Old National Bancorp · NASDAQ:ONB

Old National Bancorp — Investor Presentation (August 2010)

29 slides from Old National Bancorp's investor presentation, Aug 13, 2010

  1. Slide 1: Investment Thesis

    Investment Thesis Financial Data as of 6-30-2010 NYSE: ONB Old National Bancorp

  2. Slide 2: 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, descriptions of Old National's financial condition, results of operations, asset and c

  3. Slide 3: Non-GAAP Financial Measures

    Non-GAAP Financial Measures This presentation contains 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

  4. Slide 4: The Old National Distinction

    The Old National Distinction Through execution of a sound strategy, ONB is well positioned for the future Improve the risk profile Consistent application of conservative underwriting standards has lead to strong loan quality relative to peers 2Q10 NPL's/Loans of 1.85% vs. 1Q10 peer average of 3.23%

  5. Slide 5: Corporate Summary

    Corporate Summary MARKET STATISTICS AND SUMMARY OVERVIEW ($ in millions) MARKET STATISTICS AND SUMMARY OVERVIEW ($ in millions) MARKET STATISTICS AND SUMMARY OVERVIEW ($ in millions) MARKET STATISTICS AND SUMMARY OVERVIEW ($ in millions) MARKET STATISTICS AND SUMMARY OVERVIEW ($ in millions) MARKET

  6. Slide 6: The Old National Footprint

    The Old National Footprint The Old National Footprint ONB Headquarters

  7. Slide 7: Local Unemployment

    Local Unemployment Local Unemployment 51.8% / 8.7% 1.2% / 10.7% 4.9% / 12.0% 0% / 10.6% 42.1% / 9.9% 0% / 9.4% % of ONB's Indiana deposits* / Regional unemployment Unemployment data provided by Indiana Department of Workforce Development and Bureau of Labor Statistics June 2010 Unemployment: Indiana

  8. Slide 8: Asset/Liability Composition

    Asset/Liability Composition Investments Commercial Loans Commercial Real Estate Loans Consumer Loans* Residential Real Estate Other Asset 0.332 0.224 0.14 0.145 0.059 0.1 NOW & Savings Demand Deposits Money Markets Other Time Borrowings Brokered CDs Other Liability 0.34175 0.171 0.05281 0.254 0.1371

  9. Slide 9: Loan Concentrations

    Loan Concentrations Healthcare/Social Services Public Admin Manufacturing Educational Services Wholesale Trade Retail Other Real Estate Rental & Leasing Agriculture Construction Finance & Insurance Professional Services 0.094 0.057 0.119 0.062 0.099 0.081 0.171 0.057 0.076 0.073 0.048 0.045 At June

  10. Slide 10: Conservative Lending Limits

    Conservative Lending Limits Borrower* Asset Quality Rating In-House Lending Limit* ($ in millions) 0 $25 1, 2, or 3 $20 4 $15 5 $10 6 (Watch) $7.5 7 (Special Mention) $5 In-house lending limits conservative relative to legal lending limit ONB's legal lending limit at 3-31-2010 = $87.9 million per bo

  11. Slide 11: Proactive Risk Management

    Proactive Risk Management No subprime business line Conservative stance on commercial real estate Starting mid-year 2006 Reduction in higher-risk residential loans Sold $405.6 million in 2004 Sale of credit card portfolio June 2000 Minimal construction and land loan exposure 1Q10 at 3.10% vs. peer a

  12. Slide 12: Credit Metrics

    Credit Metrics 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Problem Loans 0.0317 0.0371 0.0378 0.0432 0.0461 0.0433 0.0409 0.0432 0.0423 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Criticized Loans 0.0206 0.0244 0.0262 0.0187 0.0243 0.0234 0.027 0.0282 0.027 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10

  13. Slide 13: Credit Metrics

    Credit Metrics 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 As a % of end of period total loans 0.0069 0.0066 0.0084 0.0073 0.0082 0.0094 0.0089 0.0055 0.0076 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 As a % of end of period total loans 0.0007 0.0007 0.0006 0.0015 0.0011 0.001 0.0021 0.0026 0.001

  14. Slide 14: Investment Portfolio

    Investment Portfolio ($ in millions) Book Value Mar. 31, 2010 Book Value June 30, 2010 Market Value* Mar. 31, 2010 Market Value* June 30, 2010 Market Value $ Change Federal National Mortgage Association $833.7 $790.3 Federal Home Loan Mortgage Corporation 148.3 141.9 Federal Home Loan Bank 156.9 183

  15. Slide 15: Municipal Bond Portfolio by State

    Municipal Bond Portfolio by State IN TX PA KY MO IL All Other 0.357 0.09 0.081 0.056 0.053 0.05 0.313 Based on book value at 6-30-2010

