Old National Bancorp Earnings 2020-03-31

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

onb-20200331

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, 2020


☐			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 (s232.405 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 165,109,000 shares outstanding at March 31, 2020.

OLD NATIONAL BANCORP

FORM 10-Q

TABLE OF CONTENTS

Page

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements

Consolidated Balance Sheets

Consolidated Statements of Income (unaudited)

Consolidated Statements of Comprehensive Income (unaudited)

Consolidated Statements of Changes in Shareholders’ Equity (unaudited)

Consolidated Statements of Cash Flows (unaudited)

Notes to Consolidated Financial Statements (unaudited)

Note 1.

Basis of Presentation

Note 2.

Recent Accounting Pronouncements

Note 3.

Net Income Per Share

Note 4.

Investment Securities

Note 5.

Loans Held for Sale

Note 6.

Loans and Allowance for Credit Losses

Note 7.

Other Real Estate Owned

Note 8.

Premises and Equipment

Note 9.

Leases

Note 10.

Goodwill and Other Intangible Assets

Note 11.

Loan Servicing Rights

Note 12.

Qualified Affordable Housing Projects and Other Tax Credit Investments

Note 13.

Securities Sold Under Agreements to Repurchase

Note 14.

Federal Home Loan Bank Advances

Note 15.

Other Borrowings

Note 16.

Accumulated Other Comprehensive Income (Loss)

Note 17.

Share-Based Compensation

Note 18.

Income Taxes

Note 19.

Derivative Financial Instruments

Note 20.

Commitments and Contingencies

Note 21.

Financial Guarantees

Note 22.

Segment Information

Note 23.

Fair Value

Note 24.

Revenue from Contracts with Customers

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Financial Highlights

Non-GAAP Financial Measures

Executive Summary

Results of Operations

Financial Condition

Risk Management

Off-Balance Sheet Arrangements

Contractual Obligations

Critical Accounting Policies and Estimates

Forward-Looking Statements

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

PART II.

OTHER INFORMATION

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 5.

Other Information

Item 6.

Exhibits

SIGNATURE

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’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)

CECL: current expected credit loss

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

COVID-19: Novel coronavirus originating in Wuhan, China in December 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

Klein: Klein Financial, Inc.

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

NASDAQ: The NASDAQ Stock Market LLC

NOW: negotiable order of withdrawal

OCC: Office of the Comptroller of the Currency

OTTI: other-than-temporary impairment

PCD: purchased with credit deterioration

PCI: purchased credit impaired

PD: probability of default

PSA: prepayment speed assumptions

Renewable Energy: investment tax credits for solar projects

SBA: Small Business Administration

SEC: Securities and Exchange Commission

SOFR: Secured Overnight Financing Rate

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, 2020		December 31, 2019
	(unaudited)
Assets
Cash and due from banks	$	203,533	$	234,766
Money market and other interest-earning investments	139,644		41,571
Total cash and cash equivalents	343,177		276,337
Equity securities	6,870		6,842
Investment securities - available-for-sale, at fair value:
U.S. Treasury	11,733		17,682
U.S. government-sponsored entities and agencies	519,171		592,984
Mortgage-backed securities	3,210,000		3,183,861
States and political subdivisions	1,302,395		1,275,643
Other securities	316,726		314,921
Total investment securities - available-for-sale	5,360,025		5,385,091
Federal Home Loan Bank/Federal Reserve Bank stock, at cost	174,113		164,099
Loans held for sale, at fair value	54,209		46,898
Loans:
Commercial	3,046,579		2,890,296
Commercial real estate	5,283,464		5,166,792
Residential real estate	2,327,851		2,334,289
Consumer credit, net of unearned income	1,726,718		1,726,147
Total loans	12,384,612		12,117,524
Allowance for loan losses (1)	(106,380)		(54,619)
Net loans	12,278,232		12,062,905
Premises and equipment, net	462,364		490,925
Operating lease right-of-use assets	86,819		95,477
Accrued interest receivable	77,810		85,123
Goodwill	1,036,994		1,036,994
Other intangible assets	56,329		60,105
Company-owned life insurance	450,148		448,967
Net deferred tax assets	17,576		29,705
Loan servicing rights	24,132		25,368
Other assets	312,343		196,831
Total assets	$	20,741,141	$	20,411,667
Liabilities
Deposits:
Noninterest-bearing demand	$	4,058,559	$	4,042,286
Interest-bearing:
Checking and NOW	4,105,006		4,149,639
Savings	2,853,305		2,845,423
Money market	1,746,798		1,833,819
Time	1,541,694		1,682,230
Total deposits	14,305,362		14,553,397
Federal funds purchased and interbank borrowings	560,770		350,414
Securities sold under agreements to repurchase	318,067		327,782
Federal Home Loan Bank advances	2,130,263		1,822,847
Other borrowings	236,114		243,685
Operating lease liabilities	95,830		99,500
Accrued expenses and other liabilities	271,300		161,589
Total liabilities	17,917,706		17,559,214
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, 165,109 and 169,616 shares issued and outstanding, respectively	165,109		169,616
Capital surplus	1,870,260		1,944,445
Retained earnings	649,909		682,185
Accumulated other comprehensive income (loss), net of tax	138,157		56,207
Total shareholders' equity	2,823,435		2,852,453
Total liabilities and shareholders' equity	$	20,741,141	$	20,411,667

(1)Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.

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)	2020		2019
Interest Income
Loans including fees:
Taxable	$	128,727	$	138,972
Nontaxable	3,625		4,223
Investment securities:
Taxable	27,356		28,037
Nontaxable	7,942		7,408
Money market and other interest-earning investments	349		278
Total interest income	167,999		178,918
Interest Expense
Deposits	12,298		16,444
Federal funds purchased and interbank borrowings	1,240		1,918
Securities sold under agreements to repurchase	384		662
Federal Home Loan Bank advances	7,768		9,931
Other borrowings	2,538		2,915
Total interest expense	24,228		31,870
Net interest income	143,771		147,048
Provision for loan losses (1)	16,950		1,043
Net interest income after provision for loan losses	126,821		146,005
Noninterest Income
Wealth management fees	8,884		8,535
Service charges on deposit accounts	10,077		10,826
Debit card and ATM fees	4,998		5,503
Mortgage banking revenue	11,119		5,011
Investment product fees	5,874		5,271
Capital markets income	4,328		2,517
Company-owned life insurance	3,080		3,188
Debt securities gains (losses), net	5,174		(103)
Other income	3,968		5,668
Total noninterest income	57,502		46,416
Noninterest Expense
Salaries and employee benefits	79,173		71,183
Occupancy	15,133		14,578
Equipment	5,305		4,474
Marketing	3,097		3,723
Data processing	9,467		9,341
Communication	2,798		3,054
Professional fees	4,293		2,910
Loan expenses	1,771		1,912
FDIC assessment	1,609		2,087
Amortization of intangibles	3,776		4,472

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	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	2020-05-08
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-31.1	onbexhibit3111q20.htm
EX-31.2	onbexhibit3121q20.htm
EX-32.1	onbexhibit3211q20.htm
EX-32.2	onbexhibit3221q20.htm

ONB 10Q Quarterly Report

Old National Bancorp Earnings 2020-03-31