Old National reports 2021 record net income driven by commercial loan growth of 7.2%

Rhea-AI Summary

Old National Bancorp (NASDAQ: ONB) reported a net income of $56.2 million for Q4 2021, with diluted EPS of $0.34, showcasing robust commercial loan growth and controlled expenses. Adjusted net income reached $60.9 million or $0.37 per diluted share. For the full year, net income stood at $277.5 million ($1.67 per diluted share), driven by a 6.9% growth in commercial loans. Despite a decrease in net interest income to $146.8 million, the company maintained strong credit quality with a non-performing loans ratio of 0.92%.

Positive

• Full-year net income increased to $277.5 million, or $1.67 per diluted share.
• Strong commercial loan growth of 6.9% annualized.
• Maintained strong credit quality, with non-performing loans at 0.92%.

Negative

• Net interest income decreased to $146.8 million from $151.6 million in Q3 2021.
• Net interest margin declined from 2.92% to 2.77%.

EVANSVILLE, Ind., Jan. 18, 2022 (GLOBE NEWSWIRE) --

Old National Bancorp (NASDAQ: ONB) reports 4Q21 net income of $56.2 million, diluted EPS of $0.34.

Adjusted1 net income of $60.9 million, or $0.37 per diluted share.

Full-year net income of $277.5 million, or $1.67 per diluted share.

Adjusted1 net income of $286.5 million, or$1.73 per diluted share.

CEO COMMENTARY:

"Old National's 4th quarter capped off a year of record earnings driven by robust commercial loan growth, strong credit quality and well controlled expenses," said Chairman and CEO Jim Ryan. "I'm particularly pleased that we achieved these strong results while also working steadily to remain on-task to complete our anticipated merger with First Midwest Bank – which also enjoyed strong 4th quarter and full-year 2021 results."

FOURTH QUARTER HIGHLIGHTS²:

Net income	Net income of $56.2 million
	Earnings per diluted share of $0.34
Net interest income/NIM	Net interest income on a fully taxable equivalent basis of $150.2 million compared to $155.1 million
	Net interest margin on a fully taxable equivalent basis of 2.77% compared to 2.92%
Operating Performance	Pre-provision net revenue1 (“PPNR”) of $69.8 million
	Adjusted PPNR1 of $78.1 million
	Noninterest expense of $131.9 million
	Adjusted noninterest expense1 of $123.2 million
	Efficiency ratio1 of 64.27%
	Adjusted efficiency ratio1 of 59.95%
Loans and Credit Quality	End-of-period total loans3 of $13,637.3 million compared to $13,636.1 million
	Total commercial loans increased $162.5 million, excluding the $185.9 million decrease in PPP loans
	Fourth-quarter total commercial production of $1.1 billion
	Provision for credit losses was a recapture of $1.9 million
	December 31 pipeline of $2.5 billion
	Net recoveries of $1.4 million compared to net recoveries of $3.0 million
	Non-performing loans of 0.92% of total loans compared to 0.94%
Return Profile & Capital	Return on average common equity of 7.49%
	Return on average tangible common equity1 of 12.07%
	Adjusted return on average tangible common equity1 of 13.04%
	No shares of common stock were repurchased during the current quarter
Notable Items	$2.0 million in tax credit amortization
	$6.7 million in merger-related charges

¹ Non-GAAP financial measure that Management believes is useful in evaluating the financial results of the Company – please refer to the Non GAAP reconciliations contained in this release ² Comparisons are on a linked-quarter basis, unless otherwise noted ³ Includes loans held for sale

RESULTS OF OPERATIONS

Old National Bancorp ("Old National") reported fourth quarter 2021 net income of $56.2 million, or $0.34 per diluted share.

Included in the fourth quarter were pre-tax charges of $6.7 million related to the pending merger with First Midwest Bancorp, Inc. Excluding these charges from the current quarter and netting out debt securities gains, adjusted net income was $60.9 million, or $0.37 per diluted share.

LOANS
Strong commercial production resulted in 6.9% annualized commercial loan growth.

• Period-end total loans were $13,637.3 million at December 31, 2021, consistent with the $13,636.1 million at September 30, 2021.
• Paycheck Protection Program (PPP) loans declined $185.9 million to $169.0 million at December 31, 2021, compared to $354.9 million at September 30, 2021.
• Excluding the $185.9 million decrease in PPP loans during the quarter, total loans increased $187.1 million, or 5.6% annualized.
• Excluding PPP loans, total commercial loans increased $162.5 million, or 6.9% annualized.
• Total commercial loan production in the fourth quarter was $1.1 billion; period-end pipeline totaled $2.5 billion.
• Consumer loans increased $9.9 million to $1,574.1 million and residential mortgage loans increased $30.5 million to $2,255.3 million.
• Average total loans in the fourth quarter were $13,603.6 million, a decrease of $83.7 million from the third quarter of 2021.
• Excluding PPP loans, average total loans in the fourth quarter increased $178.1 million from the third quarter of 2021.

DEPOSITS
Total deposit growth bolstered by strong increase in checking and NOW accounts.

• Period-end total deposits were $18,569.2 million at December 31, 2021, an increase of $373.0 million, or 8.2% annualized, when compared to the $18,196.1 million at September 30, 2021.
• Checking and NOW deposits increased $382.0 million to $5,338.0 million at December 31, 2021 from $4,956.0 million at September 30, 2021.
• On average, total deposits in the fourth quarter increased $438.3 million to $18,414.3 million, compared to $17,976.0 million in the third quarter of 2021.
  

NET INTEREST INCOME AND MARGIN
Decrease in PPP interest and fees negatively impact net interest income and margin; funding costs modestly lower.

