-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KaZs+OhYkBWSWK1iipLae0aLZOJ7y131wOFVo5YhYfnDwHrfP9wGWEl48faoWBQ1 M5UT7z2ORJ1vlpBcniYJLA== 0000926274-03-000377.txt : 20031023 0000926274-03-000377.hdr.sgml : 20031023 20031023111144 ACCESSION NUMBER: 0000926274-03-000377 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031023 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031023 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OLD NATIONAL BANCORP /IN/ CENTRAL INDEX KEY: 0000707179 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 351539838 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15817 FILM NUMBER: 03953345 BUSINESS ADDRESS: STREET 1: 420 MAIN ST CITY: EVANSVILLE STATE: IN ZIP: 47708 BUSINESS PHONE: 8124641434 MAIL ADDRESS: STREET 1: 420 MAIN ST CITY: EVANSVILLE STATE: IN ZIP: 47708 FORMER COMPANY: FORMER CONFORMED NAME: O DATE OF NAME CHANGE: 19950822 8-K 1 onb-10038k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 23, 2003 OLD NATIONAL BANCORP ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Indiana 001-15817 35-1539838 - ---------------------------- ---------------- ------------- (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 420 Main Street, Evansville, IN 47708 ---------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) (812) 464-1434 ---------------------------------------------------- (Registrant's telephone number, including area code) OLD NATIONAL BANCORP FORM 8-K Item 7. Financial Statements and Exhibits (c) Exhibits. The following exhibits are furnished herewith and this list constitutes the exhibit index: 99.1 Press Release issued by Old National Bancorp on October 23, 2003. 99.2 Financial Trends issued by Old National Bancorp on October 23, 2003. Item 12. Results of Operation and Financial Condition On October 23, 2003, Old National Bancorp reported its results for the third quarter 2003. The press release is included as Exhibit 99.1 hereto and is incorporate herein by reference. Old National Bancorp also released the financial trends including third quarter 2003 results. The financial trends is included as Exhibit 99.2 hereto and is incorporated herein by reference. The earnings release contains 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 earnings release of the non-GAAP financial measure to the most directly comparable GAAP financial measure. Operating earnings presented excludes gains and charges related to initiatives that impacted Old National Bancorp's results in prior years. Operating earnings measures and comparisons are presented as management uses this information in assessing the company's performance and believes this information is valuable to the users of its financial statements. 2 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 12 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. * * * * * * * 3 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: October 23, 2003 By: /s/ John S. Poelker ---------------------------- John S. Poelker Executive Vice President and Chief Financial Officer 4 EX-99.1 3 ex99-1.txt Exhibit 99.1 [LOGO OF OLD NATIONAL] P.O. Box 718o Evansville, IN 47705 NYSE Symbol: ONB NEWS RELEASE SUBJECT: Old National reports decline in quarterly earnings due to increased loan loss provision. DATE: October 23, 2003 For Further Information Call: John Poelker - (812) 461-9099 Executive Vice President - Chief Financial Officer Lynell Walton - (812) 464-1366 Assistant Vice President - Investor Relations Old National Bancorp (NYSE:ONB) announced net income of $11.8 million for the third quarter of 2003 compared to net income of $34.8 million in the same quarter of 2002. Third-quarter 2003 results reflected a provision for loan losses of $27.5 million compared with a provision of $11.0 million in the third quarter of last year. In addition, third-quarter 2002 results included an $8.3 million after-tax gain on sales of branches. On a year-to-date basis through September 30, 2003, net income totaled $65.1 million compared to $91.2 million for the same period of 2002. On a per-share basis, third-quarter 2003 earnings were $.18 compared to $.55 in the same period of 2002 and year-to-date net income was $1.02 compared to $1.42 last year. Operating earnings per share during the third quarter of 2003 were $.18 compared to $.42 per share earned during the third quarter of 2002, which excludes the impact of branch sales. On a year-to-date basis, per-share operating earnings were $1.02 compared to $1.29 per share earned during the first nine months of 2002. These operating earnings measures and comparisons are presented because management uses this information in assessing the company's performance and believes this information is valuable to the users of its financial statements. Page 1 of 8 The following is a reconciliation of operating earnings to net income: ------------------------------------------------------------------------ ($ in million, Three Months Ended Nine Months Ended except per share) September 30 September 30 ------------------------------------------------------------------------ 2003 2002 2003 2002 ------------------------------------------------------------------------ Income Data: ------------------------------------------------------------------------ Operating Earnings $11.8 $26.5 $65.1 $82.9 ------------------------------------------------------------------------ Gain on Branch Sales -- 8.3 - 8.3 ------------------------------------------------------------------------ Net Income 11.8 34.8 65.1 91.2 ------------------------------------------------------------------------ ------------------------------------------------------------------------ Per Share Data: ------------------------------------------------------------------------ Operating Earnings .18 .42 1.02 1.29 ------------------------------------------------------------------------ Gain on Branch Sales -- .13 - .13 ------------------------------------------------------------------------ Net Income .18 .55 1.02 1.42 ------------------------------------------------------------------------ The most significant impact on third-quarter 2003 results was the $27.5 million provision for loan losses, an increase of $5.0 million over the $22.5 million recorded during the second quarter of 2003. For the year to date, the provision for loan losses totaled $59.0 million compared to $26.0 million during the first nine months of 2002. The increased provision for loan losses during the quarter brought the reserve for loan losses at September 30, 2003, to $99.4 million, up from $98.0 million at June 30, 2003. The reserve at the end of the third quarter of 2003 represents 1.77% of total loans outstanding and 90% of total non-performing loans. These percentages are improvements from 1.74% and 67%, respectively, at June 30, 2003. Balance Sheet and Funding Weak economic conditions in Old National's markets continue to constrain commercial loan growth. From June 30 to September 30, 2003, total commercial and commercial real estate loans declined $68.7 million, including the impact of the sales of $48.2 million of non-performing loans during the quarter. These sales, along with $3.4 million of non-performing mortgages, contributed to a reduction in total non-performing loans from $146.4 million at June 30, 2003, to $110.2 million at September 30, 2003, a reduction of 24.7%. Net write-downs on these sales, included in net charge-offs during the period, were $12.5 million. Consumer loans continued to grow modestly, reflecting attractive interest rate levels and expanded marketing programs aimed at increasing the company's focus on consumer banking products. Consumer loans grew $44.7 million during the quarter ended September 30, 2003, and have increased $81.2 million since December 31, 2002. Mortgage loans, including residential loans held