EVANSVILLE, Ind., April 23, 2024 (GLOBE NEWSWIRE) -- Old National Bancorp (NASDAQ:ONB) reports 1Q24 net income applicable to common shares of $116.3 million, diluted EPS of $0.40; $130.8 million and $0.45 on an adjusted1 basis, respectively. CEO COMMENTARY:   "Old National's positive quarterly results were highlighted by continued growth in our granular, peer-leading deposit franchise, disciplined loan growth, a year-over-year tangible book value increase, and stable credit quality," said Chairman and CEO Jim Ryan. "We accomplished these strong results while driving toward a successful close (on April 1) of our partnership with Nashville-based CapStar Bank."   FIRST QUARTER HIGHLIGHTS2: Net Income Net income applicable to common shares of $116.3 million; adjusted net income applicable to common shares1 of $130.8 million Earnings per diluted common share ("EPS") of $0.40; adjusted EPS1 of $0.45     Net Interest Income/NIM Net interest income on a fully taxable equivalent basis1 of $362.7 million Net interest margin on a fully taxable equivalent basis1 ("NIM") of 3.28%, down 11 basis points ("bps")     Operating Performance Pre-provision net revenue1 ("PPNR") of $177.9 million; adjusted PPNR1 of $197.2 million Noninterest expense of $262.3 million; adjusted noninterest expense1 of $243.1 million Efficiency ratio1 of 58.3%; adjusted efficiency ratio1 of 53.4%     Deposits and Funding Period-end total deposits of $37.7 billion, up 5.0% annualized; core deposits up 3.2% annualized Granular low-cost deposit franchise; total deposit costs of 201 bps and a cycle to date (2Q22-1Q24) total deposit beta of 38% (interest-bearing deposit beta of 50%)     Loans and Credit Quality End-of-period total loans3 of $33.6 billion, up 7.5% annualized Provision for credit losses4 ("provision") of $18.9 million Net charge-offs of $11.8 million, or 14 bps of average loans; 7 bps excluding purchased credit deteriorated ("PCD") loans that had an allowance at acquisition 30+ day delinquencies of 0.16% and non-performing loans of 0.98% of total loans     Return Profile & Capital Return on average tangible common equity1 of 14.9%; adjusted return on average tangible common equity1 of 16.7%     Notable Items $13.3 million pre-tax distribution of excess legacy First Midwest pension plan assets5 $3.0 million pre-tax FDIC special assessment6 $2.9 million of pre-tax merger-related charges 1 Non-GAAP financial measure that management believes is useful in evaluating the financial results of the Company – 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 4 Includes the provision for unfunded commitments 5 Includes non-cash expense associated with the distribution of excess pension assets with the resolution of the legacy First Midwest Bancorp, Inc. plan 6 Represents the Company's estimate of its FDIC special assessment using the FDIC's updated estimate of losses to its Deposit Insurance Fund RESULTS OF OPERATIONS2Old National Bancorp ("Old National") reported first quarter 2024 net income applicable to common shares of $116.3 million, or $0.40 per diluted common share. Included in first quarter results was a $13.3 million non-cash, pre-tax expense associated with the distribution of excess pension assets with the resolution of the legacy First Midwest plan, as well as pre-tax charges of $3.0 million for the FDIC special assessment and $2.9 million of merger-related charges. Excluding these transactions and realized debt securities losses from the current quarter, adjusted net income1 was $130.8 million, or $0.45 per diluted common share. DEPOSITS AND FUNDINGGrowth in deposits including normal seasonal patterns in business checking and public funds. Period-end total deposits were $37.7 billion, up $464.2 million, or 5.0% annualized; core deposits increased 3.2% annualized; includes normal seasonal patterns in business checking and public funds. On average, total deposits for the first quarter were $37.1 billion, a decrease of 1.2%. Granular low-cost deposit franchise; total deposit costs of 201 bps and a cycle to date total deposit beta of 38% (interest-bearing deposit beta of 50%). A loan to deposit ratio of 89%, combined with existing funding sources, provides strong liquidity. LOANSBroad-based disciplined commercial loan growth. Period-end total loans3 were $33.6 billion, up 7.5% annualized. Total commercial loan production in the first quarter was $1.1 