Old National Bancorp · NASDAQ:ONB
Old National Bancorp — Investor Presentation (May 2021)
43 slides from Old National Bancorp's investor presentation, May 5, 2021
Slide 1: Investment Thesis
Investment Thesis FINANCIAL DATA AS OF March 31, 2021 DATED: May 5, 2021 Exhibit 99.1
Slide 2: Executive Summary
Executive Summary Slides 3-16
Slide 3: Forward-Looking Statements
3 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, descriptions of Old National Bancorp’s (“Old National’s”) financial condition, res
Slide 4: Old National at a glance
4 • • • 1 Non-GAAP financial measure which Management believes is useful in evaluating the financial results of the Company – see Appendix for Non-GAAP reconciliation 2 At or for the three-months ended March 31, 2021 Market data as of May 4, 2021 $ in millions, except as noted Headquarters Evansvill
Slide 5: Old National footprint map
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Slide 6: Footprint market loans and deposits
6 Source: S&P Global Market Intelligence, based on MSAs Loans & Deposits in millions Excludes PPP Median Household Income 2021 (000s) Projected Household Income Change 2021-2026 Projected Population Change 2021-2026 Average of ONB Footprint Average of ONB Footprint Average of ONB Footprint $2,442 $1
Slide 7: The Old National Proposition
7 The Old National Proposition Granular & Diversified Loan Portfolio Average Commercial & Industrial loan size ~$259,000 and average Commercial Real Estate loan size ~$853,000; diversified by product type with no significant industry concentrations; primarily to clients within the Old National footp
Slide 8: Growth since 2007
8 Source: S&P Global Market Intelligence $ in millions unless noted otherwise $5,447 $7,279 $17,775 $47 $40 $110 2007 2012 1Q21 $7,846 $9,544 $23,744 $3.15 $3.56 $9.69 2007 2012 1Q21 193 215 725 2007 2012 1Q21 (C&I = 36) (C&I = 40) (C&I = 139) $521 $579 $1,840 $274 $295 $1,023 2007 2012 1Q21 Key mar
Slide 9: Deposit growth versus peers
9 2014Y 2015Y 2016Y 2017Y 2018Y 2019Y 2020Y 1Q21 Noninterest-bearing Interest-bearing $ in billions Peer Group data per S&P Global Market Intelligence - See Appendix for definition of Peer Group As of 3/31/2021 2014Y 2015Y 2016Y 2017Y 2018Y 2019Y 2020Y 1Q21 ONB Peer Median
Slide 10: Loan portfolio composition
10 1,2 $ in billions As of 3/31/2021 1 Includes loans held for sale 2 Excludes PPP Loans 2012Y2013Y2014Y2015Y2016Y2017Y2018Y2019Y2020Y 1Q21 C&I CRE Consumer Covered Loans
Slide 11: CRE concentration and charge-offs versus peers
11 ONB Peer Average Banks $10B - $50B Peer Group data per S&P Global Market Intelligence as of 12/31/2020 - See Appendix for definition of Peer Group 1 Excludes loans held for sale & PPP ; 2 Source: Regulatory Call Report 3 Full Years 2006-2020, includes banks with 15-years of NCO’s 226% 203% 215%CR
Slide 12: In-house lending limits
12 In-house lending limits conservative relative to ONB’s legal lending limit of $301mm per borrower $ in millions 1 Includes entire relationship with borrower Borrower Asset Quality Rating (Risk Grades) In-House Lending Limit1 0 – Investment Grade $75.0 1 – Minimal Risk $65.0 2 – Modest Risk $57.5
Slide 13: Capital and tangible book value
13 Board authorization of up to $100mm in stock to be repurchased, as conditions warrant, through January 31, 2022 1 Non-GAAP financial measure which Management believes is useful in evaluating the financial results of the Company – see Appendix for Non-GAAP reconciliation 1Q20 4Q20 1Q21 Tangible Co
Slide 14: ESG Report commitments
14 Old National’s newly issued Environment, Social and Governance (ESG) Report showcases our commitment to: • • • • • • To view ONB’s ESG Report and Sustainability Accounting Standards Board (SASB) Report, go to oldnational.com/esg
Slide 15: ONB's ESG At A Glance — 2020
u ONB’s ESG At A Glance — 2020 ae Strengthening and Supporting Our Communities in Community Reinvestment Act (CRA)-eligible community development loans that supported affordable housing, economic development and community revitalization/stabilization $306I $1.4 million in Affordable Housing Program
