Old National Bancorp · NASDAQ:ONB
Old National Bancorp — Investor Presentation (February 2013)
51 slides from Old National Bancorp's investor presentation, Feb 7, 2013
Slide 1: Old National Bancorp Investment Thesis
Old National Bancorp Investment Thesis Financial Data as of 12-31-12 Dated: February 7, 2013
Slide 2: Executive Summary
Old National Bancorp Investment Thesis Executive Summary Slides 2 to 10 Financial Data as of 12-31-12 Dated: February 7, 2013
Slide 3: Disclosures
Disclosures Forward-Looking Statement This Investment Thesis 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's financial condition, results of operat
Slide 4: Why Old National Bancorp?
Why Old National Bancorp? Focused on driving core net income Conservative and consistently applied credit stance since before current cycle has led to strong credit quality No subprime business Lending to clients we know in our footprint Transforming footprint to higher-growth markets Commitment to
Slide 5: Commitment to Excellence
Commitment to Excellence Commitment to Excellence
Slide 6: Corporate Summary
Corporate Summary Corporate Summary Corporate Summary Corporate Summary Investor Inquiries: Lynell J. Walton, CPA SVP - Director of Investor Relations 812-464-1366 lynell.walton@oldnational.com 1 Non-GAAP financial measure - refer to Appendix for reconciliation
Slide 7: The Old National Landscape
The Old National Landscape MSA Market Rank Deposit Market Share Bloomington, IN 1 22.2% Central City, KY 1 40.0% Danville, IL 1 16.1% Evansville, IN-KY 1 31.5% North Vernon, IN 1 37.7% Columbus, IN 2 26.4% Jasper, IN 2 25.2% Seymour, IN 2 26.3% Terre Haute, IN 2 14.5% Vincennes, IN 2 26.6% Washingto
Slide 8: Deposit / Unemployment Distribution
Deposit / Unemployment Distribution Deposit / Unemployment Distribution 43.9% / 7.7% .6% / 8.3 1.9% / 9.1% 0% / 9.8% 40.7% / 8.4% 12.9% / 7.6% % of ONB's Indiana deposits1 / Regional unemployment Unemployment data provided by Indiana Department of Workforce Development and Bureau of Labor Statistics
Slide 9: Our Indiana Footprint Economic Vital Signs
Our Indiana Footprint Economic Vital Signs Economic Vital Signs * Preliminary 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 10: Full-Year 2012 Highlights
Full-Year 2012 Highlights Net income of $91.7 million, or $.95 per share Highest net income since 2002 26% increase in net income over 2011 $72.5 million, or $.76 per share, in 2011 140% increase in net income over 2010 $38.2 million, or $.44 per share, in 2010 Improvement in earnings driven by Well
Slide 11: Financial Data as of 12-31-12
Old National Bancorp Investment Thesis Financial Data as of 12-31-12 Dated: February 7, 2013
Slide 12: Pre-Tax, Pre-Provision Income
Pre-Tax, Pre-Provision Income1 1 Non-GAAP financial measure management believes is useful in evaluating the financial results of the Company - see Appendix for Non-GAAP reconciliation Pre-Tax, Pre-Provision Income, Net of Securities Gains and Merger and Integration Expenses1 Accretion income is defi
Slide 13: Net Interest Margin
Net Interest Margin1 1 Fully taxable equivalent basis 3.67% 3.96% 4.20% 2 ONB Core includes contractual interest income of Monroe, Integra and IN Community loans 2 4.20% Earning assets reflect purchased assets, net of discount 4.26% 4.09% 4.34%
Slide 14: Asset/Liability/Revenue Composition
Asset/Liability/Revenue Composition *Consumer Loans consist of 22% direct, 44% indirect and 34% HELOC. Period-End 12-31-12 Full-Year 2012 Assets Liabilities Total Revenues, excluding Securities Gains *Other Income includes .8% for Mortgage Banking Revenue, 1.3% for Company-Owned Life Insurance, 2.6%
Slide 15: Average Loan Trends
Average Loan Trends $ in millions - Quarterly averages - excludes residential loans and leases held for sale 1 1 Includes both covered and non-covered loans
Slide 16: Loan Portfolio at December 31, 2012