for sale, were basically unchanged from June 30 to September 30, 2003, with balances at September 30, 2003, of $951.1 million. This stabilization was Page 2 of 8 the result of a decrease in originations during the third quarter offset with an increase of loans held for investment on Old National's balance sheet. Old National's investment portfolio, including money market investments, decreased by $207.0 million during the third quarter of 2003. Cash flows from normal maturities and payments on mortgage-related securities were not completely reinvested because of reduced investment portfolio spread opportunities. It is expected that the investment portfolio will continue to decline gradually over the next few quarters. Core deposits declined $200.4 million from June 30, 2003, to September 30, 2003, primarily reflecting the company's continuing efforts to keep CD and other interest-bearing account rates at levels appropriate to overall funding needs and earning asset yields. The cost of interest-bearing deposits during the third quarter was 2.33%, a reduction of 24 basis points from the 2.57% paid during the second quarter. Reflecting primarily the smaller investment portfolio, total assets at September 30, 2003, were $9.518 billion compared to $9.738 billion at June 30, 2003. Total shareholders' equity at September 30, 2003, was $721.8 million, down from $765.7 million at June 30, 2003. The principal reason for the change during the quarter was a reduction in the other comprehensive income component of shareholders' equity from $55.3 million at June 30, 2003, to $9.2 million at September 30, 2003, reflecting significantly lower unrealized gains on investment securities at those dates. Credit Quality Third-quarter 2003 net charge-offs amounted to $26.1 million, up from the $8.5 million recorded in this year's second quarter and $5.7 million in the third quarter of 2002. Included in the charge-offs during the quarter were $12.5 million of write-downs related to the bulk sales of non-performing loans completed during the quarter and a $6.5 million charge-off on a single credit resulting from fraud within the customer's operation. The schedule below summarizes the net charge-off results for the year-to-date 2003 compared to 2002. ------------------------------------------------------------------ ($ in million) 2003 2002 ------------------------------------------------------------------ 1st Quarter Net Charge-offs $12.7 $4.9 ------------------------------------------------------------------ 2nd Quarter Net Charge-offs: ------------------------------------------------------------------ Bulk Sale of Loans 2.2 -- ------------------------------------------------------------------ Other 6.3 3.4 ------------------------------------------------------------------ 3rd Quarter Net Charge-offs: ------------------------------------------------------------------ Bulk Sale of Loans 12.5 -- ------------------------------------------------------------------ Other 13.6 5.7 ------------------------------------------------------------------ Total $47.3 $14.0 ------------------------------------------------------------------ Non-performing loans at September 30, 2003, totaled $110.2 million, a 24.7% reduction from the $146.4 million outstanding at June 30, 2003. As a percentage of total loans, non-performing loans were 1.97% at the end of the third quarter of 2003 compared to 2.60% at June 30, 2003. The company is continuing its efforts to reduce this level of non-performing loans and will consider further bulk sale transactions if deemed financially reasonable. Page 3 of 8 During the third quarter of 2003, Old National made a provision for loan losses of $27.5 million, an increase of $5.0 million from the second-quarter provision and $16.5 million greater than the provision for the third quarter of 2002. This provision resulted in a reserve for loan losses at September 30, 2003, of $99.4 million, up slightly from the $98.0 million balance at June 30, 2003. The reserve as a percentage of loans at the end of the quarter was 1.77% and as a percentage of non-performing loans was 90%, up from 67% at the end of the second quarter of 2003. While the level of non-performing loans decreased significantly during the quarter and the write-downs incurred on the bulk sales of loans were close to expectations, management believes that it is prudent to maintain the reserve for loan losses at current levels until conditions that could affect potential future loan losses show more substantial improvement. These include general economic and business conditions in the company's core markets, particularly the manufacturing segment in Indiana, and the absolute level of non-performing loans within the portfolio. Net Interest Income Net interest income for the third quarter of 2003 was $73.6 million, a decrease of $1.2 million from the second quarter and $4.4 million below the $78.0 million recorded during the third quarter of 2002. Low levels of interest rates and lack of meaningful loan growth continue to have a negative impact on net interest income. Net interest income for the first nine months of 2003 amounted to $224.6 million, a 5.6% reduction from the $237.9 million earned during the same period in 2002. As discussed above, a significant shift in the mix of the company's earning assets over the last year has contributed to this reduction in net interest income. During the third quarter of 2003, investment portfolio assets, including money market investments, represented 35.8% of total earning assets compared to 30.6% during the first quarter of 2002. This shift from loans into lower-yielding securities has contributed to the overall reduction in the net interest margin on the company's portfolio of earning assets. The net interest margin during the third quarter of 2003 stabilized somewhat, declining to 3.32% from 3.35% during the second quarter of 2003. The reduction in the size of the investment portfolio contributed to this condition, as did a reduction in the rates paid on interest-bearing liabilities. For the first nine months of the year, the net interest margin for 2003 was 3.38% compared to 3.70% during the same period of 2002. At September 30, 2003, the company's interest rate risk position remains relatively neutral. It is expected that net interest income will continue to be under modest downward pressure until economic conditions improve and commercial loan demand increases. Other Income Fee and service charge revenues continue to grow, increasing from $42.2 million in the second quarter of 2003 to $45.7 million during the third quarter of 2003. The majority of the increase was a result of mortgage banking operations revenue, along with the company's insurance agency revenue, reflecting the impact of an acquisition during the quarter. For the year to date, fee and service charge revenues totaled $128.1 million, a 37.3% increase over the $93.3 million generated during the first nine months of 2002. During the third quarter, these sources of revenue represented more than 38% of total revenue. Page 4 of 8 Mortgage banking operations continue to be a significant contributor to gains in fee income. On a year-to-date basis, fees from mortgage banking operations are up over 70%, increasing from $10.0 million in 2002 to $17.3 million in 2003. During the third quarter of 2003, higher interest rates had a negative impact on loan originations but also resulted in a reduction of future prepayment speeds on the mortgage-servicing portfolio. This reduction in prepayment speeds resulted in an increase in the value of the company's mortgage servicing rights asset due to a $5.1 million net reversal of servicing rights impairment charges taken in previous quarters. This reversal of servicing rights impairment charges contributed to the increase