• Net interest income decreased to $146.8 million in the fourth quarter of 2021 compared to $151.6 million in the third quarter of 2021.
• The net interest margin on a fully taxable equivalent basis decreased 15 basis point to 2.77% compared to 2.92% in the third quarter of 2021.
• PPP interest and net fees combined were $7.7 million, or 11 basis points of net interest margin, in the fourth quarter of 2021 compared to $12.2 million, or 16 basis points of net interest margin, in the third quarter of 2021.
• Accretion income was $3.9 million, or 7 basis points of net interest margin, in the fourth quarter of 2021 compared to $3.0 million, or 6 basis points of net interest margin, in the third quarter of 2021.
• Interest collected on nonaccrual loans was $1.4 million, or 3 basis points of net interest margin, in the fourth quarter of 2021 compared to $2.3 million, or 4 basis points of net interest margin, in the third quarter of 2021.
• The cost of total deposits declined 1 basis point to 0.05% in the fourth quarter of 2021 and the cost of total interest-bearing deposits also declined 1 basis point to 0.08%.

CREDIT QUALITY
Strong credit quality remains a hallmark of the Old National franchise.

• Old National recorded a provision recapture in the fourth quarter of 2021 of $1.9 million, compared to $4.6 million in provision recapture recorded in the third quarter of 2021.
• Net recoveries in the fourth quarter were $1.4 million, compared to net recoveries of $3.0 million in the third quarter of 2021.
• 30-89 day delinquencies were 0.11% at the end of the fourth quarter.
• Non-performing loans decreased as a percentage of total loans to 0.92%.
• Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. As of December 31, 2021, the remaining discount on these acquired loans was $33.7 million.
• The allowance for credit losses stood at $107.3 million, or 0.79% of total loans at December 31, 2021.

NONINTEREST INCOME
Noninterest income decreased primarily due to lower mortgage banking revenue.

• Total noninterest income for the fourth quarter of 2021 was $51.5 million, a decrease of $3.0 million from the third quarter of 2021.
• Mortgage banking revenue decreased $3.5 million when compared to the third quarter of 2021, due primarily to a smaller pipeline.
• Gains on sales of debt securities decreased $0.8 million when compared to the third quarter of 2021.
  

NONINTEREST EXPENSE
Increase in fourth quarter expenses due primarily to increased personnel and marketing expenses.

• Noninterest expense for the fourth quarter of 2021 was $131.9 million and included $6.7 million in merger-related charges and $2.0 million in tax credit amortization.
• Excluding these items, adjusted noninterest expense for the fourth quarter was $123.2 million, compared to the $118.2 million in adjusted noninterest expense in the third quarter of 2021.
• The fourth quarter efficiency ratio was 64.27%, while the adjusted efficiency ratio was 59.95%.
  

INCOME TAXES

• On a fully taxable-equivalent basis, income tax expense in the fourth quarter was $15.5 million, resulting in a 21.6% FTE tax rate, compared to 22.8% in the third quarter of 2021.
• Income tax expense included $2.9 million in tax credit benefit.

CAPITAL AND LIQUIDITY
Capital ratios remain strong.

• At the end of the fourth quarter, preliminary total risk-based capital was 12.77% and preliminary regulatory tier 1 capital was 12.04%.
• Tangible common equity to tangible assets was 8.30% at the end of the fourth quarter compared to 8.55% in the third quarter of 2021.
• The Company did not repurchase any shares of common stock during the fourth quarter.
• A low loan to deposit ratio of 73.4%, combined with existing funding sources plus available unencumbered, high-quality collateral, provides strong liquidity.

NON-GAAP RECONCILIATIONS

($ in millions, except EPS, shares in 000s)	4Q21			Adjustments4			Adjusted 4Q21
Total Revenues (FTE)	$	201.7		$	(0.4	)	$	201.3
Less: Provision for Credit Losses		1.9			—			1.9
Less: Noninterest Expenses		(131.9	)		6.7			(125.2	)
Income before Income Taxes (FTE)	$	71.7		$	6.3		$	78.0
Income Taxes (FTE)		(15.5	)		(1.6	)		(17.1	)
Net Income	$	56.2		$	4.7		$	60.9
Average Shares Outstanding		166,128			—			166,128
Earnings Per Share - Diluted	$	0.34		$	0.03		$	0.37

⁴ Tax-effect calculations use the current statutory FTE tax rates (federal + state)

($ in millions, except EPS, shares in 000s)		2021		Adjustments4			Adjusted 2021
Total Revenues (FTE)	$	824.5		$	(4.3	)	$	820.2
Less: Provision for Credit Losses		28.8			—			28.8
Less: Noninterest Expenses		(500.5	)		16.5			(484.0	)
Income before Income Taxes (FTE)	$	352.8		$	12.2		$	365.0
Income Taxes (FTE)		(75.3	)		(3.2	)		(78.5	)
Net Income	$	277.5		$	9.0		$	286.5
Average Shares Outstanding		165,929			—			165,929
Earnings Per Share - Diluted	$	1.67		$	0.06		$	1.73

⁴ Tax-effect calculations use the current statutory FTE tax rates (federal + state)

($ in millions)	4Q21			3Q21
Net Interest Income	$	146.8		$	151.6
Add: FTE Adjustment		3.4			3.5
Net Interest Income (FTE)	$	150.2		$	155.1
Average Earning Assets	$	21,670.7		$	21,228.6
Net Interest Margin (FTE)		2.77	%		2.92	%

($ in millions)	4Q21			4Q20
Net Interest Income	$	146.8		$	161.1
Add: FTE Adjustment		3.4			3.5
Net Interest Income (FTE)	$	150.2		$	164.6
Add: Total Noninterest Income		51.5			58.5
Less: Noninterest Expense		131.9			142.3
Pre-Provision Net Revenue	$	69.8		$	80.8
Less: Debt Securities Gains/Losses		(0.4	)		(0.2	)
Less: Gain on Branch Actions		—			(0.1	)
Add: Merger-Related Charges		6.7			—
Add: ONB Way Charges		—			3.6
Add: Amortization of Tax Credit Investments		2.0			9.9
Adjusted Pre-Provision Net Revenue	$	78.1		$	94.0

