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| 8-K - 8-K - OLD NATIONAL BANCORP /IN/ | d74139d8k.htm |
 Investment Thesis Financial Data as of 06-30-15 Dated: August 4, 2015 Exhibit 99.1 |
 Investment Thesis Executive Summary Slides 2 to 14 Financial Data as of 06-30-15 Dated: August 4, 2015 * * * * * * |
 3 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 Bancorp’s (“Old
National’s”) financial condition, results of operations, asset and credit quality trends and profitability. Forward-looking statements can be identified by the use of the words
“anticipate,” “believe,” “expect,” “intend,”
“could” and “should,” and other words of similar meaning. These forward-looking statements express management’s current expectations or forecasts of future
events and, by their nature, are subject to risks and uncertainties and there are a
number of factors that could cause actual results to differ materially from
those in such statements. Factors that might cause such a difference
include, but are not limited to: expected cost savings, synergies and other financial benefits from the recently completed mergers might not be realized within the expected timeframes and
costs or difficulties relating to integration matters might be greater than expected;
expected cost savings in connection with recent branch divestitures may not
be fully realized, and deposit attrition, customer loss, and revenue loss
may be greater than expected; market, economic, operational, liquidity,
credit and interest rate risks associated with Old National’s business; competition; government legislation and policies (including the impact of the Dodd-Frank Wall Street Reform and
Consumer Protection Act and its related regulations); ability of Old National to execute
its business plan; changes in the economy which could materially impact
credit quality trends and the ability to generate loans and gather
deposits; failure or circumvention of our internal controls; failure or
disruption of our information systems; significant changes in accounting, tax or
regulatory practices or requirements; new legal obligations or liabilities
or unfavorable resolutions of litigations; disruptive technologies in
payment systems and other services traditionally provided by banks; computer hacking and other cybersecurity threats; other matters discussed in this presentation and other factors
identified in our Annual Report on Form 10-K and other periodic filings with the
SEC. These forward- looking statements are made only as of the
date of this presentation, and Old National does not undertake an
obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this presentation. |
 4 Non-GAAP Financial Measures These slides contain 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 to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the registrant; or includes amounts, or is subject to adjustments
that have the effect of including amounts, that are excluded
from the most directly comparable measure so calculated and
presented. In this regard, GAAP refers to
generally accepted accounting principles in the United
States. Pursuant to the requirements of Regulation G,
Old National Bancorp has provided reconciliations within
the slides, as necessary, of the non-GAAP financial
measure to the most directly comparable GAAP financial
measure. |
