Old National Bancorp 8K Results of Operations and Financial Condition | ONB 22 Apr 19

Exhibit 99.1


Old National Bancorp One Main Street
Evansville, IN 47708		Media: Kathy A. Schoettlin (812)465-7269
oldnational.com		Investors: Lynell J. Walton (812)464-1366

Old National’s record 1^st quarter net income increases 17% from a year ago to $56.3 million, or $0.32 per share

Evansville, Ind. (April 22, 2019)

Old National Bancorp (NASDAQ: ONB) reports 1Q19 net income of $56.3 million, diluted EPS of $0.32.

Adjusted¹net income of $57.3 million, or $0.33 per diluted share.

CEO COMMENTARY:

“This was another quarter of extremely positive earnings, well controlled expenses and strong credit metrics as we continue to execute on our growth strategy,” said incoming CEO Jim Ryan. Chairman and current CEO Bob Jones added:

“These strong results reflect the positive momentum that Old National enjoys as we transition to Jim Ryan as CEO. The transition is progressing extraordinarily well, and I’m incredibly confident in the future of the organization under Jim’s leadership.”

FIRST-QUARTER HIGHLIGHTS²:


Net Income		● Net income of $56.3 million, an increase of 17.3% from first quarter of 2018 ● Earnings per share of $0.32, an increase of 3.2% from first quarter of 2018

Net Interest Income/NIM		● Net interest income on a fully taxable equivalent basis was $150.2 million, up 0.07% ● Net interest margin on a fully taxable equivalent basis was 3.51% compared to 3.64%

Operating Performance		● Pre-provision net revenue¹ (“PPNR”) was $73.6 million ● Adjusted PPNR¹ was $75.2 million, up 23.1% over first quarter of 2018 ● Noninterest expense was $123.0 million ● Adjusted noninterest expense¹ was $121.5 million ● Efficiency ratio¹ was 60.26% ● Adjusted efficiency ratio¹ was 59.51%, a 299 basis point improvement from first quarter of 2018

Loans and Credit Quality		● End-of-period total loans³ were $12,083.1 million compared to $12,258.8 million ● March 31 pipeline was a record high of $2.0 billion;first-quarter total commercial production was $424.1 million ● Provision for loan losses was $1.0 million compared to $3.4 million ● Netcharge-offs were $0.9 million, or 0.03% annualized, compared to netcharge-offs of $0.6 million ● Non-performing loans were 1.41% of total loans compared to 1.43%

Capital Returns		● Return on average common equity was 8.29% ● Return on average tangible common equity¹ was 14.88% ● Adjusted return on average tangible common equity¹ was 15.13% ● Repurchased 1.5 million shares of common stock during the quarter

Notable Items		● $1.2 million in merger and integration charges ● $0.3 million in tax credit amortization

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

RESULTS OF OPERATIONS

Old National Bancorp reported first-quarter 2019 net income of $56.3 million, or $0.32 per diluted share.

Included in the first quarter werepre-tax charges of $1.2 million for merger and integration activity. Excluding these charges from the current quarter and netting out debt securities losses, Old National would have reported net income of $57.3 million, or $0.33 per share.

LOANS

Record high pipeline though paydowns continued to impact outstandings.

Period-end total loans decreased to $12,083.1 million at March 31, 2019 from $12,258.8 million at December 31, 2018.

Commercial and industrial loans decreased to $3,042.8 million; commercial real estate loans increased to $5,023.6 million; consumer loans decreased to $1,758.7 million.

Period-end pipeline totaled a Company record of $2.0 billion; first-quarter commercial loan production was $424.1 million.

On average, total loans in the first quarter were $12,152.1 million, up from $11,972.6 million in the fourth quarter of 2018.

DEPOSITS

Alow-cost core deposit franchise continues to be one of Old National’s strengths.

Period-end total deposits increased to $14,429.3 million at March 31, 2019, from $14,349.9 million at December 31, 2018.

On average, total deposits in the first quarter were $14,211.0 million, compared to $13,620.6 million in the fourth quarter of 2018.