Loan Portfolio at December 31, 2012 Excel.Chart.8 $55.6 Comml, $182.8 CRE, $98.0 HELOC, $35.9 Resi Mortg $ in millions - period-end balances
Slide 17: 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 12-31-12 of $109.8 million per borrower 1Includes entire relationship with borrower Borrower1 Asset Quality Rating (Risk Grades) 8 - Classifie
Slide 18: Quick Home Refi (QHR) Product Statistics
Quick Home Refi (QHR) Product Statistics Quick Home Refi (QHR) Product Statistics Based on December 31, 2012 portfolio data Based on December 31, 2012 portfolio data Term 10 years 24% 15 years 32% 20 years 14% 25 years 11% 30 years 19% Production 7-1-12 to 12-31-12 Average loan outstanding $89,099 A
Slide 19: Loan Concentrations - Excluding Covered Loans
Loan Concentrations - Excluding Covered Loans At 12-31-12 Commercial Commercial Real Estate Diversified Commercial Loan Portfolio
Slide 20: Purchased Impaired Loans
Purchased Impaired Loans $ in millions Monroe Bancorp Integra Bank Indiana Community Bancorp
Slide 21: Credit Quality - Net Charge-Offs
Credit Quality - Net Charge-Offs $5.2 $4.9 $5.0 $3.0 $1.8 $ in millions ($.1) $.8 $.2 $3.0 $1.1 ($.5) $.4 $1.2 $.9 $.7 1 Includes both covered and non-covered loans 1 ONB Consolidated 0.27% 0.56% 0.40% 0.71% 0.36% 0.13% 0.03% 0.17% $.5 $.6 ($.8) $.0 $.4 0.49% 0.17%
Slide 22: Credit Quality - Excluding Covered Loans
Credit Quality - Excluding Covered Loans 1 Does not reflect impact of $17.4 million remaining loan discount on Monroe's loan portfolio or the $61.0 million loan discount on Indiana Community's loan portfolio 1
Slide 23: Credit Quality - ALLL and Mark Summary
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 24: Covered Assets
Covered Assets Covered Assets Covered Assets $ in millions - period-end balances vs. quarterly average balances as shown on slide 12 $ in millions - period-end balances vs. quarterly average balances as shown on slide 12 *Covered loans shown net of $144.4 million discount Commercial Loans *On this p
Slide 25: Credit Quality - Excluding Covered Loans
Credit Quality - Excluding Covered Loans Credit Quality - Excluding Covered Loans 30+ Day Delinquent Loans Specific Segment Overview 1As a % of end of period loans Peer Group data per SNL Financial See Appendix for definition of Peer Group
Slide 26: Credit Quality - Excluding Covered Loans
$ in millions Credit Quality - Excluding Covered Loans
Slide 27: Credit Quality - Excluding Covered Loans
$ in millions Credit Quality - Excluding Covered Loans
Slide 28: Shared National Credits - Excludes Covered Loans
Shared National Credits - Excludes Covered Loans Shared National Credits - Excludes Covered Loans *All but one in Indiana, Kentucky or Illinois **ONB's risk grade scale is 0 (investment grade) to 9 (nonaccrual)
Slide 29: Investment Portfolio
Investment Portfolio Investment Portfolio *Includes market value for both available for sale and held to maturity securities Effective Duration of 3.41 at Sept. 30, 2012 and 3.57 at Dec. 31, 2012
Slide 30: Other Classified Assets
Other Classified Assets Other Classified Assets
Slide 31: Securities with OTTI
Securities with OTTI Securities with OTTI
Slide 32: Municipal Bond Portfolio by State
Municipal Bond Portfolio by State IN TX PA KY MO All Other 0.357 0.137 0.04 0.061 0.047 0.332 Based on book value at 12-31-12 Illinois exposure consists of 27 bonds representing 1.4% of entire municipal portfolio
Slide 33: CD Maturity Schedule
CD Maturity Schedule CD Maturity Schedule Represents CD maturities at December 31, 2012 Opportunity exists to lower deposit costs
Slide 34: Tangible Common Book Value
Tangible Common Book Value1 Acquired Monroe Bancorp 1-1-11 FDIC acquisition of Integra Bank 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 January 2
Slide 35: Capital Ratios
Capital Ratios Peer Group data per SNL Financial - See Appendix for definition of Peer Group and Non-GAAP reconciliation