 5 Snapshot of Old National Source: SNL Financial, Company filings, FactSet Estimates Note: Market data as of July 30, 2015; financial information as of June 30, 2015.
Summary Overview Company Description Headquarters Evansville, IN Market Cap (millions) $ 1,659 2015E P / E 15.8x P / TBV 201% Dividend Yield 3.3 % LTM Average Daily Volume 645,544 Total Assets $ 12,076 Trust Assets Under Management $ 8,073 Total Core Deposits $ 8,763 2Q15 ROAA .88 % $ in millions, except noted Largest financial services bank holding company headquartered in Indiana with
a presence throughout Indiana, Western Kentucky and Louisville, Southern
Illinois and Central and Western Michigan
–
180 financial centers
–
208 ATMs
Focused on community banking with a full suite of product
offerings: –
Retail and small business
–
Wealth management
–
Mortgage
Guided by three strategic imperatives
–
Strengthen the risk profile
–
Enhance management discipline
–
Achieve consistent quality earnings
–
Investment services
–
Capital markets
–
Insurance
Asset Mix Liability Mix 2Q15 Revenue Breakdown |
 6 Attractive footprint that offers both leading share in mature markets
and room to expand in higher growth markets
Consistent financial performance with distinct revenue streams and
actions taken to improve efficiency
Diverse loan portfolio with growth accelerating while maintaining
strong credit metrics
Disciplined acquisitions that are exceeding expectations with robust
future opportunities
Steward of capital –
organic growth, dividend / share repurchases,
and acquisitions
Achieving strategic imperatives
Investment Thesis |
 7 Commitment to Excellence |
 8 Old National’s Landscape 1 1 Assumes successful completion of pending branch sales in 3Q15 |
 9 Our Indiana Footprint Economic Vital Signs Indicator Outlook Latest Statistics (June 2015) Trend (YoY change from June 2014) Jobs Employment Unemployed 3,248,300 157,900 • Labor Force increased 16,800 • Unemployment rate decreased to 5.3% (June 2014 rate was 6.1%) Unemployment Insurance Claims Initial Claims Weeks Claimed 15,837 98,844 • Initial claims decreased 8.6% • Weeks claimed decreased 33.2% Home Sales Units Sold Median Home Price 7,911 $142,500 • The number of home sales increased 8.5% • The median sale price increased 6.3% Regional Spending Net Sales Tax Collected $621.6 MM • Sales tax collections decreased 1.9% Local Indiana HQ Stock Performance Price Change during 2Q15 CMI: (5.4)% LLY: 14.9% NI: 3.2% SPG: (11.6)% STLD: 3.1% ANTM: 6.3% • Stock prices have generally increased as overall economy improves Strong Stable or Mixed Decline
Sources: US Bureau of Labor Statistics, US Dept. of Labor, Indiana Association of
Realtors, IN Dept. of Revenue and Bloomberg |
 10 Our Michigan Footprint Projected 2020 Median Household Income Ann Arbor, Michigan (MSA Population: 358,564) Highest median household income MSA in Michigan May 2015 unemployment rate of 4.2%, compared to the national rate of 5.3% Listed in Forbes’ 2013 “Best Places for Business and Careers” and was Livability.com’s 13th “Best Place to Live”
Kalamazoo, Michigan (MSA Population: 334,915)
Popular area for healthcare and pharmaceutical
organizations, with major companies such as Pfizer, Perrigo
and Stryker housing large operations
May 2015 unemployment rate of 5.2% compared to the
national rate of 5.3%
Projected 2015-2020 Median HHI Growth
