Old National Bancorp · NASDAQ:ONB
Old National Bancorp — Investor Presentation (February 2016)
51 slides from Old National Bancorp's investor presentation, Feb 9, 2016
Slide 1: Investment Thesis
Investment Thesis Financial Data as of 12-31-15 Dated: February 9, 2016 Exhibit 99.1
Slide 2: Investment Thesis Executive Summary
Investment Thesis Executive Summary Slides 2 to 17 Financial Data as of 12-31-15 Dated: February 9, 2016
Slide 3: Additional Information for Shareholders of Anchor BanCorp Wisconsin Inc.
Additional Information for Shareholders of Anchor BanCorp Wisconsin Inc. Communications in this document do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed merger, Old National Bancorp (“
Slide 4: Forward-Looking Statements
Forward-Looking Statements 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, statements about the expected timing, completion, financial benefits and other effect
Slide 5: 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 6: Snapshot of Old National
Snapshot of Old National Largest financial services bank holding company headquartered in Indiana with financial centers located in Indiana, Kentucky and Michigan 160 financial centers 182 ATMs Focused on community banking with a full suite of product offerings: Retail and small business Wealth mana
Slide 7: A Strategic Framework for Creating Long-Term Shareholder Value
A Strategic Framework for Creating Long-Term Shareholder Value Attractive footprint that offers both leading share in mature markets and room to expand in higher growth markets Consistent financial performance with distinct revenue streams and actions taken to improve efficiency Diverse loan portfol
Slide 8: Commitment to Excellence
Commitment to Excellence ja) ey ” ETHISPHERE scrascon P2015 | ernie & DISTINCTION CERTIFICATION Corporate Engagement AWARD OF Points of Light Institute
Slide 9: Old National's Landscape Map
Old National’s Landscape Map does not include markets for the pending partnership with Anchor BanCorp Wisconsin Inc. which are all located in the state of Wisconsin
Slide 10: Unemployment Rates in Top Growth Markets
Unemployment Rates in Top Growth Markets Unemployment rates have consistently been below the national average
Slide 11: 4Q15 Highlights
4Q15 Highlights Reported net income of $32.0 million, or $.27 per share 9.2% increase in net income and 8.0% increase in EPS Y/Y Continue to grow organic revenue 6.0% annualized organic loan growth ($102.0 million), net of change in covered loans 4.3% increase in total revenues over 4Q14 Improve ope
Slide 12: 2015 vs 2014 Highlights
2015 vs 2014 Highlights Reported net income of $116.7 million, or $1.00 per share 12.6% increase in net income and 5.3% increase in EPS Continue to grow organic revenue 5.1% organic loan growth ($324.1 million), excluding covered, acquired and sold loans 12.3% increase in total revenues (despite $5.
Slide 13: 4Q15 vs. 3Q15 Highlights
4Q15 vs. 3Q15 Highlights Solid fundamentals driven by disciplined execution Organic Loan Growth +6%(annualized) Q/Q TBV +2% Q/Q 1 Non-GAAP financial measure which Management believes is useful in evaluating the financial results of the Company – see Appendix for Non-GAAP reconciliations $ in million
Slide 14: A Look Ahead to 2016
A Look Ahead to 2016 2016 Outlook1 Balance Sheet Loans Mid single digit growth consistent with last half of 2015 Deposits Low single digit growth despite increased competition and pricing discipline Income Statement Core Net Interest Margin Stable assuming no further rate increases Fee-Based Busines
Slide 15: ONB to Partner with ABCW
ONB to Partner with ABCW Anchor BanCorp includes 46 branches, $1.6 billion in loans, $1.8 billion in deposits and $367 million in common shareholders’ equity as of December 31, 2015 Top 5 market presence in Madison, WI – One of the most attractive markets in the Midwest $461 million in total conside
Slide 16: Compelling Financial Returns / Strategic Fit
Compelling Financial Returns Strategic Fit Financial data as of September 30, 2015, per SNL Financial and Company documents — assumes merger and acquisition charges to be booked 50% prior to close, 50% in the remainder of 2016 Well-Positioned for Successful Execution Anchor’s team has successfully e
Slide 17: Why Wisconsin?