NET INTEREST INCOME AND MARGIN

Net interest income up on a full quarter of Klein; lower accretion, fewer days and change in mix contributed to lower margin

Net interest income increased to $147.0 million in the first quarter of 2019 from $146.2 million in the fourth quarter of 2018.

The net interest margin on a fully taxable equivalent basis decreased 13 basis points to 3.51% compared to 3.64% in the fourth quarter of 2018, with 4 basis points of the decrease due to fewer days and 2 basis points of the decrease from mix change.

Accretion income was $8.9 million, or 21 basis points of net interest margin, in the first quarter of 2019 compared to $11.3 million, or 27 basis points of net interest margin, in the fourth quarter of 2018. In the first quarter of 2019, accretion income was 4.5% of adjusted total revenue.

Loan yields, excluding accretion income, increased 6 basis points to 4.48%.

The cost of total deposits rose 6 basis points to 0.46% in the first quarter of 2019 while the cost of total interest-bearing deposits rose 8 basis points to 0.64%.

CREDIT QUALITY

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

Asset quality remained strong with net charge-offs in the first quarter of $0.9 million, or 0.03% of total average loans, and30-89 day delinquencies of 0.33%.

Provision expense for the first quarter was $1.0 million, compared to $3.4 million in the fourth quarter of 2018.

Non-performing loans decreased as a percentage of total loans to 1.41%.

In accordance with current accounting practices, the loans acquired from recent acquisitions were recorded at fair value with no allowance recorded at the acquisition date. As of March 31, 2019, the remaining discount on these acquired loans was $112.5 million.

The allowance for loan losses was $55.6 million, or 0.46% of total loans at March 31, 2019.

NONINTEREST INCOME

Noninterest income decreased due to fourth quarter’s branch gain - mortgage banking revenue and capital markets fees increased from prior quarter.

Total noninterest income for the first quarter of 2019 was $46.4 million, a decrease of $11.7 million from the fourth quarter of 2018.

Included in noninterest income in the fourth quarter of 2018 was a net gain of $14.0 million from the sale of 10 Wisconsin branches.

Capital markets income increased $1.7 million while mortgage banking revenue increased $1.1 million.

NONINTEREST EXPENSE

First quarter results demonstrated continued discipline with respect to expense management, helping to drive positive operating leverage¹.

Noninterest expense for the first quarter of 2019 was $123.0 million and included $1.2 million in merger & integration charges and $0.3 million in tax credit amortization.

Excluding these items, adjusted noninterest expense for the first quarter was $121.5 million, compared to the $126.9 million in adjusted noninterest expense in the fourth quarter of 2018.

The first quarter efficiency ratio was 60.26%, while the adjusted efficiency ratio was 59.51%.

INCOME TAXES

On a fully taxable-equivalent basis, income tax expense in the first quarter was $16.3 million, resulting in a 22.5% FTE tax rate.

CAPITAL

Strong quarterly earnings drove capital ratios higher.

At the end of the first quarter, total risk-based capital was 12.7% and regulatory tier 1 capital was 11.8%.

Tangible common equity to tangible assets was 8.66% at the end of the first quarter compared to 8.47% in the fourth quarter of 2018.

The Company repurchased 1.5 million shares of common stock during the first quarter with a weighted average price of $16.45 per share.

NON-GAAP RECONCILIATIONS


($ in millions, except EPS, shares in 000s)	1Q19	Adjustments⁴	Adjusted 1Q19
Total Revenues (FTE)	$196.6	$0.1	$196.7
Less: Provision for Loan Losses	(1.0)	-	(1.0)
Less: Noninterest Expenses	(123.0)	1.2	(121.8)
Income before Income Taxes (FTE)	$72.6	$1.3	$73.9
Income Taxes	16.3	0.3	16.6
Net Income	$56.3	$1.0	$57.3

Average Shares Outstanding	175,368	-	175,368
Earnings Per Share	$0.32	$0.01	$0.33

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


($ in millions)	1Q19	4Q18
Net Interest Income	$147.0	$146.2
Add: FTE Adjustment	3.2	3.1
Net Interest Income (FTE)	$150.2	$149.3