in mortgage revenue compared to the second quarter of 2003, during which quarter impairment charges of $2.1 million had been recorded. Revenue from insurance agency operations continues to grow in importance for the company with most of the increase in this component of revenue coming from acquisitions of agencies within Old National's banking markets. During the third quarter of 2003, the acquisition of Insurance and Risk Management (IRM), with offices in Fort Wayne and Indianapolis, Indiana was completed. This acquisition accounted for most of the $1.0 million increase in insurance revenue compared to the second quarter of 2003. Securities Gains Securities gains of less than $0.1 million were taken during the third quarter of 2003 compared to gains of $20.8 million recorded during the second quarter of 2003. On a year-to-date basis, gains on the sales of securities for 2003 totaled $23.6 million compared to $8.3 million in 2002. Other Expense Total operating expenses for the third quarter were $75.5 million, an increase of $1.5 million compared to the second quarter of the year. A $0.8 million write-down of a parcel of foreclosed real estate and the expenses of the IRM agency acquired early in the third quarter accounted for the increase. On a year-to-date basis, operating expenses were $219.6 million, a 16.5% increase over the $188.5 million expended during the first nine months of 2002. Approximately $19.0 million of this increase reflects the impact of the acquisitions made in the company's Signature Group (investment advisory services and insurance) in the last year. Outlook Old National Chairman & CEO, James A. Risinger, noted, "We continue to be disappointed with our credit quality and its negative impact on the overall performance of the company. Management and the Board of Directors continue to develop and execute strategies aimed at improving both the near-term and the long-term financial performance of the company. "We are committed to improving shareholder value and have started taking steps that are necessary to address our credit quality and financial performance challenges. During our regularly scheduled earnings conference call tomorrow morning, I will discuss our process in significant detail. Primary targets of our actions will focus on: (1) Improvements in our lending and credit administration processes geared toward reducing the unacceptably high level of non-performing assets currently in the portfolio, (2) accelerating our entry into larger and faster-growth markets with the aim of taking advantage of opportunities to accelerate revenue growth, and (3) a company-wide in-depth assessment Page 5 of 8 of operating practices aimed at identifying opportunities to improve our efficiency and reduce operating expenses in our existing operation." Old National Bancorp, a $9.5 billion financial holding company headquartered in Evansville, IN, employs more than 3,000 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 its third-quarter Conference Call at 9:30 a.m. Central on Friday, October 24, 2003. The live audio Webcast of the conference call 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 12:30 p.m. Central on October 24 through 12:00 midnight on November 7. To access the replay, dial 1-888-203-1112, confirmation code 788219. 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. Actual results could materially differ from those presented. Internal and external factors that might cause such a difference include, but are not limited to, market, economic, operational, liquidity, credit and interest rate risks associated with Old National's business, competition, government legislation and policies, ability of Old National to execute its business plan, continued softness in the economy which could materially impact credit quality trends and the ability to generate loans, and other matters discussed in this news release. Actual results could materially differ from those contained in or implied by such statements. Old National undertakes no obligation to release revisions to these forward-looking statements or reflect events or conditions after the date of this release. Page 6 of 8 Old National Bancorp Financial Highlights ($ in thousands, except per share data)
Three Months Ended September 30 - ------------------------------------------------------------------------------------- 2003 2002 Change - ------------------------------------------------------------------------------------- Income Data: - ------------------------------------------------------------------------------------- Net Interest Income (FTE) $ 73,633 $ 77,954 $ (4,321) - ------------------------------------------------------------------------------------- Noninterest Income 45,698 34,227 11,471 - ------------------------------------------------------------------------------------- Securities Gains 75 5,813 (5,738) - ------------------------------------------------------------------------------------- Total Revenue (FTE) 119,406 117,994 1,412 - ------------------------------------------------------------------------------------- Provision for Loan Losses 27,500 11,000 16,500 - ------------------------------------------------------------------------------------- Other Expense 75,465 66,729 8,736 - ------------------------------------------------------------------------------------- Income before Taxes 16,441 40,265 (23,824) - ------------------------------------------------------------------------------------- Provision for Taxes (FTE) 4,631 13,718 (9,087) - ------------------------------------------------------------------------------------- Operating Earnings 11,810 26,547 (14,737) - ------------------------------------------------------------------------------------- Gain on Branch Sales (After-Tax) -- 8,282 (8,282) - ------------------------------------------------------------------------------------- Net Income 11,810 34,829 (23,019) - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Per Share Data: (Diluted) (1) (2) - ------------------------------------------------------------------------------------- Net Income .18 .55 (.37) - ------------------------------------------------------------------------------------- Operating Earnings .18 .42 (.24) - ------------------------------------------------------------------------------------- Operating Earnings (Cash Basis) (3) .20 .42 (.22) - ------------------------------------------------------------------------------------- Average Diluted Shares Outstanding 63,878 64,075 (197) - ------------------------------------------------------------------------------------- Book Value at 9-30 11.34 11.42 (.08) - ------------------------------------------------------------------------------------- Stock Price at 9-30 22.35 23.68 (1.33) - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Performance Ratios: (Based on Net Income) - ------------------------------------------------------------------------------------- Return on Average Assets .49% 1.49% (1.00)% - ------------------------------------------------------------------------------------- Return on Average Equity (4) 6.54 20.74 (14.20) - ------------------------------------------------------------------------------------- Net Interest Margin (FTE) 3.32 3.60 (.28) - ------------------------------------------------------------------------------------- Other Expense to Revenue (Efficiency Ratio) 63.20 51.15 12.05 - ------------------------------------------------------------------------------------- Net Charge-offs to Average Loans (5) 1.85 .39 1.46 - ------------------------------------------------------------------------------------- Reserve for Loan Losses to Ending Loans (5) 1.77 1.48 .29 - ------------------------------------------------------------------------------------- Non-Performing Loans to Ending Loans (5) 1.97 1.12 .85 - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Balance Sheet: % Change - ------------------------------------------------------------------------------------- Average Assets 9,639,477 9,328,320 3.3% - ------------------------------------------------------------------------------------- End of Period Balances: - ------------------------------------------------------------------------------------- Assets 9,517,748 9,326,487 2.1 - ------------------------------------------------------------------------------------- Commercial and Consumer Loans 4,652,084 4,572,993 1.7 - ------------------------------------------------------------------------------------- Residential Real Estate Loans (5) 951,097 1,253,267 (24.1) - ------------------------------------------------------------------------------------- Core Deposits (excluding Brokered CD's) 6,005,759 6,069,760 (1.1) - ------------------------------------------------------------------------------------- Shareholders' Equity 721,769 727,876 (.8) - -------------------------------------------------------------------------------------
