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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Date of Report (Date of earliest event reported): June 9, 2004 OLD NATIONAL BANCORP Indiana 001-15817 35-1539838 420 Main Street, Evansville, IN 47708
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
(Address of Principal Executive Offices)
(Zip Code)
OLD NATIONAL BANCORP
FORM 8-K
Item 7. Financial Statements and Exhibits
The following exhibits are furnished herewith and this list constitutes the exhibit index:
99.1 |
Press release issued by Old National Bancorp on June 9, 2004. |
99.2 |
Summary of the conference call slide presentation issued by Old National Bancorp on June 9, 2004 |
Item 9. Regulation FD Disclosure
On June 9, 2004, Old National Bancorp issued a press release announcing it had begun the 18-month implementation phase of Project ASCEND and the anticipated financial impact. The press release is included as Exhibit 99.1 hereto and is incorporate herein by reference. Old National Bancorp also held a conference call to discuss the implementation of Project ASCEND. A summary of the conference call slide presentation is included as Exhibit 99.2 hereto and is incorporated herein by reference.
These exhibits may contain non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of the registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, Old National Bancorp has provided reconciliations within the exhibits, as necessary, of the non-GAAP financial measure to the m ost directly comparable GAAP financial measure.
The information in this Current Report on Form 8-K and the Exhibits 99.1 and 99.2 attached hereto, are furnished pursuant to Item 9 and shall not be deemed "filed" for purposes of Section 18 of the Securities Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in this Current Report on Form 8-K, including the Exhibits 99.1 and 99.2, shall not be deemed to be incorporated by reference into filings of Old National Bancorp under the Securities Act of 1933, except as shall be expressly set forth by specific reference to such filing.
* * * * * * *
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
Old National Bancorp
(Registrant)
Date: June 9, 2004
By: /s/ John S. Poelker
John S. Poelker
Executive Vice President and Chief Financial Officer
Exhibit 99.1
OLD NATIONAL BANCORP
NEWS RELEASE
SUBJECT: |
OLD NATIONAL IDENTIFIES $77 MILLION IN EXPENSE AND REVENUE IMPROVEMENTS; ONE-TIME CHARGES TO IMPACT SECOND-QUARTER 2004 EARNINGS. |
DATE: |
June 9, 2004 |
For Further Information Call: |
John Poelker - (812) 461-9099 Lynell Walton - (812) 464-1366 Assistant Vice President - Investor Relations Officer |
Old National Bancorp (NYSE: ONB) announced that it is has begun the 18-month implementation phase of Project ASCEND, an employee-driven, company-wide program aimed at improving both efficiency and profitability. Once fully implemented, the project is estimated to produce $77 million in annualized pre-tax earnings benefit. After taxes, the estimated impact will be $.77 per share on an annual basis commencing with the year 2006.
The implementation of Project ASCEND will result in one-time, pre-tax charges of approximately $24 million. These charges, which equate to $.24 per share on an after-tax basis, will be included in Old National's second-quarter financial results. The one-time charges will include fees to EHS Partners, the consulting firm that assisted Old National in the program; employee incentives based on projected ASCEND benefits, and severance payments.
In the initial five-month idea generation phase of Project ASCEND, which started in December of 2003, Old National employees generated over 3,000 ideas aimed at reducing costs while ensuring continuing high levels of customer service and effective product delivery. Opportunities for incremental revenue were also identified and focused on the standardization and improvement of collections of current revenue sources along with new product and service opportunities. More than 200 managers and company associates have been heavily involved in moving the program forward, analyzing ideas that were generated company-wide and laying the foundation for the implementation of more than 800 approved ideas.
In commenting on the results of the project, Old National Interim Chairman, Larry Dunigan, stated, "It would be difficult to overstate the importance of Project ASCEND, which has ramifications far beyond the improvement it will generate in earnings per share. In undertaking this project, our company has demonstrated its commitment to improving service levels to our customers, increasing shareholder value, and remaining a dominant, independent financial services organization in the markets it serves."
The $77 million pre-tax improvement will be realized in three main areas: $42 million from expense savings ideas, $24 million through revenue enhancements, and the remaining $11 million from new products and services. The $11 million benefit from new products and services will be net of $9 million of expenses necessary to generate the incremental revenue.
Of the $42 million in expense savings, $22 million is to be personnel related with the remaining $20 million to come from other expenses. Old National President, Mike Hinton, commented, "Achieving the goals of Project ASCEND and supporting our overall emphasis on improving Old National's performance will require staffing adjustments. We will do our best to achieve the necessary job changes through transfers and attrition; nonetheless, we still project that approximately 300-350 job eliminations will occur. No particular area of the company will be hard hit. This represents approximately a 10% reduction in workforce, which will be spread among all divisions and the company's five-state geographical area. Furthermore, full implementation of the ideas and the resulting job impacts will occur over 18 months."