Average Earning Assets	$17,143.6	$16,398.3
Net Interest Margin (FTE)	3.51%	3.64%

($ in millions)	1Q19	4Q18
Net Interest Income	$147.0	$146.2
Add: FTE Adjustment	3.2	3.1
Net Interest Income (FTE)	$150.2	$149.3
Total Noninterest Income	46.4	$58.2
Noninterest Expense	123.0	150.3
Pre-Provision Net Revenue	$73.6	$57.2
Less: Debt Securities Gains/Losses	0.1	0.4
Less: Gain on Branch Actions	-	(14.0)
Add: Merger and Integration Charges	1.2	14.8
Add: ONB Foundation Funding	-	7.5
Add: Amortization of Tax Credit Investments	0.3	1.1
AdjustedPre-Provision Net Revenue	$75.2	$67.0


($ in millions)	1Q19	4Q18	1Q18
Noninterest Expense	$123.0	$150.3	$117.1
Less: Merger and Integration Charges	(1.2)	(14.8)	(2.3)
Less: Branch Action Charges, Severance, ONB Foundation Funding and Client Experience Initiative Charges	-	(7.5)	(2.8)
Noninterest Expense less Charges	$121.8	$128.0	$112.0
Less: Amortization of Tax Credit Investments	(0.3)	(1.1)	(0.7)
Adjusted Noninterest Expense	$121.5	$126.9	$111.3
Less: Intangible Amortization	(4.5)	(4.1)	(3.6)
Adjusted Noninterest Expense Less Intangible Amortization	$117.0	$122.8	$107.7

Net Interest Income	$147.0	$146.2	$128.5
FTE Adjustment	3.2	3.1	2.8
Net Interest Income (FTE)	$150.2	$149.3	$131.3
Total Noninterest Income	46.4	58.2	41.9
Total Revenue (FTE)	196.6	$207.5	$173.2
Less: Debt Securities Gains/Losses	0.1	0.4	(0.8)
Less: Gain on Branch Actions	-	(14.0)	-
Adjusted Total Revenue (FTE)	$196.7	$193.9	$172.4

Efficiency Ratio	60.26%	70.33%	65.84%
Adjusted Efficiency Ratio	59.51%	63.31%	62.50%

Operating Leverage⁵ (basis points)	848
Adjusted Operating Leverage⁶ (basis points)	491

⁵ Year-over-year basis point change in noninterest expenses plus change in total revenue

⁶Year-over-year basis point change in adjusted noninterest expense plus change in adjusted total revenue


($ in millions)	1Q19	4Q18
Net Income	$56.3	$47.5
Add: Intangible Amortization (net of tax⁷)	3.4	3.3
Tangible Net Income	$59.7	$50.8
Less: Securities Gains/Losses (net of tax⁷)	0.1	0.3
Less: Gain on Branch Sale (net of tax⁷)	-	(10.6)
Add: Merger & Integration Charges (net of tax⁷)	0.9	11.2
Add: ONB Foundation Funding (net of tax⁷)	-	5.7
Adjusted Tangible Net Income	$60.7	$57.4

Average Total Shareholders’ Equity	$2,714.2	$2,503.8
Less: Average Goodwill	(1,036.3)	(969.4)
Less: Average Intangibles	(74.8)	(66.9)
Average Tangible Shareholders’ Equity	$1,603.1	$1,467.5

Return on Average Tangible Common Equity	14.88%	13.84%
Adjusted Return on Average Tangible Common Equity	15.13%	15.62%

⁷Tax-effect calculations use the current statutory FTE tax rates (federal + state)

CONFERENCE CALL AND WEBCAST

Old National will host a conference call and live webcast at 7:00 a.m. Central Time on Monday, April 22, 2019, to review first quarter 2019 financial results. The live audio web cast of the call, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page atoldnational.com and will be archived there for 12 months. A replay of the call will also be available from 10:00 a.m. Central Time on April 22 through May 6. To access the replay, dial1-855-859-2056, Conference ID Code 2358708.