(FTE) Fully taxable equivalent basis. (1) All share and per share data have been adjusted for stock dividends and stock splits. (2) Assumes conversion of stock options. (3) Excludes after-tax impact of amortization of intangible assets. (4) Based on average shareholders' equity of $722,723 and $671,627, respectively, for 2003 and 2002, which excludes other comprehensive income. (5) Includes residential loans held for sale. Page 7 of 8 Old National Bancorp Financial Highlights ($ in thousands, except per share data)
Nine Months Ended September 30 - ------------------------------------------------------------------------------------- 2003 2002 Change - ------------------------------------------------------------------------------------- Income Data: - ------------------------------------------------------------------------------------- Net Interest Income (FTE) $ 224,640 $ 237,927 $ (13,287) - ------------------------------------------------------------------------------------- Noninterest Income 128,051 93,336 34,715 - ------------------------------------------------------------------------------------- Securities Gains 23,555 8,335 15,220 - ------------------------------------------------------------------------------------- Total Revenue (FTE) 376,246 339,598 36,648 - ------------------------------------------------------------------------------------- Provision for Loan Losses 59,000 26,000 33,000 - ------------------------------------------------------------------------------------- Other Expense 219,590 188,538 31,052 - ------------------------------------------------------------------------------------- Income before Taxes 97,656 125,060 (27,404) - ------------------------------------------------------------------------------------- Provision for Taxes (FTE) 32,519 42,139 (9,620) - ------------------------------------------------------------------------------------- Operating Earnings 65,137 82,921 (17,784) - ------------------------------------------------------------------------------------- Gain on Branch Sales (After-Tax) -- 8,282 (8,282) - ------------------------------------------------------------------------------------- Net Income 65,137 91,203 (26,066) - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Per Share Data: (Diluted) (1) (2) - ------------------------------------------------------------------------------------- Net Income 1.02 1.42 (.40) - ------------------------------------------------------------------------------------- Operating Earnings 1.02 1.29 (.27) - ------------------------------------------------------------------------------------- Operating Earnings (Cash Basis) (3) 1.05 1.30 (.25) - ------------------------------------------------------------------------------------- Average Diluted Shares Outstanding 63,695 64,245 (550) - ------------------------------------------------------------------------------------- Book Value at 9-30 11.34 11.42 (.08) - ------------------------------------------------------------------------------------- Stock Price at 9-30 22.35 23.68 (1.33) - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Performance Ratios: (Based on Net Income) - ------------------------------------------------------------------------------------- Return on Average Assets .90% 1.32% (.42) - ------------------------------------------------------------------------------------- Return on Average Equity (4) 12.26 18.56 (6.30) - ------------------------------------------------------------------------------------- Net Interest Margin (FTE) 3.38 3.70 (.32) - ------------------------------------------------------------------------------------- Other Expense to Revenue (Efficiency Ratio) 58.36 53.55 4.81 - ------------------------------------------------------------------------------------- Net Charge-offs to Average Loans (5) 1.11 .32 .79 - ------------------------------------------------------------------------------------- Reserve for Loan Losses to Ending Loans (5) 1.77 1.48 .29 - ------------------------------------------------------------------------------------- Non-Performing Loans to Ending Loans (5) 1.97 1.12 .85 - ------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------- Balance Sheet: % Change - ------------------------------------------------------------------------------------- Average Assets 9,601,799 9,206,578 4.3% - ------------------------------------------------------------------------------------- End of Period Balances: - ------------------------------------------------------------------------------------- Assets 9,517,748 9,326,487 2.1 - ------------------------------------------------------------------------------------- Commercial and Consumer Loans 4,652,084 4,572,993 1.7 - ------------------------------------------------------------------------------------- Residential Real Estate Loans (5) 951,097 1,253,267 (24.1) - ------------------------------------------------------------------------------------- Core Deposits (excluding Brokered CD's) 6,005,759 6,069,760 (1.1) - ------------------------------------------------------------------------------------- Shareholders' Equity 721,769 727,876 (.8) - -------------------------------------------------------------------------------------
(FTE) Fully taxable equivalent basis. (1) All share and per share data have been adjusted for stock dividends and stock splits. (2) Assumes conversion of stock options. (3) Excludes after-tax impact of amortization of intangible assets. (4) Based on average shareholders' equity of $708,441 and $655,187, respectively, for 2003 and 2002, which excludes other comprehensive income. (5) Includes residential loans held for sale. Page 8 of 8 EX-99.2 4 ex99-2.txt Exhibit 99.2 [LOGO OF OLD NATIONAL BANCORP] Old National Bancorp Financial Trends Third Quarter 2003 October 23, 2003 Please direct inquiries to: John Poelker, Executive Vice President & Chief Financial Officer (812) 461-9099 or Candice Jenkins, Vice President & Corporate Controller (812) 461-9769 Note: - 1999 data has been restated to reflect the acquisitions of ANB Corporation and Heritage Financial Services, Inc. during the 1st Quarter, 2000. Dulaney Bancorp, also acquired during the 1st Quarter of 1999, was also accounted for as a pooling of interests but prior year data was not restated due to immateriality. - Disclosures based on operating earnings, which exclude gains on branch divestitures and restructuring charges, are included to provide comparable data between years. - Certain prior year amounts may have been restated to conform with the 2003 presentation. Such reclassifications had no effect on net income. - All share and per share data have been adjusted for stock dividends and stock splits.