Expense ideas include streamlining the consumer and small business lending processes, centralizing the procurement process, improving efficiency in administrative and support areas, insourcing selected functions, and staffing at branches to benchmarked service levels. Revenue enhancements include a standardized fee structure, a tiering of fees, reduced waived fee rates, an increase in selected fees, intensifying telemarketing and focused cross-selling, and an implementation of risk-based pricing.
All ideas and their related financial impact should be fully in place by the end of 2005 for a full year benefit to be realized in 2006. The following table outlines the estimated timing and related impact of the benefits/charges of the project:
($ in thousands, except per share data) |
2004 |
2005 |
2006 |
Pre-tax benefit |
$3,000 |
$47,000 |
$77,000 |
After-tax benefit |
2,000 |
31,000 |
50,800 |
EPS impact of benefits |
$0.03 |
$0.47 |
$0.77 |
Pre-tax one-time charges |
24,000 |
- |
- |
After-tax one-time charges |
15,800 |
- |
- |
EPS impact of charges |
($0.24) |
- |
- |
Old National Bancorp, a $9.3 billion financial holding company headquartered in Evansville, IN, employs 3,200 professionals who advise, design and facilitate financial solutions to help clients reach their goals. Founded in 1834, Old National has grown to include client-focused financial services operations in Indiana, Illinois, Ohio, Kentucky, Tennessee and Missouri. With a special attention to service quality, Old National provides individuals and businesses financial solutions through a broad range of banking services as well as trust and investment services, insurance brokerage services and investment products.
Old National will hold a special Conference Call to discuss the financial impact of Project ASCEND at 3:00 p.m. Central today. The live audio Webcast of the conference call, along with a series of power point slides, will be available on the company's Shareholder Relations Web page at www.oldnational.com and will be archived there for 12 months. A replay of the call will also be available from 6:00 p.m. Central today through 12:00 midnight on June 23. To access the replay, dial 1-888-203-1112, confirmation code 144495 |
Forward-Looking Statement This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include expressions such as "expects," "intends," "believes," and "should," which are statements of belief as to the expected outcomes of future events. For these statements, Old National Bancorp claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to Old National Bancorp's ASCEND project and its estimated benefits to the company. Actual results, performance or developments could differ materially from those expressed or implied by these forward-looking statements as a result of known and unknown risks, uncertainties and other factors, including without limitation, the general business environment, interest rates, credit quality, the economy, competitive conditions between banks and non-bank financi al service providers, regulatory changes, government legislation or policy, ability of Old National Bancorp to execute its business plan and implement the ASCEND project initiatives and other factors identified in the company's Form 10-K and other periodic filings with the Securities and Exchange Commission. The company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. |
Exhibit 99.2
Project ASCEND
Forward-Looking Statement
This presentation may contain forward-looking statements regarding management's current expectations pertaining to financial performance, business prospects, growth and operating strategies. For these statements, Old National Bancorp claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to Old National Bancorp's ASCEND project and its estimated benefits to the company. Actual results, performance or developments could differ materially from those expressed or implied by these forward-looking statements as a result of known and unknown risks, uncertainties and other factors, including without limitation, the general business environment, interest rates, credit quality, the economy, competitive conditions between banks and non-bank financial service providers, regulatory changes, government legislation or policy, ability of Old National Bancorp to exec ute its business plan and implement the ASCEND project initiatives and other factors identified in the Company's Form 10-K and other periodic filings with the Securities and Exchange Commission. The company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
Mike Hinton
Program Overview
Program Objectives
Summary of Improvements
* Net of $9 million of expenses
Largest Impact Ideas
Expense Highlights
Revenue / Growth Highlights
John Poelker
Summary of Improvements
* Net of $9 million of expenses
($ in millions) |
1st Qtr. |
ASCEND |
Pro-Forma |
|||
Revenue FTE * |
459.4 |
+44.0 |
503.4 |
|||
Expense ** |
304.8 |
-33.0 |
271.8 |
|||
Efficiency ratio |
66.3 |
% |
54.0 |
% |
* Excludes $2.0 million securities gains
**Excludes $4.3 million severance & OREO charges
Special Charges
Estimated Timing of Benefits
($ in thousands, except per share data) |
2004 |
2005 |
2006 |
Estimated benefit |
$3,000 |
$47,000 |
$77,000 |
After-tax amount |
2,000 |
31,000 |
50,800 |
EPS impact |
$.03 |
$.47 |
$.77 |
One-time charges |
$24,000 |
||
After-tax one-time charges |
15,800 |
||
EPS impact of charges |
($.24) |
ASCEND - "A path to greatness"