  16. Slide 16: Monthly Net Interest Margin

    Monthly Net Interest Margin* 7/1/2009 8/1/2009 9/1/2009 10/1/2009 11/1/2009 12/1/2009 1/1/2010 2/1/2010 3/1/2010 4/1/2010 5/1/2010 6/1/2010 ONB 0.0355 0.0359 0.034 0.0328 0.0323 0.0333 0.0339 0.0327 0.0333 0.0341 0.0343 0.0336 *Fully taxable-equivalent basis 1Q10 = 3.33% 2Q10 = 3.40%

  17. Slide 17: Focus on Capital Management

    Focus on Capital Management Common stock offering completed September, 2009 Issued 20.7 million shares, including over-allotment Net proceeds of $196 million Significantly improved capital ratios - at 6-30-2010 Tangible common equity to 9.03% Tier 1 to 15.1% Total risk-based capital to 17.0% Allows

  18. Slide 18: Tangible Common Equity Ratio vs. Peers

    4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 ONB 0.0603 0.0644 0.0621 0.0606 0.0581 0.0523 0.0551 0.0853 0.0825 0.0862 0.0903 Peer Group Average 0.0665 0.0675 0.0665 0.0668 0.0635 0.0645 0.0653 0.0684 0.0668 0.0705 The Company's calculation of tangible common equity includes other comprehe

  19. Slide 19: 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

  20. Slide 20: 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

  21. Slide 21: Appendix

    APPENDIX

  22. Slide 22: Non-GAAP Reconciliations

    Non-GAAP Reconciliations 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Total Shareholders' Equity $652.9 $675.4 $649.0 $635.4 $730.9 $631.8 $634.6 $865.4 $843.8 $855.5 $874.7 Deduct: Goodwill and Intangible Assets (191.0) (190.3) (188.7) (187.8) (186.8) (205.6) (204.0) (202.4) (200.2) (198.

  23. Slide 23: The Old National Peer Group

    The Old National Peer Group Name Ticker Name Ticker 1st Source Corp. SRCE International Bancshares Corp. IBOC BancorpSouth, Inc. BXS MB Financial, Inc. MBFI Bank of Hawaii Corp. BOH National Penn Bancshares, Inc. NPBC Citizens Republic Bancorp, Inc. CRBC Park National Corp. PRK Cullen/Frost Bankers,

  24. Slide 24: Minimal Shared National Credits

    Minimal Shared National Credits ($ in millions) 2Q10 Count (#)* 12 Total exposure $133.2 Dollar outstanding $50.8 Largest exposure ($0 outstanding) $20.0 Weighted average risk grade** 1.7 *All but one in ONB footprint of Indiana, Kentucky or Illinois **ONB risk grade scale is 0 (investment grade) to

  25. Slide 25: Other Classified Assets

    Other Classified Assets ($ in millions) Book Value Mar. 31, 2010 Market Value Mar. 31, 2010 Book Value June 30, 2010 Market Value June 30, 2010 Corporate Bonds $3.4 $2.4 $3.3 $2.5 Pooled Trust Preferred Securities $28.5 $11.7 $28.2 $10.5 Non-Agency Mortgage Backed Securities $126.6 $93.4 $120.8 $96.

  26. Slide 26: Securities with OTTI

    Securities with OTTI $ in Thousands *Lowest credit rating provided by any nationally recognized credit rating agency. Vintage Lowest Credit Rating* Book Value at June 30, 2010 OTTI 2Q10 OTTI YTD 2010 BAFC Ser 4 2007 CCC $14,026 $79 $79 CWALT Ser 73CB 2005 CCC 6,606 150 207 CWALT Ser 73CB 2005 CCC 8,

  27. Slide 27: Deposit Costs vs. Peer Group

    Deposit Costs vs. Peer Group Peer Group data per SNL Financial See Appendix for definition of Peer Group 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 ONB (Including Brokered CDs) 0.0347 0.0311 0.0259 0.0203 0.0204 0.0183 0.0158 0.0148 0.014 0.0132 0.0123 0.0113 Peer Group Average 0.03

  28. Slide 28: Loan Yields vs. Peer Group

    Loan Yields Vs. Peer Group 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 ONB 0.0751 0.0723 0.0681 0.0629 0.0611 0.0597 0.0521 0.0514 0.0514 0.0508 0.0507 0.0508 Peer Group Average 0.0749 0.0725 0.0685 0.0624 0.0612 0.0591 0.057 0.0535 0.0533 0.0535 0.0557 Peer Group data per SNL Financ

  29. Slide 29: 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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