($ in millions)	4Q21			3Q21			4Q20				2021			2020
Noninterest Expense	$	131.9		$	121.3		$	142.3		$	500.5		$	541.4
Less: ONB Way Charges		—			—			(3.6	)		(1.9	)		(42.6	)
Less: Merger-Related Charges		(6.7	)		(1.4	)		—			(14.6	)		—
Noninterest Expense less Charges	$	125.2		$	119.9		$	138.7		$	484.0		$	498.8
Less: Amortization of Tax Credit Investments		(2.0	)		(1.7	)		(9.9	)		(6.7	)		(18.8	)
Adjusted Noninterest Expense	$	123.2		$	118.2		$	128.8		$	477.3		$	480.0
Less: Intangible Amortization		(2.6	)		(2.8	)		(3.3	)		(11.4	)		(14.1	)
Adjusted Noninterest Expense Less Intangible Amortization	$	120.6		$	115.4		$	125.5		$	465.9		$	465.9
Net Interest Income	$	146.8		$	151.6		$	161.1		$	596.4		$	596.1
FTE Adjustment		3.4			3.5			3.5			13.9			13.6
Net Interest Income (FTE)	$	150.2		$	155.1		$	164.6		$	610.3		$	609.7
Total Noninterest Income		51.5			54.5			58.5			214.2			239.2
Total Revenue (FTE)	$	201.7		$	209.6		$	223.1		$	824.5		$	848.9
Less: Debt Securities Gains/Losses		(0.4	)		(1.2	)		(0.2	)		(4.3	)		(10.8	)
Less: Gain on Branch Actions		—			—			(0.1	)		—			—
Adjusted Total Revenue (FTE)	$	201.3		$	208.4		$	222.8		$	820.2		$	838.1
Efficiency Ratio		64.27	%		56.86	%		62.37	%		59.65	%		62.91	%
Adjusted Efficiency Ratio		59.95	%		55.38	%		56.35	%		56.80	%		55.59	%

                

($ in millions)	4Q21			3Q21
Net Income	$	56.2		$	71.7
Add: Intangible Amortization (net of tax5)		1.9			2.1
Tangible Net Income	$	58.1		$	73.8
Less: Securities Gains/Losses (net of tax5)		(0.3	)		(0.9	)
Add: Merger-Related Charges (net of tax5)		5.0			1.1
Adjusted Tangible Net Income	$	62.8		$	74.0
Average Total Shareholders’ Equity		2,998.8			3,027.9
Less: Average Goodwill		(1,037.0	)		(1,037.0	)
Less: Average Intangibles		(36.0	)		(38.6	)
Average Tangible Shareholders’ Equity	$	1,925.8		$	1,952.3
Return on Average Tangible Common Equity		12.07	%		15.13	%
Adjusted Return on Average Tangible Common Equity		13.04	%		15.16	%

⁵ Tax-effect calculations use the current statutory FTE tax rates (federal + state)

CONFERENCE CALL AND WEBCAST
Old National will host a conference call and live webcast at 9:00 a.m. Central Time on Tuesday, January 18, 2022, to review fourth-quarter 2021 financial results. The live audio webcast link and corresponding presentation slides will be available on the Company’s Investor Relations web page at oldnational.com and will be archived there for 12 months. To listen to the live conference call, dial U.S. (877) 660-9071 or International (929) 517-9523, Conference I.D. 3313815. A replay of the call will also be available from Noon Central Time on January 18 through February 1. To access the replay, dial (855) 859-2056, Conference ID Code 3313815.

ABOUT OLD NATIONAL
Old National Bancorp (NASDAQ: ONB), the holding company of Old National Bank, is the largest bank holding company headquartered in Indiana. With $24.5 billion in assets, it ranks among the top 100 banking companies in the U.S. and has been recognized as a World’s Most Ethical Company by the Ethisphere Institute for ten consecutive years.  Since its founding in Evansville in 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships and keeping our clients at the center of all we do. This is an approach to business that we call The ONB Way. Today, Old National’s footprint includes Indiana, Kentucky, Michigan, Minnesota and Wisconsin. In addition to providing extensive services in retail and commercial banking, Old National offers comprehensive wealth management, investment and capital market services. For more information and financial data, please visit Investor Relations at oldnational.com.

USE OF NON-GAAP FINANCIAL MEASURES
This earnings release contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Old National’s results of operations or financial position. 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 tables of this release.

FORWARD-LOOKING STATEMENTS
This communication includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to Old National’s future plans, objectives, performance, revenues, growth, profits, operating expenses or Old National’s underlying assumptions; First Midwest’s and Old National’s beliefs, goals, intentions, and expectations regarding the proposed transaction, revenues, earnings, loan production, asset quality, and capital levels, among other matters; our estimates of future costs and benefits of the actions we may take; our assessments of expected losses on loans; our assessments of interest rate and other market risks; our ability to achieve our financial and other strategic goals; the expected timing of completion of the proposed transaction; the expected cost savings, synergies and other anticipated benefits from the proposed transaction; and other statements that are not historical facts.

Forward‐looking statements are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “should,” “will,” and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. These forward-looking statements include, without limitation, those relating to the terms, timing and closing of the proposed transaction.

