Old National Bancorp (ONB) 8-K Results of Operations and Financial Condition

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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): January 25, 2006

OLD NATIONAL BANCORP

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Indiana
(State or other jurisdiction of incorporation) 001-15817
(Commission File Number) 35-1539838
(IRS Employer Identification No.)

One Main Street
Evansville, Indiana 47708
(Address of Principal Executive Offices, including Zip Code)

(812) 464-1294
(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

o Written communications pursuant to Rule 425 under the Securities Act

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

TABLE OF CONTENTS

Press Release

Financial Trends

Item 2.02. Results of Operation and Financial Condition.

     On January 31, 2006, Old National Bancorp (the “Company”) issued a press release announcing its financial results for the fourth quarter and full year 2005. The Company also released its financial trends including its 2005 results. The financial trends are included as Exhibit 99.2 hereto which is incorporated herein by reference. In connection therewith, a slide presentation outlining fourth quarter and full year 2005 earnings, the company’s financial outlook, and current strategic developments will be available on the Company’s website to supplement the conference call to be held on January 31, 2006, at 2:30 p.m. CST and will be accessible atwww.oldnational.com before the conference call begins.

     In addition, the Company announced that it will restate its audited financial statements for the years ended December 31, 2002, 2003 and 2004 and its unaudited interim financial statements for the quarters ended March 31, June 30 and September 30, 2004 and 2005 to correct the accounting for certain derivative transactions relating to interest rate swap agreements on the Company’s junior subordinated debt and brokered certificates of deposit.

     A copy of the press release is attached to this report as Exhibit 99.1.

Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

     On January 25, 2006, management and the Audit Committee of the Board of Directors of the Company, concluded that the Company’s audited financial statements for the years ended December 31, 2002, 2003 and 2004 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 and its unaudited interim financial statements for each of the quarters ended March 31, June 30 and September 30, 2004 and 2005 included in the Company’s Forms 10-Q for such quarters should no longer be relied upon as a result of the accounting treatment applied by the Company in connection with certain derivative transactions associated with its brokered certificates of deposit and junior subordinated debt under Statement of Financial Accounting Standards No. 133,Accounting for Derivative Instruments and Hedging Activities(“SFAS No. 133”).

     Management and the Audit Committee have discussed the matters surrounding the restatement of the financial statements disclosed herein pursuant to Item 4.02(a) of Form 8-K with the Company’s independent registered public accounting firm.

     Accordingly, the Company intends to amend its Annual Report on Form 10-K for the year ended December 31, 2004 and its Quarterly Reports on Form 10-Q for each of the quarters ended March 31, June 30 and September 30, 2005 to reflect the proper application of SFAS No. 133. In connection with this restatement, the Company will be making certain other non-significant adjustments to its financial statements for the quarters ended June 30 and September 30, 2005.

Background

     Since 2001, the Company has entered into interest rate swap agreements to hedge the interest rate risk inherent in certain of its junior subordinated debt and brokered certificates of deposit. From inception of these transactions, the Company has applied a method of fair value hedge accounting under SFAS No. 133

2

(commonly referred to as the “short-cut” method) and, as a result, assumed no ineffectiveness in the hedging relationships. However, based upon re-examination of the original documentation supporting the designation of these swap transactions as hedges, the Company concluded that the hedging relationships involving brokered certificates of deposit did not qualify for the short-cut method in prior periods because the related swap did not have a fair value of zero at inception (a requirement under SFAS No. 133 to qualify for the short-cut method). Additionally, the Company determined that the hedging relationships involving junior subordinated debt did not qualify for the short-cut method in prior periods because of an interest deferral feature that permits interest payments to be deferred for up to 20 consecutive quarterly periods without creating an event of default or acceleration.

     The Company continues to believe that the swaps have been and will continue to be highly effective economic hedges. However, the hedging relationships do not qualify for the “short-cut” method of accounting and cannot qualify for preferable hedge accounting treatment retrospectively due to a lack of applicable contemporaneous documentation.

     Fair value hedge accounting allows a company to offset the fair value adjustment of the hedged item with the fair value adjustment of the related interest rate swap. Eliminating the application of fair value hedge accounting reverses the market value adjustments that were made to the junior subordinated debt and brokered certificates of deposit and results in fluctuations in the market value of the interest rate swaps being recognized currently in the income statement without the offsetting adjustment to the liability accounts.