Grand Rapids, Michigan (MSA Population: 1,031,360)
Home to five of the world’s leading office furniture
companies.
May 2015 unemployment rate of 4.2%, compared to the
national rate of 5.3%
Source: SNL Financial and Bureau of Labor Statistics as of July, 2015
(1) Crain’s Detroit Business, article published July 16, 2014 Michigan named "most improved" in ranking of pro-business states in 2014 by the American Economic
Institute
(improved
from 39th to 18th) 1 6.7% 7.3% 4.7% 5.2% 3.2% 5.8% USA Indiana Michigan Ann Arbor MSA Kalamazoo MSA Grand Rapids MSA $57,294 $52,614 $50,421 $62,312 $46,609 $55,836 USA Indiana Michigan Ann Arbor MSA Kalamazoo MSA Grand Rapids MSA |
 11 Indiana’s Economic Achievements “AAA” Credit Rating – Fitch, Moody’s and Standard and Poor’s 1 3 rd Best U.S. State for Manufacturing Jobs 2 6 th Best State for Business – CEO Magazine 3 280 new manufacturing jobs created – Berry Plastics, Evansville, Indiana 4 230 new jobs created – GE Aviation, Lafayette, Indiana 5 Sources: (1) December 2013 (2) June 2013; National Association of Manufacturers (3) May 2014 (4) January 2014 press release of Berry Plastics (5) January 2015 press release of GE Aviation |
 12 2Q15 Highlights Reported net income of $26.2 million, or $.22 per share – 22% increase in EPS Y/Y and Q/Q Continue to grow organic revenue – 7% annualized loan growth – Stable net interest margin – Positive trends in all fee-based businesses Improve operating leverage – 1% decline in operational expenses from 1Q15 – Adjusted Efficiency Ratio of 66.9% 1 – Anticipate branch sales to close mid-August Prudent use of capital – 1.9 million shares of stock repurchased – Additional 1.0 million authorized on July 23, 2015 – Tangible Common Equity of 7.23% 1 Non-GAAP financial measure which Management believes is useful in evaluating the financial results of the Company –
see Appendix for Non-GAAP reconciliation |
 13 $0.22 $0.25 2Q14 2Q15 Earnings Per Share 2Q15 Adjusted Net Income Adjusted Net Income excludes acquisition & divestiture charges 1 Non-GAAP financial measure which Management believes is useful in evaluating the financial results of the Company –
see Appendix for Non-GAAP reconciliation
2Q15 ROA of 1.0% 1 ROTCE of 15.7% 1 |
 14 2015 Initiatives – Execution is KEY Grow organic revenue – Redesigned checking product lineup – Leverage fee income businesses Enhanced referral program Leverage new markets + Lexington, KY satellite operations Capital Markets hires Improve operating leverage – Expect operational expenses to be in the mid $90 millions in 4Q15 upon completion of efficiency
initiatives
Close/consolidate 19 banking centers
Sale of Southern Illinois market (12 locations)
Sale of 5 banking centers (4 in Eastern Indiana + 1 in Ohio)
Early retirement program
–
Gains on sales should offset costs associated with these
actions –
Efficiency ratio target is 63.0% in 4Q15 –
represents 25% of 2015 short-term incentive performance
goals Prudent use of capital – Share buyback program – another 1.0 million shares authorized at July Board meeting – Pause means pause Anticipated timing of branch actions: 3 consolidations in 1Q15, 16 consolidations in 2Q15, sales should be completed by mid-August,
2015 Approx. $600 million in deposits
and $200 million in loans combined |
 Investment Thesis Financial Data as of 06-30-15 Dated: August 4, 2015 * * * * * * |
