Old National Bancorp · NASDAQ:ONB
Old National Bancorp — Investor Presentation (May 2023)
42 slides from Old National Bancorp's investor presentation, May 9, 2023
Slide 1: Investment Thesis
Investment Thesis Financial Data as of March 31, 2023 Dated: May 2023 Exhibit 99.1
Slide 2: Executive Summary
2 Executive Summary Slides 5 — 14
Slide 3: Forward-Looking Statements
3 Forward-Looking Statements These materials contain 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 conta
Slide 4: Non-GAAP Financial Measures
4 Non-GAAP Financial Measures The 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 ar
Slide 5: The Best of Offense and Defense
5 The Best of Offense and Defense Financial data as of or for the quarter ended March 31, 2023, except as noted 1 Non-GAAP financial measure that management believes is useful in evaluating the financial results of the Company - see Appendix for Non-GAAP reconciliation 2 Includes the estimate of Old
Slide 6: Commitment to Excellence
| Commitment to Excellence Bloomberg Gender-Equality Index AMAITMENT. ® INVESTORS SERVICE Chwatds ae owe NATIONAL ORGANIZATION ON LEADING H BEST PLACE TO WORK FOR [Xj D =| DISABILITY INCLUSION Fy DISABILITY are 100% DISABILITY EQUALITY INDEX = OLD NATIONAL BANCORP 6
Slide 7: Snapshot of Old National
7 HELOC 3% CRE Non- Owner Occupied 30% CRE Owner Occupied 10% C&I 31% Residential Real Estate 21% Other Consumer 5% Snapshot of Old National $ in millions, except as noted 1 Market data as of 05/08/2023 2 Non-GAAP financial measures that management believes is useful in evaluating the financial resu
Slide 8: Accomplished an Exceptional Transformation
8 Accomplished an Exceptional Transformation $9 $12 $33 2016 2019 2023E $11 $15 $35 2016 2019 2023E $202 $326 $861 2016 2019 2023E $0.95 $1.45 $2.05 2016 2019 2023E 1.71% 1.88% 2.07% 2016 2019 2023E 12% 16% 19% 2016 2019 2023E Loans ($ in billions) Deposits ($ in billions) Adj. PPNR2 ($ in millions)
Slide 9: ONB - A Premier Midwest Banking Franchise
9 7th Largest wealth management platform among banks <$100 billion in assets2 6th Largest commercial bank headquartered in the Midwest by assets1 Top 35 Largest commercial bank in the country by assets3 7th Largest wealth management platform among banks <$100 billion in assets2 6th Largest commercia
Slide 10: Stable Deposit Base
10 Stable Deposit Base Key Performance Drivers • Deposits stable including normal seasonal patterns in public funds • Spot rate of 1.26% on IB deposits at March 31, 2023 • Peer leading deposit franchise • Total cost of deposits of 72 bps • Noninterest-bearing deposits represent 32% of core deposits
Slide 11: Core Deposit Tenure
11 Core Deposit Tenure 25% 25%20% 30% <5 years 5-15 years 15-25 years >25 years 75% >5 years Granular, Long-Tenured Deposit Base Deposit Highlights • Uninsured deposits2 ~30% of total deposits • Granular low-cost core deposit franchise • Top 20 deposit clients represents only 4.8% of total deposits;
Slide 12: Ample Funding & Liquidity
12 Ample Funding & Liquidity Funding & Liquidity Highlights • Ample liquidity sources of $15.7 billion, covering ~150% of uninsured deposits4 • $10.3 billion of immediate liquidity sources includes cash and cash equivalents, FHLB, BTFP and Fed discount window • $5.4 billion of estimated funding capa
Slide 13: Granular & Diversified Loan Portfolio
13 Granular & Diversified Loan Portfolio1 As of March 31, 2023 1 Includes loans held for sale 2 Based on review of top 80% of CRE non-owner occupied office portfolio. CBD - Central business district MSP - Minneapolis & St. Paul Home Equity 3% CRE Non- Owner Occupied 30% CRE Owner Occupied 10% C&I 31
Slide 14: Outlook
14 Outlook Category Outlook Loans • Loan growth consistent with our pipelines in the mid single digit range for the remainder of FY2023 Net Interest Income / Net Interest Margin • Net interest income expected to be 9-12% higher than FY2022; margin will continue to be under pressure and dependent upo
Slide 15: Financial Details
Financial Details Financial Data as of March 31, 2023
Slide 16: First-Quarter 2023 Highlights
