EVANSVILLE, Ind., Jan. 19, 2021 (GLOBE NEWSWIRE) --

Old National Bancorp (NASDAQ: ONB) reports 4Q20 net income of $74.1 million, diluted EPS of $0.44.

Adjusted¹net income of $76.6 million, or $0.46 per diluted share.

Full-Year 2020 net income of $226.4 million, or $1.36 per diluted share.

Adjusted¹ Full-Year net income of $250.3 million, or $1.50 per diluted share.

CEO COMMENTARY:

"Our 4th quarter success capped a very strong year of earnings as our team members worked with passion and resiliency to serve our clients," said Chairman and CEO Jim Ryan. "Another significant factor was the successful implementation of our ONB Way growth strategy in 2020, which enabled us to effectively and efficiently serve all client segments with streamlined processes and enhanced technology. This led to a phenomenal year of commercial loan production and outstanding performance."

FOURTH QUARTER HIGHLIGHTS²:

Net income	• Net income of $74.1 million
Net income	• Earnings per diluted share of $0.44

Net interest income/NIM	• Net interest income on a fully taxable equivalent basis of $164.6 million compared to $149.0 million
Net interest income/NIM	• Net interest margin on a fully taxable equivalent basis of 3.26% compared to 3.03%

Operating Performance	• Pre-provision net revenue¹ (“PPNR”) of $80.8 million
	• Adjusted PPNR¹ of $94.0 million, up 27.2% over fourth quarter of 2019
	• Noninterest expense of $142.3 million
	• Adjusted noninterest expense¹ of $128.8 million
	• Efficiency ratio¹ of 62.37%
	• Adjusted efficiency ratio¹of 56.35%

Loans and Credit Quality	• End-of-period total loans³ of $13,849.7 million compared to $13,977.6 million
	• Total commercial loans increased $473.1 million, excluding the $536.2 million decline in PPP loans
	• Fourth-quarter total commercial production of $1,197.1 million
	• Provision for credit losses was a recapture of $1.1 million
	• December 31 pipeline of $2.1 billion
	• Net recoveries of $1.1 million compared to net recoveries of $3.0 million
	• Non-performing loans of 1.20% of total loans compared to 1.15%

Return Profile & Capital	• Return on average common equity of 10.11%
	• Return on average tangible common equity¹ of 16.57%
	• Adjusted return on average tangible common equity¹ of 17.08%
	• No shares of common stock were repurchased during the current quarter

Notable Items	• $3.6 million in ONB Way charges
Notable Items	• $9.9 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 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

RESULTS OF OPERATIONS

Old National Bancorp reported fourth quarter 2020 net income of $74.1 million, or $0.44 per diluted share.

Included in the fourth quarter were pre-tax charges of $3.6 million for the ONB Way. Excluding these charges from the current quarter and netting out debt securities gains, adjusted net income was $76.6 million, or $0.46 per diluted share.

LOANS
Strong commercial production continued; PPP loan forgiveness accelerated.

Period-end total loans were $13,849.7 million at December 31, 2020, a decrease of $127.9 million, or 3.7% annualized, when compared to the $13,977.6 million at September 30, 2020.
Excluding the $536.2 million decline in PPP loans during the quarter, total loans increased $408.3 million, or 13.1% annualized.
Excluding PPP loans, commercial and industrial loans increased $228.1 million, or 32.8% annualized.
Commercial real estate loans increased $245.0 million to $5,946.5 million, or 17.2% annualized growth.
Total commercial loan production in the fourth quarter was $1,197.1 million; period-end pipeline totaled $2.1 billion.
Consumer loans decreased $26.0 million to $1,635.1 million and residential mortgage loans decreased $16.9 million to $2,248.4 million.
Average total loans in the fourth quarter were $13,927.7 million, an increase of $78.8 million from the third quarter of 2020.
Excluding PPP loans, average total loans in the fourth quarter increased $333.9 million from the third quarter of 2020.