Why Wisconsin? Cultural similarities to newly entered growth markets Comparable competitive dynamics and client opportunities Wisconsin’s forecasted job picture has improved dramatically to No. 21 this year.1 Ranked #1 in the East North Central Region by Site Selection for top Workforce Development
Slide 18: Investment Thesis
Investment Thesis Financial Data as of 12-31-15 Dated: February 9, 2016
Slide 19: Loan Production
Loan Production CAGR of 16.7% Loan Production includes 50% credit for line of credit unfunded commitments $ in millions
Slide 20: Loan Growth
Loan Growth $ in millions – End of Period 1 Includes Loans Held for Sale and Covered Loans 1 1 Annualized Organic Loan Growth of 6.0% 1 1 Organic Loan Growth of 5.1% 3Q15 vs. 4Q15 2014 vs. 2015
Slide 21: Commercial & Commercial Real Estate Loans
Commercial & Commercial Real Estate Loans $ in millions 1New Quarterly Production includes 50% credit for line of credit unfunded commitments 2Yield is based on funded balances only New Quarterly Production1 Production Yield 2 Average loan size of 4Q15 production is less than $440,000 Loan Pipeline
Slide 22: Loan Production & Yield Trends
Loan Production & Yield Trends $ in millions New quarterly production includes unfunded commitments – Yield is based on funded balances only Residential Mortgage Consumer Direct Consumer Indirect
Slide 23: Auto Loan Portfolio
Auto Loan Portfolio $ in millions Total portfolio average original loan term of 66 months and weighted average FICO score of 767 Total Portfolio yield of 3.37% 30+ Days Delinquency at 12/31/2015 is 0.45% Loans originated within the ONB footprint
Slide 24: Loan Concentrations
Loan Concentrations As of December 31, 2015 Commercial Commercial Real Estate Diversified Commercial Loan Portfolio
Slide 25: Credit Quality
Credit Quality Special Mention Loans $199.3 $141.2 $1343 4ai4 31s 4015 Substandard Accruing Loans $110.0 $114.2 $140.9 $140.7 $80.0 4ai4 301s 4Q15 4at4 3016 Substandard Nonaccruing + Doubtful Loans $132.4
Slide 26: Net Charge-Offs / Provision
Net Charge-Offs / Provision $ in millions YTD net recoveries of $1.5 million & YTD provision expense of $2.9 million
Slide 27: ALLL and Remaining Purchase Discount Summary
ALLL and Remaining Purchase Discount Summary $ in millions 1 Non-GAAP financial measure which Management believes useful to demonstrate that the remaining discount considers credit risk and should be included as part of total coverage N/A = not applicable
Slide 28: Conservative Lending Limits/Risk Grades
Conservative Lending Limits/Risk Grades Borrower1 Asset Quality Rating (Risk Grades) In-House Lending Limit1 ($ in millions) 0 – Investment Grade $30 1 – Minimal Risk $25 2 – Modest Risk $25 3 – Average Risk $22.5 4 – Monitor $15 5 – Weak Monitor $10 6 – Watch $7.5 7 – Criticized (Special Mention) $
Slide 29: Investment Portfolio Purchases 4Q15
Investment Portfolio Purchases 4Q151 1 Data as of December 31, 2015 Q4 2015 Purchases- Book Value Treasuries - Agencies 60,999,497 Pools - CMOs 36,198,906 Municipals 35,329,457 Corporates 12,490,602 ABS - Equity - Total 145,018,462
Slide 30: Investment Portfolio
Investment Portfolio 1Includes market value for both available-for-sale and held-to-maturity securities
Slide 31: Net Interest Margin
Net Interest Margin1 1 Fully taxable equivalent basis, non-GAAP financial measure which Management believes is useful in evaluating the financial results of the Company – see Appendix for Non-GAAP reconciliation 2 ONB Core includes contractual interest income of recent acquisitions 2 4Q15 core margi
Slide 32: Acquired Loans
Acquired Loans $ in millions – as of December 31, 2015 1 1$10 million is considered nonaccrual PCI = Purchased Credit Impaired
Slide 33: Projected Purchase Accounting Impact
Projected Purchase Accounting Impact Actual Accretion Projected Accretion1 Actual Discount Projected Discount1 $ in millions 1 Updated quarterly – subject to change IA = Indemnification Asset Manageable declines in purchase accounting impact expected in future periods Actual IA Amortization Projecte
Slide 34: Modeled Interest Rate Sensitivity (One Year)