billion; period-end commercial pipeline totaled $2.7 billion. Average total loans in the first quarter were $33.2 billion, an increase of $480.3 million. CREDIT QUALITY Strong credit quality continues to be a hallmark of Old National. Provision4 expense was $18.9 million, compared to $11.6 million, reflecting net charge-offs and loan growth, as well as economic factors. Net charge-offs were $11.8 million, or 14 bps of average loans compared to net charge-offs of 12 bps of average loans. Excluding PCD loans that had an allowance for credit losses established at acquisition, net charge-offs to average loans were 7 bps. 30+ day delinquencies as a percentage of loans were 0.16%, compared to 0.22%. Non-performing loans as a percentage of total loans were 0.98% compared to 0.83%. Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. The remaining discount on these acquired loans was $75.0 million. The allowance for credit losses, including the allowance for credit losses on unfunded commitments, stood at $346.0 million, or 1.03% of total loans, compared to $338.8 million, or 1.03% of total loans. NET INTEREST INCOME AND MARGINLower net interest income and margin compression reflective of the rate environment. Net interest income on a fully taxable equivalent basis1 decreased to $362.7 million compared to $370.5 million, driven by higher funding costs and fewer days in the quarter, partly offset by loan growth. Net interest margin on a fully taxable equivalent basis1 decreased 11 bps to 3.28%. Accretion income on loans and borrowings was $5.1 million, or 5 bps of net interest margin1, compared to $6.2 million, or 6 bps of net interest margin1. Cost of total deposits was 2.01%, increasing 16 bps and the cost of total interest-bearing deposits increased 15 bps to 2.68%. NONINTEREST INCOMEIncreased mortgage fees, wealth fees, and other income, offset by lower capital markets income. Total noninterest income was $77.5 million. Excluding realized debt securities gains/losses for both periods and gain on sale of Visa Class B restricted shares for the fourth quarter of 2023, adjusted noninterest income was down 2.2% due to lower capital markets income, partially offset by an increase in mortgage fees, wealth fees, and other income. NONINTEREST EXPENSEDisciplined expense management. Noninterest expense was $262.3 million and included a $13.3 million non-cash expense associated with the distribution of excess pension assets with the resolution of the legacy First Midwest plan, as well as $3.0 million of FDIC special assessment charges and $2.9 million of merger-related charges. Excluding these items, adjusted noninterest expense was $243.1 million, compared to $255.2 million; lower due to elevated performance-driven incentive accruals and higher amortization of tax credit investments for the fourth quarter of 2023, as well as lower professional fees and other expense for the first quarter of 2024, partially offset by payroll tax due to timing. The efficiency ratio1 was 58.3%, while the adjusted efficiency ratio1 was 53.4% compared to 59.0% and 53.8%, respectively. INCOME TAXES Income tax expense was $32.5 million, resulting in an effective tax rate of 21.3% compared to 21.5%. On an adjusted fully taxable equivalent ("FTE") basis, the effective tax rate was 24.4% compared to 24.2%. Income tax expense included $3.3 million of tax credit benefit. CAPITALCapital ratios remain strong. All regulatory capital ratios grew in the quarter with preliminary total risk-based capital up 10 bps to 12.74% and preliminary regulatory Tier 1 capital up 5 bps to 11.40%, driven by retained earnings, partly offset by strong loan growth. Tangible common equity to tangible assets was 6.86% compared to 6.85%. CAPSTAR TRANSACTIONOn April 1, 2024, Old National completed its acquisition of CapStar Financial Holdings, Inc. ("CapStar"), and its wholly-owned subsidiary, CapStar Bank. This partnership strengthens Old National's Nashville, Tennessee presence and adds several new high-growth markets. At closing, CapStar had approximately $3.0 billion of total assets, $2.3 billion of total loans, and $2.6 billion of deposits. Old National expects system conversions related to the transaction to be completed in the third quarter of 2024. CONFERENCE CALL AND WEBCASTOld National will host a conference call and live webcast at 9:00 a.m. Central Time on Tuesday, April 23, 2024, to review first