Old National Bancorp · NASDAQ:ONB
Old National Bancorp — Q4 2024 Earnings Presentation
49 slides from Old National Bancorp's earnings presentation, Feb 10, 2025
Slide 1: 4th Quarter 2024 Investment Thesis
Exhibit 99.1 4th Quarter 2024 Investment Thesis February 10, 2025
Slide 2: Executive Summary
Executive Summary Slides 5 —16
Slide 3: 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 4: 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 5: Corporate Strategy
Corporate Strategy Old National’s primary strategic objective is to be a top quartile performing “basic bank” that is a primary, trusted partner to our clients in the communities we serve, and a highly respected, highly valued employer that continually empowers our team members to grow, develop and
Slide 6: Snapshot of Old National
Snapshot of Old National Summary1 Company Description Headquarters Evansville, IN • 6th largest commercial bank headquartered in Market Cap $7,754 Midwest - top 30 banking company based in the U.S. by assets P/ TBV 204% • 280 branches and 356 ATMs Dividend Yield 2.3% LTM Average Daily Volume (Actual
Slide 7: The Best of Offense and Defense
The Best of Offense and Defense OFFENSE DEFENSE Top quartile 4Q2024 Quality, peer-leading deposit franchise financial metrics • Growth in core deposits of 1.9% annualized 1 • 17% Adj. ROATCE • Low total deposit costs of 208 bps • 51.8% Adj. Efficiency. Ratio1 • 75% of core deposits have tenure >5 ye
Slide 8: Low-Risk Balance Sheet Relative to Peers
Low-Risk Balance Sheet Relative to Peers Risk-Weighted Assets / Total Assets1 3 and 15-Year Cumulative NCOs / Avg. Loans2 91% 86% 78% 76% 71% 5.69% 1.89% 0.25% 0.44% Lower Average Upper Peer Max ONB 3-Year 15-Year Quartile Quartile 3 ONB Peer Average Financial data as of or for the quarter ended 12/
Slide 9: ONB is Building Capital Faster than Peers
1 ONB is Building Capital Faster than Peers ROA2 ROATCE2 FY2024 Payout Ratio HWC 1.3% COLB 18.8% ASB 124% WBS 1.2% WBS 17.2% VLY 64% COLB 1.2% ONB 16.4% CMA 57% SNV 1.2% ZION 16.0% COLB 56% WTFC 1.2% SNV 16.0% SNV 50% ONB 1.1% HWC 15.5% FHN 44% CADE 1.1% UMBF 14.6% FNB 38% FNB 1.1% WTFC 14.4% WBS 37
Slide 10: Strong TBV Per Share Growth History
Strong TBV Per Share Growth History f 12% GR o % 4 CA of 7 - 202 CA GR 2022 1 6- 202 $11.43 $11.70 $11.91 201 $11.00 $10.35 $9.42 $9.00 $8.30 $8.37 $7.62 TBV Per Share CAGR (%) Old National KRX1 2-Year 12.4% 9.1% 3-Year 0.6% 1.4% 5-Year 2.9% 3.7% 7-Year 5.2% 5.1% 5 6 7 8 9 0 1 2 3 4 201 201 201 201
Slide 11: ONB has Dramatically Enhanced Franchise Value
ONB has Dramatically Enhanced Franchise Value 2013 2025E Added Scale Assets ($B) $10 $71 + $61B in assets AUM ($B) $6 $301 + $48B in Deposits Core EPS 2 $1.05 $2.07 + $24B in AUM TBV Per Share $7.85 $12.19 Major Markets3 Efficiency Ratio Chicago ~$16B in Deposits #9 Mkt Share 67% 54% Minneapolis ~$4
Slide 12: Pending Partnership with Bremer Financial Corporation
Pending Partnership with Bremer Financial Corporation A Combination Creating The Premier Midwest Regional Bank Pro Forma Impact Source: S&P Capital IQ, FactSet, ONB filings and management and Bremer filings. Financial data as of the quarter ended September 30, 2024 1 Reflects pro forma balances as o
Slide 13: Bremer Financial Corporation Transaction Highlights
Bremer Financial Corporation Transaction Highlights Source: S&P Capital IQ, FactSet, ONB filings and management and Bremer filings. Financial data as of the quarter ended September 30, 2024. Branch data as of June 30, 2024. Pro forma impact is presented for illustrative purposes only. See disclaimer
Slide 14: 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 15: 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 16: 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 17: Financial Details
Financial Details Data as of December 31, 2024
Slide 18: Strong Fourth-Quarter 2024 Highlights
Strong 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 Ass
Slide 19: 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 20: Earning Assets
Earning Assets Total Loans1 Total Loans1 Up 10% YoY • Down of $143 million, (1.6)% annualized from $36,463 $36,320 $33,024 3Q24 – Strong production offset by ~$600 million of outsized payoffs and lower line utilization 6.14% – $1.5 billion total commercial production 6.36% ◦ 79% floating; avg yield
Slide 21: 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 22: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin1 1 Net Interest Income Key Performance Drivers • Net interest income1 increase reflective of $398 $400 higher accretion and lower funding costs,partly $370 offset by earning asset mix 3.39% • NIM1 decreased modestly by 2 bps, compared 3.32% 3.30% to 3Q24 • S
