OLD NATIONAL BANCORP IN
For the period ended Jun 30, 2024. Filed Jul 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 31, 2024
ONB$24.93-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-01.
0000707179-24-000009
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsForward-Looking StatementsFinancial HighlightsNon-GAAP Financial MeasuresExecutive SummaryCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0000707179-24-000013
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsForward-Looking StatementsFinancial HighlightsNon-GAAP Financial MeasuresExecutive SummaryThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 33 previous paragraphs and 43 current paragraphs.
21 unchanged; 9 reworded; 5 added; 3 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 2 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Deposits: Period-end total deposits increased $2.3 billion to $40.0 billion at June 30, 2024 compared to March 31, 2024, including $2.1 billion of end of period deposits assumed in the CapStar transaction. Excluding deposits assumed in the CapStar transaction, period-end total deposits were up 2.4% annualized.
Current report
Loans: Our loan balances, excluding loans held-for-sale, increased $2.5 billion to $36.2 billion at June 30, 2024 compared to March 31, 2024, including $2.1 billion of period end loans acquired in the CapStar transaction. Excluding loans acquired in the CapStar transaction, period-end total loans were up 5.9% annualized.
Current report
Noninterest Income: Noninterest income increased $9.7 million to $87.3 million compared to the first quarter of 2024 reflecting $6.5 million of CapStar revenue as well as higher wealth fees, mortgage fees, and capital markets income.
Current report
On April 1, 2024, Old National completed its acquisition of CapStar, and its wholly-owned subsidiary, CapStar Bank. This partnership strengthens Old National’s Nashville, Tennessee presence and adds several new high-growth markets. At closing, CapStar had approximately $3.1 billion of total assets, $2.1 billion of total loans, and $2.6 billion of deposits. The consideration paid totaled $417.6 million and consisted of 24.0 million shares of Old National common stock. All system conversions related to the transaction were completed in early July of 2024.
Removed paragraphs (3)
Previous report
Deposits: Period-end total deposits increased $464.2 million to $37.7 billion, reflecting continued efforts to compete for new client relationships as well as normal seasonally lower patterns in business checking and public funds compared to December 31, 2023.
Previous report
Loans: Our loan balances, excluding loans held-for-sale, increased $631.4 million to $33.6 billion at March 31, 2024 compared to December 31, 2023. This was primarily driven by broad-based, disciplined commercial and commercial real estate loan growth.
Previous report
Noninterest Income: Noninterest income decreased $22.6 million to $77.5 million compared to the fourth quarter of 2023 reflecting the $21.6 million pre-tax gain on sale of Visa Class B restricted shares in the fourth quarter of 2023. Excluding this gain, noninterest income decreased slightly driven by lower capital markets income, partially offset by increases in mortgage fees, wealth fees, and other income.
Reworded paragraphs (9)
Previous wording
The following is an analysis and discussion of our results of operations for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, and financial condition as of March 31, 2024 compared to December 31, 2023. This discussion and analysis should be read in conjunction with the consolidated financial statements and related notes, as well as our 2023 Annual Report on Form 10-K.
Current wording
The following is an analysis and discussion of our results of operations for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, and financial condition as of June 30, 2024 compared to December 31, 2023. This discussion and analysis should be read in conjunction with the consolidated financial statements and related notes, as well as our 2023 Annual Report on Form 10-K.
Previous wording
The Company presents net income per common share and net income applicable to common shares, adjusted for certain notable items. These items include gain on sale of Visa Class B restricted shares, the expense associated with the distribution of excess pension assets, FDIC special assessment expense, contract termination charges, merger-related charges associated with completed and pending acquisitions, debt securities gains/losses, expenses related to the tragic April 10, 2023 event at our downtown Louisville location (“Louisville expenses”), and property optimization charges. Management believes excluding these items from net income per common share and net income applicable to common shares may be useful in assessing the Company's underlying operational performance since these items do not pertain to its core business operations and their exclusion may facilitate better comparability between periods. Management believes that excluding merger-related charges from these metrics may be useful to the Company, as well as analysts and investors, since these expenses can vary significantly based on the size, type, and structure of each acquisition. Additionally, management believes excluding these items from these metrics may enhance comparability for peer comparison purposes.
