Old National Bancorp Earnings 2021-03-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

onb-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number 1-15817

OLD NATIONAL BANCORP

(Exact name of Registrant as specified in its charter)


Indiana		35-1539838
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One Main Street		47708
Evansville,	Indiana	(Zip Code)
(Address of principal executive offices)

(800) 731-2265

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common Stock, No Par Value

ONB

The

NASDAQ

Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock. The registrant has one class of common stock (no par value) with 165,676,000 shares outstanding at March 31, 2021.

OLD NATIONAL BANCORP

FORM 10-Q

TABLE OF CONTENTS


			Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets		4
	Consolidated Statements of Income (unaudited)		5
	Consolidated Statements of Comprehensive Income (unaudited)		6
	Consolidated Statements of Changes in Shareholders’ Equity (unaudited)		7
	Consolidated Statements of Cash Flows (unaudited)		8
	Notes to Consolidated Financial Statements (unaudited)		9
	Note 1.	Basis of Presentation	9
	Note 2.	Recent Accounting Pronouncements	9
	Note 3.	Net Income Per Share	11
	Note 4.	Investment Securities	12
	Note 5.	Loans and Allowance for Credit Losses	15
	Note 6.	Other Real Estate Owned	29
	Note 7.	Premises and Equipment	29
	Note 8.	Leases	29
	Note 9.	Goodwill and Other Intangible Assets	31
	Note 10.	Loan Servicing Rights	32
	Note 11.	Qualified Affordable Housing Projects and Other Tax Credit Investments	33
	Note 12.	Securities Sold Under Agreements to Repurchase	34
	Note 13.	Federal Home Loan Bank Advances	35
	Note 14.	Other Borrowings	36
	Note 15.	Accumulated Other Comprehensive Income (Loss)	37
	Note 16.	Share-Based Compensation	38
	Note 17.	Income Taxes	39
	Note 18.	Derivative Financial Instruments	41
	Note 19.	Commitments and Contingencies	44
	Note 20.	Financial Guarantees	45
	Note 21.	Segment Information	45
	Note 22.	Fair Value	45
	Note 23.	Revenue from Contracts with Customers	52
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		53
	Forward-Looking Statements		53
	Financial Highlights		55
	Non-GAAP Financial Measures		56
	Executive Summary		58
	Results of Operations		59
	Financial Condition		65
	Risk Management		70
	Off-Balance Sheet Arrangements		80
	Contractual Obligations		80
	Critical Accounting Policies and Estimates		81
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		83
Item 4.	Controls and Procedures		83
PART II.	OTHER INFORMATION		84
Item 1A.	Risk Factors		84
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		84
Item 5.	Other Information		84
Item 6.	Exhibits		85
SIGNATURE			86

GLOSSARY OF ABBREVIATIONS AND ACRONYMS

As used in this report, references to “Old National,” “we,” “our,” “us,” and similar terms refer to the consolidated entity consisting of Old National Bancorp and its wholly-owned affiliates. Old National Bancorp refers solely to the parent holding company, and Old National Bank refers to Old National Bancorp’s bank subsidiary.

The acronyms and abbreviations identified below are used in the Notes to Consolidated Financial Statements (Unaudited) as well as in the Management’s Discussion and Analysis of Financial Condition and Results of Operations. You may find it helpful to refer to this page as you read this report.

Anchor (MN): Anchor Bancorp, Inc.

Anchor (WI): Anchor BanCorp Wisconsin Inc.

AOCI: accumulated other comprehensive income (loss)

AQR: asset quality rating

ASC: Accounting Standards Codification

ASU: Accounting Standards Update

ATM: automated teller machine

BBCC: business banking credit center (small business)