Slide 23: Noninterest Income
Noninterest Income 4Q24 3Q24 4Q23 Key Performance Drivers Bank Fees $32 $32 $29 • Increases 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 • 4Q2
Slide 24: Noninterest Expense
Noninterest Expense 4Q24 3Q24 4Q23 Key Performance Drivers • Salaries & employee benefits higher in Salary & 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 mill
Slide 25: 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, excludin
Slide 26: 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 27: Conservative Lending Limit/Risk Grades
Conservative Lending Limit/Risk Grades Borrower Asset Quality Rating In-House Direct Lending Limit (Risk Grades) 0 - Investment Grade $100.0 1 - Minimal Grade $100.0 2 - Modest Grade $87.5 3 - Average Risk $75.0 4 - Monitor $60.0 5 - Weak Monitor $45.0 6 - Watch $25.0 Borrower Asset Quality Rating (
Slide 28: 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 29: 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 30: 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 31: 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 32: Strong Capital Position
Strong Capital Position 4Q24 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 stoc
Slide 33: Appendix
Appendix Lo OLD NATIONAL BANCORP’
Slide 34: 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 35: 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 36: Commitment to Strong Corporate Governance
Commitment to Strong Corporate Governance • Stock ownership guidelines have been established for executive officers as follows: Position or Salary Target Ownership Guidelines Chief Executive Officer 5X salary in stock or 200,000 shares Chief Operating Officer 4X salary in stock or 100,000 shares Sal
Slide 37: Commitment to Excellence
Commitment to Excellence Trade names, trademarks and service marks of other companies appearing in this presentation are the property of their respective holders 37
Slide 38: Commitment to Corporate Social Responsibility
Commitment to Corporate Social Responsibility Old National’s 2023 Environmental, Social and Governance (“ESG”) Report showcases our commitment to: • Strong risk management and corporate governance principles • Putting our clients at the center of all we do • Investing in our team members • Diversity
Slide 39: ESG At A Glance - 2023
ESG At A Glance - 2023 $564 MILLION in Community Reinvestment Act (CRA)-eligible community development loans that supported affordable housing, economic development, community services for low- and moderate-income people, and revitalization/stabilization of low- and moderate-income communities woe $
Slide 40: 2024 Executive Compensation
2024 Executive Compensation • Tied to long-term shareholder value Short-Term Incentive Compensation Performance Measure Weight Adjusted EPS 100% Pre-determined formulaic modifiers for relative deposit cost and deposit growth versus banks in the KRX Index Long-Term Equity Compensation Performance Mea
Slide 41: Board of Directors and Corporate Governance
Board of Directors and Corporate Governance 93% Independent 47% Female and minority directors Tenure1 80% Other public company Lead Independent Since 2025, Daniel Hermann will 20% experience Director serve as Lead Independent Director 0-5 years 33% 6-10 years Annual Elected each year for one- Stock
Slide 42: Pro Forma Earnings Per Share Reconciliation
Pro Forma Earnings Per Share Reconciliation Source: S&P Capital IQ, FactSet, ONB filings and management and Bremer filings. Financial Data as of the quarter ended September 30,2024. Pro forma impact is presented for illustrative purposes only. 1 Based on 2026E median consensus estimates 2 There can
Slide 43: 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 44: 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 45: 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 46: 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 47: 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 48: 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
Slide 49: Old National Investor Relations Contact
Old National Investor Relations Contact Additional information can be found on the Investor Relations web pages at www.oldnational.com Investor Inquiries: Lynell J. Durchholz, CPA SVP - Director of Investor Relations 812-464-1366 lynell.durchholz@oldnational.com 49