 16 Total Loan Growth $ in millions – End of Period 1 Includes Loans Held for Sale and Covered Loans – Excluding covered loans, loan growth was $2.2 million in 1Q15 and $122.1 million in 2Q15
$6,863.0 $120.7 $6,863.0 $6,983.7 March 31, 2015 June 30, 2015 Loan Growth Loan growth predominantly in footprint, not syndicated deals, participations or acquired 1 1 |
 17 $227.8 $378.0 1Q15 2Q15 Commercial & Commercial Real Estate Loans $ in millions 1 New Quarterly Production includes 50% credit for unfunded commitments Yield is based on funded balances only 3.23% 3.37% 1Q15 2Q15 New Quarterly Production Production Yield 2 Average loan size of 2Q15 production is less than $400,000 Approximately 45% of new 2Q15 outstanding production was to new loan clients $349 $468 $299 $83 $175 $210 $98 $190 $232 $530 $833 $740 2Q14 1Q15 2Q15 Discussed Proposed Accepted Loan Pipeline 1 2 |
 18 $65.2 $84.7 4.52% 4.44% 1Q15 2Q15 New Quarterly Production Production Yield $126.4 $180.9 3.79% 3.74% 1Q15 2Q15 New Quarterly Production Production Yield Loan Production & Yield Trends $ in millions New quarterly production includes unfunded commitments – Yield is based on funded balances only Residential Mortgage Consumer Direct Consumer Indirect $163.8 $157.7 2.21% 2.39% 1Q15 2Q15 New Quarterly Production Production Yield |
 19 Loan Concentrations – Excluding Covered Loans As of June 30, 2015 Commercial Commercial Real Estate Diversified Commercial Loan Portfolio Healthcare/Soci al Services, 9% Public Admin, 8% Manufacturing, 13% Educational Services, 8% Wholesale Trade, 8% Retail, 6% Other, 21% Real Estate Rental & Leasing, 6% Agriculture, 7% Construction & Land Dev, 7% Finance & Insurance, 4% Professional Services, 3% |
 20 $ in millions Credit Quality $118.0 $155.9 $167.8 2Q14 1Q15 2Q15 Substandard Nonaccruing + Doubtful Loans $119.4 $190.0 $173.9 2Q14 1Q15 2Q15 Special Mention Loans $110.7 $97.2 $88.7 2Q14 1Q15 2Q15 Substandard Accruing Loans |
 21 Credit Quality See Appendix for definition of Peer Group 1 As a % of end of period total loans Peer Group data per SNL Financial 0.07% -0.06% 0.06% -$0.4 $0.0 $2.3 -$1.0 $0.0 $1.0 $2.0 $3.0 -0.1% 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 2Q14 1Q15 2Q15 Net Charge-Offs / Provision NCOs Provision for Loan Losses $ in millions 0.47% 0.40% 0.31% 0.84% 0.69% 2Q14 1Q15 2Q15 30+ Day Delinquent Loans 1 ONB Peer Group Average 0.01% 0.00% 0.01% 0.30% 0.22% 2Q14 1Q15 2Q15 90+ Day Delinquent Loans 1 ONB Peer Group Average |
 22 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 At June 30, 2015 ONB Legacy Monroe Integra Indiana Community Tower United Lafayette Founders Total Allowance for Loan Losses (ALLL) $47.3 $1.0 $1.8 $0.0 $0.0 $0.0 $0.0 $0.0 $50.2 Loan Mark N/A $5.5 $32.0 $20.1 $16.5 $28.9 $18.6 $16.0 $137.5 Total ALLL/Mark $47.3 $6.5 $33.8 $20.1 $16.5 $28.9 $18.6 $16.0 $187.6 Pre-Mark Loan Balance $5,230.9 $96.7 $173.1 $156.7 $249.6 $486.8 $206.2 $303.5 $6,903.5 ALLL/Pre-Mark Loan Balance 0.90% 1.03% 1.02% 0.00% 0.00% 0.01% 0.00% 0.00% 0.73% Mark/Pre-Mark Loan Balance N/A 5.53% 18.28% 12.82% 6.55% 5.93% 9.02% 5.27% 1.99% Combined ALLL & Mark/Pre- Mark Loan Balance 1 0.90% 6.56% 19.31% 12.82% 6.55% 5.94% 9.02% 5.27% 2.71% |