     In January of 2006, Old National decided to terminate certain swaps and has redesignated the remaining interest rate swaps on its junior subordinated debt and brokered certificates of deposit as fair value hedges utilizing the long-haul method of effectiveness testing, and as a result should receive hedge accounting treatment in future periods. The future impact on earnings from the related ineffectiveness is expected to be minimal.

     The tables below set forth the primary changes from the previously reported quarterly financial results for the periods ended March 31, June 30, and September 30, 2005 and for the year ended December 31, 2004 and for the quarterly periods in 2004. The restatement required the following adjustments:

1.	The net cash settlements under the interest rate swaps that were originally reported in interest expense have been reclassified to noninterest income.
2.	The change in the fair value of the interest rate swaps that originally off-set the change in the fair value of the associated junior subordinated debt and brokered certificates of deposit is reported in noninterest income.
3.	Income tax expense (benefits) for the adjustments.
4.	The fair value adjustments to the brokered certificates of deposit have been eliminated.
5.	The fair value adjustments to the junior subordinated debt have been eliminated.
6.	The income tax liability has changed as a result of the adjustments noted above.
7.	The adjustment to stockholders’ equity reflects the cumulative impact of the adjustments, net of income taxes.

3

2005
OLD NATIONAL BANCORP
($ and shares in thousands except per share data)

	As Previously Reported										Adjustments									As Restated
	1Q				2Q			3Q			1Q			2Q			3Q			1Q			2Q			3Q			4Q			YTD
	2005				2005			2005			2005			2005			2005			2005			2005			2005			2005			2005
Condensed Statement of Income
Net Interest Income (1)	$	58,638			$	57,126		$	57,608		$	(3,441	)	$	(2,445	)	$	(1,942	)	$	55,197		$	54,681		$	55,666		$	53,608		$	219,152
Provision for Loan Losses		5,100				6,000			6,000			—			—			—			5,100			6,000			6,000			6,000			23,100
Noninterest Income (2)		36,005				38,473			39,268			(2,747	)		8,045			(4,808	)		33,258			46,518			34,460			45,662			159,898
Noninterest Expense		66,356				63,901			62,002			—			—			—			66,356			63,901			62,002			69,848			262,107
Income before Income Taxes		23,187				25,698			28,874			(6,188	)		5,600			(6,750	)		16,999			31,298			22,124			23,422			93,843
Income Taxes (3)		3,747				4,489			5,774			(2,304	)		2,112			(2,526	)		1,443			6,601			3,248			3,962			15,254
Income -Cont. Operations		19,440				21,209			23,100			(3,884	)		3,488			(4,224	)		15,556			24,697			18,876			19,460			78,589
Income-Disc Operations		(984	)			1,666			(15,507	)		—			(1,124	)		1,124			(984	)		542			(14,383	)		—			(14,825	)