Current wording
The Company presents net income per common share and net income applicable to common shares, adjusted for certain notable items. These items include merger-related charges associated with completed and pending acquisitions, CECL Day 1 non-PCD provision expense, debt securities gains/losses, the expense associated with the distribution of excess pension assets, FDIC special assessment expense, gain on sale of Visa Class B restricted shares, contract termination charges, expenses related to the tragic April 10, 2023 event at our downtown Louisville location (“Louisville expenses”), and property optimization charges. Management believes excluding these items from net income per common share and net income applicable to common shares may be useful in assessing the Company's underlying operational performance since these items do not pertain to its core business operations and their exclusion may facilitate better comparability between periods. Management believes that excluding merger-related charges from these metrics may be useful to the Company, as well as analysts and investors, since these expenses can vary significantly based on the size, type, and structure of each acquisition. Additionally, management believes excluding these items from these metrics may enhance comparability for peer comparison purposes.
Previous wording
Old National is the sixth largest commercial bank headquartered in the Midwest by asset size and ranks among the top 30 banking companies headquartered in the United States with consolidated assets of approximately $50 billion at March 31, 2024. The Company’s corporate headquarters and principal executive office is located in Evansville, Indiana with commercial and consumer banking operations headquartered in Chicago, Illinois. Through our wholly-owned banking subsidiary and non-bank affiliates, we provide a wide range of services primarily throughout the Midwest region of the United States and elsewhere, including commercial and consumer loan and depository services, as well as private banking, capital markets, brokerage, wealth management, trust, investment advisory, and other traditional banking services.
Current wording
Old National is the sixth largest commercial bank headquartered in the Midwest by asset size and ranks among the top 30 banking companies headquartered in the United States with consolidated assets of approximately $53 billion at June 30, 2024. The Company’s corporate headquarters and principal executive office is located in Evansville, Indiana with commercial and consumer banking operations headquartered in Chicago, Illinois. Through our wholly-owned banking subsidiary and non-bank affiliates, we provide a wide range of services primarily throughout the Midwest and Southeast regions of the United States. In addition to providing extensive services in consumer and commercial banking, Old National offers comprehensive wealth management and capital markets services.
Previous wording
Net income applicable to common shares for the first quarter of 2024 was $116.3 million, or $0.40 per diluted common share, compared to $128.4 million, or $0.44 per diluted common share, for the fourth quarter of 2023.
Current wording
Net income applicable to common shares for the second quarter of 2024 was $117.2 million, or $0.37 per diluted common share, compared to $116.3 million, or $0.40 per diluted common share, for the first quarter of 2024.
Previous wording
Results for the first quarter of 2024 were impacted by a $13.3 million non-cash, pre-tax expense associated with the distribution of excess pension plan assets with the resolution of the legacy First Midwest defined benefit pension plan, as well as pre-tax charges of $3.0 million for an FDIC special assessment and $2.9 million of merger-related charges. Results for the fourth quarter of 2023 were impacted by the $21.6 million pre-tax gain on sale of Visa Class B restricted shares, $19.1 million for an FDIC special assessment, and $9.9 million of merger-related and other expenses. Excluding these items, net income applicable to common shares for the first quarter of 2024 was $130.8 million, or $0.45 per diluted common share on an adjusted basis 1, compared to $134.6 million, or $0.46 per diluted common share on an adjusted basis 1, for the fourth quarter of 2023.
Current wording
Results for the second quarter of 2024 were impacted by $19.4 million in pre-tax merger-related expenses primarily related to the April 1, 2024 acquisition of CapStar and $15.3 million of CECL Day 1 non-PCD provision expense related to the allowance for credit losses established on acquired non-PCD loans. Results for the first quarter of 2024 were impacted by a $13.3 million non-cash, pre-tax expense associated with the distribution of excess pension plan assets with the resolution of the legacy First Midwest defined benefit pension plan, $3.0 million for an FDIC special assessment, and $2.9 million of merger-related expenses. Excluding these items, net income applicable to common shares for the second quarter of 2024 was $144.1 million, or $0.46 per diluted common share on an adjusted basis 1, compared to $130.8 million, or $0.45 per diluted common share on an adjusted basis 1, for the first quarter of 2024.
