OLD NATIONAL BANCORP IN
For the period ended Dec 31, 2023. Filed Feb 22, 2024.
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FY2023 · Filed Feb 22, 2024
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Non-GAAP Financial Measures
The Company’s accounting and reporting policies conform to 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 useful because they assist users of the financial statements in assessing the Company’s operating performance. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the following table.
The taxable equivalent adjustment to net interest income and net interest margin recognizes the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal income tax rate of 21%. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on a fully tax-equivalent basis and that it may enhance comparability for peer comparison purposes.
In management’s view, tangible common equity measures are capital adequacy metrics that may be meaningful to the Company, as well as users of the financial statements, in assessing the Company’s use of equity and in facilitating comparisons with peers. These non-GAAP measures are valuable indicators of a financial institution’s capital strength since they eliminate intangible assets from shareholders’ equity and retain the effect of AOCI in shareholders’ equity.
Although intended to enhance understanding of the Company’s business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. In addition, these non-GAAP financial measures may differ from those used by other financial institutions to assess their business and performance. See the previously provided tables and the following reconciliations in the “Non-GAAP Reconciliations” section for details on the calculation of these measures to the extent presented herein.
The following table presents GAAP to non-GAAP reconciliations for the previous five quarters:
| Three Months Ended | |||||
|---|---|---|---|---|---|
| (dollars and shares in thousands,except per share data) | December 31, | September 30, | June 30, | March 31, | December 31, |
| 2023 · 2023 · 2023 · 2023 · 2022 | |||||
| Tangible common book value: | |||||
| Shareholders’ common equity | $5,319,181 | $4,995,818 | $5,048,376 | $5,033,707 | $4,884,876 |
| Deduct: Goodwill and intangible assets | 2,100,966 | 2,106,835 | 2,112,875 | 2,118,935 | 2,125,121 |
| Tangible shareholders’ common equity (1) | $3,218,215 | $2,888,983 | $2,935,501 | $2,914,772 | $2,759,755 |
| Period end common shares | 292,655 | 292,586 | 292,597 | 291,922 | 292,903 |
| Tangible common book value (1) | 11.00 | 9.87 | 10.03 | 9.98 | 9.42 |
| Return on average tangible common equity: | |||||
| Net income applicable to common shares | $128,446 | $143,842 | $151,003 | $142,566 | $196,701 |
| Add: Intangible amortization (net of tax) (2) | 4,402 | 4,530 | 4,545 | 4,639 | 5,090 |
| Tangible net income (1) | $132,848 | $148,372 | $155,548 | $147,205 | $201,791 |
| Average shareholders’ common equity | $5,037,768 | $5,050,353 | $5,030,083 | $4,922,469 | $4,692,863 |
| Deduct: Average goodwill and intangible assets | 2,103,935 | 2,109,944 | 2,115,894 | 2,122,157 | 2,132,480 |
| Average tangible shareholders’ common equity (1) | $2,933,833 | $2,940,409 | $2,914,189 | $2,800,312 | $2,560,383 |
| Return on average tangible common equity (1) | 18.11% | 20.18% | 21.35% | 21.03% | 31.53% |
| Net interest margin: | |||||
| Net interest income | $364,408 | $375,086 | $382,171 | $381,488 | $391,090 |
| Taxable equivalent adjustment | 6,100 | 5,837 | 5,825 | 5,666 | 5,378 |
| Net interest income – taxable equivalent basis (1) | $370,508 | $380,923 | $387,996 | $387,154 | $396,468 |
| Average earning assets | $43,701,283 | $43,617,456 | $43,097,198 | $41,941,913 | $41,206,695 |
| Net interest margin (1) | 3.39% | 3.49% | 3.60% | 3.69% | 3.85% |