16 First-Quarter 2023 Highlights EPS / Net Income $0.49 / $143 million Total Cost of Deposits / Total Deposit Beta 72 bps / 15% Adj. EPS1 / Net Income $0.54 / $159 million Uninsured Coverage Ratio2 ~150% Adj. Return on Avg. Assets / TCE1 1.39% / 23.4% Adj. Efficiency Ratio1 48.8% 1 Non-GAAP financia
Slide 17: First-Quarter 2023 Results
17 First-Quarter 2023 Results $ in millions, except per-share data 1 Impacted by the merger with First Midwest Bancorp, Inc. during mid-1Q22 2 Non-GAAP financial measures that management believes is useful in evaluating the financial results of the Company - see Appendix for Non- GAAP reconciliation
Slide 18: Liquid, Well-Capitalized Balance Sheet
18 Liquid, Well-Capitalized Balance Sheet $ in millions 1 Impacted by the merger with First Midwest Bancorp, Inc. during mid-1Q22 2 Includes loans held-for-sale AOCI - accumulated other comprehensive income CET1 - common equity Tier 1 RWA - risk-weighted assets 1Q23 4Q22 1Q221 1Q23 vs. End of Period
Slide 19: Total Loans and Earning Assets
19 $28,336 $29,554 $30,529 $31,124 $31,822 1Q22 2Q22 3Q22 4Q22 1Q23 Total Loans and Earning Assets Earning Asset Mix Consumer 6% Residential 16% Commercial 53% Cash / Securities 25% $ in millions 1 Includes consumer and residential real estate loans 2 Available for sale effective duration including
Slide 20: Commercial Loan Production & Pipeline
20 Commercial Loan Production & Pipeline $ in millions Retail 5% Warehouse/ Industrial 14% Other 6% Multifamily 19% Office 2% Production & Pipeline Highlights • $1.8 billion total production • $1.3 billion on balance sheet • $5.4 billion total pipeline CRE - Non-OO $835 CRE - OO $137 Business Bankin
Slide 21: Credit Continues to be Strong
21 Credit Continues to be Strong Key Performance Drivers • Stable net charge-offs of 5 bps excluding 16 bps impact of PCD loans; continues to trend better than peers 0.81% 0.74% 2019Y 2020Y 2021Y 1Q22 2Q22 3Q22 4Q22 1Q23 0.19% 0.14% 2019Y 2020Y 2021Y 1Q22 2Q22 3Q22 4Q22 1Q23 Non-Performing Loans 30+
Slide 22: Allowance for Credit Losses
22 Allowance for Credit Losses Allowance to Total Loans $103 $303 $310 $328 $336 $333 0.85% 1.07% 1.05% 1.08% 1.08% 1.05% ACL ACL / Total Loans 1/1/2020 1Q22 2Q22 3Q22 4Q22 1Q23 $ in millions 1 Includes reserve for unfunded commitments 2 Excludes loans held for sale 3 Includes the provision for unfu
Slide 23: Net Interest Income & Net Interest Margin
23 Net Interest Income & Net Interest Margin1 $ in millions 1 Fully Taxable Equivalent Basis; Non-GAAP financial measure that management believes is useful in evaluating the financial results of the Company - see Appendix for Non-GAAP reconciliation 2 Excludes PPP loans 3 Includes consumer and resid
Slide 24: Noninterest Income
24 Noninterest Income $ in millions 1 Non-GAAP financial measure that management believes is useful in evaluating the financial results of the Company - see Appendix for Non-GAAP reconciliation 2 Residential mortgage production includes quick home refinance product Adjusted Noninterest Income $65 $8
Slide 25: Noninterest Expense
25 Noninterest Expense Adjusted Noninterest Expense $175 $241 $240 $235 $235 $101 $140 $139 $132 $126 $26 $33 $33 $34 $34$22 $28 $24 $22 $23 $26 $40 $44 $47 $51 Salary & Employee Benefits Occupancy & Equipment Technology/Communication Other 1Q22 2Q22 3Q22 4Q22 1Q23 Key Performance Drivers • 1Q23 adj
Slide 26: Capital
26 Capital CET1 - common equity Tier 1 RWA - risk-weighted assets TCE - tangible common equity HTM - held-to-maturity Capital Ratios 1Q22 2Q22 3Q22 4Q22 1Q23 CET1 capital to RWA 10.04 % 9.90 % 9.88 % 10.03 % 9.98 % Tier 1 capital to RWA 10.79 % 10.63 % 10.58 % 10.71 % 10.64 % Total capital to RWA 12
Slide 27: Appendix
Appendix = OLD NATIONAL BANCORP
Slide 28: Projected Acquisition Accounting Impact
28 Projected Acquisition Accounting Impact $ in millions 1 Projections are updated quarterly, assume no prepayments, and are subject to change 2 Accretion on acquired loans and borrowings Accretion on acquired loans and borrowings • $8 million recognized in 1Q23 • $16 million contractual for remaind
Slide 29: Commitment to Strong Corporate Governance
29 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 be
Slide 30: 2022 Executive Compensation
