Old National Bancorp · NASDAQ:ONB
Old National Bancorp — Investor Presentation (November 2015)
44 slides from Old National Bancorp's investor presentation, Nov 9, 2015
Slide 1: Investment Thesis
Exhibit 99.1 Investment Thesis Financial Data as of 09-30-15 Dated: November 9, 2015
Slide 2: Investment Thesis: Executive Summary
Investment Thesis Executive Summary Slides 2 to 12 Financial Data as of 09-30-15 Dated: November 9, 2015
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 Bancorp’s (“Old National’s”) financial condition, results
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: Snapshot of Old National
Snapshot of Old National Source: SNL Financial, Company filings, FactSet Estimates Note: Market data as of November 3, 2015; financial information as of September 30, 2015. Summary Overview Company Description $ in millions, except noted Asset Mix Liability Mix 3Q15 Revenue Breakdown • Largest finan
Slide 6: Investment Thesis
Investment Thesis • 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 portfolio with growth accelerating while maint
Slide 7: Awards and certifications
a | iO INSIDE: SEAL OF 4 DISTINCTION CERTIFICATION VolunteerMatch Corporate —EEEEESS Engagement Ei] ETHICAL aa AWARD OF -— a =. Pl eiaaa Eas S Points of Light Institute ____——
Slide 8: We are proud to serve these communities
im OLD NATIONAL | MICHIGAN “fend: Fab Weare proud serve these communities ILLINOIS
Slide 9: Unemployment Rates in Top Growth Markets
Unemployment Rates in Top Growth Markets 5.2 5.0 5.4 4.7 5.1 4.3 5.3 4.6 4.4 5.7 3.8 3.8 4.3 3.6 4.0 3.5 3.9 3.3 3.1 4.9 Unemployment Rate (Not Seasonally Adjusted %) Sep-14 Sep-15 • Unemployment rates have consistently been below the national average
Slide 10: 3Q15 Highlights vs. 2Q15
1 See slide 24 for definition of core net interest margin 2 See slide 33 for definition of operational expenses 3 Non-GAAP financial measure which Management believes is useful in evaluating the financial results of the Company – see Appendix for Non-GAAP reconciliation 3Q15 Highlights vs. 2Q15 Repo
Slide 11: 3Q15 Adjusted Net Income
3Q15 Adjusted Net Income Adjusted Net Income excludes acquisition, divestiture charges & net gain on branch divestitures – see Appendix for Non-GAAP reconciliation 1 Non-GAAP financial measure which Management believes is useful in evaluating the financial results of the Company – see Appendix for N
Slide 12: 3Q15 vs. 2Q15 Adjusted Highlights
3Q15 vs. 2Q15 Adjusted Highlights Adjusted Net Income, Operational Expenses and Adjusted Efficiency Ratio excludes acquisition, divestiture charges & net gain on branch divestitures – see Appendix for Non-GAAP reconciliations 1 Non-GAAP financial measure which Management believes is useful in evalua
Slide 13: Investment Thesis
Investment Thesis Financial Data as of 09-30-15 Dated: November 9, 2015
Slide 14: Total Loan Growth
Total Loan Growth $ in millions – End of Period 1 Includes Loans Held for Sale and Covered Loans and net of branch sales Loan growth predominantly in footprint, not syndicated deals, participations or acquired $6,983.7 $6,866.7 $98.0 ($193.6) ($21.4) June 30, 2015 Sold Loans Change in Covered Loans
Slide 15: Commercial & Commercial Real Estate Loans
Commercial & Commercial Real Estate Loans $ in millions 1 New Quarterly Production includes 50% credit for line of credit unfunded commitments 2 Yield is based on funded balances only $356 $299 $341 $378.0 $373.2 2Q15 3Q15 3.37% 3.40% 2Q15 3Q15 New Quarterly Production Production Yield Average loan
Slide 16: 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 17: Loan Concentrations – Excluding Covered Loans