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

Period-end total deposits were $17,037.5 million at December 31, 2020, an increase of $531.0 million, or 12.9% annualized, when compared to the $16,506.5 million at September 30, 2020.
Interest-bearing checking deposits increased $288.6 million to $4,877.0 million at December 31, 2020.
Noninterest-bearing deposits increased $170.7 million to $5,633.7 million at December 31, 2020 from $5,463.0 million at September 30, 2020.
On average, total deposits in the fourth quarter were $16,810.6 million, compared to $16,436.8 million in the third quarter of 2020.

NET INTEREST INCOME AND MARGIN
Net interest income and margin benefit from accelerated PPP loan forgiveness; deposit and funding costs continue to decline.

Net interest income increased to $161.1 million in the fourth quarter of 2020.
The net interest margin on a fully taxable equivalent basis increased 23 basis points to 3.26% compared to 3.03% in the third quarter of 2020.
PPP interest and net fees combined were $22.6 million, or 26 basis points of net interest margin, in the fourth quarter of 2020 compared to $8.8 million, or a 5 basis points reduction to the net interest margin, in the third quarter of 2020.
Accretion income was $5.4 million, or 10 basis points of net interest margin, in the fourth quarter of 2020 compared to $5.4 million, or 11 basis points of net interest margin, in the third quarter of 2020. In the fourth quarter of 2020, accretion income was 2.4% of adjusted total revenue.
Interest collected on nonaccrual loans was $0.9 million, or 2 basis points of net interest margin, in the fourth quarter of 2020 compared to $1.0 million, or 2 basis point of net interest margin, in the third quarter of 2020.
The cost of total deposits declined 4 basis points to 0.09% in the fourth quarter of 2020 while the cost of total interest-bearing deposits decreased 6 basis points to 0.13%.

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

Old National recorded a provision recapture in the fourth quarter of 2020 of $1.1 million, compared to no provision recorded in the third quarter.
Net recoveries in the fourth quarter were $1.1 million, compared to net recoveries of $3.0 million in the third quarter.
30-89 day delinquencies were 0.15% at the end of the fourth quarter.
Non-performing loans increased as a percentage of total loans to 1.20%.
Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. As of December 31, 2020, the remaining discount on these acquired loans was $50.6 million.
The allowance for credit losses remained unchanged at $131.4 million, or 0.95% of total loans at December 31, 2020.

NONINTEREST INCOME
Noninterest income decreased due to lower securities gains and a seasonal decline in mortgage banking revenue.

Total noninterest income for the fourth quarter of 2020 was $58.5 million, a decrease of $6.2 million from the third quarter of 2020.
Mortgage banking revenue decreased $1.9 million when compared to the third quarter of 2020.
Gains on sales of debt securities decreased $4.8 million when compared to the third quarter of 2020.

NONINTEREST EXPENSE
Fourth quarter results demonstrate benefit of The ONB Way, helping drive positive operating leverage¹.

Noninterest expense for the fourth quarter of 2020 was $142.3 million and included $3.6 million in ONB Way charges and $9.9 million in tax credit amortization.
Excluding these items, adjusted noninterest expense for the fourth quarter was $128.8 million, compared to the $114.2 million in adjusted noninterest expense in the third quarter of 2020.
The fourth quarter of 2020 also included $8.1 million in additional incentive compensation which is included in adjusted noninterest expense defined above.
The fourth quarter efficiency ratio was 62.37%, while the adjusted efficiency ratio was 56.35%.
Adjusted operating leverage¹ was +917 basis points for the fourth quarter of 2020 as compared to the fourth quarter of 2019.

INCOME TAXES

On a fully taxable-equivalent basis, income tax expense in the fourth quarter was $7.8 million, resulting in a 9.5% FTE tax rate.
Income tax expense included $13.6 million in tax credit benefit.

CAPITAL AND LIQUIDITY
Capital ratios remain strong.