Old National Bancorp Financial Summary ----------------- Third Quarter 2003 2002 2003 1999 2000 2001 2002 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr ---- ---- ---- ---- ------- ------- ------- ------- ------- ------- ------- ------- Profitability (in millions) --------------------------- 93.3 61.7 93.0 117.9 NET INCOME from Continuing Operations 27.9 28.5 34.8 26.7 26.3 27.1 11.8 - (25.7) (5.9) 8.3 NON-OPERATING Income (Expense) - - 8.3 - - - - 93.3 87.4 99.0 109.6 OPERATING EARNINGS (2) 27.9 28.5 26.5 26.7 26.3 27.1 11.8 95.5 91.5 105.1 110.7 OPERATING CASH EARNINGS (1) 28.1 28.7 26.9 27.0 26.7 27.5 12.4 - ------------------------------------------------------------------------------------------------------------------------------------ Diluted EPS ----------- 1.37 0.94 1.42 1.84 Net Income from Continuing Operations 0.43 0.44 0.55 0.42 0.41 0.43 0.18 - (0.37) (0.09) 0.13 Non-Operating - - 0.13 - - - - 1.37 1.31 1.51 1.71 Operating (2) 0.43 0.44 0.42 0.42 0.41 0.43 0.18 1.41 1.38 1.61 1.72 Operating Cash (1) 0.43 0.45 0.42 0.42 0.42 0.43 0.20 - ------------------------------------------------------------------------------------------------------------------------------------ Net Income Ratios ----------------- 15.13% 10.11% 14.91% 17.84% Return on Common Equity (3) 17.55% 17.31% 20.74% 15.77% 15.07% 15.35% 6.54% 1.20% 0.73% 1.05% 1.27% Return on Assets 1.23% 1.24% 1.49% 1.13% 1.11% 1.12% 0.49% Operating Ratios ----------------- 1.20% 1.03% 1.12% 1.18% Return on Assets (2) 1.23% 1.24% 1.14% 1.13% 1.11% 1.12% 0.49% 58.6% 58.3% 57.6% 56.5% Efficiency Ratio (2) 55.3% 54.7% 56.6% 59.2% 58.9% 53.7% 63.2% 4.09% 3.65% 3.77% 3.65% Net Interest Margin 3.81% 3.71% 3.60% 3.50% 3.46% 3.35% 3.32% 0.17% 0.39% 0.45% 0.34% Net Charge-offs / Average Loans (4) 0.33% 0.23% 0.39% 0.41% 0.89% 0.60% 1.85% - ------------------------------------------------------------------------------------------------------------------------------------ Capital Ratios: --------------- Risk-Based Capital Ratios (end of period): 10.6% 9.2% 9.3% 11.1% Tier 1 9.7% 11.5% 11.3% 11.1% 11.3% 11.4% 11.1% 12.1% 10.4% 12.8% 14.8% Total 13.4% 15.1% 14.9% 14.8% 15.0% 15.1% 14.7% 7.5% 6.7% 6.6% 7.5% Leverage Ratio (to average assets) 6.7% 7.8% 7.7% 7.5% 7.6% 7.5% 7.3% 7.90% 6.92% 7.27% 7.47% Total equity to assets (averages) 7.21% 7.29% 7.67% 7.68% 7.88% 7.85% 7.70% - ------------------------------------------------------------------------------------------------------------------------------------ Stock Price/ Dividend Ratios: ----------------------------- 0.54 0.59 0.62 0.69 Per Share Dividend 0.16 0.16 0.18 0.19 0.19 0.19 0.19 39% 44% 41% 40% Dividend Payout Ratio 38% 37% 43% 43% 46% 44% 100% 26.69 25.86 22.90 23.14 Stock Price at EOP 23.31 24.24 23.68 23.14 21.40 23.00 22.35 8.94 9.43 9.95 11.60 Book Value Per Share 10.08 10.83 11.42 11.60 11.68 12.05 11.34
(1) Excludes after-tax impact of amortization of intangible assets. (2) Operating earnings exclude gains on branch divestitures and restructuring charges. (3) Excludes other comprehensive income. (4) Net charge-offs include $12.5 million and $2.2 million of write-downs on loans transferred to held for sale for the third quarter and second quarter of 2003, respectively. PAGE 1
Old National Bancorp INCOME STATEMENT ($ In Millions except EPS information) Nine Months Change Third Quarter Change 2003 2002 $ % 2003 2002 $ % - ------- ------- -------- ----- ------- ------- -------- ----- $ 377.5 $ 434.9 $ (57.4) -13% Interest Income - FTE $ 120.9 $ 142.7 $ (21.7) -15% 152.8 197.0 (44.1) -22% Less: Interest Expense 47.3 64.7 (17.4) -27% - ------- ------- -------- ----- ------- ------- -------- ----- 224.6 237.9 (13.3) -6% Net Interest Income - FTE 73.6 78.0 (4.3) -6% 22.7 17.3 5.4 31% Trust and asset management fees 7.6 7.3 0.3 5% 33.8 30.3 3.5 11% Service charges on deposit accounts 11.5 10.8 0.7 6% 27.4 11.7 15.7 134% Insurance premiums and commissions 10.1 3.3 6.8 206% 8.0 6.4 1.6 25% Investment product fees 2.6 2.5 0.1 4% 17.3 10.0 7.3 73% Mortgage banking revenue 8.0 3.9 4.1 104% 18.9 17.6 1.3 7% Other income 5.9 6.4 (0.5) -8% - ------- ------- -------- ----- ------- ------- -------- ----- 128.1 93.3 34.7 37% Total Fees and Service Charges 45.7 34.2 11.5 34% 23.6 8.3 15.2 183% Gains (Losses) Sales of Securities 0.1 5.8 (5.7) -99% 151.6 101.7 49.9 49% Total Noninterest Income 45.8 40.0 5.7 14% 376.2 339.6 36.6 11% Total Revenues (FTE) 119.4 118.0 1.4 1% 129.2 109.7 19.5 18% Salaries and employee benefits 43.4 38.7 4.7 12% 90.4 78.8 11.6 15% Other expense 32.1 28.0 4.0 14% - ------- ------- -------- ----- ------- ------- -------- ----- 219.6 188.5 31.1 16% Total Noninterest Expense 75.5 66.7 8.7 13% 59.0 26.0 33.0 127% Provision for loan losses 27.5 11.0 16.5 150% 97.7 125.1 (27.4) -22% Pre-Tax Income (FTE) 16.4 40.3 (23.8) -59% 13.6 23.6 (10.0) -42% Income Taxes (1.5) 7.3 (8.9) -121% 18.9 18.5 0.4 2% FTE Adjustment 6.2 6.4 (0.2) -4% - ------- ------- -------- ----- ------- ------- -------- ----- 32.5 42.1 (9.6) -23% Total Taxes (FTE) 4.6 13.7 (9.1) -66% 65.1 82.9 (17.8) -21% Operating Earnings (1) 11.8 26.5 (14.7) -56% - 8.3 (8.3) -100% Non-Operating Income (Expense) - 8.3 (8.3) -100% - --------------------------------- ------------------------------------------------- $ 65.1 $ 91.2 $ (26.1) -29% Net Income from Cont. Ops. $ 11.8 $ 34.8 $ (23.0) -66% ================================= ================================================= 1.02 1.42 (0.40) -28% EPS - Diluted Net Income from Cont. Ops. 0.18 0.55 (0.37) -67% - (0.13) 0.13 N/M EPS - Non-Operating - (0.13) 0.13 N/M 1.02 1.29 (0.27) -21% EPS - Diluted Operating (1) 0.18 0.42 (0.24) -57% 1.05 1.30 (0.25) -19% EPS - Diluted Operating Cash (2) 0.20 0.42 (0.22) -52% 63,629 63,729 (100) 0% EOP Shares Outstanding (000s) 63,629 63,729 (100) 0% 63,631 64,101 (470) -1% Average Basic Shares (000s) 63,718 63,901 (183) 0% 63,695 64,245 (550) -1% Average Diluted Shares (000s) 63,878 64,075 (197) 0%