Loan Concentrations – Excluding Covered Loans As of September 30, 2015 Diversified Commercial Loan Portfolio Commercial Commercial Real Estate Healthcare/Social Services, 8% Public Admin, 9% Manufacturing, 14% Educational Services, 8% Wholesale Trade, 8% Retail, 6% Other, 20% Real Estate Rental & Le
Slide 18: Credit Quality
$ in millions Credit Quality $142.3 $167.8 $140.7 3Q14 2Q15 3Q15 Substandard Nonaccruing + Doubtful Loans $175.8 $173.9 $141.2 3Q14 2Q15 3Q15 Special Mention Loans $102.8 $88.7 $111.2 3Q14 2Q15 3Q15 Substandard Accruing Loans
Slide 19: Net Charge-Offs / Provision
Net Charge-Offs / Provision $ in millions 0.03% 0.06% -0.05% $2.6 $2.3 $0.2 -$1.0 $0.0 $1.0 $2.0 $3.0 -0.1% 0.0% 0.1% 0.2% 0.3% 3Q14 2Q15 3Q15 Net Charge-Offs / Provision NCOs Provision for Loan Losses YTD net recoveries of $0.9 million & YTD provision expense of $2.4 million
Slide 20: Credit Quality – ALLL and Mark Summary
Credit Quality – ALLL and Mark 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 21: Conservative Lending Limits/Risk Grades
Conservative Lending Limits/Risk Grades Borrower 1 Asset Quality Rating (Risk Grades) In-House Lending Limit 1 ($ in millions) 1 Includes entire relationship with borrower Borrower 1 Asset Quality Rating (Risk Grades) 0 – Investment Grade $30 1 – Minimal Risk $25 2 – Modest Risk $25 3 – Average Risk
Slide 22: Investment Portfolio Purchases
Investment Portfolio Purchases 3Q15 1 1 Data as of September 30, 2015 0.00 2.00 4.00 6.00 8.00 10.00 12.00 Total ABS Corporates Municipals CMOs Pools Agencies Treasuries 4.04 0.00 5.11 9.71 3.07 5.13 3.29 0.00 Duration of Purchases 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% Total ABS Corporates Municipals
Slide 23: Investment Portfolio
Investment Portfolio 1 Includes market value for both available-for-sale and held-to-maturity securities $ in millions Book Value Jun 30, 2015 Book Value Sep 30, 2015 Market Value1 Jun 30, 2015 Market Value 1 Sep 30, 2015 Market Value $ Change Federal National Mortgage Association $412.6 $340.8 $414
Slide 24: Net Interest Margin
Net Interest Margin 1 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 Monroe, Integra, IN Community, Tower
Slide 25: Acquired Loans
Acquired Loans $ in millions – as of September 30, 2015 $14 million is considered nonaccrual PCI = Purchased Credit Impaired
Slide 26: Projected Purchase Accounting Impact
Projected Purchase Accounting Impact $ in millions 1 Projections assume no prepayments – updated quarterly – subject to change IA = Indemnification Asset $36.9 $57.5 $59.0 $86.6 $56.7 $29.5 $20.4 $(0.4) $3.4 $9.3 $43.2 $10.8 $0.7 $0.4 Projected Accretion Income Actual Accretion Projected Accretion A
Slide 27: Modeled Interest Rate Sensitivity (One Year)
$ in thousands Change to Net Interest Income based on a one year time horizon Refer to slide 29 for rate curves Modeled Interest Rate Sensitivity 22.2% of total non-interest bearing DDA are considered rate sensitive 41% of C&I and CRE loans reprice within one year 16% of loans have floors; less than
Slide 28: Modeled Interest Rate Sensitivity (Two Year)
$ in thousands Change to Net Interest Income based on a two year time horizon Refer to slide 29 for rate curves Modeled Interest Rate Sensitivity
Slide 29: Forward Curves: Up vs. Base
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 up 100 Forward Curves 3.0% 25% 2.0% 15% 1.0% 0.5% 0.0% 1M 2M 3M 4M 5M 6M 9M ly 15Y 2v 25Y 3Y 4Y SY 7.SY 1oY 15Y 20Y 30Y 9/30/2015 9/30/2016 9/30/2017
Slide 30: Tangible Common Equity
$ and shares in millions Tangible Common Equity 694,000 shares of stock repurchased at an average price of $13.89 during 3Q15 306,000 shares remain available for repurchase under the current authorization