Net Income	$	18,456			$	22,875		$	7,593		$	(3,884	)	$	2,364		$	(3,100	)	$	14,572		$	25,239		$	4,493		$	19,460		$	63,764
Diluted Earnings Per Share
Income from Cont Operations	$	0.28			$	0.31		$	0.34		$	(0.06	)	$	0.06		$	(0.06	)	$	0.22		$	0.37		$	0.28		$	0.28		$	1.15
Income from Disc Operations		(0.01	)			0.02			(0.23	)		—			(0.02	)		0.02			(0.01	)		—			(0.21	)		—			(0.22	)
Net Income	$	0.27			$	0.33		$	0.11		$	(0.06	)	$	0.04		$	(0.04	)	$	0.21		$	0.37		$	0.07		$	0.28		$	0.93
Diluted Common Shares O/S		68,787				68,488			68,331			—			—			—			68,787			68,488			68,331			67,591			68,256
Condensed Balance Sheet
Earning Assets	$	7,949,544			$	7,728,290		$	7,704,823		$	—		$	—		$	—		$	7,949,544		$	7,728,290		$	7,704,823		$	7,611,157		$	7,611,157
Nonearning Assets		843,503				922,048			830,468			—			(1,830	)		—			843,503			920,218			830,468			880,865			880,865
Total Assets	$	8,793,047			$	8,650,338		$	8,535,291		$	—		$	(1,830	)	$	—		$	8,793,047		$	8,648,508		$	8,535,291		$	8,492,022		$	8,492,022
Deposits (4)	$	6,361,663			$	6,320,772		$	6,365,172		$	8,258		$	3,327		$	8,208		$	6,369,921		$	6,324,099		$	6,373,380		$	6,465,636		$	6,465,636
Short-term Borrowings		493,312				468,046			350,999			—			—			—			493,312			468,046			350,999			302,765			302,765
Other Borrowings (5)		1,155,595				1,051,315			1,036,093			(3,332	)		(3,999	)		(2,130	)		1,152,263			1,047,316			1,033,963			954,925			954,925
Other Liabilities (6)		111,888				107,979			110,226			(1,926	)		(521	)		(2,342	)		109,962			107,458			107,884			118,798			118,798
Stockholders Equity (7)		670,589				702,226			672,801			(3,000	)		(637	)		(3,736	)		667,589			701,589			669,065			649,898			649,898
Total Liab & Equity	$	8,793,047			$	8,650,338		$	8,535,291		$	—		$	(1,830	)	$	—		$	8,793,047		$	8,648,508		$	8,535,291		$	8,492,022		$	8,492,022
Impact on Certain Ratios
(Based on Net Income)
Net Interest Margin		3.22	%			3.20	%		3.26	%		(0.17)	%		(0.13)	%		(0.10)	%		3.05	%		3.07	%		3.16	%		3.09	%		3.09	%
Return on Ave Assets		0.84	%	��		1.05	%		0.36	%		(0.18)	%		0.11	%		(0.15)	%		0.66	%		1.16	%		0.21	%		0.92	%		0.74	%
Return on Average Equity		10.48	%			13.18	%		4.48	%		(2.21)	%		1.51	%		(1.82)	%		8.27	%		14.69	%		2.66	%		11.69	%		9.33	%
Efficiency Ratio (A)		66.22	%			63.18	%		60.72	%		4.36	%		(3.31)	%		4.30	%		70.58	%		59.86	%		65.02	%		66.87	%		65.43	%
Ave Equity to Ave Assets		7.99	%			7.96	%		7.92	%		—			(0.08)	%		(0.01)	%		7.99	%		7.88	%		7.91	%		7.91	%		7.92	%
Tier 1 Risk Based Capital		11.01	%			10.06	%		10.42	%		(0.05)	%		0.02	%		(0.06)	%		10.96	%		10.08	%		10.36	%		10.64	%		10.64	%
Leverage (to ave assets)		7.76	%			7.22	%		7.61	%		(0.03)	%		0.01	%		(0.04)	%		7.73	%		7.23	%		7.57	%		7.67	%		7.67	%
Book Value	$	9.76			$	10.18		$	9.89		$	(0.04)		$	—		$	(0.05)		$	9.72		$	10.18		$	9.84		$	9.61		$	9.61

(A) Based on Continuing Operations.

OLD NATIONAL BANCORP
($ and shares in thousands except per share data)