Additionally, forward‐looking statements speak only as of the date they are made; Old National does not assume any duty, and does not undertake, to update such forward‐looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise. Furthermore, because forward‐looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in such forward-looking statements as a result of a variety of factors, many of which are beyond the control of Old National. Such statements are based upon the current beliefs and expectations of the management of Old National and are subject to significant risks and uncertainties outside of the control of the parties. Caution should be exercised against placing undue reliance on forward-looking statements. The factors that could cause actual results to differ materially include the following: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between First Midwest and Old National; the outcome of any legal proceedings that may be instituted against First Midwest or Old National; the possibility that the proposed transaction will not close when expected or at all because required regulatory or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated (and the risk that required regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction); the ability of First Midwest and Old National to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the common stock of either or both parties to the proposed transaction; the possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where First Midwest and Old National do business; certain restrictions during the pendency of the proposed transaction that may impact the parties’ ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; iversion of management’s attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or at all and to successfully integrate First Midwest’s operations and those of Old National; such integration may be more difficult, time consuming or costly than expected; revenues following the proposed transaction may be lower than expected; First Midwest’s and Old National’s success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the dilution caused by Old National’s issuance of additional shares of its capital stock in connection with the proposed transaction; effects of the announcement, pendency or completion of the proposed transaction on the ability of First Midwest and Old National to retain customers and retain and hire key personnel and maintain relationships with their suppliers, and on their operating results and businesses generally; risks related to the potential impact of general economic, political and market factors on the companies or the proposed transaction and other factors that may affect future results of First Midwest and Old National; uncertainty as to the extent of the duration, scope, and impacts of the COVID-19 pandemic on First Midwest, Old National and the proposed transaction; and the other factors discussed in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of each of First Midwest’s and Old National’s Annual Report on Form 10‐K for the year ended December 31, 2020, in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of each of First Midwest’s and Old National’s Quarterly Report on Form 10‐Q for the quarter ended September 30, 2021, and in other reports First Midwest and Old National file with the U.S. Securities and Exchange Commission (the “SEC”).

Financial Highlights (unaudited)
($ and shares in thousands, except per share data)
	Three Months Ended										Twelve Months Ended
	December 31,			September 30,			December 31,				December 31,			December 31,
		2021			2021			2020				2021			2020
Income Statement
Net interest income	$	146,781		$	151,572		$	161,079			$	596,400		$	596,094
Tax equivalent adjustment (1)		3,442			3,501			3,517				13,913			13,586
Net interest income - tax equivalent basis		150,223			155,073			164,596				610,313			609,680
Provision for credit losses		(1,914	)		(4,613	)		(1,100	)			(28,812	)		38,395
Noninterest income		51,484			54,515			58,552				214,219			239,274
Noninterest expense		131,937			121,274			142,318				500,569			541,417
Net income		56,188			71,746			74,120				277,538			226,409
Per Common Share Data
Weighted average diluted shares		166,128			165,939			165,631				165,929			166,177
Net income (diluted)	$	0.34		$	0.43		$	0.44			$	1.67		$	1.36
Cash dividends		0.14			0.14			0.14				0.56			0.56
Common dividend payout ratio (2)		41	%		33	%		31	%			33	%		41	%
Book value	$	18.16		$	18.31		$	17.98			$	18.16		$	17.98
Stock price		18.12			16.95			16.56				18.12			16.56
Tangible common book value (3)		11.70			11.83			11.43				11.70			11.43
Performance Ratios
Return on average assets		0.93	%		1.20	%		1.30	%			1.17	%		1.04	%
Return on average common equity		7.49	%		9.48	%		10.11	%			9.26	%		7.87	%
Return on tangible common equity (3)		11.98	%		15.05	%		16.20	%			14.74	%		12.54	%
Return on average tangible common equity (3)		12.07	%		15.13	%		16.57	%			14.89	%		13.27	%
Net interest margin (FTE)		2.77	%		2.92	%		3.26	%			2.89	%		3.18	%
Efficiency ratio (4)		64.27	%		56.86	%		62.37	%			59.65	%		62.91	%
Net charge-offs (recoveries) to average loans	(0.04)        %			(0.09)        %			(0.03)        %				(0.03)        %				0.02	%
Allowance for credit losses to ending loans		0.79	%		0.79	%		0.95	%			0.79	%		0.95	%
Non-performing loans to ending loans		0.92	%		0.94	%		1.20	%			0.92	%		1.20	%
Balance Sheet (EOP)
Total loans	$	13,601,846		$	13,584,828		$	13,786,479			$	13,601,846		$	13,786,479
Total assets		24,453,564			24,018,733			22,960,622				24,453,564			22,960,622
Total deposits		18,569,195			18,196,149			17,037,453				18,569,195			17,037,453
Total borrowed funds		2,575,240			2,536,303			2,676,554				2,575,240			2,676,554
Total shareholders' equity		3,012,018			3,035,892			2,972,656				3,012,018			2,972,656
Capital Ratios (3)
Risk-based capital ratios (EOP):
Tier 1 common equity		12.04	%		12.08	%		11.75	%			12.04	%		11.75	%
Tier 1		12.04	%		12.08	%		11.75	%			12.04	%		11.75	%
Total		12.77	%		12.84	%		12.69	%			12.77	%		12.69	%
Leverage ratio (to average assets)		8.59	%		8.54	%		8.20	%			8.59	%		8.20	%
Total equity to assets (averages)		12.35	%		12.69	%		12.83	%			12.60	%		13.20	%
Tangible common equity to tangible assets		8.30	%		8.55	%		8.64	%			8.30	%		8.64	%
Nonfinancial Data
Full-time equivalent employees		2,374			2,410			2,445				2,374			2,445
Banking centers		162			162			162				162			162
(1) Calculated using the federal statutory tax rate in effect of 21% for all periods.
(2) Cash dividends per share divided by net income per share (basic).
(3) Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures.
December 31, 2021 capital ratios are preliminary.
(4) Efficiency ratio is defined as noninterest expense before amortization of intangibles as a percent of FTE net interest income and
noninterest revenues, excluding net gains from debt securities transactions. This presentation excludes amortization of intangibles
and net debt securities gains, as is common in other company releases, and better aligns with true operating performance.
FTE - Fully taxable equivalent basis EOP - End of period actual balances