Slide 16: Commitment to Excellence
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Slide 17: Financial Details
Financial Details FINANCIAL DATA AS OF March 31, 2021 DATED: May 5, 2021
Slide 18: First quarter 2021 highlights
18 • End of period commercial loans (excluding PPP) increase +2.6% annualized; $718mm production • End of period total deposits $812.3mm increase + 19% annualized • Allowance for credit losses recapture of $17.4mm net recoveries of $5 thousand • Net interest income (excluding PPP impact) stable excl
Slide 19: Quarterly results and changes
19 Change vs. 1Q21 4Q20 1Q20 annualized growth 3.6% annualized growth 19.1% Net income $86.8 $12.7 $64.2 Earnings per diluted share $0.52 $0.08 $0.39 Adjusted earnings per diluted share1 $0.52 $0.06 $0.27 • Allowance for credit losses decreased $17.4mm • Net recoveries/charge-offs $0mm $ in millions
Slide 20: Adjusted pre-provision net revenue and operating leverage
20 • Adjusted Positive operating leverage continues • 919 bps Y/Y improvement • Adjusted pre-provision net revenue increased 18% YoY • Improvement driven by successful execution of our stated strategy • Strong commercial loan production • Improved fee income • Low-cost core deposit funding • Strong
Slide 21: Loans and earning asset yields
21 4.35% 3.96% 3.81% 3.73% 3.58% Total Loans Earning Asset Mix2 • Commercial production of $718mm • Average new production size ~$1mm • Commercial pipeline at quarter end of $2.6bn • Line utilization decreased 2.3% • - 13 bps loan coupons/mix/volume • - 2 bp accretion income • Commercial and industr
Slide 22: Deposits and funding costs
22 • 1Q21 total deposit costs of 7 bps • Total interest-bearing liabilities costs were 32 bps, down 3 bps from 4Q20 $ in millions Total Deposits Average Balances Period-End Balances
Slide 23: Net interest income and margin
23 3.84% 3.46% 3.16% 3.31% 3.26% 2.94% 0.73% 0.35% 0.32% 1Q20 2Q20 3Q20 4Q20 1Q21 • Net interest income (excluding PPP) decreased $2.9mm • PPP 1% coupon + fees • $10.1mm decrease to NII • 16 bps decrease to NIM • NIM decreased 32 bps vs. 4Q20 • - 9 bps asset yields • - 4 bps # of days • - 4 bps exce
Slide 24: Noninterest income
24 • 1Q21 adjusted noninterest income • $2.8mm decrease in capital markets income • Mortgage activity • 1Q21 production was $518mm • 40% purchase / 60% refi • 66% sold in secondary market • Quarter-end pipeline at $412mm $ in millions 1Non-GAAP financial measure which management believes is useful i
Slide 25: Noninterest expense and efficiency
25 • 1Q21 adjusted noninterest expense • Reduction in incentives, professional fees and provision for unfunded commitments • 1Q21 adjusted efficiency ratio of 54.3% • 506 bps improvement from 1Q20 • 1Q21 charges were $1.5mm $ in millions 1Non-GAAP financial measure which management believes is usefu
Slide 26: Paycheck Protection Program balances
26$ in millions 1 Net of unearned fees 4Q20 Round 1 Forgiveness/Paydowns Round 2 Production 1Q21 Paycheck Protection Program Balances1 • $7.1mm from Round 1 • $22.2mm from Round 2
Slide 27: Asset quality versus peers
27 2015Y 2016Y 2017Y 2018Y 2019Y 2020Y 1Q21 Net Charge-offs / NPL's ONB Peer Avg 2015Y 2016Y 2017Y 2018Y 2019Y 2020Y 1Q21 Net Charge-offs ONB Peer Avg Peer Group data per S&P Global Market Intelligence as of 12/31/2020- See Appendix for definition of Peer Group 1 2020Y excludes Hancock Whitney 1 1 2
Slide 28: Allowance for credit losses
281 Excludes loans held for sale $ in millions Allowance 12/31/2020 Economic Forecast Portfolio Changes Qualitative Factors Allowance 3/31/2021 Allowance for Credit Losses • Commercial Asset Quality Ratings • Consumer Credit Bureau Score • Loan To Value • Portfolio segment • Seasoning 1/1/2020 1Q20
Slide 29: Category outlook
29 Category Outlook Commercial Loans Healthy pipeline heading into 2Q with $623mm in the accepted category; Round 1 PPP runoff continues; Round 2 PPP forgiveness/runoff expected to be concentrated in late 2021 Net Interest Margin Net interest income should remain stable given expected earning asset
Slide 30: Appendix
Appendix = OLD NATIONAL BANCORP’