ABOUT OLD NATIONAL

Old National Bancorp (NASDAQ: ONB) is the holding company of Old National Bank. Headquartered in Evansville with $20.1 billion in assets, it is a top 100 U.S. bank, the largest Indiana-based bank andhas been recognized as a World’s Most Ethical Company by the Ethisphere Institute for eight consecutive years. For 185 years, Old National has been a community bank committed to building long-term, highly valued relationships with clients. With locations in Indiana, Kentucky, Michigan, Minnesota and Wisconsin, Old National provides retail and commercial banking services along with comprehensive wealth management, investment and capital markets services. For information and financial data, please visit Investor Relations atoldnational.com.

USE OFNON-GAAP FINANCIAL MEASURES

This earnings release contains GAAP financial measures andnon-GAAP financial measures where management believes it to be helpful in understanding Old National’s results of operations or financial position. Wherenon-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables of this release.

FORWARD-LOOKING STATEMENT

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, descriptions of Old National Bancorp’s (“Old National’s”) financial condition, results of operations, asset and credit quality trends and profitability. Forward-looking statements can be identified by the use of the words “anticipate,” “believe,” “expect,” “intend,” “could” and “should,” 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 to differ materially from those in such statements. Factors that might cause such a difference include, but are not limited to: expected cost savings, synergies and other financial benefits from the merger with Klein that might not be realized within the expected timeframes and costs or difficulties relating to integration matters might be greater than expected; market, economic, operational, liquidity, credit and interest rate risks associated with Old National’s business; competition; government legislation and policies (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its related regulations); ability of Old National to execute its business plan; changes in the economy which could materially impact credit quality trends and the ability to generate loans and gather deposits; failure or circumvention of our internal controls; failure or disruption of our information systems; significant changes in accounting, tax or regulatory practices or requirements; new legal obligations or liabilities or unfavorable resolutions of litigations; disruptive technologies in payment systems and other services traditionally provided by banks; computer hacking and other cybersecurity threats; other matters discussed in this press release; and other factors identified in our Annual Report on Form10-K and other periodic filings with the SEC. These forward-looking statements are made only as of the date of this press release, and Old National does not undertake an obligation to release revisions to these forward-looking statements to reflect events or conditions after the date of this press release.


Financial Highlights (unaudited)
($ and shares in thousands, except per share data)
	Three Months Ended
	March 31,		December 31,		March 31,
	2019		2018		2018
Income Statement
Net interest income	$	147,048	$	146,225	$	128,572
Provision for loan losses		1,043		3,390		380
Noninterest income		46,416		58,154		41,905
Noninterest expense		123,041		150,268		117,157
Net income		56,276		47,498		47,983

Per Common Share Data(Diluted)
Net income available to common shareholders	$	0.32	$	0.28	$	0.31
Average diluted shares outstanding		175,368		167,992		152,370
Book value		15.82		15.36		14.32
Stock price		16.40		15.40		16.90
Dividend payout ratio		41%		46%		41%
Tangible common book value (1)		9.44		9.00		8.55

Performance Ratios
Return on average assets		1.14%		1.01%		1.10%
Return on average common equity		8.29%		7.59%		8.86%
Return on average tangible common equity (1)		14.88%		13.84%		15.80%
Net interest margin (FTE)		3.51%		3.64%		3.45%
Efficiency ratio (2)		60.26%		70.33%		65.84%
Net charge-offs (recoveries) to average loans		0.03%		0.02%		0.01%
Allowance for loan losses to ending loans		0.46%		0.45%		0.45%
Non-performing loans to ending loans		1.41%		1.43%		1.28%

Balance Sheet
Total loans	$	12,068,977	$	12,243,892	$	11,238,682
Total assets		20,084,420		19,728,435		17,496,287
Total deposits		14,429,270		14,349,949		12,788,600
Total borrowed funds		2,639,038		2,493,793		2,371,292
Total shareholders’ equity		2,751,872		2,689,570		2,179,118

Capital Ratios (1)
Risk-based capital ratios (EOP):
Tier 1 common equity		11.8%		11.4%		10.7%
Tier 1		11.8%		11.4%		10.7%
Total		12.7%		12.3%		11.7%
Leverage ratio (to average assets)		8.8%		9.2%		8.1%

Total equity to assets (averages)		13.70%		13.28%		12.42%
Tangible common equity to tangible assets		8.66%		8.47%		7.83%

