Group
The Old National Peer Group Name Ticker Name Ticker 1st Source Corporation SRCE Heartland Financial USA, Inc. HTLF BancFirst Corporation BANF IBERIABANK Corporation IBKC BancorpSouth, Inc. BXS MB Financial, Inc. MBFI Bank of Hawaii Corporation BOH Park National Corporation PRK Chemical Financial Cor
Slide 26: Minimal Shared National Credits
Minimal Shared National Credits *All but one in ONB footprint of Indiana, Kentucky or Illinois **ONB risk grade scale is 0 (investment grade) to 9 (nonaccrual) ($ in millions) 1Q10 2Q10 3Q10 Count (#)* 12 12 10 Total exposure $134.6 $133.2 $118.2 Dollar outstanding $54.4 $50.8 $38.7 Largest exposure
Slide 27: Other Classified Assets
($ in millions) Book Value June 30, 2010 Market Value June 30, 2010 Book Value Sept. 30, 2010 Market Value Sept. 30, 2010 Corporate Bonds $3.3 $2.5 $3.4 $2.5 Pooled Trust Preferred Securities $28.2 $10.5 $28.1 $8.4 Non-Agency Mortgage Backed Securities $120.8 $96.0 $116.5 $97.8 Totals $152.3 $109.0
Slide 28: Securities with OTTI
Securities with OTTI $ in Thousands *Lowest credit rating provided by any nationally recognized credit rating agency. Vintage Lowest Credit Rating* Book Value at Sept. 30, 2010 OTTI 3Q10 OTTI YTD 2010 OTTI Life to Date BAFC Ser 4 2007 CCC $14,026 $- $79 $142 CWALT Ser 73CB 2005 CCC 6,606 - 207 290 C
Slide 29: Deposit Costs vs. Peer Group
Deposit Costs vs. Peer Group Peer Group data per SNL Financial See Appendix for definition of Peer Group 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 ONB (Including Brokered CDs) 0.0204 0.0183 0.0158 0.0148 0.014 0.0132 0.0123 0.0113 0.0106 Peer Group Average 0.0219 0.0204 0.0174 0.0157 0.0144 0.012
Slide 30: Loan Yields Vs. Peer Group
Loan Yields Vs. Peer Group 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 ONB 0.0611 0.0597 0.0521 0.0514 0.0514 0.0508 0.0507 0.0508 0.0502 Peer Group Average 0.0616 0.0596 0.0548 0.0542 0.0545 0.0546 0.0547 0.0548 0.0544 Peer Group data per SNL Financial See Appendix for definition of Peer Group Div
Slide 31: Investor Contact
Investor Contact Additional information can be found on the Investor Relations web pages at www.oldnational.com Investor Inquiries: Lynell J. Walton, CPA SVP - Director of Investor Relations 812-464-1366 lynell.walton@oldnational.com
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