Slide 31: Total Revenue
$ in millions Total Revenue $108.4 $92.1 $97.1 The Durbin Amendment to the Dodd-Frank Act became effective for Old National beginning July 1, 2015, reducing 3Q15 interchange income by $2.7 million $34.4 $55.0 $44.3 $15.4 $142.8 $147.1 $156.8 3Q14 2Q15 3Q15 Fees, Service Charges, Security Gains & Oth
Slide 32: Fee-Based Business Revenue
Fee-Based Business Revenue $ in millions $10.1 $0.1 Contingency Revenues $9.4 $8.3 2Q15 3Q15 Wealth Management $10.2 $9.9 2Q15 3Q15 Insurance $4.7 $4.4 2Q15 3Q15 Investments $4.3 $3.2 2Q15 3Q15 Mortgage Banking
Slide 33: Noninterest Expense
$ in millions 1 Operational expenses = total noninterest expense less merger/integration costs and efficiency program charges – includes ongoing operating costs associated with recent acquisitions 2 Non-GAAP financial measure which Management believes is useful in evaluating the financial results of
Slide 34: Transforming Old National's Landscape
Acquired St. Joseph Capital – Entry into Northern IN market February, 2007 Acquired 65 Charter One branches throughout Indiana March, 2009 Acquired Monroe Bancorp – Enhanced Bloomington, IN presence January, 2011 Acquired Indiana Community – Entry into Columbus, IN September, 2012 FDIC-assisted acqu
Slide 35: Committed to Strong Corporate Governance
Committed to Strong Corporate Governance • Stock ownership guidelines have been established for named executive officers as follows: • As of September 30, 2015, each named executive officer has met their stock ownership requirement
Slide 36: Executive Compensation
Executive Compensation • Tied to long term shareholder value:
Slide 37: Old National Bancorp
MM OLD NATIONAL BANCORP’ ASDA: O88 idence
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations $ in millions end of period balances 3Q14 2Q15 3Q15 Total Shareholders’ Equity $1,407.2 $1,456.7 $1,476.0 Deduct: Goodwill and Intangible Assets (530.5) (629.5) (622.8) Tangible Common Shareholders’ Equity $876.7 $827.3 $853.2 Total Assets $11,179.8 $12,075.8 $11,915.2 Add:
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations $ in millions 3Q14 2Q15 3Q15 end of period balances 3Q14 2Q15 3Q15 end of period balances 3Q14 4Q14 1Q15 2Q15 3Q15 Pre-Tax Income (FTE Basis) $44.7 $39.9 $59.0 Acquisition/Divestiture Charges & Gain on Branch Sales $3.6 $5.5 ($13.4) Adjusted Pre-tax income $48.3 $45.4 $45.6
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations 3Q14 2Q15 3Q15 3Q14 2Q15 3Q15 Net Interest Income ($ in 000's) $108,367 $92,097 $97,104 Taxable Equivalent Adjustment 4,488 4,757 4,965 Net Interest Income – Taxable Equivalent $112,855 $96,854 $102,069 Average Earning Assets $9,444,853 $10,325,938 $10,364,691 Net Interest M
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations Efficiency Ratio - As Reported 3Q15 Efficiency Ratio Excluding Acquisition, Divestiture Charges & Net Gain on Branch Divestitures 3Q15 Net Interest Income (FTE) ($ in millions) $102.1 Noninterest Income 59.7 Less Security Gains 0.9 Revenue Less Security Gains 160.9 Nonintere
Slide 42: Non-GAAP Reconciliations
Non-GAAP Reconciliations $ in millions 3Q15 3Q15 Net Income $37.7 Acquisition/Divestiture Charges & Gain on Branch Sales (after tax) ($8.3) Adjusted Net Income $29.4 Average Assets $11,927.8 Adjusted ROA 0.99% Net Income $37.7 Acquisition/Divestiture Charges & Gain on Branch Sales (after tax) ($8.3)
Slide 43: 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 44: 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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