Nonfinancial Data
Full-time equivalent employees		2,908		2,892		2,721
Number of branches		193		191		191

(1) See“Non-GAAP Measures” table. (2) Efficiency ratio is defined as noninterest expense before amortization of intangibles as a percent of FTE net interest income and noninterest revenues, excluding net gains from securities transactions. This presentation excludes amortization of intangibles and net securities gains, as is common in other company releases, and better aligns with true operating performance.
FTE - Fully taxable equivalent basis EOP - End of period actual balances


Income Statement (unaudited)
($ and shares in thousands, except per share data)
	Three Months Ended
	March 31,			December 31,			March 31,
	2019			2018			2018
Interest income	$	178,918		$	175,234		$	147,706
Less: interest expense		31,870			29,009			19,134
Net interest income		147,048			146,225			128,572
Provision for loan losses		1,043			3,390			380
Net interest income after provision for loan losses		146,005			142,835			128,192

Wealth management fees		8,535			9,069			9,026
Service charges on deposit accounts		10,826			11,474			10,759
Debit card and ATM fees		5,503			5,565			4,865
Mortgage banking revenue		5,011			3,928			4,192
Investment product fees		5,271			5,369			5,031
Capital markets income		2,517			840			498
Company-owned life insurance		3,188			2,591			2,605
Other income		5,702			5,700			4,130
Net gain on branch divestitures		-			13,989			-
Gains (losses) on sales of debt securities		(103	)		(357	)		788
Gains (losses) on derivatives		(34	)		(14	)		11
Total noninterest income		46,416			58,154			41,905

Salaries and employee benefits		71,183			87,346			64,179
Occupancy		14,578			13,210			13,280
Equipment		4,474			3,916			3,565
Marketing		3,723			4,782			3,697
Data processing		9,341			9,418			8,400
Communication		3,054			2,537			3,064
Professional fees		2,910			5,615			2,730
Loan expenses		1,912			1,877			1,744
Supplies		755			705			722
FDIC assessment		2,087			2,110			2,645
Other real estate owned expense		36			176			349
Amortization of intangibles		4,472			4,134			3,609
Amortization of tax credit investments		260			1,142			716
Other expense		4,256			13,300			8,457
Total noninterest expense		123,041			150,268			117,157

Income before income taxes		69,380			50,721			52,940
Income tax expense		13,104			3,223			4,957
Net income	$	56,276		$	47,498		$	47,983


Diluted Earnings Per Share
Net income	$	0.32		$	0.28		$	0.31

Average Common Shares Outstanding
Basic		174,734			167,044			151,721
Diluted		175,368			167,992			152,370

Common shares outstanding at end of period		173,979			175,141			152,172


Balance Sheet (unaudited)
($ in thousands)
	March 31,			December 31,			March 31,
	2019			2018			2018
Assets
Federal Reserve Bank account	$	101,033		$	26,182		$	73,657
Money market investments		10,909			6,980			12,562
Investments:
Treasury and government-sponsored agencies		782,486			707,438			655,353
Mortgage-backed securities		2,684,330			2,336,415			1,623,554
States and political subdivisions		1,252,448			1,245,657			1,159,614
Other securities		498,977			488,802			458,270
Total investments		5,218,241			4,778,312			3,896,791
Loans held for sale, at fair value		14,082			14,911			17,635
Loans:
Commercial		3,042,790			3,232,970			2,811,629
Commercial and agriculture real estate		5,023,620			4,958,851			4,449,980
Consumer:
Home equity		553,264			589,322			487,237
Other consumer loans		1,205,418			1,214,345			1,331,304
Subtotal of commercial and consumer loans		9,825,092			9,995,488			9,080,150
Residential real estate		2,243,885			2,248,404			2,158,532
Total loans		12,068,977			12,243,892			11,238,682
Total earning assets		17,413,242			17,070,277			15,239,327