 23 Conservative Lending Limits/Risk Grades Borrower 1 Asset Quality Rating (Risk Grades) In-House Lending Limit 1 ($ in millions) 0 – Investment Grade $30 1 – Minimal Risk $25 2 – Modest Risk $25 3 – Average Risk $22.5 4 – Monitor $15 5 – Weak Monitor $10 6 – Watch $7.5 7 – Criticized (Special Mention) $5 In-house lending limits conservative relative to ONB’s legal lending limit
at 06-30-15 of $152.6 million per borrower
1 Includes entire relationship with borrower Borrower 1 Asset Quality Rating (Risk Grades) 8 – Classified (Problem) 9 – Nonaccrual |
 24 0.00 2.00 4.00 6.00 8.00 10.00 12.00 Total ABS Corporates Municipals CMOs Pools Agencies Treasuries 4.62 0.00 5.59 9.35 3.16 5.75 2.50 0.00 Duration of Purchases Investment Portfolio Purchases 2Q15 1 1 Data as of June 30, 2015 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% Total ABS Corporates Municipals CMOs Pools Agencies Treasuries 2.36% 0.00% 2.77% 4.75% 2.17% 2.76% 1.31% 0.00% T/E Book Yield of Purchases Q2 2015 Purchases- Book Value Treasuries - Agencies 130,499,990 Pools 3,650,486 CMOs 98,722,017 Municipals 92,074,403 Corporates 7,489,689 ABS - Equity - Total 332,436,585 |
 25 Investment Portfolio 1 Includes market value for both available-for-sale and held-to-maturity securities
$ in millions
Book Value Mar 31, 2015 Book Value Jun 30, 2015 Market Value 1 Mar 31, 2015 Market Value 1 Jun 30, 2015 Market Value $ Change Federal National Mortgage Association $432.0 $412.6 $438.1 $414.5 Federal Home Loan Mortgage Corporation 217.7 242.6 218.1 241.5 Federal Farm Credit Bank 60.7 53.8 61.1 53.5 Federal Home Loan Bank and Other 163.4 135.5 164.7 135.0 Subtotal U.S. Government Agencies-Senior Debentures $873.8 $844.5 $882.0 $844.5 ($37.5) U.S. Treasury $24.9 $12.0 $25.2 $12.2 ($13.0) Mortgage Backed Securities $1,099.7 $1,120.7 $1,113.2 $1,124.5 $11.3 Trust Preferred 31.3 27.2 19.3 15.9 Other Corporate 324.0 323.9 325.2 322.3 Subtotal Corporate Securities $355.3 $351.1 $344.5 $338.2 ($6.3) Municipal Securities – Taxable $199.0 $195.8 $256.9 $235.0 ($21.9) Municipal Securities – Tax Exempt $779.5 $849.3 $788.3 $850.6 $62.3 Federal Reserve, FHLB Stock, Other Securities $110.1 $106.5 $110.1 $106.5 ($3.6) Totals $3,442.3 $3,479.9 $3,520.2 $3,511.5 ($8.7) |
 26 3.26% 3.14% 3.15% 0.81% 0.56% 0.60% 4.07% 3.70% 3.75% 2Q14 1Q15 2Q15 ONB Core Acquisition Accretion Net Interest Margin 1 1 Fully taxable equivalent basis, non-GAAP financial measure which Management believes is useful in evaluating the financial results of the
Company – see
Appendix for Non-GAAP reconciliation
2 ONB Core includes contractual interest income of Monroe, Integra, IN Community, Tower, United, Lafayette and Founders loans
2 |
 27 $73 $100 Pre-Marked Integra Loans Non-PCI PCI Acquired Loans $1,440 $60 Pre-Marked Acquired
Loans
(excluding Integra loans)
Non-PCI PCI $ in millions – as of June 30, 2015 1 1 $25 million is considered nonaccrual PCI = Purchased Credit Impaired Remaining Discount Non-PCI 5% ($77) PCI 47% ($28) Remaining Discount Non-PCI 4% ($3) PCI 29% ($29) |
 28 $36.9 $57.5 $59.0 $86.6 $48.3 $34.5 $17.5 $(0.4) $3.4 $9.3 $43.2 $7.2 $3.8 $0.3 2011 2012 2013 2014 2015 2016 2017 Projected Accretion Income Projected Purchase Accounting Impact Actual Accretion Projected Accretion 1 Actual Discount Projected Discount 1 $ in
millions
1 Projections assume no prepayments – updated quarterly – subject to change IA = Indemnification Asset Manageable declines in purchase accounting impact expected in future periods Actual IA Amortization Projected IA Amortization 1 Net Income Statement Contribution $252.9 $224.1 $146.1 $148.5 $118.7 $84.1 $66.6 2011 2012 2013 2014 2015 2016 2017 Projected Remaining Discount |