Slide 36: M&A Strategy
M&A Strategy Branch acquisition FDIC assisted transaction Whole bank purchase Must enhance Old National's mission of being a true "community bank" Must align both strategically and culturally Must meet/exceed financial targets Must pass rigorous due diligence process
Slide 37: M&A Strategy
M&A Strategy Focus on community banking, client relationships and consistent quality earnings Target geographic markets Mid-sized markets within or near existing franchise with average to above average growth rates In market community banks where significant cost saves could be achieved
Slide 38: Transforming Old National's Landscape
Transforming Old National's Landscape1 Shifting to higher-growth markets from lower- growth markets Entry and fill-in of existing higher-growth markets through strategic acquisitions Acquired 151 branches Sale or consolidations in lower-growth, non-core markets Consolidated 103 branches Sold 17 bran
Slide 39: Transforming Old National's Landscape
Transforming Old National's Landscape 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 Acquired
Slide 40: ONB Acquired Monroe Bancorp
ONB Acquired Monroe Bancorp Transaction closed 1-1-11 Provides #1 market share in Monroe County (Bloomington, Indiana) Home to Indiana University Market has above-average growth rates and lower unemployment vs. state of Indiana Systems conversion occurred 5-14-11 Balance sheet acquired1 $419.4 milli
Slide 41: FDIC Acquisition of Integra Bank, NA
FDIC Acquisition of Integra Bank, NA Transaction Due Diligence Financial Impact Capital Closing / Conversion Purchased $1.8 billion in assets1 and assumed $1.8 billion of liabilities2 from the FDIC as receiver of Integra Bank, NA, Evansville, IN Approximately $.7 billion in loans covered by FDIC los
Slide 42: ONB Acquired Indiana Community
ONB Acquired Indiana Community Transaction Due Diligence Financial Impact Capital TARP Repayment Acceptable Risk Profile Closing Consideration: 100% stock transaction at an exchange ratio of 1.9455, resulting in 6.6 million shares issued Deal value = $88.5 million based on average ONB closing price
Slide 43: ONB to Acquire Bank of America Branches
ONB to Acquire 24 Bank of America Branches 24 full-service branches 4 in Northern Indiana 20 in Southwest Michigan Total deposits of $778.8 million1 Deposit premium of 2.94% Total loans of $7.7 million1 2014 accretion of $.03 to $.05 per share One-time acquisition/conversion costs of $5.0 million Tr
Slide 44: Old National Bancorp Appendix
Old National Bancorp Appendix
Slide 45: Committed to Strong Corporate Governance
Committed to Strong Corporate Governance Stock ownership guidelines have been established for named executive officers as follows: As of December 31, 2012, each named executive officer has met their stock ownership requirement ownership requirement ownership requirement ownership requirement ownersh
Slide 46: Non-GAAP Reconciliations
Non-GAAP financial measures management believes is useful in evaluating the financial results of the Company 20.6% (1.2%) 7.9% 17.9% Non-GAAP Reconciliations
Slide 47: Non-GAAP Reconciliations
Non-GAAP Reconciliations Non-GAAP Reconciliations Non-GAAP financial measures management believes is useful in evaluating the financial results of the Company
Slide 48: Non-GAAP Reconciliations
Non-GAAP Reconciliations Non-GAAP Reconciliations Non-GAAP financial measures management believes is useful in evaluating the financial results of the Company
Slide 49: Non-GAAP Reconciliations
Non-GAAP Reconciliations Non-GAAP Reconciliations Non-GAAP financial measures management believes is useful in evaluating the financial results of the Company
Slide 50: 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 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
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