Allowance for loan losses		(55,559	)		(55,461	)		(50,381	)
Non-earning Assets:
Cash and due from banks		211,174			284,003			192,022
Premises and equipment, net		490,216			485,912			453,603
Operating leaseright-of-use assets		109,916			-			-
Goodwill and other intangible assets		1,108,802			1,113,274			877,637
Company-owned life insurance		444,551			444,224			404,561
Net deferred tax assets		59,430			87,048			88,773
Loan servicing rights		24,254			24,497			24,380
Other real estate owned and repossessed personal property		3,279			3,232			6,735
Other assets		275,115			271,429			259,630
Totalnon-earning assets		2,726,737			2,713,619			2,307,341
Total assets	$	20,084,420		$	19,728,435		$	17,496,287


Liabilities and Equity
Noninterest-bearing demand deposits	$	3,903,314		$	3,965,380		$	3,655,732
Interest-bearing:
Checking and NOW accounts		3,742,241			3,788,339			3,135,778
Savings accounts		2,941,361			2,944,092			3,091,101
Money market accounts		1,780,756			1,627,882			1,130,258
Other time deposits		1,835,110			1,845,149			1,573,874
Total core deposits		14,202,782			14,170,842			12,586,743
Brokered CD’s		226,488			179,107			201,857
Total deposits		14,429,270			14,349,949			12,788,600

Federal funds purchased and interbank borrowings		325,030			270,135			150,026
Securities sold under agreements to repurchase		342,480			362,294			308,189
Federal Home Loan Bank advances		1,719,944			1,613,481			1,664,179
Other borrowings		251,584			247,883			248,898
Total borrowed funds		2,639,038			2,493,793			2,371,292
Operating lease liabilities		114,040			-			-
Accrued expenses and other liabilities		150,200			195,123			157,277
Total liabilities		17,332,548			17,038,865			15,317,169

Common stock, surplus, and retained earnings		2,749,252			2,734,520			2,240,644
Accumulated other comprehensive income (loss), net of tax		2,620			(44,950	)		(61,526	)
Total shareholders’ equity		2,751,872			2,689,570			2,179,118
Total liabilities and shareholders’ equity	$	20,084,420		$	19,728,435		$	17,496,287


Average Balance Sheet and Interest Rates (unaudited) ($ in thousands)

	Three Months Ended								Three Months Ended								Three Months Ended
	March 31, 2019								December 31, 2018								March 31, 2018
	Average			Income (1)/		Yield/			Average			Income (1)/		Yield/			Average			Income (1)/		Yield/
Earning Assets:	Balance			Expense		Rate			Balance			Expense		Rate			Balance			Expense		Rate
Money market and other interest-earning investments	$	58,701		$	278		1.92	%	$	39,207		$	205		2.07	%	$	66,536		$	90		0.55	%
Investments:
Treasury and government-sponsored agencies		705,417			3,902		2.21	%		694,409			3,874		2.23	%		663,096			3,424		2.07	%
Mortgage-backed securities		2,497,368			17,603		2.82	%		2,011,275			13,688		2.72	%		1,632,610			9,520		2.33	%
States and political subdivisions		1,232,355			11,453		3.72	%		1,187,404			11,147		3.76	%		1,204,855			10,478		3.48	%
Other securities		497,604			4,440		3.57	%		493,426			4,017		3.26	%		459,458			3,669		3.19	%
Total investments		4,932,744			37,398		3.03	%		4,386,514			32,726		2.98	%		3,960,019			27,091		2.74	%
Loans: (2)
Commercial		3,122,402			36,035		4.62	%		3,133,153			37,358		4.67	%		2,759,688			28,205		4.09	%
Commercial and agriculture real estate		4,989,622			65,076		5.22	%		4,834,589			65,461		5.30	%		4,394,002			55,787		5.08	%
Consumer:
Home equity		588,366			7,596		5.24	%		562,801			7,159		5.05	%		502,902			5,688		4.59	%
Other consumer loans		1,192,496			11,802		4.01	%		1,203,436			11,702		3.86	%		1,346,331			12,140		3.66	%
Subtotal commercial and consumer loans		9,892,886			120,509		4.94	%		9,733,979			121,680		4.96	%		9,002,923			101,820		4.59	%
Residential real estate loans		2,259,243			23,931		4.24	%		2,238,588			23,672		4.23	%		2,176,413			21,472		3.95	%

Total loans		12,152,129			144,440		4.76	%		11,972,567			145,352		4.78	%		11,179,336			123,292		4.42	%