30 2022 Executive Compensation Short-Term Incentive Plan Performance Measure Weight Corporate EPS 70% ROATCE 15% Merger-Related Cost Savings 15% Long-Term Equity Compensation Performance Measure Weight Performance-based (50% TSR & 50% ROATCE) CEO 60% All other NEO’s 50% Service-based CEO 40% All oth
Slide 31: Board of Directors
31 Board of Directors Director Market Background Barbara A. Boigegrain Chicago, IL Former CEO and General Secretary of Wespath Benefits and Investments Thomas L. Brown Chicago, IL Former Senior Vice President and CFO of RLI Corp. (NYSE), a specialty insurer serving diverse niche property, casualty a
Slide 32: Commitment to Corporate Social Responsibility
32 Commitment to Corporate Social Responsibility Old National’s 2022 Environmental, Social and Governance (“ESG”) Report showcases our commitment to: • Strong corporate governance • Putting our clients at the center of all we do • Investing in our team members • Diversity, equity and inclusion • Str
Slide 33: ESG At A Glance - 2022
ESG At A Glance - 2022 ‘community development loans that supported In Affordable Housing Program (AHP) grants $870, 000 through the Federal Home Loan Bank In Community Reinvestment Act (CRA)-ellgible affordable housing, economic development and community revitallzation/stabilization In CRA-eligible
Slide 34: Non-GAAP Reconciliation
34 Non-GAAP Reconciliation $ in millions, except per share data 1 Tax-effect calculations use management's estimate of the full year FTE tax rates (federal + state) 1Q22 4Q22 1Q23 Net interest income (FTE) $226.6 $396.5 $387.1 Add: Fee income 65.2 165.0 70.7 Total revenue (FTE) $291.8 $561.5 $457.8
Slide 35: Non-GAAP Reconciliation
35 Non-GAAP Reconciliation 1Q22 2Q22 3Q22 4Q22 1Q23 Noninterest expense $215.6 $277.5 $262.4 $282.7 $250.7 Less: Intangible amortization (4.8) (7.2) (7.1) (6.8) (6.2) Noninterest expense, excluding intangible amortization 210.8 270.3 255.3 275.9 244.5 Adjustments: Less: Merger related charges1 (41.3
Slide 36: Non-GAAP Reconciliation
36 Non-GAAP Reconciliation $ in millions 1 Tax-effect calculations use management's estimate of the full year FTE tax rates (federal + state) 2 Certain reclassifications were made to conform to the current presentation 1Q22 2Q22 3Q22 4Q22 1Q23 Net interest income $222.8 $337.5 $376.5 $391.1 $381.5 F
Slide 37: Non-GAAP Reconciliation
37 Non-GAAP Reconciliation $ in millions, except per share data 1 Tax-effect calculations use management's estimate of the full year FTE tax rates (federal + state) 1Q23 GAAP shareholders’ common equity $5,033.7 Less: Goodwill and intangible assets (2,118.9) Tangible shareholder’s common equity $2,9
Slide 38: Non-GAAP Reconciliation
38 Non-GAAP Reconciliation $ in millions, except per share data 2016 2019 Net interest income (FTE) $424.0 $617.2 Add: Fee income 252.8 199.3 Total revenue (FTE) $676.8 $816.5 Less: Noninterest expense 454.1 508.5 PPRN $222.7 $308.0 Adjustments: Debt securities gains $(5.8) $(1.9) Gain on sale of in
Slide 39: Non-GAAP Reconciliation
39 Non-GAAP Reconciliation $ in millions, except per share data 2016 2019 Net interest income (FTE) $424.0 $617.2 Add: Fee income 252.8 199.3 Total revenue (FTE) $676.8 $816.5 Less: Provision for credit losses (0.9) (4.7) Less: Noninterest expense (454.1) (508.5) Income before income taxes $221.8 $3
Slide 40: Non-GAAP Reconciliation
40 Non-GAAP Reconciliation $ in millions, except per share data 2016 2019 Net income applicable to common shares $134.3 $238.2 Add: Intangible amortization (net of tax)1 8.1 12.8 Tangible net income applicable to common shares $142.4 $251.0 Less: Debt securities gains (net of tax)1 $(3.8) $(1.4) Les
Slide 41: Peer Group
41 Peer Group Like-size, publicly-traded financial services companies, serving comparable demographics with comparable services as Old National Bancorp Associated Banc-Corp ASB BOK Financial Corporation BOKF Cadence Bancorporation CADE Comerica Incorporated CMA F.N.B. Corporation FNB First Horizon C
Slide 42: Old National Investor Relations Contact
42 Old National Investor Relations 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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