CAA: Consolidated Appropriations Act

CARES Act: Coronavirus Aid, Relief and Economic Security Act

CECL: current expected credit loss

Common Stock: Old National Bancorp common stock, without par value

COVID-19: coronavirus 2019

DTI: debt-to-income

FASB: Financial Accounting Standards Board

FDIC: Federal Deposit Insurance Corporation

FHLB: Federal Home Loan Bank

FHTC: Federal Historic Tax Credit

FICO: Fair Isaac Corporation

GAAP: U.S. generally accepted accounting principles

LGD: loss given default

LIBOR: London Interbank Offered Rate

LIHTC: Low Income Housing Tax Credit

LTV: loan-to-value

N/A: not applicable

N/M: not meaningful

NMTC: New Markets Tax Credit

NOW: negotiable order of withdrawal

OCC: Office of the Comptroller of the Currency

PD: probability of default

PPP: Paycheck Protection Program

Renewable Energy: investment tax credits for solar projects

SBA: Small Business Administration

SEC: Securities and Exchange Commission

TBA: to be announced

TDR: troubled debt restructuring

OLD NATIONAL BANCORP

CONSOLIDATED BALANCE SHEETS


(dollars and shares in thousands, except per share data)	March 31, 2021		December 31, 2020
	(unaudited)
Assets
Cash and due from banks	$	154,330	$	268,208
Money market and other interest-earning investments	303,447		321,504
Total cash and cash equivalents	457,777		589,712
Equity securities, at fair value	2,429		2,547
Investment securities - available-for-sale, at fair value:
U.S. Treasury	228,890		10,208
U.S. government-sponsored entities and agencies	1,373,533		841,988
Mortgage-backed securities	3,385,339		3,339,098
States and political subdivisions	1,467,804		1,492,162
Other securities	268,964		286,659
Total investment securities - available-for-sale	6,724,530		5,970,115
Federal Home Loan Bank/Federal Reserve Bank stock, at cost	169,417		169,433
Loans held for sale, at fair value	50,281		63,250
Loans:
Commercial	4,068,896		3,956,422
Commercial real estate	6,074,135		5,946,512
Residential real estate	2,203,277		2,248,422
Consumer credit, net of unearned income	1,578,953		1,635,123
Total loans	13,925,261		13,786,479
Allowance for credit losses	(114,037)		(131,388)
Net loans	13,811,224		13,655,091
Premises and equipment, net	466,559		464,408
Operating lease right-of-use assets	74,611		76,197
Accrued interest receivable	80,841		85,306
Goodwill	1,036,994		1,036,994
Other intangible assets	42,939		46,014
Company-owned life insurance	456,782		456,110
Other assets	370,067		345,445
Total assets	$	23,744,451	$	22,960,622
Liabilities
Deposits:
Noninterest-bearing demand	$	6,091,054	$	5,633,672
Interest-bearing:
Checking and NOW	4,958,791		4,977,046
Savings	3,631,145		3,395,747
Money market	2,125,862		1,908,118
Time deposits	1,042,903		1,122,870
Total deposits	17,849,755		17,037,453
Federal funds purchased and interbank borrowings	922		1,166
Securities sold under agreements to repurchase	395,242		431,166
Federal Home Loan Bank advances	1,912,541		1,991,435
Other borrowings	266,282		252,787
Operating lease liabilities	84,665		86,598
Accrued expenses and other liabilities	255,597		187,361
Total liabilities	20,765,004		19,987,966
Shareholders' Equity
Preferred stock, 2,000 shares authorized, no shares issued or outstanding	—		—
Common stock, $1.00 per share stated value, 300,000 shares authorized, 165,676 and 165,367 shares issued and outstanding, respectively	165,676		165,367
Capital surplus	1,874,572		1,875,626
Retained earnings	847,290		783,892
Accumulated other comprehensive income (loss), net of tax	91,909		147,771
Total shareholders' equity	2,979,447		2,972,656
Total liabilities and shareholders' equity	$	23,744,451	$	22,960,622

The accompanying notes to consolidated financial statements are an integral part of these statements.

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (unaudited)


	Three Months Ended March 31,
(dollars and shares in thousands, except per share data)	2021		2020
Interest Income
Loans including fees:
Taxable	$	122,529	$	128,727
Nontaxable	3,357		3,625
Investment securities:
Taxable	24,131		27,356
Nontaxable	9,132		7,942
Money market and other interest-earning investments	88		349
Total interest income	159,237		167,999
Interest Expense
Deposits	3,159		12,298
Federal funds purchased and interbank borrowings	—		1,240
Securities sold under agreements to repurchase	120		384
Federal Home Loan Bank advances	5,409		7,768
Other borrowings	2,429		2,538
Total interest expense	11,117		24,228
Net interest income	148,120		143,771
Provision for credit losses	(17,356)		16,950
Net interest income after provision for credit losses	165,476		126,821
Noninterest Income
Wealth management fees	9,708		8,884
Service charges on deposit accounts	8,124		10,077
Debit card and ATM fees	5,143		4,998
Mortgage banking revenue	16,525		11,119
Investment product fees	5,864		5,874
Capital markets income	3,715		4,328
Company-owned life insurance	2,714		3,080
Debt securities gains (losses), net	1,993		5,174
Other income	2,926		3,968
Total noninterest income	56,712		57,502
Noninterest Expense
Salaries and employee benefits	68,117		79,173
Occupancy	14,872		15,133
Equipment	3,969		5,305
Marketing	2,062		3,097
Data processing	12,353		9,467
Communication	2,878		2,798
Professional fees	2,724		4,293
FDIC assessment	1,607		1,609
Amortization of intangibles	3,075		3,776
Amortization of tax credit investments	1,202		5,515
Other expense	4,881		28,578
Total noninterest expense	117,740		158,744
Income before income taxes	104,448		25,579
Income tax expense	17,630		2,939
Net income	$	86,818	$	22,640
Net income per common share - basic	$	0.53	$	0.13
Net income per common share - diluted	0.52		0.13
Weighted average number of common shares outstanding - basic	164,997		167,748
Weighted average number of common shares outstanding - diluted	165,707		168,404
Dividends per common share	$	0.14	$	0.14

The accompanying notes to consolidated financial statements are an integral part of these statements.