$ in thousands Change to Net Interest Income based on a one year time horizon Refer to slide 36 for rate curves Total non-maturity, interest-bearing accounts increase from 0.06% to 0.30% in the “Up 100 bps” scenario 22% of total non-interest bearing DDA are considered rate sensitive 41% of C&I and C
Slide 35: Modeled Interest Rate Sensitivity (Two Year)
$ in thousands Change to Net Interest Income based on a two year time horizon Refer to slide 36 for rate curves Modeled Interest Rate Sensitivity
Slide 36: Interest Rate Curves
Interest Rate Curves Up 100 vs. Base 1M 2M 3M 4M 5M 6M 9M 1Y 15Y 2¥ 25Y 3Y 4Y SY 7.5Y 10Y 15Y 20Y 30Y —base ——up100 Forward Curves 3.0% 25% ™ a — 15% 1.0% 0.5% 0.0% 1M 2M 3M 4M 5M 6M 9M ly 15Y 2¥ 25Y 3Y 4Y SY 7.SY 1OY 15Y 20Y 30Y 12/31/2015 12/31/2016 12/31/2017
Slide 37: Tangible Common Equity
Tangible Common Equity1 306,000 shares of stock repurchased at an average price of $13.97 during 4Q15 $ and shares in millions 1 Non-GAAP financial measure which Management believes is useful in evaluating the financial results of the Company – see Appendix for Non-GAAP reconciliation Shares TBV/Sha
Slide 38: Total Revenue
$ in millions Total Revenue The Durbin Amendment to the Dodd-Frank Act became effective for Old National beginning July 1, 2015, reducing 3Q15 and 4Q15 interchange income by a combined $5.4 million
Slide 39: Fee-Based Business Revenue – Quarterly
Fee-Based Business Revenue – Quarterly $ in millions
Slide 40: Fee-Based Business Revenue – Annual
Fee-Based Business Revenue – Annual $ in millions Annual production $313.2 $608.6
Slide 41: Noninterest Expense
$ in millions 1Operational expenses = total noninterest expense less merger/integration costs, efficiency program charges and litigation reserve – includes ongoing operating costs associated with recent acquisitions FTE reduction of 286 (10%) from 4Q14 Branch reduction of 35 (18%) from 4Q14 Full-yea
Slide 42: Company history and acquisitions timeline
Returned to community bank model 2004 2005 Sold non-strategic market – Clarksville, TN – 5 branches 2006 Sold non-strategic market – O’Fallon, IL – 1 branch 2007 2008 2009 2010 2011 2012 2013 Acquired St. Joseph Capital – Entry into Northern IN market February, 2007 Acquired 65 Charter One branches
Slide 43: Commitment to Strong Corporate Governance
Position or Salary Target Ownership Guidelines Chief Executive Officer 5X salary in stock or 200,000 shares Chief Operating Officer 4X salary in stock or 100,000 shares Salary equal to or greater than $250,000 3X salary in stock or 50,000 shares Salary below $250,000 2X salary in stock or 25,000 sha
Slide 44: Executive Compensation
Executive Compensation Short Term Incentive Plan (CEO, CFO, CBO, CCO, Chief Legal Counsel) Performance Measure Weight Corporate Net Income 60% Net Charge-Offs 15% Efficiency Ratio 25% Tied to long term shareholder value: Long Term Incentive Plan (CFO,CBA, CCO, Chief Legal Counsel) Performance Measur
Slide 45: Appendix
Appendix Ml OLD NATIONAL BANCORP
Slide 46: Non-GAAP Reconciliations
Non-GAAP Reconciliations $ in millions
Slide 47: Non-GAAP Reconciliations
Non-GAAP Reconciliations $ in millions
Slide 48: GAAP Reconciliations
GAAP Reconciliations 4014 3Q15 4Q15 \Net Interest Income ($ in 000's) $90,043) $97,104) $85,922| Taxable Equi Adjustment 4,324) 4,965) 5,163} Taxable Equivalent $94,367) $102,069} $91,085} Assets $9,858,522] $10,364,691] $10,414,823} \Net Interest Margin 3.65% 3.75%) 3.30%) Net Interest Margin - Ful
Slide 49: Non-GAAP Reconciliations: Deal Price to ABCW Tangible Book Value
Non-GAAP Reconciliations $ in millions Deal Price to ABCW Tangible Book Value 9/30/2015 Total Shareholders' Equity $359.9 Deduct: Goodwill and Intangibles Assets - Tangible Common Shareholders' Equity $359.9 Deal Value $461.3 Price to Tangible Book Value 128.2%
Slide 50: Old National's Peer Group
Old National’s Peer Group Like-size, publicly-traded financial services companies, generally in the Midwest, serving comparable demographics with comparable services as ONB Associated Banc-Corporation ASB IberiaBank Corporation IBKC BancFirst Corporation BANF MB Financial Inc. MBFI BancorpSouth, Inc
Slide 51: 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
OLD National Bancorp — Investor Presentation (February 2016) on 6ix