Income Statement (unaudited)
($ and shares in thousands, except per share data)
	Three Months Ended										Twelve Months Ended
	December 31,			September 30,			December 31,				December 31,			December 31,
		2021			2021			2020				2021			2020
Interest income	$	156,928		$	162,026		$	173,249			$	638,649		$	663,308
Less: interest expense		10,147			10,454			12,170				42,249			67,214
Net interest income		146,781			151,572			161,079				596,400			596,094
Provision for credit losses		(1,914	)		(4,613	)		(1,100	)			(28,812	)		38,395
Net interest income after provision for credit losses		148,695			156,185			162,179				625,212			557,699
Wealth management fees		9,833			10,134			9,259				40,409			36,806
Service charges on deposit accounts		9,121			8,926			8,724				34,685			35,081
Debit card and ATM fees		5,071			4,942			5,072				20,739			20,178
Mortgage banking revenue		7,336			10,870			16,233				42,558			62,775
Investment product fees		6,258			6,475			5,544				24,639			21,614
Capital markets income		6,394			6,017			6,545				21,997			22,480
Company-owned life insurance		2,737			2,355			3,153				10,589			12,031
Other income		4,299			3,589			3,861				14,276			17,542
Gains (losses) on sales of debt securities		435			1,207			161				4,327			10,767
Total noninterest income		51,484			54,515			58,552				214,219			239,274
Salaries and employee benefits		72,336			71,005			78,001				284,098			293,590
Occupancy		13,151			12,757			13,008				54,834			55,316
Equipment		4,473			3,756			3,778				16,704			16,690
Marketing		4,723			3,267			3,242				12,684			10,874
Data processing		11,489			11,508			12,362				47,047			41,086
Communication		2,412			2,372			2,396				10,073			9,731
Professional fees		5,409			3,416			4,834				20,077			15,755
FDIC assessment		1,598			1,628			1,780				6,059			6,722
Amortization of intangibles		2,573			2,779			3,244				11,336			14,091
Amortization of tax credit investments		2,019			1,736			9,871				6,770			18,788
Other expense		11,754			7,050			9,802				30,887			58,774
Total noninterest expense		131,937			121,274			142,318				500,569			541,417
Income before income taxes		68,242			89,426			78,413				338,862			255,556
Income tax expense		12,054			17,680			4,293				61,324			29,147
Net income	$	56,188		$	71,746		$	74,120			$	277,538		$	226,409
Diluted Earnings Per Share
Net income	$	0.34		$	0.43		$	0.44			$	1.67		$	1.36
Average Common Shares Outstanding
Basic		165,278			165,258			164,799				165,178			165,509
Diluted		166,128			165,939			165,631				165,929			166,177
Common shares outstanding at end of period		165,838			165,814			165,367				165,838			165,367

Balance Sheet (unaudited)
($ in thousands)
	December 31,				September 30,				December 31,
		2021				2021				2020
Assets
Federal Reserve Bank account	$	627,354			$	600,581			$	307,967
Money market investments		22,002				16,294				13,537
Investments:
Treasury and government-sponsored agencies		1,778,357				1,803,273				852,196
Mortgage-backed securities		3,698,831				3,354,701				3,339,098
States and political subdivisions		1,654,986				1,609,283				1,492,162
Other securities		432,478				442,503				458,639
Total investments		7,564,652				7,209,760				6,142,095
Loans held for sale, at fair value		35,458				51,306				63,250
Loans:
Commercial		3,391,769				3,505,183				3,956,422
Commercial and agriculture real estate		6,380,674				6,290,632				5,946,512
Consumer:
Home equity		560,590				554,322				556,414
Other consumer loans		1,013,524				1,009,909				1,078,709
Subtotal of commercial and consumer loans		11,346,557				11,360,046				11,538,057
Residential real estate		2,255,289				2,224,782				2,248,422
Total loans		13,601,846				13,584,828				13,786,479
Total earning assets		21,851,312				21,462,769				20,313,328
Allowance for credit losses		(107,341	)			(107,868	)			(131,388	)
Non-earning Assets:
Cash and due from banks		172,663				180,583				268,208
Premises and equipment, net		476,186				476,036				464,408
Operating lease right-of-use assets		69,560				69,912				76,197
Goodwill and other intangible assets		1,071,672				1,074,245				1,083,008
Company-owned life insurance		463,324				461,310				456,110
Other assets		456,188				401,746				430,751
Total non-earning assets		2,709,593				2,663,832				2,778,682
Total assets	$	24,453,564			$	24,018,733			$	22,960,622
Liabilities and Equity
Noninterest-bearing demand deposits	$	6,303,106			$	6,440,526			$	5,633,672
Interest-bearing:
Checking and NOW accounts		5,338,022				4,956,012				4,877,046
Savings accounts		3,798,494				3,708,807				3,395,747
Money market accounts		2,169,160				2,097,967				1,908,118
Other time deposits		960,413				992,837				1,103,313
Total core deposits		18,569,195				18,196,149				16,917,896
Brokered deposits		—				—				119,557
Total deposits		18,569,195				18,196,149				17,037,453
Federal funds purchased and interbank borrowings		276				34				1,166
Securities sold under agreements to repurchase		392,275				375,247				431,166
Federal Home Loan Bank advances		1,886,019				1,890,054				1,991,435
Other borrowings		296,670				270,968				252,787
Total borrowed funds		2,575,240				2,536,303				2,676,554
Operating lease liabilities		76,236				76,771				86,598
Accrued expenses and other liabilities		220,875				173,618				187,361
Total liabilities		21,441,546				20,982,841				19,987,966
Common stock, surplus, and retained earnings		3,014,393				2,979,082				2,824,885
Accumulated other comprehensive income (loss), net of tax		(2,375	)			56,810				147,771
Total shareholders' equity		3,012,018				3,035,892				2,972,656
Total liabilities and shareholders' equity	$	24,453,564			$	24,018,733			$	22,960,622