Slide 31: Projected accretion income and discount
31 $ in millions 1 Projections are updated quarterly, assumes no prepayments and are subject to change 2 Non-GAAP financial measure which management believes is useful in evaluating the financial results of the Company – see Appendix for Non- GAAP reconciliation Manageable declines in purchase accou
Slide 32: Select industry exposures
321 Includes loans held for sale $ in millions Data as of 3/31/2021 Excludes PPP Loans % of Industry Balance Total Loans Exposure CRE - Senior Housing $277 2.2% $298 Restaurants $216 1.7% $235 Arts/Entertainment $145 1.1% $184 Hotels $104 0.8% $106 C&I - Retail $88 0.7% $252 Oil/Gas $55 0.4% $122 To
Slide 33: Interest rate sensitivity and balance sheet positioning
33 Fixed 55% Variable 40% Floating 5% Noninterest- bearing 34% CDs (Maturing/ Repricing ≤ 1-Year) 4% Other Interest- bearing 62% Year 1&2 NII Impact vs Rates Unchanged $25.0 2.3% $(31.9) -3.0% +50 bps Parallel Shock -50 bps Parallel Shock • 45% of loans are variable/floating-rate1 • $400mm of downra
Slide 34: Stock ownership guidelines
34 • Stock ownership guidelines have been established for named executive officers as follows: • As part of Old National’s Proxy filed March 8, 2021, each named executive officer has met their stock ownership requirement Chief Executive Officer 5X salary in stock or 200,000 shares Chief Operating Of
Slide 35: Incentive compensation metrics
35 • Tied to long term shareholder value Corporate EPS 60% ROATCE 20% Efficiency Ratio 20% Proxy 5 Performance-based (50% TSR & 50% ROATCE) 75% Service-based 25% Proxy 5
Slide 36: Board of directors
36 Andrew E. Goebel Evansville, IN 34-year career in the energy industry, most recently serving as President and Chief Operating Officer of Vectren Corporation Jerome F. Henry Jr. Ft. Wayne, IN Owner and President of Midwest Pipe & Steel, Inc., a company he founded in 1972 Daniel S. Hermann Evansvil
Slide 37: Net income and EPS reconciliation
37 $ in millions, except per share data 1Q21 Net Income $86.8 Risk-Weighted Assets $15,524.6 Return on Risk-Weighted Assets 2.24% 1Q20 4Q20 1Q21 As Reported: Net Income $22.6 $74.1 $86.8 Earnings Per Share $0.13 $0.44 $0.52 Adjusted Net Income $42.1 $76.6 $86.4 Adjusted Earnings Per Diluted Share $0
Slide 38: Pre-provision net revenue reconciliation
38 $ in millions 1Q20 2Q20 3Q20 4Q20 1Q21 As Reported: Pre-Provision Net Revenue (PPNR) $45.9 $87.3 $93.5 $80.8 $90.6 Revenue Adjustments: Expense Adjustments: Adjusted Pre-Provision Net Revenue (PPNR) $77.4 $92.1 $94.6 $94.0 $91.3 Accretion Income as a % of Total Revenue 3.3% 2.8% 2.5% 2.4% 2.3% Ac
Slide 39: Efficiency ratio and operating leverage
39$ in millions 1 Year-over-year basis point change in noninterest expense plus change in total revenue 2 Year-over-year basis point change in adjusted noninterest expense plus change in adjusted total revenue 1Q20 4Q20 1Q21 Adjusted Noninterest Expense Less Intangible Amortization $118.2 $125.5 $11
Slide 40: Tangible equity and book value reconciliation
40 $ in millions , except per share data 3Q20 4Q20 1Q21 Net Interest Margin (FTE) 3.03% 3.26% 2.94% 1Q20 2Q20 3Q20 4Q20 1Q21 Adjusted Noninterest Income $52.3 $58.1 $59.8 $58.2 $54.7 1Q20 4Q20 1Q21 Shareholders' Equity As Reported $2,823.4 $2,972.7 $2,979.4 Less: Goodwill and Intangible Assets (1,09
Slide 41: Return on tangible common equity and assets
41 $ in millions 1Q21 18.88% Adjusted Return on Average Tangible Common Equity 18.79% 1Q21 $86.8 (1.5) 1.1 $86.4 $23,243.0 1.49% Adjusted Return on Average Assets 1.49%
Slide 42: Peer group definition
42 Like-size, publicly-traded financial services companies, generally in the Midwest, serving comparable demographics with comparable services as ONB Associated Banc-Corp ASB BancorpSouth Bank BXS Bank OZK OZK Cadence Bancorporation CADE Commerce Bancshares, Inc. CBSH F.N.B. Corporation FNB First Fi
Slide 43: Investor Relations contact
43 Additional information can be found on the Investor Relations web pages at Investor Inquiries:
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