	As Previously Reported												Adjustments												As Restated
	1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q			1Q			2Q			3Q			4Q
	2004			2004			2004			2004			2004			2004			2004			2004			2004			2004			2004			2004
Condensed Statement of Income
Net Interest Income (1)	$	65,099		$	65,130		$	60,988		$	59,512		$	(5,021	)	$	(5,131	)	$	(4,681	)	$	(4,139	)	$	60,078		$	59,999		$	56,307		$	55,373
Provision for Loan Losses		7,500			7,500			7,400			—			—			—			—			—			7,500			7,500			7,400			—
Noninterest Income (2)		37,660			42,380			35,165			35,853			9,263			(9,163	)		10,419			1,311			46,923			33,217			45,584			37,164
Noninterest Expense		74,002			91,725			69,094			74,582			—			—			—			—			74,002			91,725			69,094			74,582
Income before Income Taxes		21,257			8,285			19,659			20,783			4,242			(14,294	)		5,738			(2,828	)		25,499			(6,009	)		25,397			17,955
Income Taxes (3)		2,667			(1,930	)		1,840			2,587			1,582			(5,338	)		2,163			(1,042	)		4,249			(7,268	)		4,003			1,545
Income -Cont. Operations		18,590			10,215			17,819			18,196			2,660			(8,956	)		3,575			(1,786	)		21,250			1,259			21,394			16,410
Income-Disc Operations		919			1,068			365			399			—			—			—			—			919			1,068			365			399
Net Income	$	19,509		$	11,283		$	18,184		$	18,595		$	2,660		$	(8,956	)	$	3,575		$	(1,786	)	$	22,169		$	2,327		$	21,759		$	16,809
Diluted Earnings Per Share
Income from Cont Operations	$	0.27		$	0.14		$	0.26		$	0.26		$	0.04		$	(0.13	)	$	0.05		$	(0.03	)	$	0.31		$	0.01		$	0.31		$	0.23
Income from Disc Operations		0.01			0.02			—			0.01			—			—			—			—			0.01			0.02			—			0.01
Net Income	$	0.28		$	0.16		$	0.26		$	0.27		$	0.04		$	(0.13	)	$	0.05		$	(0.03	)	$	0.32		$	0.03		$	0.31		$	0.24
Diluted Common Shares O/S		69,783			70,160			70,067			70,022			—			—			—			—			69,783			70,160			70,067			70,022
Condensed Balance Sheet
Earning Assets	$	8,466,808		$	8,175,191		$	8,122,791		$	8,012,398		$	—		$	—		$	—		$	—		$	8,466,808		$	8,175,191		$	8,122,791		$	8,012,398
Nonearning Assets		800,481			866,259			858,924			885,906			—			—			—			—			800,481			866,259			858,924			885,906
Total Assets	$	9,267,289		$	9,041,450		$	8,981,715		$	8,898,304		$	—		$	—		$	—		$	—		$	9,267,289		$	9,041,450		$	8,981,715		$	8,898,304
Deposits (4)	$	6,385,103		$	6,346,326		$	6,408,129		$	6,414,263		$	(783	)	$	8,152		$	3,436		$	4,446		$	6,384,320		$	6,354,478		$	6,411,565		$	6,418,709
Short-term Borrowings		471,403			426,679			338,531			347,353			—			—			—			—			471,403			426,679			338,531			347,353
Other Borrowings (5)		1,533,202			1,456,179			1,405,522			1,312,661			(11,862	)		(6,504	)		(7,525	)		(5,708	)		1,521,340			1,449,675			1,397,997			1,306,953
Other Liabilities (6)		136,720			138,968			117,187			120,819			4,594			(741	)		1,420			378			141,314			138,227			118,607			121,197
Stockholders Equity (7) (B)		740,861			673,298			712,346			703,208			8,051			(907	)		2,669			884			748,912			672,391			715,015			704,092
Total Liab & Equity	$	9,267,289		$	9,041,450		$	8,981,715		$	8,898,304		$	—		$	—		$	—		$	—		$	9,267,289		$	9,041,450		$	8,981,715		$	8,898,304
Impact on Certain Ratios
Net Interest Margin		3.37	%		3.38	%		3.30	%		3.21	%		(0.24)	%		(0.25)	%		(0.23)	%		(0.21)	%		3.13	%		3.13	%		3.07	%		3.00	%
Return on Ave Assets		0.84	%		0.49	%		0.81	%		0.83	%		0.12	%		(0.39)	%		0.16	%		(0.08)	%		0.96	%		0.10	%		0.97	%		0.75	%
Return on Average Equity		10.68	%		6.34	%		10.58	%		10.45	%		1.35	%		(5.04)	%		2.01	%		(1.03)	%		12.03	%		1.30	%		12.59	%		9.42	%
Efficiency Ratio (A)		67.99	%		80.78	%		67.67	%		73.72	%		(2.55)	%		11.63	%		(3.60)	%		2.11	%		65.44	%		92.41	%		64.07	%		75.83	%
Ave Equity to Ave Assets		7.89	%		7.69	%		7.66	%		7.90	%		0.07	%		0.05	%		0.04	%		0.03	%		7.96	%		7.74	%		7.70	%		7.93	%
Tier 1 Risk Based Capital		11.08	%		11.31	%		11.43	%		11.18	%		0.13	%		(0.01)	%		0.05	%		0.01	%		11.21	%		11.30	%		11.48	%		11.19	%
Leverage (to ave assets)		7.53	%		7.48	%		7.69	%		7.68	%		0.08	%		(0.01)	%		0.03	%		0.01	%		7.61	%		7.47	%		7.72	%		7.69	%
Book Value	$	10.62		$	9.68		$	10.29		$	10.15		$	0.11		$	(0.02	)	$	0.03		$	0.01		$	10.73		$	9.66		$	10.32		$	10.16

(A)	Based on Continuing Operations.
(B)	Stockholder’s Equity was impacted by cumulative prior year adjustments of $5,390 and adjustments to the current year net income of $(4,506).