| Efficiency ratio: | |||||
| Noninterest expense | $284,235 | $244,776 | $246,584 | $250,711 | $282,675 |
| Deduct: Intangible amortization expense | 5,869 | 6,040 | 6,060 | 6,186 | 6,787 |
| Adjusted noninterest expense (1) | $278,366 | $238,736 | $240,524 | $244,525 | $275,888 |
| Net interest income – taxable equivalent basis (1) (see above) | $370,508 | $380,923 | $387,996 | $387,154 | $396,468 |
| Noninterest income | 100,094 | 80,938 | 81,629 | 70,681 | 165,037 |
| Deduct: Debt securities gains (losses), net | (825) | (241) | 17 | (5,216) | (173) |
| Adjusted total revenue (1) | $471,427 | $462,102 | $469,608 | $463,051 | $561,678 |
| Efficiency ratio | 59.05% | 51.66% | 51.22% | 52.81% | 49.12% |
| Tangible common equity to tangible assets: | |||||
| Tangible shareholders’ equity (1) (see above) | $3,218,215 | $2,888,983 | $2,935,501 | $2,914,772 | $2,759,755 |
| Assets | $49,089,836 | $49,059,448 | $48,496,755 | $47,842,644 | $46,763,372 |
| Deduct: Goodwill and intangible assets | 2,100,966 | 2,106,835 | 2,112,875 | 2,118,935 | 2,125,121 |
| Tangible assets (1) | $46,988,870 | $46,952,613 | $46,383,880 | $45,723,709 | $44,638,251 |
| Tangible common equity to tangible assets (1) | 6.85% | 6.15% | 6.33% | 6.37% | 6.18% |
(1)Represents a non-GAAP financial measure.
(2)Calculated using management’s estimate of the annual fully taxable equivalent rates (federal and state).
The following table presents GAAP to non-GAAP reconciliations for the year-to-date periods:
| Years Ended December 31, | ||
|---|---|---|
| (dollars and shares in thousands, except per share data) | 2023 | 2022 |
| Tangible common book value: | ||
| Shareholders’ common equity | $5,319,181 | $4,884,876 |
| Deduct: Goodwill and intangible assets | 2,100,966 | 2,125,121 |
| Tangible shareholders’ common equity (1) | $3,218,215 | $2,759,755 |
| Period end common shares | 292,655 | 292,903 |
| Tangible common book value (1) | 11.00 | 9.42 |
| Return on average tangible common equity: | ||
| Net income applicable to common shares | $565,857 | $414,169 |
| Add: Intangible amortization (net of tax) (2) | 18,116 | 19,718 |
| Tangible net income (1) | $583,973 | $433,887 |
| Average shareholders’ common equity | $5,010,594 | $4,644,971 |
| Deduct: Average goodwill and intangible assets | 2,112,924 | 1,989,466 |
| Average tangible shareholders’ common equity (1) | $2,897,670 | $2,655,505 |
| Return on average tangible common equity (1) | 20.15% | 16.34% |
| Net interest margin: | ||
| Net interest income | $1,503,153 | $1,327,936 |
| Taxable equivalent adjustment | 23,428 | 18,414 |
| Net interest income – taxable equivalent basis (1) | $1,526,581 | $1,346,350 |
| Average earning assets | $43,095,730 | $38,751,786 |
| Net interest margin (1) | 3.54% | 3.47% |
| Efficiency ratio: | ||
| Noninterest expense | $1,026,306 | $1,038,183 |
| Deduct: Intangible amortization expense | 24,155 | 25,857 |
| Adjusted noninterest expense (1) | $1,002,151 | $1,012,326 |
| Net interest income – taxable equivalent basis (1) (see above) | $1,526,581 | $1,346,350 |
| Noninterest income | 333,342 | 399,779 |
| Deduct: Debt securities gains (losses), net | (6,265) | (88) |
| Adjusted total revenue (1) | $1,866,188 | $1,746,217 |
| Efficiency ratio | 53.70% | 57.97% |
| Tangible common equity to tangible assets: | ||
| Tangible shareholders’ equity (1) (see above) | $3,218,215 | $2,759,755 |
| Assets | $49,089,836 | $46,763,372 |
| Deduct: Goodwill and intangible assets | 2,100,966 | 2,125,121 |
| Tangible assets (1) | $46,988,870 | $44,638,251 |
| Tangible common equity to tangible assets (1) | 6.85% | 6.18% |
(1)Represents a non-GAAP financial measure.
(2)Calculated using management’s estimate of the annual fully taxable equivalent rates (federal and state).
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.