FTE - Fully taxable equivalent basis (1) Operating earnings exclude gains on branch divestitures and restructuring charges. (2) Excludes after-tax impact of amortization of intangible assets. PAGE 2
Old National Bancorp NET INCOME TRENDS ----------------- Third Quarter 2003 ($ In Millions except EPS information) 2002 2003 ------------------------------- -------------------------------- 1999 2000 2001 2002 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr ---- ---- ---- ---- ------- ------- ------- ------- ------- ------- ------- ------- 583.7 657.9 651.0 572.6 Interest Income - FTE 146.2 146.0 142.7 137.7 130.0 126.6 120.9 284.6 368.4 338.4 258.0 Less: Interest Expense 65.9 66.4 64.7 61.0 53.8 51.8 47.3 - --------------------------- ------------------------------- -------------------------------- 299.2 289.5 312.6 314.6 Net Interest Income - FTE 80.3 79.6 78.0 76.7 76.2 74.8 73.6 21.7 22.6 20.7 24.4 Trust and asset management fees 5.0 5.1 7.3 7.0 7.4 7.7 7.6 25.0 34.3 40.5 42.0 Service charges on deposit accounts 9.3 10.2 10.8 11.6 10.8 11.6 11.5 6.6 11.5 13.3 16.7 Insurance premiums and commissions 4.2 4.2 3.3 5.0 8.2 9.1 10.1 6.4 7.1 6.8 9.0 Investment product fees 1.8 2.1 2.5 2.6 2.7 2.7 2.6 2.0 2.6 9.7 14.5 Mortgage banking revenue 3.4 2.7 3.9 4.5 4.4 4.9 8.0 18.8 23.7 17.2 23.0 Other income 5.2 5.9 6.4 5.5 6.7 6.2 5.9 80.5 101.8 108.2 129.6 Total Fees and Service Charges 28.9 30.2 34.2 36.2 40.2 42.2 45.7 2.6 (0.1) 4.8 12.4 Gains (Losses) Sales of Securities 1.6 1.0 5.8 4.1 2.7 20.8 0.1 83.2 101.7 113.0 142.0 Total Noninterest Income 30.5 31.1 40.0 40.4 42.9 62.9 45.8 382.3 391.2 425.6 456.6 Total Revenues (FTE) 110.9 110.8 118.0 117.0 119.1 137.7 119.4 129.4 130.2 138.2 148.4 Salaries and employee benefits 36.2 34.8 38.7 38.7 41.7 44.1 43.4 94.5 97.8 106.9 109.4 Other expense 25.1 25.7 28.0 30.6 28.5 29.8 32.1 223.9 228.0 245.1 257.8 Total Noninterest Expense 61.3 60.5 66.7 69.3 70.2 74.0 75.5 14.8 26.0 28.7 33.5 Provision for loan losses 7.5 7.5 11.0 7.5 9.0 22.5 27.5 143.6 137.2 151.8 165.3 Pre-Tax Income (FTE) 42.1 42.7 40.3 40.2 39.9 41.3 16.4 32.4 30.1 31.5 30.5 Income Taxes 8.3 7.9 7.3 6.9 7.3 7.9 (1.5) 17.9 19.6 21.3 25.2 FTE Adjustment 5.9 6.3 6.4 6.6 6.4 6.4 6.2 50.4 49.8 52.8 55.6 Total Taxes (FTE) 14.2 14.2 13.7 13.5 13.7 14.2 4.6 93.3 87.4 99.0 109.6 Operating Earnings (1) 27.9 28.5 26.5 26.7 26.3 27.1 11.8 - (25.7) (5.9) 8.3 Non-Operating Income (Expense) - - 8.3 - - - - 93.3 61.7 93.0 117.9 Net Income from Cont. Ops. 27.9 28.5 34.8 26.7 26.3 27.1 11.8 1.37 0.94 1.42 1.84 EPS - Diluted Net Income from Cont. Ops. 0.43 0.44 0.55 0.42 0.41 0.43 0.18 - (0.37) (0.09) 0.13 EPS - Non-Operating - - 0.13 - - - - 1.37 1.31 1.51 1.71 EPS - Diluted Operating (1) 0.43 0.44 0.42 0.42 0.41 0.43 0.18 1.41 1.38 1.61 1.72 EPS - Diluted Operating Cash (2) 0.43 0.45 0.42 0.42 0.42 0.43 0.20 68,549 66,371 65,341 64,103 Average Diluted Shares (000s) 64,281 64,383 64,075 63,679 63,757 63,523 63,878
FTE - Fully taxable equivalent basis (1) Operating earnings exclude gains on branch divestitures and restructuring charges. (2) Excludes after-tax impact of amortization of intangible assets. PAGE 3
Old National Bancorp Balance Sheet (EOP) ------------------- Third Quarter 2003 ($ in Millions) 9/30/03 6/30/03 9/30/02 Change from Prior Year ------- ------- ------- ---------------------- $ % --------- ------ Assets Securities Government and Agencies $ 615.9 $ 559.6 $ 477.7 $ 138.2 29% Municipals 653.5 679.6 710.1 (56.6) -8% Mortgage Backed 1,644.5 1,957.9 1,472.6 171.9 12% Other (1) 213.2 136.9 143.0 70.2 49% ---------- ---------- ---------- -------- ------ Total Investments (1) 3,127.0 3,334.0 2,803.4 323.7 12% ---------- ---------- ---------- -------- ------ Residential Loans Held for Sale 16.9 56.3 129.7 (112.8) -87% Loans Commercial 1,684.8 1,709.9 1,677.2 7.6 0% Commercial and Agriculture Real Estate 1,832.5 1,876.0 1,833.1 (0.6) 0% Consumer 1,134.8 1,090.1 1,062.7 72.1 7% ---------- ---------- ---------- -------- ------ Subtotal 4,652.1 4,676.0 4,573.0 79.1 2% Residential Real Estate 934.2 895.3 1,123.6 (189.4) -17% ---------- ---------- ---------- -------- ------ Total Loans 5,586.3 5,571.3 5,696.6 (110.3) -2% ---------- ---------- ---------- -------- ------ Total Earning Assets 8,730.2 8,961.6 8,629.6 100.6 1% ---------- ---------- ---------- -------- ------ Allowance for loan losses (99.4) (98.0) (86.1) (13.3) 15% Nonearning assets Goodwill and Intangible assets 172.2 146.1 111.3 60.9 55% Other assets 714.8 728.1 671.8 43.0 6% ---------- ---------- ---------- -------- ------ Total Nonearning assets 887.0 874.1 783.0 104.0 13% ---------- ---------- ---------- -------- ------ ---------- ---------- ---------- -------- ------ Total Assets $ 9,517.7 $ 9,737.7 $ 9,326.5 $ 191.3 2% ========== ========== ========== ======== ====== Liabilities and Equity