OLD NATIONAL BANCORP
($ and shares in thousands except per share data)

	As Previously Reported									Adjustments									As Restated
	2002			2003			2004			2002			2003			2004			2002			2003			2004
Condensed Statement of Income
Net Interest Income (1)	$	289,424		$	271,957		$	250,729		$	(9,904	)	$	(16,666	)	$	(18,972	)	$	279,520		$	255,291		$	231,757
Provision for Loan Losses		33,500			85,000			22,400			—			—			—			33,500			85,000			22,400
Noninterest Income (2)		147,891			164,059			151,058			25,957			8,883			11,830			173,848			172,942			162,888
Noninterest Expense		252,317			275,801			309,403			—			—			—			252,317			275,801			309,403
Income before Income Taxes		151,498			75,215			69,984			16,053			(7,783	)		(7,142	)		167,551			67,432			62,842
Income Taxes (3)		34,198			7,273			5,164			5,855			(2,892	)		(2,635	)		40,053			4,381			2,529
Income -Cont. Operations		117,300			67,942			64,820			10,198			(4,891	)		(4,507	)		127,498			63,051			60,313
Income-Disc Operations		632			2,471			2,751			—			—			—			632			2,471			2,751
Net Income	$	117,932		$	70,413		$	67,571		$	10,198		$	(4,891	)	$	(4,507	)	$	128,130		$	65,522		$	63,064
Diluted Earnings Per Share
Income from Cont Operations	$	1.66		$	0.97		$	0.93		$	0.14		$	(0.07	)	$	(0.07	)	$	1.80		$	0.90		$	0.86
Income from Disc Operations		0.01			0.03			0.04			—			—			—			0.01			0.03			0.04
Net Income	$	1.67		$	1.00		$	0.97		$	0.14		$	(0.07	)	$	(0.07	)	$	1.81		$	0.93		$	0.90
Diluted Common Shares O/S		70,673			70,174			70,024			—			—			—			70,673			70,174			70,024
Condensed Balance Sheet
Earning Assets	$	8,860,651		$	8,518,204		$	8,012,398		$	—		$	—		$	—		$	8,860,651		$	8,518,204		$	8,012,398
Nonearning Assets		751,905			845,028			885,906			—			—			—			751,905			845,028			885,906
Total Assets	$	9,612,556		$	9,363,232		$	8,898,304		$	—		$	—		$	—		$	9,612,556		$	9,363,232		$	8,898,304
Deposits (4)	$	6,439,280		$	6,493,092		$	6,414,263		$	(2,345	)	$	1,747		$	4,446		$	6,436,935		$	6,494,839		$	6,418,709
Short-term Borrowings		918,349			414,588			347,353			—			—			—			918,349			414,588			347,353
Other Borrowings (5)		1,397,857			1,624,092			1,312,661			(13,843	)		(10,150	)		(5,708	)		1,384,014			1,613,942			1,306,953
Other Liabilities (6)		116,360			115,970			120,819			5,907			3,013			378			122,267			118,983			121,197
Stockholders Equity (7)		740,710			715,490			703,208			10,281			5,390			884			750,991			720,880			704,092
Total Liab & Equity	$	9,612,556		$	9,363,232		$	8,898,304		$	—		$	—		$	—		$	9,612,556		$	9,363,232		$	8,898,304
Impact on Certain Ratios
Net Interest Margin		3.65	%		3.37	%		3.31	%		(0.11	)%		(0.19	)%		(0.23	)%		3.54	%		3.18	%		3.08	%
Return on Ave Assets		1.27	%		0.74	%		0.74	%		0.11	%		(0.05	)%		(0.05	)%		1.38	%		0.69	%		0.69	%
Return on Average Equity		17.05	%		9.48	%		9.51	%		1.38	%		(0.76	)%		(0.68	)%		18.43	%		8.72	%		8.83	%
Efficiency Ratio (A)		54.56	%		59.81	%		72.68	%		(1.83	)%		1.03	%		1.24	%		52.73	%		60.84	%		73.92	%
Ave Equity to Ave Assets		7.47	%		7.78	%		7.79	%		0.03	%		0.08	%		0.04	%		7.50	%		7.86	%		7.83	%
Tier 1 Risk Based Capital		11.12	%		10.96	%		11.18	%		0.16	%		0.09	%		0.01	%		11.28	%		11.05	%		11.19	%
Leverage (to ave assets)		7.53	%		7.35	%		7.68	%		0.11	%		0.06	%		0.01	%		7.64	%		7.41	%		7.69	%
Book Value	$	10.52		$	10.24		$	10.15		$	0.15		$	0.07		$	0.01		$	10.67		$	10.31		$	10.16