 29 Modeled Interest Rate Sensitivity $ in thousands Change to Net Interest Income based on a one year time horizon Refer to slide 31 for rate curves Total non-maturity, interest- bearing accounts increase from 0.06% to 0.38% in the “Up 100 bps” scenario 18.9% of total non-interest bearing DDA are considered rate sensitive 41% of C&I and CRE loans reprice within one year 17% of loans have floors; less than 1% of these loans are currently below their floor rates Investment portfolio duration of 4.23 at 06/30/15, up from 3.74 at 03/31/15. |
 30 Modeled Interest Rate Sensitivity $ in thousands Change to Net Interest Income based on a two year time horizon Refer to slide 31 for rate curves |
 31 Interest Rate Curves |
 32 Tangible Common Equity $ in millions 1.9 million shares of stock repurchased at an average price of $13.77 during 2Q15 On July 23, 2015, the ONB Board of Directors approved an additional 1.0 million shares to be added to the original 6.0 million authorization approved in October, 2014 Tangible Common Equity – 03/31/2015 $851.6 2Q15 Earnings 26.2 2Q15 Dividend (13.8) 2Q15 Share Repurchase (26.4) Changes in OCI – Securities (16.7) Changes in Equity - Other 4.3 Changes in Goodwill & Intangibles 2.1 Tangible Common Equity – 06/30/2015 $827.3 |
 33 Capital Ratios Peer Group data per SNL Financial See Appendix for definition of Peer Group 1 See Appendix for Non-GAAP reconciliation 14.0% 12.2% 11.6% 13.5% 12.7% 2Q14 1Q15 2Q15 Tier 1 Risk-Based Capital Ratio ONB Peer Group Average 8.4% 7.5% 7.2% 8.8% 8.6% 2Q14 1Q15 2Q15 Tangible Common Equity to Tangible Assets 1 ONB Peer Group Average |
 34 Total Revenue $ in millions $84.5 $91.0 $92.1 $39.7 $55.3 $55.0 $124.2 $146.3 $147.1 2Q14 1Q15 2Q15 Fees, Service Charges, Security Gains & Other Rev.
Net Interest Income |
 35 Fee-Based Business Revenue $ in millions $8.5 $9.4 1Q15 2Q15 Wealth Management $4.4 $4.7 1Q15 2Q15 Investments $3.0 $4.3 1Q15 2Q15 Mortgage Banking Contingency Revenues $10.0 $10.1 $2.1 $0.1 $12.1 $10.2 1Q15 2Q15 Insurance |
 36 $91.8 $105.2 $104.2 $6.3 $4.0 $7.0 $4.0 $98.1 $116.2 $109.7 2Q14 1Q15 2Q15 Operational Expenses Merger/Integration Costs Efficiency Program Charges $ in millions 1 Operational expenses = total noninterest expense less merger/integration costs and efficiency program charges – includes ongoing operating costs associated with recent acquisitions Noninterest Expense Adjusted 2Q15 efficiency ratio of 66.9% 2 2Q15 operational expenses include $1.0 million in annual merit increases Expect operational expenses to be in the mid $90’s in 4Q15 upon completion of efficiency initiatives 2 Non-GAAP financial measure which Management believes is useful in evaluating the financial results of the Company – see Appendix for Non-GAAP reconciliation $1.5 |