quarter financial results. The live audio webcast link and corresponding presentation slides will be available on the Company's Investor Relations website at oldnational.com and will be archived there for 12 months. To listen to the live conference call, dial U.S. (800) 715-9871 or International (646) 307-1963, access code 3992332. A replay of the call will also be available from approximately noon Central Time on April 23, 2024 through May 7, 2024. To access the replay, dial U.S. (800) 770-2030 or International (647) 362-9199; Access code 3992332. ABOUT OLD NATIONALOld National Bancorp (NASDAQ:ONB) is the holding company of Old National Bank, which is the sixth largest commercial bank headquartered in the Midwest. With approximately $53 billion of assets and $29 billion of assets under management (including CapStar Financial Holdings, Inc. on a pro forma basis as of December 31, 2023), Old National ranks among the top 30 banking companies headquartered in the U.S. Tracing our roots to 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships with clients and in the communities it serves. 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 MEASURESThe Company's accounting and reporting policies conform to U.S. generally accepted accounting principles ("GAAP") and general practices within the banking industry. As a supplement to GAAP, the Company provides non-GAAP performance results, which the Company believes are useful because they assist investors in assessing the Company's operating performance. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables at the end of this release. The Company presents EPS, the efficiency ratio, return on average common equity, return on average tangible common equity, and net income applicable to common shares, all adjusted for certain notable items. These items include gain on sale of Visa Class B restricted shares, distribution of excess pension assets expense, FDIC special assessment expense, contract termination charges, merger-related charges associated with completed and pending acquisitions, debt securities gains/losses, expenses related to the tragic April 10, 2023 event at our downtown Louisville location ("Louisville expenses"), and property optimization charges. Management believes excluding these items from EPS, the efficiency ratio, return on average common equity, and return on average tangible common equity may be useful in assessing the Company's underlying operational performance since these items do not pertain to its core business operations and their exclusion may facilitate better comparability between periods. Management believes that excluding merger-related charges from these metrics may be useful to the Company, as well as analysts and investors, since these expenses can vary significantly based on the size, type, and structure of each acquisition. Additionally, management believes excluding these items from these metrics may enhance comparability for peer comparison purposes. Income tax expense, provision for credit losses, and the certain notable items listed above are excluded from the calculation of pre-provision net revenues, adjusted due to the fluctuation in income before income tax and the level of provision for credit losses required. Management believes pre-provision net revenues, adjusted may be useful in assessing the Company's underlying operating performance and their exclusion may facilitate better comparability between periods and for peer comparison purposes. The Company presents adjusted noninterest expense, which excludes distribution of excess pension assets expense, FDIC special assessment expense, contract termination charges, merger-related charges, property optimization charges, Louisville expenses, as well as adjusted noninterest income, which excludes the gain on sale of Visa Class B restricted shares and debt securities gains/losses. Management believes that excluding these items from noninterest expense and noninterest income may be useful in assessing the Company's underlying operational performance as these items either do not pertain to its core business operations or their exclusion may facilitate better comparability between periods and for peer comparison purposes. The tax-equivalent adjustment to net interest income and net interest margin recognizes the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal income tax rate of 21%. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on a fully tax-equivalent basis and that it may enhance comparability for peer comparison purposes. In management's view, tangible common equity measures are capital adequacy metrics that may be meaningful to the Company, as well as analysts and investors, in assessing the Company's use of equity and in facilitating comparisons with peers. These non-GAAP measures are valuable indicators of a financial institution's capital strength since they eliminate intangible assets from stockholders' equity and retain the effect of accumulated other comprehensive loss in stockholders' equity. Although intended to enhance investors' understanding of the Company's business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. In addition, these non-GAAP financial measures may differ from those used by other financial institutions to assess their business and performance. See the previously provided tables and the following reconciliations in the "Non-GAAP Reconciliations" section for details on the calculation of these measures to the extent presented herein. FORWARD-LOOKING STATEMENTS This communication contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the Securities and Exchange Commission ("SEC"), in press releases, and in oral and written statements made by us that are not statements of historical fact and constitute forward‐looking statements within the meaning of the Act. These statements include, but are not limited to, descriptions of Old National's financial condition, results of operations, asset and credit quality trends, profitability and business plans or opportunities. Forward-looking statements can be identified by the use of words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "should," "would," and "will," and other words of similar meaning. These forward-looking statements express management's current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those in such statements, including, but not limited to: competition; government legislation, regulations and policies; the ability of Old National to execute its business plan; unanticipated changes in our liquidity position, including but not limited to changes in our access to sources of liquidity and capital to address our liquidity needs; changes in economic conditions and economic and business uncertainty which could materially impact credit quality trends and the ability to generate loans and gather deposits; inflation and governmental responses to inflation, including increasing interest rates; market, economic, operational, liquidity, credit, and interest rate risks associated with our business; our ability to successfully manage our credit risk and the sufficiency of our allowance for credit losses; the expected cost savings, synergies and other financial benefits from the merger (the "Merger") between Old National and CapStar Financial Holdings, Inc. not being realized within the expected time frames and costs or difficulties relating to integration matters being greater than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the Merger; the potential impact of future business combinations on our performance and financial condition, including our ability to successfully integrate the businesses and the success of revenue-generating and cost reduction initiatives; failure or circumvention of our internal controls; operational risks or risk management failures by us or critical third parties, including without limitation with respect to data processing, information systems, cybersecurity, technological changes, vendor issues, business interruption, and fraud risks; significant changes in accounting, tax or regulatory practices or requirements; new legal obligations or liabilities; disruptive technologies in payment systems and other services traditionally provided by banks; failure or disruption of our information systems; computer hacking and other cybersecurity threats; the effects of climate change on Old National and its customers, borrowers, or service providers; political and economic uncertainty and instability; the impacts of pandemics, epidemics and other infectious disease outbreaks; other matters discussed in this communication; and other factors identified in our Annual Report on Form 10-K for the year ended December 31, 2023 and other filings with the SEC. These forward-looking statements are made