Old National Bancorp · NASDAQ:ONB
Old National Bancorp — Investor Presentation (August 2014)
50 slides from Old National Bancorp's investor presentation, Aug 18, 2014
Slide 1: Old National Bancorp Investment Thesis
Dated: August 18, 2014 Old National Bancorp Investment Thesis Financial Data as of 6-30-14
Slide 2: Investment Thesis Executive Summary
Investment Thesis Executive Summary Slides 2 to 17 Financial Data as of 6-30-14 Dated: August 18, 2014 Old National Bancorp
Slide 3: Additional Information for Shareholders of Founders Financial Corporation
Additional Information for Shareholders of Founders Financial Corporation This communication does 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 ("Old Nation
Slide 4: Additional Information for Shareholders of LSB Financial Corp.
Additional Information for Shareholders of LSB Financial Corp. This communication does 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 ("Old National") has fi
Slide 5: 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, statements about the expected timing, completion, financial benefits and other effects
Slide 6: 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 7: Snapshot of Old National
Snapshot of Old National Source: SNL Financial, Company filings, FactSet Estimates Note: Market data as of August 12, 2014; financial information as of June 30, 2014. 1 Pro forma for closed UBMI acquisition. Summary Overview Company Description Headquarters Evansville, IN Market Cap (millions) $ 1,5
Slide 8: 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 improving efficiency Diverse loan portfolio with growth accelerating while maintaining strong credit metrics Discipline
Slide 9: Commitment to Excellence
Commitment to Excellence Commitment to Excellence
Slide 10: Our Indiana Footprint
Our Indiana Footprint Economic Vital Signs Economic Vital Signs Strong Stable or Mixed Decline Sources: US Bureau of Labor Statistics, US Dept. of Labor, Stats Indiana, Indiana Association of Realtors, Yahoo Finance, IN Dept. of Revenue
Slide 11: Our Michigan Footprint
Our Michigan Footprint Projected 2019 Median Household Income Ann Arbor, Michigan (MSA Population: 354,530) Highest median household income MSA in Michigan May 2014 unemployment rate of 5.3%, compared to the national rate of 6.3% Listed in Forbes' 2013 "Best Places for Business and Careers" and was
Slide 12: Indiana's Economic Achievements
Indiana's Economic Achievements "AAA" Credit Rating - Fitch, Moody's and Standard and Poor's1 3rd Best U.S. State for Manufacturing Jobs2 6th Best State for Business - CEO Magazine3 280 new manufacturing jobs created - Berry Plastics, Evansville, Indiana4 200 new jobs created - General Electric, Laf
Slide 13: Executing the Plan - 2Q14 Highlights
Executing the Plan - 2Q14 Highlights Continued execution of our M&A strategy of adding higher-growth markets Fort Wayne, IN - Tower acquisition closed and fully converted Ann Arbor, MI - United Bancorp, Inc. acquisition closed July 31, 2014 Lafayette, IN - Announced pending acquisition of LSB Financ
Slide 14: 2Q14 Financials
2Q14 Financials Net income of $18.8 million or $.18 per share Included in 2Q14 are the following items $6.3 million in pre-tax merger and integration charges $10.5 million unfavorable pre-tax change in indemnification asset $.8 million pre-tax in other expense items $1.0 million unfavorable income t
Slide 15: Fee-Based Business Revenue
Fee-Based Business Revenue $ in millions Net of change in FDIC indemnification asset Assets under management as of June 30, 2014 of $6.5 billion 1 1 2 YTD June 30, 2014, Old National's noninterest income1 as a percent of total revenue1 was 36.9%
Slide 16: Net Charge-Offs / Provision
Net Charge-Offs / Provision $ in millions 1 Excludes FDIC-covered loans
Slide 17: Credit Quality - Excluding Covered Loans
$ in millions 1Loans less those acquired through the Tower Financial transaction Credit Quality - Excluding Covered Loans
Slide 18: Old National Bancorp Investment Thesis
Dated: August 18, 2014 Old National Bancorp Investment Thesis Financial Data as of 6-30-14
Slide 19: Strategic Imperatives Scorecard
Strategic Imperatives Scorecard 1 2 3 Executing the Plan 1H2014 Financials
Slide 20: Adjusted Income - Strong Growth
Adjusted Income1 - Strong Growth $ 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 Adjusted income represents income before taxes less accretion income, change in indemnificatio
Slide 21: 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 Monroe, Integra and IN Community loan
Slide 22: Loan Growth - Excluding Covered Loans
Loan Growth - Excluding Covered Loans End of period balances - $ in millions
Slide 23: Commercial Loans
Commercial Loans $ in millions 2007-2008 Average 2.6%
Slide 24: Loan Concentrations - Excluding Covered Loans
Loan Concentrations - Excluding Covered Loans At 6-30-14 Commercial Commercial Real Estate Diversified Commercial Loan Portfolio Diversified Commercial Loan Portfolio (CHART)
Slide 25: Credit Quality - Excluding Covered Loans