Noninterest-bearing demand deposits $ 756.4 $ 835.1 $ 724.6 $ 31.8 4% NOW and Savings accounts 1,937.6 2,074.4 1,698.4 239.2 14% Money market accounts 644.8 565.2 590.1 54.7 9% Other time 2,667.0 2,731.4 3,056.7 (389.7) -13% ---------- ---------- ---------- -------- ------ Total Core Deposits 6,005.8 6,206.2 6,069.8 (64.0) -1% ---------- ---------- ---------- -------- ------ Borrowed Funds (includes Brokered CD's) 2,679.4 2,597.4 2,428.4 251.0 10% Accrued expenses and other liabilities 110.8 168.5 100.5 10.4 10% ---------- ---------- ---------- -------- ------ Total Liabilities 8,796.0 8,972.1 8,598.6 197.4 2% ---------- ---------- ---------- -------- ------ Shareholders' equity 721.8 765.7 727.9 (6.1) -1% ---------- ---------- ---------- -------- ------ Total Liabilities and Shareholders Equity $ 9,517.7 $ 9,737.7 $ 9,326.5 $ 191.3 2% ========== ========== ========== ======== ======
(1) Includes money market investments. PAGE 4
Old National Bancorp Balance Sheet Trends -------------------- PERIOD AVERAGES ($ in Millions) 1999 2000 2001 2002 2002 2003 ---- ---- ---- ---- ---------------------------------- ---------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr ------- ------- ------- ------- ------- ------- ------- ------- Assets Securities $ 404 $ 513 $ 482 $ 593 Government and Agencies $ 607 $ 563 $ 565 $ 637 $ 708 $ 614 $ 589 551 542 582 656 Municipals 602 624 688 710 689 676 654 829 666 773 1,342 Mortgage Backed 1,099 1,351 1,436 1,480 1,573 1,886 1,814 103 122 181 146 Other (1) 142 144 145 154 128 132 168 - --------------------------- ---------------------------------- ---------------------------------- 1,887 1,842 2,018 2,737 Total Investments (1) 2,450 2,682 2,834 2,981 3,098 3,308 3,225 - --------------------------- ---------------------------------- ---------------------------------- Loans 1,278 1,476 1,692 1,690 Commercial 1,698 1,701 1,690 1,673 1,677 1,706 1,698 Commercial and Agriculture 1,211 1,538 1,855 1,844 Real Estate 1,842 1,853 1,832 1,851 1,876 1,872 1,869 856 986 1,052 1,057 Consumer 1,045 1,051 1,066 1,065 1,054 1,069 1,110 - --------------------------- ---------------------------------- ---------------------------------- 3,345 4,000 4,599 4,592 Subtotal 4,584 4,606 4,588 4,589 4,607 4,647 4,678 2,081 2,088 1,682 1,287 Residential Real Estate (2) 1,406 1,300 1,247 1,193 1,091 984 977 - --------------------------- ---------------------------------- ---------------------------------- 5,425 6,088 6,281 5,878 Total Loans (2) 5,991 5,906 5,835 5,782 5,698 5,631 5,655 - --------------------------- ---------------------------------- ---------------------------------- 7,313 7,930 8,299 8,615 Total Earning Assets 8,441 8,588 8,669 8,763 8,796 8,940 8,880 - --------------------------- ---------------------------------- ---------------------------------- (64) (71) (74) (81)Allowance for loan losses (76) (79) (83) (88) (89) (87) (98) 537 592 640 730 Nonearning assets 705 713 742 761 794 811 858 - --------------------------- ---------------------------------- ---------------------------------- $7,785 $8,451 $8,864 $9,264 Total Assets $ 9,069 $ 9,222 $ 9,328 $ 9,436 $ 9,501 $ 9,665 $ 9,639 =========================== ================================== ================================== Liabilities and Equity Noninterest-bearing demand $ 613 $ 637 $ 664 $ 712 deposits $ 709 $ 705 $ 707 $ 728 $ 730 $ 744 $ 761 1,290 1,299 1,339 1,678 NOW and Savings accounts 1,539 1,650 1,716 1,809 1,871 2,058 1,996 712 712 778 644 Money market accounts 699 666 612 599 590 587 629 2,610 2,713 3,065 3,146 Other time 3,223 3,208 3,136 3,019 2,900 2,813 2,694 - --------------------------- ---------------------------------- ---------------------------------- 5,226 5,361 5,847 6,181 Total Core Deposits 6,170 6,229 6,171 6,156 6,091 6,202 6,080 - --------------------------- ---------------------------------- ---------------------------------- Borrowed Funds 1,844 2,417 2,287 2,294 (includes Brokered CD's) 2,153 2,232 2,346 2,446 2,541 2,594 2,683 Accrued expenses and other 100 89 86 97 liabilities 92 89 96 110 121 110 135 - --------------------------- ---------------------------------- ---------------------------------- 7,170 7,866 8,220 8,572 Total Liabilities 8,415 8,550 8,613 8,711 8,753 8,906 8,898 - --------------------------- ---------------------------------- ---------------------------------- 615 585 644 692 Shareholders' equity 654 673 715 725 749 758 742 - --------------------------- ---------------------------------- ---------------------------------- Total Liabilities and $7,785 $8,451 $8,864 $9,264 Equity $ 9,069 $ 9,222 $ 9,328 $ 9,436 $ 9,501 $ 9,665 $ 9,639 =========================== ================================== ==================================
(1) Includes money market investments. (2) Includes residential loans held for sale. PAGE 5