only as of the date of this communication and are not guarantees of future results, performance or outcomes, and Old National does not undertake an obligation to update these forward-looking statements to reflect events or conditions after the date of this communication. CONTACTS:     Media: Kathy Schoettlin   Investors: Lynell Durchholz (812) 465-7269   (812) 464-1366                   Financial Highlights (unaudited) ($ and shares in thousands, except per share data)               Three Months Ended   March 31, December 31, September 30, June 30, March 31,     2024     2023     2023     2023     2023   Income Statement           Net interest income $ 356,458   $ 364,408   $ 375,086   $ 382,171   $ 381,488   FTE adjustment1,3   6,253     6,100     5,837     5,825     5,666   Net interest income - tax equivalent basis3   362,711     370,508     380,923     387,996     387,154   Provision for credit losses   18,891     11,595     19,068     14,787     13,437   Noninterest income   77,522     100,094     80,938     81,629     70,681   Noninterest expense   262,317     284,235     244,776     246,584     250,711   Net income available to common shareholders $ 116,250   $ 128,446   $ 143,842   $ 151,003   $ 142,566   Per Common Share Data           Weighted average diluted shares   292,207     292,029     291,717     291,266     292,756   EPS, diluted $ 0.40   $ 0.44   $ 0.49   $ 0.52   $ 0.49   Cash dividends   0.14     0.14     0.14     0.14     0.14   Dividend payout ratio2   35 %   32 %   29 %   27 %   29 % Book value $ 18.24   $ 18.18   $ 17.07   $ 17.25   $ 17.24   Stock price   17.41     16.89     14.54     13.94     14.42   Tangible book value3   11.10     11.00     9.87     10.03     9.98   Performance Ratios           ROAA   0.98 %   1.09 %   1.22 %   1.29 %   1.25 % ROAE   8.7 %   10.2 %   11.4 %   12.0 %   11.6 % ROATCE3   14.9 %   18.1 %   20.2 %   21.4 %   21.0 % NIM (FTE)   3.28 %   3.39 %   3.49 %   3.60 %   3.69 % Efficiency ratio3   58.3 %   59.0 %   51.7 %   51.2 %   52.8 % NCOs to average loans   0.14 %   0.12 %   0.24 %   0.13 %   0.21 % ACL on loans to EOP loans   0.95 %   0.93 %   0.93 %   0.93 %   0.94 % ACL4 to EOP loans   1.03 %   1.03 %   1.03 %   1.04 %   1.05 % NPLs to EOP loans   0.98 %   0.83 %   0.80 %   0.91 %   0.74 % Balance Sheet (EOP)           Total loans $ 33,623,319   $ 32,991,927   $ 32,577,834   $ 32,432,473   $ 31,822,374   Total assets   49,534,918     49,089,836     49,059,448     48,496,755     47,842,644   Total deposits   37,699,418     37,235,180     37,252,676     36,231,315     34,917,792   Total borrowed funds   5,331,161     5,331,147     5,556,010     6,034,008     6,740,454   Total shareholders' equity   5,595,408     5,562,900     5,239,537     5,292,095     5,277,426   Capital Ratios           Risk-based capital ratios (EOP):           Tier 1 common equity   10.76 %   10.70 %   10.41 %   10.14 %   9.98 % Tier 1 capital   11.40 %   11.35 %   11.06 %   10.79 %   10.64 % Total capital   12.74 %   12.64 %   12.32 %   12.14 %   11.96 % Leverage ratio (average assets)   8.96 %   8.83 %   8.70 %   8.59 %   8.53 % Equity to assets (averages)3   11.32 %   10.81 %   10.88 %   10.96 %   11.00 % TCE to TA3   6.86 %   6.85 %   6.15 %   6.33 %   6.37 % Nonfinancial Data           Full-time equivalent employees   3,955     3,940     3,981     4,021     4,023   Banking centers   258     258     257     256     256   1 Calculated using the federal statutory tax rate in effect of 21% for all periods. 2 Cash dividends per common share divided by net income per common share (basic). 3 Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures.    March 31, 2024 capital ratios are preliminary. 4 Includes the allowance for credit losses on loans and unfunded loan commitments.             