Old National Bancorp · NASDAQ:ONB
Old National Bancorp — Q4 2024 Earnings Presentation
33 slides from Old National Bancorp's earnings presentation, Jan 21, 2025
Slide 1: 4th Quarter 2024 Financial Review
4th Quarter 2024 Financial Review January 21, 2025
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: Full-Year 2024 Highlights
Full-Year 2024 Highlights Highlights Reported Adjusted1 • Announced Bremer partnership November 25, EPS $1.68 $1.86 2024, which solidifies our position as the Net Income $523 $578 premier bank in the Midwest Key Performance Drivers Return on Average Assets 1.03% 1.14% • Completed CapStar acquisition
Slide 5: Fourth-Quarter 2024 Highlights
Fourth-Quarter 2024 Highlights Key Performance Drivers Reported Adjusted1 EPS $0.47 $0.49 • Granular, peer-leading deposit franchise – Core deposits up 1.9% annualized Net Income $150 $156 – NIB deposits represent 24% of core deposits – Low total deposit costs of 208 bps Return on Average Assets 1.1
Slide 6: Liquid, Well-Capitalized Balance Sheet
Liquid, Well-Capitalized Balance Sheet % Change End of Period Balances 4Q24 3Q24 4Q23 4Q24 vs. 3Q24 4Q24 vs. 4Q23 Available-for-sale securities, at fair value $7,458 $7,432 $6,713 —% 11% Held-to-maturity securities, at amortized cost $2,955 $2,969 $3,013 —% (2)% Total loans1 $36,320 $36,463 $33,024
Slide 7: Earning Assets
Earning Assets Total Loans 1 Total loans1 Up 10% YoY • Down $143 million, (1.6)% annualized from $36,463 $36,320 3Q24 $33,024 – Strong production offset by ~$600 million of outsized payoffs and lower line utilization – $1.5 billion total commercial production 6.36% ◦ 79% floating; avg yield of 7.2%
Slide 8: Peer-Leading Deposit Franchise
Peer-Leading Deposit Franchise Period End Total Deposits Key Performance Drivers Up 10% YoY • Period end deposits stable; $37.2 $40.8 $1.7 $40.8 $1.5 – Core deposits up 1.9% annualized $1.0 $3.6 $4.2 $4.0 – Includes normal seasonal patterns in public funds; $13.5 $14.9 $15.1 down ~$200 million – Bro
Slide 9: Fourth-Quarter 2024 Results
Fourth-Quarter 2024 Results % Change 4Q24 3Q24 4Q23 4Q24 vs. 3Q24 4Q24 vs. 4Q23 Net Interest Income (FTE)1,2 $400 $398 $370 1% 8% Provision for credit losses $27 $29 $12 (7%) 125% 1 Adjusted noninterest income 96 94 79 2% 22% Net securities losses — — (1) N/M N/M Gain on sale of Visa Class B restric
Slide 10: Net Interest Income & Net Interest Margin
1 Net Interest Income & Net Interest Margin 1 Net Interest Income Key Performance Drivers • Net interest income1 increase reflective of $398 $400 higher accretion and lower funding costs, $370 partly offset by earning asset mix • NIM1 decreased modestly 2 bps vs. 3Q24 3.39% • Strong low-cost deposit
Slide 11: Noninterest Income
Noninterest Income 4Q24 3Q24 4Q23 Key Performance Drivers Bank Fees $32 $32 $29 • Increase in other income and wealth fees partly offset by lower mortgage and capital Wealth Fees 30 29 28 markets – Other income impacted by $8 million of discrete items Mortgage Fees 7 8 4 Capital Markets 5 7 5 • 4Q24
Slide 12: Noninterest Expense
Noninterest Expense 4Q24 3Q24 4Q23 Key Performance Drivers • Salaries & employee benefits higher in Salaries & Employee Benefits $143 $142 $137 4Q24 resulting from $5 million year-to- date performance-driven incentive Occupancy & Equipment 39 36 35 accrual true-up • Other expense impacted by $1.2 mi