 37 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 February, 2007 Acquired 65 Charter One branches throughout Indiana March, 2009 Acquired Monroe Bancorp – Enhanced Bloomington, IN presence January, 2011 Acquired Indiana Community – Entry into Columbus, IN September, 2012 FDIC-assisted acquisition of Integra Bank July, 2011 Sold non- strategic market – Chicago-area - 4 branches Consolidation of 21 branches Acquired 24 MI / IN branches July, 2013 Consolidation of 2 branches Consolidation of 8 branches Consolidation of 1 branch Consolidation of 10 branches Consolidation of 12 branches Consolidation of 44 branches Consolidation of 5 branches Sold 12 branches Consolidation of 22 branches Acquired 209 Sold 22 Consolidated 148 Acquired Tower Financial – Enhancing Ft. Wayne, IN presence April, 2014 Transforming Old National’s Landscape Acquired United Bancorp — Entering Ann Arbor, MI July, 2014 2014 Consolidation of 4 branches Acquired LSB Financial Corp.– Enhancing Lafayette, IN presence November 1, 2014 Acquired Founders Financial Corporation– Entry into Grand Rapids , MI January 1, 2015 2015 Consolidation of 19 branches |
 38 Committed to Strong Corporate Governance Stock ownership guidelines have been established for named executive officers as follows: As of June 30, 2015, each named executive officer has met their stock ownership requirement 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 Salary equal to or greater than $250,000 3X salary in stock or 50,000 shares Salary below $250,000 2X salary in stock or 25,000 shares Salary equal to or less than $150,000 1X salary in stock or 15,000 shares |
 39 Executive Compensation Tied to long term shareholder value: Short Term Incentive Plan (CEO, CFO, CBA, CCO, Chief Legal Counsel) Performance Measure Weight Corporate Net Income 60% Net Charge-Offs 15% Efficiency Ratio 25% Long Term Incentive Plan (CFO,CBA, CCO, Chief Legal Counsel) Performance Measure Weight Performance-based 75% (67% TSR & 33% EPS Growth) Service-based 25% Long Term Incentive Plan (CEO) Performance Measure Weight Performance-based 100% (75% TSR & 25% EPS Growth) |
 Appendix * * * * * * * * |
 41 Non-GAAP Reconciliations $ in millions end of period balances 2Q14 1Q15 2Q15 Total Shareholders’ Equity $1,277.3 $1,483.3 $1,456.7 Deduct: Goodwill and Intangible Assets (439.3) (631.6) (629.5) Tangible Common Shareholders’ Equity $838.1 $851.6 $827.3 Total Assets $10,387.9 $11,951.3 $12,075.8 Add: Trust Overdrafts 0.0 0.1 0.1 Deduct: Goodwill and Intangible Assets (439.3) (631.6) (629.5) Tangible Assets $9,948.7 $11,319.7 $11,446.4 Tangible Equity to Tangible Assets 8.42% 7.52% 7.23% Tangible Common Equity to Tangible Assets 8.42% 7.52% 7.23% Net Income $18.8 $20.9 $26.2 After-Tax Intangible Amortization 1.7 2.8 2.7 Tangible Net Income $20.4 $23.7 $28.8 ROTCE 9.76% 11.12% 13.95% |
 42 Non-GAAP Reconciliations 2Q14 1Q15 2Q15 Reported Pre-Tax Income (FTE Basis) $30.7 $34.8 $39.9 Add Back - Acquisition & Divestiture Charges $6.3 $11.0 $5.5 Adjusted Pre-tax income $37.0 $45.8 $45.4 Taxes ($14.4) ($18.3) ($15.6) Adjusted Net Income $22.6 $27.5 $29.8 Average Diluted Shares 104.361 119.076 116.223 Adjusted EPS $0.22 $0.23 $0.25 end of period balances 2Q14 1Q15 2Q15 Total Shareholders’ Equity $1,277.3 $1,483.3 $1,456.7 Deduct: Goodwill and Intangible Assets (439.3) (631.6) (629.5) Tangible Common Shareholders’ Equity $838.1 $851.6 $827.3 Risk Weighted Assets $6,339.2 $7,694.0 $7,991.6 Tangible Common Equity to Risk Weighted Assets 13.22% 11.07% 10.35% end of period balances 2Q14 3Q14 4Q14 1Q15 2Q15 Total Shareholders’ Equity $1,277.3 $1,407.2 $1,465.8 $1,483.3 $1,456.7 Deduct: Goodwill and Intangible Assets (439.3) (530.5) (569.5) (631.6) (629.5) Tangible Common Shareholders’ Equity $838.1 $876.7 $896.2 $851.6 $827.3 Common Shares Issued and Outstanding at Period End 105,851 113,984 116,847 116,983 115,205 Tangible Common Book Value $7.92 $7.69 $7.67 $7.28 $7.18 |