FTE - Fully taxable equivalent basis ROAA - Return on average assets ROAE - Return on average equity ROATCE - Return on average tangible common equity NCOs - Net Charge-offs ALL - Allowance for loan losses ACL - Allowance for Credit Losses EOP - End of period actual balances NPLs - Non-performing Loans TCE - Tangible common equity TA - Tangible assets             Income Statement (unaudited) ($ and shares in thousands, except per share data)   Three Months Ended   March 31, December 31, September 30, June 30, March 31,     2024     2023     2023     2023     2023   Interest income $ 595,981   $ 589,751   $ 576,519   $ 544,902   $ 495,649   Less: interest expense   239,523     225,343     201,433     162,731     114,161   Net interest income   356,458     364,408     375,086     382,171     381,488   Provision for credit losses   18,891     11,595     19,068     14,787     13,437   Net interest income after provision for credit losses   337,567     352,813     356,018     367,384     368,051   Wealth and investment services fees   28,304     27,656     26,687     26,521     26,920   Service charges on deposit accounts   17,898     18,667     18,524     17,751     17,003   Debit card and ATM fees   10,054     10,700     10,818     10,653     9,982   Mortgage banking revenue   4,478     3,691     5,063     4,165     3,400   Capital markets income   2,900     5,416     5,891     6,173     6,939   Company-owned life insurance   3,434     3,773     3,740     4,698     3,186   Gain on sale of Visa Class B restricted shares   —     21,635     —     —     —   Other income   10,470     9,381     10,456     11,651     8,467   Debt securities gains (losses), net   (16 )   (825 )   (241 )   17     (5,216 ) Total noninterest income   77,522     100,094     80,938     81,629     70,681   Salaries and employee benefits   149,803     141,649     131,541     135,810     137,364   Occupancy   27,019     26,514     25,795     26,085     28,282   Equipment   8,671     8,769     8,284     7,721     7,389   Marketing   10,634     10,813     9,448     9,833     9,417   Technology   20,023     20,493     20,592     20,056     19,202   Communication   4,000     4,212     4,075     4,232     4,461   Professional fees   6,406     8,250     5,956     6,397     6,732   FDIC assessment   11,313     27,702     9,000     9,624     10,404   Amortization of intangibles   5,455     5,869     6,040     6,060     6,186   Amortization of tax credit investments   2,749     7,200     2,644     2,762     2,761   Other expense   16,244     22,764     21,401     18,004     18,513   Total noninterest expense   262,317     284,235     244,776     246,584     250,711   Income before income taxes   152,772     168,672     192,180     202,429     188,021   Income tax expense   32,488     36,192     44,304     47,393     41,421   Net income $ 120,284   $ 132,480   $ 147,876   $ 155,036   $ 146,600   Preferred dividends   (4,034 )   (4,034 )   (4,034 )   (4,033 )   (4,034 ) Net income applicable to common shares $ 116,250   $ 128,446   $ 143,842   $ 151,003   $ 142,566               EPS, diluted $ 0.40   $ 0.44   $ 0.49   $ 0.52   $ 0.49   Weighted Average Common Shares Outstanding           Basic   290,980     290,701     290,648     290,559     291,088   Diluted   292,207     292,029     291,717     291,266     292,756   Common shares outstanding (EOP)   293,330     292,655     292,586     292,597     291,922                 End of Period Balance Sheet (unaudited) ($ in thousands)   March 31, December 31, September 30, June 30, March 31,     2024     2023     2023     2023     2023   Assets           Cash and due from banks $ 350,990   $ 430,866   $ 381,343   $ 473,023   $ 386,879   Money market and other interest-earning investments   588,509     744,192     1,282,087     724,863     727,056   Investments:           Treasury and government-sponsored agencies   2,243,754     2,453,950     2,515,249     2,309,285     2,236,412   Mortgage-backed securities   5,566,881     5,245,691     4,906,290     5,168,458     5,395,680   States and political subdivisions   1,672,061     1,693,819     1,705,200     1,760,725     1,785,073   Other securities   760,847     779,048     751,404     802,323     826,575   Total investments   10,243,543     10,172,508     9,878,143     10,040,791     10,243,740   Loans held-for-sale, at fair value   19,418     32,006     122,033     114,369     10,584   Loans:           Commercial   9,648,269     9,512,230     9,333,448     9,698,241     9,751,875   Commercial and agriculture real estate   14,653,958     14,140,629     13,916,221     13,450,209     12,908,380   Residential real estate   6,661,379     6,699,443     6,696,288     6,684,480     6,568,666   Consumer   2,659,713     2,639,625     2,631,877     2,599,543     2,593,453   Total loans   33,623,319     32,991,927     32,577,834     32,432,473     31,822,374   Allowance for credit losses on loans   (319,713 )   (307,610 )   (303,982 )   (300,555 )   (298,711 ) Premises and equipment, net   564,007     565,396