Slide 13: Credit Quality
Credit Quality Asset Quality Net Charge-Offs 1.22% 1.23% 0.19% 0.21% 0.83% 0.12% 0.16% 0.17% 0.22% 0.26% 0.27% 0.03% 4Q23 3Q24 4Q24 4Q23 3Q24 4Q24 30+ Day Delinquency Non-Performing Loans ONB ONB, excluding PCD Allowance for Credit Losses 1 Key Performance Drivers $12 $414 • NCOs of 17 bps excluding
Slide 14: Peer Credit Data
Peer Credit Data 30+ Day Delinquency Net Charge-Offs 0.50% 0.40% 0.40% 0.30% 0.30% 0.20% 0.20% 0.10% 0.10% 0.00% 0.00% (0.10)% FY17 FY18 FY19 FY20 FY21 FY22 FY23 1Q24 2Q24 3Q24 4Q24 FY17 FY18 FY19 FY20 FY21 FY22 FY23 1Q24 2Q24 3Q24 4Q24 1 2 1 ONB Peer Average ONB Peer Average Non-Performing Loans Ne
Slide 15: Strong Capital Position
Strong Capital Position 4Q241 3Q24 4Q23 Key Performance Drivers • Strong retained earnings drive capital CET1 capital to RWA 11.38% 11.00% 10.70% • HTM securities pre-tax unrealized losses of $351 million (~$263 million net of tax) Tier 1 capital to RWA 11.98% 11.60% 11.35% • No shares of common sto
Slide 16: Net Interest Income Outlook (includes Bremer)
1,2 Net Interest Income Outlook (includes Bremer) 1 2025 Net Interest Income Outlook Maintaining Neutral Rate Risk Position $320 - $1,960 - $350 $1,990 • 56% of loans are variable/floating-rate • ~$4.5 billion fixed-rate loans and securities ~ $40 $0 expected to reprice over NTM $1,600 $1,555 • 35%
Slide 17: Outlook (includes Bremer)
2 Outlook (includes Bremer) 1Q25 Outlook Full-Year 2025 Outlook EOP loans up 2% - 4%, annualized up 4% - 6%, excl. Bremer (Including HFS) Net interest income (FTE basis)1 ~$390 million ~$1,960 - $1,990 million (4Q24 baseline: $400 million) Noninterest income1 (4Q24 baseline: $88 million) ~$88 millio
Slide 18: Appendix
Appendix Lo OLD NATIONAL BANCORP’
Slide 19: Diversified Loan Portfolio
Diversified Loan Portfolio CRE Non-Owner Occupied $12.0 billion Office Total Loans 4% $36.3 billion Warehouse Multifamily Industrial 5% 15% Total Loans By State Other 7% IL $8.5 23% Consumer Retail 8% 4% IN 5.4 15% MN 3.9 11% CRE Non- Residential Owner Real Estate WI 3.6 10% Occupied 19% 33% MI 2.9
Slide 20: CRE Non-Owner Occupied Maturities
CRE Non-Owner Occupied Maturities CRE NOO CRE NOO Maturing <18 Mos. Maturing <18 Mos. Current Int. Rate Int. Rate <4% ~1% of Total Loans Office Other $0.5 $4.3 <4% billion >4% billion Multifamily Maturing CRE NOO Loans • Manageable volume of loans subject to refinance risk – Predominantly multifamil
Slide 21: CRE Non Owner Occupied - Office
CRE Non Owner Occupied - Office Our Lending Looks More Like This ...Less Like This • Total office portfolio of $1.5 billion; average loans size is $3.1 million – Largest exposure of ~$50 million • 94% located in bank’s footprint, diversified by submarket • 42% of portfolio is medical office (“MOB”)
Slide 22: CRE Non Owner Occupied - Multifamily
CRE Non Owner Occupied - Multifamily Our Lending Looks More Like This ...Less Like This • Total multifamily portfolio of $5.5 billion; average loans size is $5.0 million – Largest exposure of ~$60 million • 85% located in bank’s footprint • Continued strong demand and rental rates in core markets (I
Slide 23: Granular, Long-Tenured Deposit Base