Average Balance Sheet and Interest Rates (unaudited)
($ in thousands)
		Three Months Ended								Three Months Ended								Three Months Ended
		December 31, 2021								September 30, 2021								December 31, 2020
		Average			Income (1)/		Yield/			Average			Income (1)/		Yield/			Average			Income (1)/		Yield/
Earning Assets:		Balance			Expense		Rate			Balance			Expense		Rate			Balance			Expense		Rate
Money market and other interest-earning
investments		$	726,144		$	276	0.15	%		$	467,572		$	177	0.15	%		$	413,782		$	126	0.12	%
Investments:
Treasury and government-sponsored agencies			1,763,544			6,390	1.45	%			1,730,553			6,968	1.61	%			648,314			2,937	1.81	%
Mortgage-backed securities			3,513,482			15,071	1.72	%			3,313,027			14,509	1.75	%			3,291,436			16,137	1.96	%
States and political subdivisions			1,625,390			12,941	3.18	%			1,586,743			12,609	3.18	%			1,437,890			12,008	3.34	%
Other securities			438,583			2,608	2.38	%			443,393			2,638	2.38	%			462,836			2,629	2.27	%
Total investments			7,340,999			37,010	2.02	%			7,073,716			36,724	2.08	%			5,840,476			33,711	2.31	%
Loans: (2)
Commercial			3,420,274			31,641	3.62	%			3,645,197			36,139	3.88	%			4,132,831			46,468	4.40	%
Commercial and agriculture real estate			6,341,296			57,347	3.54	%			6,200,144			57,820	3.65	%			5,829,912			58,334	3.92	%
Consumer:
Home equity			556,851			4,380	3.12	%			549,229			4,448	3.21	%			550,548			4,380	3.17	%
Other consumer loans			1,009,690			9,488	3.73	%			1,018,385			9,690	3.77	%			1,099,504			11,276	4.08	%
Subtotal commercial and consumer loans			11,328,111			102,856	3.60	%			11,412,955			108,097	3.76	%			11,612,795			120,458	4.13	%
Residential real estate loans			2,275,469			20,228	3.56	%			2,274,347			20,529	3.61	%			2,314,938			22,471	3.88	%
Total loans			13,603,580			123,084	3.56	%			13,687,302			128,626	3.70	%			13,927,733			142,929	4.04	%
Total earning assets		$	21,670,723		$	160,370	2.93	%		$	21,228,590		$	165,527	3.08	%		$	20,181,991		$	176,766	3.46	%
Less: Allowance for credit losses			(107,990	)							(111,216	)							(137,539	)
Non-earning Assets:
Cash and due from banks		$	228,126							$	272,855							$	341,154
Other assets			2,481,792								2,479,079								2,479,253
Total assets		$	24,272,651							$	23,869,308							$	22,864,859
Interest-Bearing Liabilities:
Checking and NOW accounts		$	5,093,496		$	458	0.04	%		$	4,873,914		$	484	0.04	%		$	4,708,568		$	629	0.05	%
Savings accounts			3,766,543			524	0.06	%			3,678,944			500	0.05	%			3,329,494			487	0.06	%
Money market accounts			2,139,702			456	0.08	%			2,110,981			438	0.08	%			1,932,594			445	0.09	%
Other time deposits			978,723			1,047	0.42	%			998,060			1,156	0.46	%			1,158,715			2,189	0.75	%
Total interest-bearing core deposits			11,978,464			2,485	0.08	%			11,661,899			2,578	0.09	%			11,129,371			3,750	0.13	%
Brokered deposits			—			—	0.00	%			—			—	0.00	%			37,176			26	0.28	%
Total interest-bearing deposits			11,978,464			2,485	0.08	%			11,661,899			2,578	0.09	%			11,166,547			3,776	0.13	%
Federal funds purchased and interbank borrowings			1,162			—	0.00	%			689			—	0.00	%			843			—	0.03	%
Securities sold under agreements to repurchase			381,744			92	0.10	%			384,724			90	0.09	%			438,272			125	0.11	%
Federal Home Loan Bank advances			1,887,821			5,122	1.08	%			1,890,916			5,326	1.12	%			2,089,519			5,953	1.13	%
Other borrowings			274,926			2,448	3.56	%			270,597			2,460	3.64	%			240,815			2,316	3.85	%
Total borrowed funds			2,545,653			7,662	1.19	%			2,546,926			7,876	1.23	%			2,769,449			8,394	1.21	%
Total interest-bearing liabilities		$	14,524,117		$	10,147	0.28	%		$	14,208,825		$	10,454	0.29	%		$	13,935,996		$	12,170	0.35	%
Noninterest-Bearing Liabilities and Shareholders' Equity
Demand deposits		$	6,435,829							$	6,314,100							$	5,644,017
Other liabilities			313,880								318,448								352,256
Shareholders' equity			2,998,825								3,027,935								2,932,590
Total liabilities and shareholders' equity		$	24,272,651							$	23,869,308							$	22,864,859
Net interest rate spread							2.65	%							2.79	%							3.11	%
Net interest margin (FTE)							2.77	%							2.92	%							3.26	%
FTE adjustment					$	3,442							$	3,501							$	3,517
(1) Interest income is reflected on a fully taxable equivalent basis (FTE).
(2) Includes loans held for sale.