Total earning assets	$	17,143,574		$	182,116		4.26	%	$	16,398,288		$	178,283		4.30	%	$	15,205,891		$	150,473		3.97	%

Less: Allowance for loan losses		(55,789	)							(53,045	)							(50,953	)
Non-earning Assets:
Cash and due from banks	$	229,957							$	232,360							$	199,132
Other assets		2,490,524								2,275,907								2,089,790
Total assets	$	19,808,266							$	18,853,510							$	17,443,860


Interest-Bearing Liabilities:
Checking and NOW accounts	$	3,693,886		$	3,142		0.34	%	$	3,391,630		$	2,004		0.23	%	$	3,067,437		$	819		0.11	%
Savings accounts		2,935,710			2,283		0.32	%		2,919,900			2,225		0.30	%		3,052,646			1,343		0.18	%
Money market accounts		1,702,655			2,826		0.67	%		1,482,022			1,922		0.51	%		1,159,010			546		0.19	%
Other time deposits		1,840,514			7,102		1.56	%		1,769,243			6,519		1.46	%		1,561,945			3,900		1.01	%
Total interest-bearing deposits		10,172,765			15,353		0.61	%		9,562,795			12,670		0.53	%		8,841,038			6,608		0.30	%
Brokered CD’s		191,443			1,091		2.31	%		193,455			1,024		2.10	%		175,039			647		1.50	%
Total interest-bearing deposits and CD’s		10,364,208			16,444		0.64	%		9,756,250			13,694		0.56	%		9,016,077			7,255		0.33	%

Federal funds purchased and interbank borrowings		316,998			1,918		2.45	%		312,730			1,938		2.46	%		261,353			1,017		1.58	%
Securities sold under agreements to repurchase		361,261			662		0.74	%		351,392			634		0.72	%		342,682			359		0.42	%
Federal Home Loan Bank advances		1,672,376			9,931		2.41	%		1,649,304			9,441		2.27	%		1,675,700			7,780		1.88	%
Other borrowings		249,794			2,915		4.67	%		250,926			3,302		5.26	%		248,828			2,723		4.38	%
Total borrowed funds		2,600,429			15,426		2.41	%		2,564,352			15,315		2.37	%		2,528,563			11,879		1.91	%

Total interest-bearing liabilities	$	12,964,637		$	31,870		1.00	%	$	12,320,602		$	29,009		0.93	%	$	11,544,640		$	19,134		0.67	%


Noninterest-Bearing Liabilities
Demand deposits	$	3,846,828							$	3,864,302							$	3,563,104
Other liabilities		282,615								164,771								170,061
Shareholders’ equity		2,714,186								2,503,835								2,166,055
Total liabilities and shareholders’ equity	$	19,808,266							$	18,853,510							$	17,443,860


Net interest rate spread							3.26	%							3.37	%							3.30	%

Net interest margin (FTE)							3.51	%							3.64	%							3.45	%

FTE adjustment				$	3,198							$	3,049							$	2,767

(1) Interest income is reflected on a fully taxable equivalent basis (FTE). (2) Includes loans held for sale.


Asset Quality (EOP) (unaudited) ($ in thousands)

	Three Months Ended
	March 31,			December 31,			March 31,
	2019			2018			2018

Beginning allowance for loan losses	$	55,461		$	52,713		$	50,381

Provision for loan losses		1,043			3,390			380

Gross charge-offs		(2,892	)		(2,969	)		(2,685	)
Gross recoveries		1,947			2,327			2,305
Net (charge-offs) recoveries		(945	)		(642	)		(380	)


Ending allowance for loan losses	$	55,559		$	55,461		$	50,381


Net charge-offs (recoveries) / average loans (1)		0.03%			0.02%			0.01%

Average loans outstanding (1)	$	12,147,560		$	11,967,241		$	11,175,329

EOP loans outstanding (1)		12,068,977		$	12,243,892		$	11,238,682

Allowance for loan losses / EOP loans (1)		0.46%			0.45%			0.45%

Underperforming Assets:
Loans 90 Days and over (still accruing)	$	560		$	1,353		$	328