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)


	Three Months Ended March 31,
(dollars in thousands)	2021		2020
Net income	$	86,818	$	22,640

Other comprehensive income (loss):

Change in debt securities available-for-sale:
Unrealized holding gains (losses) for the period	(73,514)		103,954

Reclassification adjustment for securities (gains) losses realized in income	(1,993)		(5,174)
Income tax effect	16,667		(22,411)
Unrealized gains (losses) on available-for-sale debt securities	(58,840)		76,369

Cash flow hedges:
Net unrealized derivative gains (losses) on cash flow hedges	4,048		7,803
Reclassification adjustment for (gains) losses realized in net income	(149)		(431)
Income tax effect	(958)		(1,811)
Changes from cash flow hedges	2,941		5,561

Defined benefit pension plans:
Amortization of net loss recognized in income	49		27

Price	17.31	EPS	1
Shares	174	P/E	13
MCap	3,004	P/FCF	22
Net Debt	-420	EBIT	408
TEV	2,584	TEV/EBIT	6
TTM 2019-09-30, in MM, except price, ratios

10-Q	2021-03-31	Filed 2021-04-28
10-K	2020-12-31	Filed 2021-02-10
10-Q	2020-09-30	Filed 2020-10-28
10-Q	2020-06-30	Filed 2020-07-29
10-Q	2020-03-31	Filed 2020-04-29
10-K	2019-12-31	Filed 2020-02-12
10-Q	2019-09-30	Filed 2019-10-30
10-Q	2019-06-30	Filed 2019-07-31
10-Q	2019-03-31	Filed 2019-05-02
10-K	2018-12-31	Filed 2019-02-12
10-Q	2018-09-30	Filed 2018-10-31
10-Q	2018-06-30	Filed 2018-08-01
10-Q	2018-03-31	Filed 2018-05-02
10-K	2017-12-31	Filed 2018-02-15
10-Q	2017-09-30	Filed 2017-11-01
10-Q	2017-06-30	Filed 2017-08-01
10-Q	2017-03-31	Filed 2017-05-05
10-K	2016-12-31	Filed 2017-02-16
10-Q	2016-09-30	Filed 2016-11-04
10-Q	2016-06-30	Filed 2016-08-05
10-Q	2016-03-31	Filed 2016-05-06
10-K	2015-12-31	Filed 2016-02-26
10-Q	2015-09-30	Filed 2015-10-30
10-Q	2015-06-30	Filed 2015-07-31
10-Q	2015-03-31	Filed 2015-05-01
10-K	2014-12-31	Filed 2015-02-25
10-Q	2014-09-30	Filed 2014-10-31
10-Q	2014-06-30	Filed 2014-08-01
10-Q	2014-03-31	Filed 2014-05-02
10-K	2013-12-31	Filed 2014-02-25
10-Q	2013-09-30	Filed 2013-11-01
10-Q	2013-06-30	Filed 2013-08-02
10-Q	2013-03-31	Filed 2013-05-03
10-K	2012-12-31	Filed 2013-02-26
10-Q	2012-09-30	Filed 2012-11-02
10-Q	2012-06-30	Filed 2012-08-03
10-Q	2012-03-31	Filed 2012-05-08
10-K	2011-12-31	Filed 2012-02-27
10-Q	2011-09-30	Filed 2011-11-08
10-Q	2011-06-30	Filed 2011-08-08
10-Q	2011-03-31	Filed 2011-05-06
10-K	2010-12-31	Filed 2011-02-25
10-Q	2010-09-30	Filed 2010-11-05
10-Q	2010-06-30	Filed 2010-07-30
10-Q	2010-03-31	Filed 2010-04-30
10-K	2009-12-31	Filed 2010-02-26

8-K	2020-11-02
8-K	2020-10-29
8-K	2020-10-19
8-K	2020-08-10
8-K	2020-07-30
8-K	2020-07-20
8-K	2020-05-08
8-K	2020-04-30
8-K	2020-04-20
8-K	2020-02-03
8-K	2020-01-30
8-K	2020-01-21
8-K	2019-11-04
8-K	2019-10-24
8-K	2019-10-21
8-K	2019-08-06
8-K	2019-08-01
8-K	2019-07-22
8-K	2019-05-02
8-K	2019-04-30
8-K	2019-04-25
8-K	2019-04-22
8-K	2019-04-16
8-K	2019-02-13
8-K	2019-02-05
8-K	2019-01-24
8-K	2019-01-22
8-K	2019-01-15
8-K	2018-11-01
8-K	2018-11-01
8-K	2018-10-25
8-K	2018-10-22
8-K	2018-10-17
8-K	2018-07-30
8-K	2018-07-26
8-K	2018-07-23
8-K	2018-06-20
8-K	2018-05-04
8-K	2018-04-26
8-K	2018-04-23
8-K	2018-02-06
8-K	2018-01-25
8-K	2018-01-23

EX-10.1	onb_exhibit101.htm
EX-10.2	onb_exhibit102.htm
EX-10.3	onb_exhibit103.htm
EX-31.1	onb_exhibit3111q21.htm
EX-31.2	onb_exhibit3121q21.htm
EX-32.1	onb_exhibit3211q21.htm
EX-32.2	onb_exhibit3221q21.htm

ONB 10Q Quarterly Report

Old National Bancorp Earnings 2021-03-31