Old National Bancorp Interest Rate Trends (FTE basis) -------------------------------- PERIOD AVERAGES 1999 2000 2001 2002 2002 2003 ---- ---- ---- ---- ------------------------------- ------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr ------- ------- ------- ------- ------- ------- ------- ------- Earning Assets Securities 6.38% 6.80% 6.17% 4.55% Government and Agencies 4.83% 4.77% 4.54% 4.09% 3.99% 3.92% 3.77% 7.47% 7.49% 7.07% 7.13% Municipals 7.21% 7.28% 6.97% 7.08% 7.08% 7.03% 6.97% 6.45% 6.84% 6.46% 5.45% Mortgage Backed 5.75% 5.76% 5.51% 4.88% 4.50% 4.02% 3.81% 6.57% 7.52% 6.05% 5.14% Other (1) 5.38% 5.32% 5.30% 4.59% 4.83% 4.91% 3.64% - --------------------------- ------------------------------- ------------------------------- 6.74% 7.07% 6.53% 5.64% Total Investments (1) 5.86% 5.89% 5.66% 5.22% 4.97% 4.65% 4.43% - --------------------------- ------------------------------- ------------------------------- Loans 8.74% 9.28% 8.18% 6.58% Commercial 6.90% 6.67% 6.47% 6.27% 5.95% 5.66% 5.50% Commercial and Agriculture 8.15% 8.63% 8.22% 6.93% Real Estate 7.35% 7.04% 6.85% 6.50% 6.25% 6.05% 5.62% 9.57% 9.38% 9.28% 8.04% Consumer 8.38% 8.16% 7.95% 7.70% 7.55% 7.43% 7.10% - --------------------------- ------------------------------- ------------------------------- 8.74% 9.05% 8.45% 7.06% Subtotal 7.42% 7.16% 6.97% 6.69% 6.44% 6.22% 5.93% 7.89% 7.93% 7.77% 7.32% Residential Real Estate (2) 7.54% 7.47% 7.06% 7.16% 6.72% 6.50% 6.23% - --------------------------- ------------------------------- ------------------------------- 8.41% 8.67% 8.27% 7.11% Total Loans (2) 7.45% 7.23% 6.99% 6.79% 6.49% 6.27% 5.98% - --------------------------- ------------------------------- ------------------------------- - --------------------------- ------------------------------- ------------------------------- 7.98% 8.30% 7.84% 6.65% Total Earning Assets 6.98% 6.81% 6.55% 6.26% 5.95% 5.67% 5.42% =========================== =============================== =============================== Interest-bearing Liabilities 1.70% 1.94% 1.68% 1.22% NOW and Savings accounts 1.16% 1.23% 1.32% 1.17% 0.99% 1.04% 0.73% 3.85% 4.88% 3.32% 1.55% Money market accounts 1.65% 1.64% 1.60% 1.30% 1.11% 1.00% 0.82% 5.18% 5.64% 5.52% 4.58% Other time 4.70% 4.65% 4.53% 4.43% 4.24% 4.03% 3.86% - --------------------------- ------------------------------- ------------------------------- 4.00% 4.51% 4.20% 3.19% Total Interest-Bearing Deposits 3.31% 3.27% 3.20% 3.00% 2.77% 2.57% 2.33% - --------------------------- ------------------------------- ------------------------------- 5.43% 6.43% 5.29% 3.63% Borrowed Funds (includes Brokered CD's) 4.01% 3.83% 3.50% 3.25% 2.75% 2.59% 2.38% - --------------------------- ------------------------------- ------------------------------- 4.41% 5.16% 4.53% 3.32% Total Interest-Bearing Liabilities 3.51% 3.43% 3.29% 3.07% 2.76% 2.58% 2.34% =========================== =============================== =============================== 3.58% 3.14% 3.31% 3.32% Net Interest Rate Spread 3.47% 3.38% 3.27% 3.18% 3.19% 3.09% 3.08% 4.09% 3.65% 3.77% 3.65% Net Interest Margin 3.81% 3.71% 3.60% 3.50% 3.46% 3.35% 3.32%
(1) Includes money market investments. (2) Includes residential loans held for sale. PAGE 6
Old National Bancorp Asset Quality ------------- End of Period ($ in Millions) 1999 2000 2001 2002 2002 2003 ---- ---- ---- ---- ------------------------------- ------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr ------- ------- ------- ------- ------- ------- ------- ------- 59.4 65.7 73.8 74.2 Beginning allowance for loan losses 74.2 76.8 80.9 86.1 87.7 84.0 98.0 14.8 26.0 28.7 33.5 Provision for loan losses 7.5 7.5 11.0 7.5 9.0 22.5 27.5 1.0 6.0 - - Acquired from acquisition - - - - - - - (16.9) (29.3) (36.2) (27.6) Gross charge-offs (1) (6.8) (5.4) (7.8) (7.6) (14.3) (10.2) (29.6) 7.4 5.5 7.9 7.6 Gross recoveries 1.9 2.0 2.0 1.7 1.6 1.7 3.5 - -------------------------------- ------------------------------- ------------------------------- (9.5) (23.9) (28.3) (20.0) Net Charge-offs (1) (4.9) (3.4) (5.7) (5.9) (12.7) (8.5) (26.1) - -------------------------------- ------------------------------- ------------------------------- - -------------------------------- ------------------------------- ------------------------------- 65.7 73.8 74.2 87.7 Ending allowance for loan losses 76.8 80.9 86.1 87.7 84.0 98.0 99.4 ================================ =============================== =============================== Net Charge-offs / Average 0.17% 0.39% 0.45% 0.34% Loans (1) (2) 0.33% 0.23% 0.39% 0.41% 0.89% 0.60% 1.85% 5,425.1 6,087.9 6,281.0 5,878.3 Average Loans Outstanding (2) 5,990.6 5,906.0 5,834.9 5,781.6 5,698.0 5,631.5 5,655.0 5,714.7 6,348.3 6,132.9 5,769.6 EOP Loans Outstanding (2) 5,927.9 5,893.2 5,826.3 5,769.6 5,639.9 5,627.6 5,603.2 Allowance for Loan Loss / 1.15% 1.16% 1.21% 1.52% EOP Loans(2) 1.30% 1.37% 1.48% 1.52% 1.49% 1.74% 1.77% Underperforming Assets Loans 90 days and over 5.2 6.6 12.6 9.5 (still accruing) 6.5 12.2 6.3 9.5 14.1 5.6 11.4 Non-performing loans: 19.2 22.7 37.9 100.3 Nonaccrual loans 35.6 35.2 65.2 100.3 116.5 146.4 110.2 0.5 0.2 25.9 - Renegotiated loans 6.6 6.7 - - - - - - -------------------------------- ------------------------------- ------------------------------- 19.7 23.0 63.8 100.3 Total non-performing loans 42.2 41.8 65.2 100.3 116.5 146.4 110.2 - -------------------------------- ------------------------------- ------------------------------- 3.7 3.6 9.2 7.9 Foreclosed properties 9.2 8.8 9.0 7.9 9.0 8.9 9.8 0.35% 0.36% 1.04% 1.74% Non-performing loans / Loans (2) 0.71% 0.71% 1.12% 1.74% 2.07% 2.60% 1.97% 333% 321% 116% 87% Allowance to Non-performing 182% 193% 132% 87% 72% 67% 90%
(1) Net charge-offs include $12.5 million and $2.2 million of write-downs on loans transferred to held for sale for the third quarter and second quarter of 2003, respectively. (2) Includes residential loans held for sale. PAGE 7 -----END PRIVACY-ENHANCED MESSAGE-----