Average Balance Sheet and Interest Rates (unaudited)
($ in thousands)
		Twelve Months Ended								Twelve Months Ended
		December 31, 2021								December 31, 2020
		Average			Income (1)/		Yield/			Average			Income (1)/		Yield/
Earning Assets:		Balance			Expense		Rate			Balance			Expense		Rate
Money market and other interest-earning
investments		$	450,158		$	589	0.13	%		$	174,494		$	568	0.33	%
Investments:
Treasury and government-sponsored agencies			1,573,855			24,209	1.54	%			547,054			12,124	2.22	%
Mortgage-backed securities			3,356,950			60,479	1.80	%			3,246,520			70,611	2.17	%
States and political subdivisions			1,548,939			50,115	3.24	%			1,347,490			47,034	3.49	%
Other securities			443,606			10,680	2.41	%			485,430			11,990	2.47	%
Total investments		$	6,923,350		$	145,483	2.10	%		$	5,626,494		$	141,759	2.52	%
Loans: (2)
Commercial			3,763,099			138,063	3.67	%			3,843,089			140,473	3.66	%
Commercial and agriculture real estate			6,168,146			228,568	3.71	%			5,477,562			234,670	4.28	%
Consumer:
Home equity			547,322			17,181	3.14	%			553,570			18,561	3.35	%
Other consumer loans			1,030,145			39,100	3.80	%			1,131,028			46,661	4.13	%
Subtotal commercial and consumer loans			11,508,712			422,912	3.67	%			11,005,249			440,365	4.00	%
Residential real estate loans			2,269,989			83,578	3.68	%			2,352,444			94,202	4.00	%
Total loans			13,778,701			506,490	3.68	%			13,357,693			534,567	4.00	%
Total earning assets		$	21,152,209		$	652,562	3.09	%		$	19,158,681		$	676,894	3.53	%
Less: Allowance for credit losses			(117,436	)							(115,321	)
Non-earning Assets:
Cash and due from banks		$	256,860							$	327,053
Other assets			2,492,054								2,414,602
Total assets		$	23,783,687							$	21,785,015
Interest-Bearing Liabilities:
Checking and NOW accounts		$	4,945,435		$	2,065	0.04	%		$	4,464,027		$	5,449	0.12	%
Savings accounts			3,648,019			2,003	0.05	%			3,113,435			3,156	0.10	%
Money market accounts			2,080,332			1,750	0.08	%			1,866,196			4,585	0.25	%
Other time deposits			1,020,359			5,105	0.50	%			1,337,269			14,013	1.05	%
Total interest-bearing core deposits			11,694,145			10,923	0.09	%			10,780,927			27,203	0.25	%
Brokered deposits			41,371			31	0.08	%			85,041			966	1.14	%
Total interest-bearing deposits			11,735,516			10,954	0.09	%			10,865,968			28,169	0.26	%
Federal funds purchased and interbank borrowings			1,113			—	0.00	%			138,257			1,296	0.94	%
Securities sold under agreements to repurchase			392,777			397	0.10	%			375,961			854	0.23	%
Federal Home Loan Bank advances			1,902,407			21,075	1.11	%			2,055,155			27,274	1.33	%
Other borrowings			269,484			9,823	3.65	%			242,642			9,621	3.96	%
Total borrowed funds			2,565,781			31,295	1.22	%			2,812,015			39,045	1.39	%
Total interest-bearing liabilities			14,301,297			42,249	0.30	%			13,677,983			67,214	0.49	%
Noninterest-Bearing Liabilities and Shareholders' Equity
Demand deposits		$	6,163,937							$	4,945,506
Other liabilities			320,933								286,066
Shareholders' equity			2,997,520								2,875,460
Total liabilities and shareholders' equity		$	23,783,687							$	21,785,015
Net interest rate spread							2.79	%							3.04	%
Net interest margin (FTE)							2.89	%							3.18	%
FTE adjustment					$	13,913							$	13,586
(1) Interest income is reflected on a fully taxable equivalent basis (FTE).
(2) Includes loans held for sale.

Asset Quality (EOP) (unaudited)
($ in thousands)
	Three Months Ended										Twelve Months Ended
	December 31,			September 30,			December 31,				December 31,			December 31,
		2021			2021			2020				2021			2020
Beginning allowance for credit losses	$	107,868		$	109,444		$	131,388			$	131,388		$	54,619
Impact of adopting ASC 326 on 01/01/2020		—			—			—				—			41,347
Provision for credit losses		(1,914	)		(4,613	)		(1,100	)			(28,812	)		38,395
Gross charge-offs		(545	)		(1,215	)		(707	)			(4,310	)		(15,553	)
Gross recoveries		1,932			4,252			1,807				9,075			12,580
Net (charge-offs) recoveries		1,387			3,037			1,100				4,765			(2,973	)
Ending allowance for credit losses	$	107,341		$	107,868		$	131,388			$	107,341		$	131,388
Net charge-offs (recoveries) / average loans (1)	(0.04)		%	(0.09)		%	(0.03)		%		(0.03)		%		0.02	%
Average loans outstanding (1)	$	13,594,543		$	13,675,436		$	13,910,145			$	13,766,590		$	13,341,677
EOP loans outstanding (1)		13,601,846			13,584,828			13,786,479				13,601,846			13,786,479
Allowance for credit losses / EOP loans (1)		0.79	%		0.79	%		0.95	%			0.79	%		0.95	%
Underperforming Assets:
Loans 90 Days and over (still accruing)	$	7		$	113		$	167			$	7		$	167
Non-performing loans:
Nonaccrual loans (2)		106,691			111,586			147,339				106,691			147,339
TDRs still accruing		18,378			16,420			17,749				18,378			17,749
Total non-performing loans		125,069			128,006			165,088				125,069			165,088
Foreclosed properties		2,030			1,943			1,324				2,030			1,324
Total underperforming assets	$	127,106		$	130,062		$	166,579			$	127,106		$	166,579
Classified and Criticized Assets:
Nonaccrual loans (2)		106,691			111,586			147,339				106,691			147,339
Substandard accruing loans		162,572			164,192			157,276				162,572			157,276
Loans 90 days and over (still accruing)		7			113			167				7			167
Total classified loans - "problem loans"	$	269,270		$	275,891		$	304,782			$	269,270		$	304,782
Other classified assets		4,338			4,300			3,706				4,338			3,706
Criticized loans - "special mention loans"		235,910			240,215			287,192				235,910			287,192
Total classified and criticized assets	$	509,518		$	520,406		$	595,680			$	509,518		$	595,680
Non-performing loans / EOP loans (1)		0.92	%		0.94	%		1.20	%			0.92	%		1.20	%
Allowance to non-performing loans		86	%		84	%		80	%			86	%		80	%
Under-performing assets / EOP loans (1)		0.93	%		0.96	%		1.21	%			0.93	%		1.21	%
EOP total assets	$	24,453,564		$	24,018,733		$	22,960,622			$	24,453,564		$	22,960,622
Under-performing assets / EOP assets		0.52	%		0.54	%		0.73	%			0.52	%		0.73	%
EOP - End of period actual balances
(1) Excludes loans held for sale.
(2) Includes non-accruing TDRs totaling $11.7 million at December 31, 2021, $12.8 million at September 30, 2021, and $14.9 million at December 30, 2020.

