Old National Bancorp · NASDAQ:ONB
Old National Bancorp — Q1 2024 Earnings Presentation
25 slides from Old National Bancorp's earnings presentation, Apr 23, 2024
Slide 1: 1st Quarter 2024 Financial Review
1st Quarter 2024 Financial Review April 23, 2024
Slide 2: Forward-Looking Statements
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 contain
Slide 3: Non-GAAP Financial Measures
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 are
Slide 4: Strong First-Quarter 2024 Highlights
Strong First-Quarter 2024 Highlights Key Performance Drivers Reported Adjusted1 EPS $0.40 $0.45 ▪ Granular, peer-leading deposit franchise with growth in total deposits of 5.0% annualized and Net Income $116 $131 low total deposit costs of 201 bps Return on Average Assets 0.98% 1.10% ▪ Disciplined t
Slide 5: Liquid, Well-Capitalized Balance Sheet
Liquid, Well-Capitalized Balance Sheet % Change End of Period Balances 1Q24 4Q23 1Q23 1Q24 vs. 4Q23 1Q24 vs. 1Q23 Available-for-sale securities, at fair value $6,792 $6,713 $6,687 1% 2% Held-to-maturity securities, at amortized cost $3,001 $3,013 $3,071 —% (2)% Total loans1 $33,643 $33,024 $31,822 2
Slide 6: Total Loans and Earning Assets
Total Loans and Earning Assets Total Loans1 Total loans1 Up 6% YoY • Disciplined growth of $619 million,+7.5% $33,024 $33,643 $31,822 annualized from 4Q23 • Commercial growth of $635 million, +10.8% annualized 6.07% • $1.1 billion total commercial production 6.06% • 71% of commercial production is f
Slide 7: Peer-Leading Deposit Franchise
Peer-Leading Deposit Franchise Period End Total Deposits Key Performance Drivers $34.9 $37.2 $1.0 $37.7 $1.2 • Period end deposits up $464.2 million, or 5.0% $0.8 $2.8 $3.6 $3.5 annualized $13.2 $13.5 $13.8 • Business checking and public funds showing normal seasonal outflow patterns $19.1 $19.2 • T
Slide 8: First-Quarter 2024 Results
First-Quarter 2024 Results % Change 1Q24 4Q23 1Q23 1Q24 vs. 4Q23 1Q24 vs. 1Q23 Net Interest Income (FTE)1,2 $363 $370 $387 (2%) (6%) Provision for credit losses 19 12 13 58% 46% 1 Adjusted noninterest income 78 79 76 (1%) 3% Gain on sale of Visa Class B restricted shares — 22 — N/M N/M 1 Adjusted no
Slide 9: Net Interest Income & Net Interest Margin
1 Net Interest Income & Net Interest Margin 1 Net Interest Income Key Performance Drivers • Net interest income1 decrease reflective of the $387 rate environment $370 $363 • NIM1 decreased 11 bps vs. 4Q23 • Strong low-cost deposit franchise; total deposit costs of 201 bps and 8.0% growth YoY 3.69% •
Slide 10: Noninterest Income
Noninterest Income 1Q24 4Q23 1Q23 Key Performance Drivers Bank Fees $28 $29 $27 • Modest increases in mortgage, wealth and other income, offset by lower capital Wealth Fees 28 28 27 markets • 1Q24 mortgage activity Mortgage Fees 5 4 3 • Production was $213 million2 ▪ 90% purchase / 10% refi Capital
Slide 11: Noninterest Expense
Noninterest Expense 1Q24 4Q23 1Q23 Key Performance Drivers • Salaries & employee benefits lower due Salary & Employee Benefits $135 $137 $126 to performance-driven incentive accrual true-up in 4Q23, partly offset by payroll Occupancy & Equipment 36 35 34 tax due to timing • Other expense down due to
Slide 12: Credit Quality
Credit Quality Asset Quality Net Charge-Offs 0.83% 0.98% 0.74% 0.21% 0.12% 0.14% 0.22% 0.07% 0.14% 0.16% 0.05% 0.03% 1Q23 4Q23 1Q24 1Q23 4Q23 1Q24 30+ Day Delinquency Non-Performing Loans ONB ONB, excluding PCD Allowance for Credit Losses 1 $5 $339 $7 $346 Key Performance Drivers $(5) • Net charge-o
Slide 13: Strong Capital Position
Strong Capital Position 1Q241 4Q23 1Q23 Key Performance Drivers • Ratios increased as retained earnings more CET1 capital to RWA 10.76% 10.70% 9.98% than offset strong loan growth • HTM securities pre-tax unrealized losses of Tier 1 capital to RWA 11.40% 11.35% 10.64% $454 million (~$340 million net