Previous wording
We achieved strong results during the first quarter of 2024, including growth in total loans and deposits, modest compression of net interest income reflective of the rate environment, strong credit quality, and disciplined expense management.
Current wording
Our results for the second quarter of 2024 reflected growth in total loans and deposits, increased net interest income, strong credit quality, and disciplined expense management.
Previous wording
Net Interest Income: Net interest income decreased $8.0 million to $356.5 million compared to the fourth quarter of 2023 driven by higher funding costs and fewer days in the quarter, partly offset by loan growth.
Current wording
Net Interest Income: Net interest income increased $32.0 million to $388.4 million compared to the first quarter of 2024 driven by CapStar, loan growth, and higher asset yields, partly offset by higher funding costs.
Previous wording
Provision for Credit Losses: Provision for credit losses increased $7.3 million to $18.9 million compared to the fourth quarter of 2023 reflecting net charge-offs and loan growth, as well as economic factors.
Current wording
Provision for Credit Losses: Provision for credit losses was $36.2 million; $20.9 million excluding $15.3 million of CECL Day 1 non-PCD provision expense related to the allowance for credit losses established on acquired non-PCD loans in the CapStar transaction, compared to $18.9 million for the first quarter of 2024, reflecting net charge-offs and loan growth, as well as economic factors.
Previous wording
Noninterest Expense: Noninterest expense decreased $21.9 million compared to the fourth quarter of 2023. For the first quarter of 2024, noninterest expense included a $13.3 million non-cash, pre-tax expense associated with the distribution of excess pension assets with the resolution of the legacy First Midwest plan, as well as pre-tax charges of $3.0 million for the FDIC special assessment, and $2.9 million of merger-related expenses compared to pre-tax charges of $19.1 million for the FDIC special assessment and $9.9 million of merger-related and other expenses in the fourth quarter of 2023. Excluding these expenses, noninterest expense decreased $12.1 million compared to the fourth quarter of 2023 primarily due to elevated performance-driven incentive accruals and higher amortization of tax credit investments for the fourth quarter of 2023, as well as lower professional fees and other expense for the first quarter of 2024, partially offset by higher payroll taxes due to timing.
Current wording
Noninterest Expense: Noninterest expense increased $20.7 million compared to the first quarter of 2024. For the second quarter of 2024, noninterest expense included $19.4 million of pre-tax merger-related expenses compared to a $13.3 million non-cash, pre-tax expense associated with the distribution of excess pension assets with the resolution of the legacy First Midwest plan, as well as pre-tax charges of $3.0 million for the FDIC special assessment and $2.9 million of merger-related and other expenses in the first quarter of 2024. Excluding these expenses, noninterest expense was $263.6 million for the second quarter of 2024, compared to $243.1 million for the first quarter of 2024, due primarily to operating costs associated with CapStar.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
The following table sets forth certain financial highlights of Old National for the year-to-date periods:
Current report — wording carried from elsewhere
(1)Calculated using the federal statutory tax rate in effect of 21% for all periods.
Current report — wording carried from elsewhere
(2)Cash dividends per common share divided by net income per common share (basic).
Current report — wording carried from elsewhere
(3)Represents a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for reconciliations to GAAP financial measures.
Current report — wording carried from elsewhere
(4)Includes the allowance for credit losses on loans and unfunded loan commitments.
Current report — wording carried from elsewhere
The following table presents GAAP to non-GAAP reconciliations for the year-to-date periods:
Current report — wording carried from elsewhere
(1)Represents a non-GAAP financial measure.
Current report — wording carried from elsewhere
(2)Calculated using management’s estimate of the annual fully taxable equivalent income tax rates (federal and state).