Non-GAAP Measures (unaudited)
($ in thousands)
	Three Months Ended										Twelve Months Ended
	December 31,			September 30,			December 31,				December 31,			December 31,
		2021			2021			2020				2021			2020
Actual End of Period Balances
GAAP shareholders' equity	$	3,012,018		$	3,035,892		$	2,972,656			$	3,012,018		$	2,972,656
Deduct:
Goodwill		1,036,994			1,036,994			1,036,994				1,036,994			1,036,994
Intangibles		34,678			37,251			46,014				34,678			46,014
		1,071,672			1,074,245			1,083,008				1,071,672			1,083,008
Tangible shareholders' equity	$	1,940,346		$	1,961,647		$	1,889,648			$	1,940,346		$	1,889,648
Average Balances
GAAP shareholders' equity	$	2,998,825		$	3,027,935		$	2,932,590			$	2,997,520		$	2,875,460
Deduct:
Goodwill		1,036,994			1,036,994			1,036,994				1,036,994			1,036,994
Intangibles		35,992			38,585			47,536				40,071			52,740
		1,072,986			1,075,579			1,084,530				1,077,065			1,089,734
Average tangible shareholders' equity	$	1,925,839		$	1,952,356		$	1,848,060			$	1,920,455		$	1,785,726
Actual End of Period Balances
GAAP assets	$	24,453,564		$	24,018,733		$	22,960,622			$	24,453,564		$	22,960,622
Add:
Trust overdrafts		—			116			26				—			26
Deduct:
Goodwill		1,036,994			1,036,994			1,036,994				1,036,994			1,036,994
Intangibles		34,678			37,251			46,014				34,678			46,014
		1,071,672			1,074,245			1,083,008				1,071,672			1,083,008
Tangible assets	$	23,381,892		$	22,944,604		$	21,877,640			$	23,381,892		$	21,877,640
Risk-weighted assets (2)	$	16,588,469		$	16,227,070		$	15,369,076			$	16,588,469		$	15,369,076
GAAP net income	$	56,188		$	71,746		$	74,120			$	277,538		$	226,409
Add:
Amortization of intangibles (net of tax)		1,930			2,084			2,433				8,502			10,585
Tangible net income	$	58,118		$	73,830		$	76,553			$	286,040		$	236,994
Tangible Ratios
Return on tangible common equity		11.98	%		15.05	%		16.20	%			14.74	%		12.54	%
Return on average tangible common equity		12.07	%		15.13	%		16.57	%			14.89	%		13.27	%
Return on tangible assets		0.99	%		1.29	%		1.40	%			1.22	%		1.08	%
Tangible common equity to tangible assets		8.30	%		8.55	%		8.64	%			8.30	%		8.64	%
Tangible common equity to risk-weighted assets (2)		11.70	%		12.09	%		12.30	%			11.70	%		12.30	%
Tangible common book value (1)		11.70			11.83			11.43				11.70			11.43
Tangible common equity presentation includes other comprehensive income as is common in other company releases.
(1) Tangible common shareholders' equity divided by common shares issued and outstanding at period-end.
Tier 1 common equity (2)	$	1,998,056		$	1,960,340		$	1,805,194			$	1,998,056		$	1,805,194
Risk-weighted assets (2)		16,588,469			16,227,070			15,369,076				16,588,469			15,369,076
Tier 1 common equity to risk-weighted assets (2)		12.04	%		12.08	%		11.75	%			12.04	%		11.75	%
(2) December 31, 2021 figures are preliminary.

Media: Kathy A. Schoettlin (812) 465-7269

Investors: Lynell J. Walton (812) 464-1366

FAQ

What was Old National Bancorp's net income for Q4 2021?

Old National Bancorp reported a net income of $56.2 million for Q4 2021.

How did Old National Bancorp perform in terms of earnings per share (EPS)?

The diluted EPS for Old National Bancorp in Q4 2021 was $0.34.

What was the annual growth rate of commercial loans for Old National Bancorp?

Old National Bancorp reported a 6.9% annualized growth in commercial loans.

How does Old National Bancorp's non-performing loans ratio compare?

Old National Bancorp's non-performing loans ratio was 0.92% in Q4 2021.

What impact did the merger-related charges have on Old National Bancorp's earnings?

Old National Bancorp incurred $6.7 million in merger-related charges in Q4 2021.