Granular, Long-Tenured Deposit Base Average Core Account Balance Deposit Highlights • Insured deposits2 >70% of total deposits • Granular low-cost deposit franchise $1.5mm – Top 20 deposit clients represents ~7% of $1.0mm total deposits; weighted average tenure > 28 years; ~70% collateralized or ins
Slide 24: Projected Acquisition Accounting Impact
Projected Acquisition Accounting Impact (excludes pending acquisition of Bremer Financial Corporation) 1,2 Contractual Accretion Accretion on acquired loans and borrowings • $19 million recognized in 4Q24 $42 • $42 million contractual for 2025 $34 $23 2025 2026 2027 1 Projected Remaining Loan Discou
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation 4Q24 3Q24 4Q23 Net interest income $394.1 $391.8 $364.4 FTE Adjustment 5.8 6.1 6.1 Net interest income (FTE) $399.9 $397.9 $370.5 Add: Fee income 95.8 94.1 100.1 Total revenue (FTE) $495.7 $492.0 $470.6 Less: Provision for credit losses (27.0) (28.5) (11.6) Less: Noninterest
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation 4Q24 3Q24 4Q23 Noninterest income $95.8 $94.1 $100.1 Less: Debt securities losses 0.1 0.1 0.8 Less: Gain on sale of Visa Class B restricted shares 0.0 0.0 (21.6) Adjusted noninterest income $95.9 $94.2 $79.3 Noninterest expense $276.8 $272.3 $284.2 Less: Merger-related charge
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation 4Q24 3Q24 4Q23 Noninterest Expense $276.8 $272.3 $284.2 Less: Intangible amortization (7.2) (7.4) (5.9) Noninterest expense, excluding intangible amortization 269.6 264.9 278.3 Adjustments: Less: Merger-related charges (8.1) (6.8) (5.4) Less: Separation expense 0.0 (2.6) 0.0
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation 4Q24 3Q24 4Q23 Net income applicable to common shares $149.8 $139.8 $128.5 Add: Intangibles amortization, net of tax 5.4 5.5 4.4 Tangible net income applicable to common shares $155.3 $145.3 $132.9 Total adjustments, net of tax $6.1 $7.4 $6.1 Adjusted net income applicable to
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation 4Q24 3Q24 4Q23 Shareholders' equity $6,340.3 $6,367.3 $5,562.9 Less: Preferred equity (243.7) (243.7) (243.7) Shareholders' common equity 6,096.6 6,123.6 5,319.2 Less: Goodwill and other intangible assets (2,296.1) (2,305.1) (2,101.0) Tangible shareholders' common equity $3,8
Slide 30: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2024 Net interest income $1,530.8 FTE Adjustment 24.5 Net interest income (FTE) $1,555.3 Add: Fee income 354.7 Total revenue (FTE) $1,910.0 Less: Provision for credit losses (110.6) Less: Noninterest expense (1,094.4) Income before income taxes (FTE) $704.9 Less: Income taxes
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2024 Noninterest Expense $1,094.4 Less: Intangible amortization (27.5) Noninterest expense, excluding intangible amortization 1,066.9 Adjustments: Less: Merger-related charges (37.3) Less: Distribution of excess pension assets (13.3) Less: FDIC special assessment (3.0) Less:
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2024 Net income $539.2 Total adjustments, net of tax 55.0 Adjusted net income $594.2 Average assets $52,302.4 Return on average assets 1.03% Adjusted return on average assets 1.14% Net income applicable to common shares $523.1 Add: Intangible amortization, net of tax1 20.6 Ta
Slide 33: 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