Credit Quality - Excluding Covered Loans See Appendix for definition of Peer Group 1As a % of end of period total loans Peer Group data per SNL Financial
Slide 26: 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 27: Conservative Lending Limits/Risk Grades
Conservative Lending Limits/Risk Grades Conservative Lending Limits/Risk Grades In-house lending limits conservative relative to ONB's legal lending limit at 6-30-14 of $120.7 million per borrower 1Includes entire relationship with borrower Borrower1 Asset Quality Rating (Risk Grades) 8 - Classified
Slide 28: Investment Portfolio Purchases 2Q14
Investment Portfolio Purchases 2Q141 1 Data as of June 30, 2014
Slide 29: CD Maturity Schedule
CD Maturity Schedule Represents CD maturities at June 30, 2014
Slide 30: Tangible Common Book Value
Tangible Common Book Value1 Acquisition Of Integra Bank From FDIC 7-29-11 1 Non-GAAP financial measure management believes is useful in evaluating the financial results of the Company - see Appendix for Non-GAAP reconciliation Acquired IN Community Bancorp 9-15-12 Acquired Bank of America Branches 7
Slide 31: Capital Ratios
Capital Ratios See Appendix for definition of Peer Group Peer Group financials as of June 30 2014 or MRQ per SNL Financial $ in millions 1See Appendix for Non-GAAP reconciliation
Slide 32: Interest Rate Curves
Interest Rate Curves Up 200 vs. Base RRR RR AM 2M 3M GM SM GM OM AY 15¥ 2¥ 257 3 4Y BY 75Y 20Y SY 207 30¥ Forward Curves _ TLea AM 2M 3M GM. SM GM OM a ASY 2¥ 25¥ BY ay SY 75 20¥ 45¥ 207 30y RRRRRRLRS shops —/s072015 —spop0%6
Slide 33: Interest Rate Sensitivity
Interest Rate Sensitivity Change in Net Interest Income1 Interest Rate Sensitivity 1 Comparisons from flat rates, which assume stable rates and a stable balance sheet. These scenarios do not take into account changes in customer behavior that could result in changes to mix and/or volumes in the bala
Slide 34: Total Revenue - Increasing Core Revenues
Total Revenue - Increasing Core Revenues $ in millions Growth of $4.5 million, or 4.1%, 2Q13 to 2Q14 in core revenue
Slide 35: 32.9% increase in total assets with 2.0% decrease in FTE
32.9% increase in total assets with a corresponding 2.0% decrease in FTE FTE and Asset Change $ in millions 1,2 3 4
Slide 36: Returned to community bank model
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 branche
Slide 37: M&A Strategy and Process
Represents MSAs with more than 15,000 households in IN,KY,IL, southern MI, Cincinnati and St. Louis. MSA quartile rankings weighted as follows: 25% number of households, 20% median HH income, 10% unemployment, 10% median HH income 5-year growth, 10% population 5-year growth, 10% deposits/branch rati
Slide 38: Old National's Landscape
Shifting to higher-growth markets from lower-growth markets Entry and fill-in of existing higher-growth markets through strategic acquisitions Acquired 200 branches + 9 pending Sale or consolidations in lower-growth, non-core markets Consolidated 128 branches Sold 22 branches 38 Old National's Lands
Slide 39: Completed and Pending Acquisitions
$ in millions N/A equals not applicable (1) Based on end of quarter assets immediately preceding announcement date Completed and Pending Acquisitions
Slide 40: Committed to Strong Corporate Governance
Committed to Strong Corporate Governance Stock ownership guidelines have been established for named executive officers as follows: As of June 30, 2014, each named executive officer has met their stock ownership requirement requirement requirement requirement requirement requirement requirement requi
Slide 41: Executive Compensation
Executive Compensation Tied to long term shareholder value: Long Term Incentive Plan (CFO,CBA, CCO, Chief Legal Counsel) Long Term Incentive Plan (CFO,CBA, CCO, Chief Legal Counsel) Performance Measure Weight Performance-based-TSR 75% Service-based 25% Short Term Incentive Plan (CBA, CCO) Short Term
Slide 42: Old National Bancorp Appendix
Old National Bancorp Appendix
Slide 43: Noninterest Income
Noninterest Income $ in millions
Slide 44: Noninterest Expense
$ in millions Noninterest Expense *Other Expenses include: In 2Q13, $1.3 million impairment on property held for sale, $.6 million for the BSA/AML project, a $.5 million litigation settlement, $.3 million for ATM/branch optimization, $.3 million for debt extinguishment charges, a $2.1 million revers
Slide 45: Non-GAAP Reconciliations
Non-GAAP Reconciliations $ in millions
Slide 46: Non-GAAP Reconciliations
Non-GAAP Reconciliations $ in millions
Slide 47: Non-GAAP Reconciliations
Non-GAAP Reconciliations $ in millions
Slide 48: Non-GAAP Reconciliations
Non-GAAP Reconciliations $ in thousands
Slide 49: ONB's Peer Group
ONB's Peer Group ONB's Peer Group Like-size, publicly-traded financial services companies, generally in the Midwest, serving comparable demographics with comparable services as ONB
Slide 50: 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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