(A) Based on Continuing Operations.

Internal Control Over Financial Reporting

     Management of Old National will restate its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, originally included in management’s report on Internal Control over Financial Reporting in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004. In that report management concluded that the Company’s internal control over financial reporting was effective as of that date. A material weakness is a control deficiency, or a combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management has now concluded that the Company’s internal control over financial reporting as of December 31, 2004 was ineffective as a result of the following material weakness:

     The Company did not maintain effective controls over the identification, evaluation and documentation of all contractual terms included in certain derivative financial instruments and certain liabilities designated in hedging relationships. Specifically, the Company failed to consider the impact of upfront fees included in interest rate swap agreements and interest deferral features embedded in the Company’s junior subordinated debt. As a result, the Company incorrectly used the short-cut method of accounting which assumes no hedge ineffectiveness. This control deficiency resulted in the restatement of the Company’s consolidated financial statements for the years ended December 31, 2004, 2003 and 2002 and for each of the interim periods in fiscal years 2005 and 2004. Additionally, this control deficiency could result in a misstatement of the derivatives, hedged liabilities and related income statement accounts that would result in a material misstatement to the Company’s annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, management of the Company determined that this control deficiency constitutes a material weakness.

     As a result, management’s report on Internal Control over Financial Reporting, as originally filed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004, should no longer be relied upon and will be restated when the Company files its 2004 Form 10-K/A. In such Form 10-K/A, the Company (i) will conclude that the aforementioned controls were not effective as of December 31, 2004 and (ii) expects that PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm will issue an opinion stating that the Company did not maintain effective controls over financial reporting as of December 31, 2004.

     The impact of this internal control deficiency on the Company’s assessment of internal control over financial reporting as of December 31, 2005 has not yet been determined as management’s assessment and control testing is not complete.

     As of the date of this filing, the Company has remediated the internal control deficiency identified above to ensure future hedging transactions are appropriately classified in accordance with GAAP and, additionally, that updating procedures performed by the accounting and financial reporting functions in respect of prior period accounting conclusions include timely evaluation of changes in technical interpretations of existing GAAP and/or changes in business conditions. In connection with that remediation effort the Company has:

1)	Established enhanced procedures to be performed by knowledgeable and trained accounting personnel over documentation, evaluation and classification of new hedging relationships;
2)	Established an enhanced quarterly and annual procedure to review the impact of new interpretations or accounting changes in respect of the application of hedge accounting on previous significant hedging relationships;
3)	Established a policy that the long haul method of hedge accounting be utilized in all hedging relationships unless otherwise approved by the Senior Accounting Officer of the Company;
4)	Retained a consultant to provide additional guidance with respect to complex derivative accounting principles; and
5)	Established a plan to augment its accounting expertise through extensive training on accounting for derivatives and hedging activities.

     Management and the Audit Committee have discussed the matters described in this report with PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

99.1	Press Release of the Company dated January 31, 2006
99.2	Financial Trends of the Company dated January 31, 2006

*  *  *

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

     Date: January 31, 2006

OLD NATIONAL BANCORP
By:	/s/ Christopher A. Wolking
	Christopher A. Wolking
	Executive Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release of the Company dated January 31, 2006
99.2	Financial Trends of the Company dated January 31, 2006

10