Non-performing loans:
Nonaccrual loans (2)		152,881			157,484			127,295
Renegotiated loans		17,123			17,356			16,802
Totalnon-performing loans		170,004			174,840			144,097

Foreclosed properties		3,279			3,232			6,735

Total underperforming assets	$	173,843		$	179,425		$	151,160


Classified and Criticized Assets:
Nonaccrual loans (2)		152,881			157,484			127,295
Substandard accruing loans		210,680			175,948			118,123
Loans 90 days and over (still accruing)		560			1,353			328
Total classified loans - “problem loans”	$	364,121		$	334,785		$	245,746

Other classified assets		2,715			2,820			2,987
Criticized loans - “special mention loans”		268,836			238,752			174,873

Total classified and criticized assets	$	635,672		$	576,357		$	423,606


Non-performing loans / EOP loans (1)		1.41%			1.43%			1.28%

Allowance tonon-performing loans (3)		33%			32%			35%

Under-performing assets / EOP loans (1)		1.44%			1.47%			1.35%

EOP total assets	$	20,084,420		$	19,728,435		$	17,496,287

Under-performing assets / EOP assets		0.87%			0.91%			0.86%
EOP - End of period actual balances (1) Excludes loans held for sale. (2) Includes renegotiated loans totaling $27.0 million at March 31, 2019, $26.3 million at December 31, 2018, and $36.9 million at March 31, 2018. (3) Includes acquired loans that were recorded at fair value in accordance with ASC 805 at the date of acquisition. As such, the credit risk was incorporated in the fair value recorded and no allowance for loan losses was recorded on the acquisition date.


Non-GAAP Measures (unaudited) ($ in thousands)

	Three Months Ended
	March 31,		December 31,		March 31,
	2019		2018		2018
Actual End of Period Balances
GAAP shareholders’ equity	$	2,751,872	$	2,689,570	$	2,179,118

Deduct:
Goodwill		1,036,258		1,036,258		828,804
Intangibles		72,544		77,016		48,833
		1,108,802		1,113,274		877,637
Tangible shareholders’ equity	$	1,643,070	$	1,576,296	$	1,301,481


Average Balances
GAAP shareholders’ equity	$	2,714,186	$	2,503,835	$	2,166,055

Deduct:
Goodwill		1,036,258		969,403		828,141
Intangibles		74,849		66,927		51,092
		1,111,107		1,036,330		879,233
Average tangible shareholders’ equity	$	1,603,079	$	1,467,505	$	1,286,822


Actual End of Period Balances
GAAP assets	$	20,084,420	$	19,728,435	$	17,496,287

Add:
Trust overdrafts		28		11		50

Deduct:
Goodwill		1,036,258		1,036,258		828,804
Intangibles		72,544		77,016		48,833
		1,108,802		1,113,274		877,637
Tangible assets	$	18,975,646	$	18,615,172	$	16,618,700


Risk-weighted assets	$	13,966,569	$	14,248,562	$	12,523,432


GAAP net income	$	56,276	$	47,498	$	47,983

Add:
Amortization of intangibles (net of tax)		3,373		3,266		2,851
Tangible net income	$	59,649	$	50,764	$	50,834


Tangible Ratios
Return on tangible common equity		14.52%		12.88%		15.62%
Return on average tangible common equity		14.88%		13.84%		15.80%
Return on tangible assets		1.26%		1.09%		1.22%
Tangible common equity to tangible assets		8.66%		8.47%		7.83%
Tangible common equity to risk-weighted assets		11.76%		11.06%		10.39%
Tangible common book value (1)		9.44		9.00		8.55

Tangible common equity presentation includes other comprehensive income as is common in other company releases. (1) Tangible common shareholders’ equity divided by common shares issued and outstanding atperiod-end.

Tier 1 capital	$	1,643,496	$	1,617,936	$	1,341,261

Deduct:
Tier 1 capital adjustments		-		-		-
		-		-		-
Tier 1 common equity	$	1,643,496	$	1,617,936	$	1,341,261


Risk-weighted assets		13,966,569		14,248,562		12,523,432

Tier 1 common equity to risk-weighted assets		11.77%		11.36%		10.71%

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