At the end of the fourth quarter, preliminary total risk-based capital was 12.69% and preliminary regulatory tier 1 capital was 11.75%.
Tangible common equity to tangible assets was 8.64% at the end of the fourth quarter compared to 8.58% in the third quarter of 2020.
The Company did not repurchase any shares of common stock during the fourth quarter.
A low loan to deposit ratio of 81.3%, combined with existing funding sources plus available unencumbered, high-quality collateral, provides strong liquidity.

NON-GAAP RECONCILIATIONS

($ in millions, except EPS, shares in 000s)	4Q20			Adjustments⁴			Adjusted 4Q20
Total Revenues (FTE)	$	223.1		$	(0.3	)	$	222.8
Less: Provision for Credit Losses	1.1			—			1.1
Less: Noninterest Expenses	(142.3		)	3.6			(138.7		)
Income before Income Taxes (FTE)	$	81.9		$	3.3		$	85.2
Income Taxes	(7.8		)	(0.8		)	(8.6		)
Net Income	$	74.1		$	2.5		$	76.6
Average Shares Outstanding	165,631			—			165,631
Earnings Per Share - Diluted	$	0.44		$	0.02		$	0.46

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

($ in millions, except EPS, shares in 000s)	2020			Adjustments⁴			Adjusted 2020
Total Revenues (FTE)	$	848.9		$	(10.8	)	$	838.1
Less: Provision for Credit Losses	(38.4		)	—			(38.4		)
Less: Noninterest Expenses	(541.4		)	42.6			(498.8		)
Income before Income Taxes (FTE)	$	269.1		$	31.8		$	300.9
Income Taxes	(42.7		)	(7.9		)	(50.6		)
Net Income	$	226.4		$	23.9		$	250.3
Average Shares Outstanding	166,177			—			166,177
Earnings Per Share - Diluted	$	1.36		$	0.14		$	1.50

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

($ in millions)	4Q20			3Q20
Net Interest Income	$	161.1		$	145.6
Add: FTE Adjustment	3.5			3.4
Net Interest Income (FTE)	$	164.6		$	149.0
Average Earning Assets	$	20,182.0		$	19,654.3
Net Interest Margin (FTE)	3.26		%	3.03		%

($ in millions)	4Q20			4Q19
Net Interest Income	$	161.1		$	148.9
Add: FTE Adjustment	3.5			3.3
Net Interest Income (FTE)	$	164.6		$	152.2
Add: Total Noninterest Income	58.5			47.7
Less: Noninterest Expense	142.3			134.7
Pre-Provision Net Revenue	$	80.8		$	65.2
Less: Debt Securities Gains	(0.2		)	(0.4		)
Less: Gain on Branch Actions	(0.1		)	—
Add: ONB Way Charges	3.6			8.2
Add: Merger and Integration Charges	—			0.2
Add: Amortization of Tax Credit Investments	9.9			0.7
Adjusted Pre-Provision Net Revenue	$	94.0		$	73.9

($ in millions)	4Q20				3Q20				4Q19				2020				2019
Noninterest Expense	$	142.3			$	120.2			$	134.7			$	541.4			$	508.5
Less: ONB Way Charges	(3.6		)		(2.9		)		(8.2		)		(42.6		)		(11.4		)
Less: Merger and Integration Charges	—				—				(0.2		)		—				(6.0		)
Noninterest Expense less Charges	$	138.7			$	117.3			$	126.3			$	498.8			$	491.1
Less: Amortization of Tax Credit Investments	(9.9		)		(3.1		)		(0.7		)		(18.8		)		(2.7		)
Adjusted Noninterest Expense	$	128.8			$	114.2			$	125.6			$	480.0			$	488.4
Less: Intangible Amortization	(3.3		)		(3.4		)		(3.9		)		(14.1		)		(16.9		)
Adjusted Noninterest Expense Less Intangible Amortization	$	125.5			$	110.8			$	121.7			$	465.9			$	471.5
Net Interest Income	$	161.1			$	145.6			$	148.9			$	596.1			$	604.3
FTE Adjustment	3.5				3.4				3.3				13.6				12.9
Net Interest Income (FTE)	$	164.6			$	149.0			$	152.2			$	609.7			$	617.2
Total Noninterest Income	58.5				64.7				47.7				239.2				199.3
Total Revenue (FTE)	$	223.1			$	213.7			$	199.9			$	848.9			$	816.5
Less: Debt Securities Gains/Losses	(0.2		)		(4.9		)		(0.4		)		(10.8		)		(1.9		)
Less: Gain on Branch Actions	(0.1		)		—				—				—				—
Adjusted Total Revenue (FTE)	$	222.8			$	208.8			$	199.5			$	838.1			$	814.6
Efficiency Ratio	62.37			%	55.93			%	65.57			%	62.91			%	60.35			%
Adjusted Efficiency Ratio	56.35			%	53.06			%	60.97			%	55.59			%	57.87			%
Operating Leverage⁵ (basis points)	598												(251		)
Adjusted Operating Leverage⁶ (basis points)	917												460