Slide 14: Net Interest Income Outlook
Net Interest Income Outlook Managing to Neutral Quarterly NII Outlook Rate Risk Position • 54% of loans are variable/floating-rate ~ $404 • ~$4.7 billion fixed-rate loans and securities ~ $398 expected to reprice over NTM ~ $390 • 32% of total deposits are exception priced at an average rate of 4.37
Slide 15: Outlook (includes CapStar)
2 Outlook (includes CapStar) 2Q24 Outlook Full-Year 2024 Outlook EOP loans up 5% - 7%, annualized, up 5% - 7%, excl. CapStar (Including HFS) excl. CapStar Net interest income (FTE basis)1 ~$390 million ~$1,555 million Noninterest income1 ~$85 million ~$335 million Noninterest expense1 ~$265 million
Slide 16: Appendix
Appendix Lo OLD NATIONAL BANCORP’
Slide 17: CRE Non-Owner Occupied Details
CRE Non-Owner Occupied Details CRE NOO - Office CRE NOO CRE NOO 4% of Total Loans Maturing <18 Mos. Maturing <18 Mos. Current Int. Rate Int. Rate <4% ~1% of Total Loans Suburban and other 2% Central Office Business $1.4 Other District $0.4 billion <1% $2.8 <4% billion >4% Medical billion Multifamily
Slide 18: Granular, Long-Tenured Deposit Base
Granular, Long-Tenured Deposit Base Average Core Account Balance Deposit Highlights • Insured deposits2 >70% of total deposits $1.5mm • Granular low-cost deposit franchise • Top 20 deposit clients represents ~6% of $960k total deposits; weighted average tenure > 25 years; ~70% collateralized or insu
Slide 19: Projected Acquisition Accounting Impact
Projected Acquisition Accounting Impact (excludes acquisition of CapStar Financial Holdings, Inc.) 1,2 Contractual Accretion Accretion on acquired loans and borrowings $17 • $5 million recognized in 1Q24 $15 $14 • $15 million contractual for remainder of 2024 2Q-4Q 2024 2025 2026 1 Projected Remaini
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation 1Q24 4Q23 1Q23 Net interest income $356.5 $364.4 $381.6 FTE Adjustment 6.3 6.1 5.6 Net interest income (FTE) $362.7 $370.5 $387.2 Add: Fee income 77.5 100.1 70.7 Total revenue (FTE) $440.2 $470.6 $457.9 Less: Provision for credit losses (18.9) (11.6) (13.4) Less: Noninterest
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation 1Q24 4Q23 1Q23 Noninterest income $77.5 $100.1 $70.7 Less: Debt securities losses 0.0 0.8 5.2 Less: Gain on sale of Visa Class B restricted shares 0.0 (21.6) 0.0 Adjusted noninterest income $77.5 $79.3 $75.9 Noninterest expense $262.3 $284.2 $250.7 Less: Distribution of exces
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation 1Q24 4Q23 1Q23 Noninterest Expense $262.3 $284.2 $250.7 Less: Intangible amortization (5.5) (5.9) (6.2) Noninterest expense, excluding intangible amortization 256.8 278.3 244.5 Adjustments: Less: Distribution of excess pension assets (13.3) 0.0 0.0 Less: FDIC Special Assessme
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation 1Q24 4Q23 1Q23 Net income applicable to common shares $116.3 $128.5 $142.7 Add: Intangibles amortization, net of tax 4.1 4.4 4.6 Tangible net income applicable to common shares $120.4 $132.9 $147.3 Total adjustments, net of tax $14.5 $6.1 $16.5 Adjusted net income applicable
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation 1Q24 4Q23 1Q23 Shareholders' equity $5,595.4 $5,562.9 $5,277.4 Less: Preferred equity (243.7) (243.7) (243.7) Shareholders' common equity 5,351.7 5,319.2 5,033.7 Less: Goodwill and other intangible assets (2,095.5) (2,101.0) (2,118.9) Tangible shareholders' common equity 3,25
Slide 25: 2024 Peer Group
2024 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 Columbia Banking System, Inc. COLB Comerica Incorporated CMA F