 43 Non-GAAP Reconciliations 2Q14 1Q15 2Q15 Net Interest Income ($ in 000's) $84,482 $90,993 $92,097 Taxable Equivalent Adjustment 4,256 4,658 4,757 Net Interest Income – Taxable Equivalent $88,738 $95,651 $96,854 Average Earning Assets $8,730,063 $10,346,167 $10,325,938 Net Interest Margin 3.87% 3.52% 3.57% Net Interest Margin – Fully Taxable Equivalent 4.07% 3.70% 3.75% 2Q14 1Q15 2Q15 Net Interest Income ($ in 000's) $84,482 $90,993 $92,097 Taxable Equivalent Adjustment 4,256 4,658 4,757 Net Interest Income – Taxable Equivalent $88,738 $95,651 $96,854 Less Accretion 17,630 14,556 15,562 Net Interest Income – Taxable Equivalent Less Accretion $71,108 $81,095 $81,292 Average Earning Assets $8,730,063 $10,346,167 $10,325,938 Core Net Interest Margin - Fully Taxable Equivalent 3.26% 3.14% 3.15% |
 44 Non-GAAP Reconciliations Efficiency Ratio - As Reported 2Q15 Net Interest Income (FTE) ($ in millions) $96.9 Noninterest Income 55.0 Less Security Gains 0.5 Revenue Less Security Gains 151.3 Noninterest Expense 109.7 Intangible Amortization 3.0 Noninterest Expense Less Intangible Amortization 106.7 Efficiency Ratio 70.52% Efficiency Ratio Excluding Acquisition Costs & Branch Divestitures
2Q15 Net Interest Income (FTE) ($ in millions) $96.9 Noninterest Income 55.0 Less Security Gains 0.5 Revenue Less Security Gains 151.3 Noninterest Expense 109.7 Intangible Amortization 3.0 Acquisition Costs 1.5 Branch Divestitures 4.0 Noninterest Expense Less Intangible Amortization, Acquisition & Branch Divestiture Cost
101.2 Adjusted Efficiency Ratio 66.86% |
 45 Non-GAAP Reconciliations 2Q15 Net Income $26.2 Plus Acquisition Costs (after tax) $1.0 Plus Branch Divestitures (after tax) $2.6 Adjusted Net Income $29.8 Plus After-Tax Intangible Amortization $2.7 Tangible Net Income $32.5 Adjusted ROTCE 15.70% 2Q15 Net Income $26.2 Plus Acquisition Costs (after tax) $1.0 Plus Branch Divestitures (after tax) $2.6 Adjusted Net Income $29.8 Average Assets $11,911.6 Adjusted ROA 1.00% |
 46 Old National’s Peer Group •Like-size, publicly-traded financial services companies, generally in the Midwest, serving comparable demographics with comparable services as ONB Associated Banc-Corporation ASB MB Financial Inc. MBFI BancFirst Corporation BANF National Penn Bancshares Inc. NPBC BancorpSouth, Inc. BXS Park National Corporation PRK Bank of Hawaii Corporation BOH PrivateBancorp, Inc. PVTB Chemical Financial Corporation CHFC Prosperity Bancshares Inc. PB Commerce Bancshares, Inc. CBSH Renasant Corporation RNST Cullen/Frost Bankers, Inc. CFR South State Corporation SSB F.N.B. Corporation FNB Susquehanna Bancshares, Inc. SUSQ First Commonwealth Financial Corporation FCF TCF Financial Corporation TCB First Finanacial Bancorp. FFBC TFS Financial Corporation TFSL First Merchants Corporation FRME Trustmark Corporation TRMK First Midwest Bancorp Inc. FMBI UMB Financial Corporation UMBF FirstMerit Corporation FMER United Bankshares Inc. UBSI Flagstar Bancorp Inc. FBC Valley National Bancorp VLY Fulton Financial Corporation FULT WesBanco Inc. WSBC Home Bancshares, Inc. HOMB Wintrust Financial Corporation WTFC IberiaBank Corporation IBKC |
 47 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 |