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)	4Q20				3Q20
Net Income	$	74.1			$	77.9
Add: Intangible Amortization (net of tax⁷)	2.4				2.6
Tangible Net Income	$	76.5			$	80.5
Less: Securities Gains/Losses (net of tax⁷)	(0.2		)		(3.7		)
Add: Loss on Branch Actions (net of tax⁷)	(0.1		)		—
Add: ONB Way Charges (net of tax⁷)	2.7				2.2
Adjusted Tangible Net Income	$	78.9			$	79.0
Average Total Shareholders’ Equity	2,932.6				2,889.5
Less: Average Goodwill	(1,037.0		)		(1,037.0		)
Less: Average Intangibles	(47.5		)		(50.9		)
Average Tangible Shareholders’ Equity	$	1,848.1			$	1,801.6
Return on Average Tangible Common Equity	16.57			%	17.88			%
Adjusted Return on Average Tangible Common Equity	17.08			%	17.54			%

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 9:00 a.m. Central Time on Tuesday, January 19, 2021, to review fourth-quarter 2020 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 at oldnational.com and will be archived there for 12 months. A replay of the call will also be available from Noon Central Time on January 19 through February 2. To access the replay, dial 1-855-859-2056, Conference ID Code 6389837.

ABOUT OLD NATIONAL
Old National Bancorp (NASDAQ: ONB), the holding company of Old National Bank, is the largest bank holding company headquartered in Indiana. With $23.0 billion in assets, it ranks among the top 100 banking companies in the U.S. and has been recognized as a World’s Most Ethical Company by the Ethisphere Institute for nine consecutive years. Since its founding in Evansville in 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships and keeping our clients at the center of all we do. This is an approach to business that we call The ONB Way. Today, Old National’s footprint includes Indiana, Kentucky, Michigan, Minnesota and Wisconsin. 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 MEASURES
This earnings release contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Old National’s results of operations or financial position. 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 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, such as statements about the potential impacts of the COVID-19 pandemic. 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: the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on our operations and personnel, and on commercial activity and demand across our and our customers’ businesses; market, economic, operational, liquidity, credit and interest rate risks associated with Old National’s business (including developments and volatility arising from the COVID-19 pandemic); competition; heightened regulatory and governmental oversight and scrutiny of Old National's business practices; current, pending or future 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, including the anticipated impact from the ONB Way strategic plan that may differ from current estimates; 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, including the impact of the CECL standard as well as changes to address the impact of COVID-19; 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 Form 10-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												Twelve Months Ended
	December 31,				September 30,				December 31,				December 31,			December 31,
	2020				2020				2019				2020			2019
Income Statement
Net interest income	$	161,079			$	145,573			$	148,899			$	596,094		$	604,273
Tax equivalent adjustment (1)	3,517				3,379				3,282				13,586			12,940
Net interest income - tax equivalent basis	164,596				148,952				152,181				609,680			617,213
Provision for loan losses (4)	(1,100		)		—				1,264				38,395			4,747
Noninterest income	58,552				64,759				47,726				239,274			199,317
Noninterest expense	142,318				120,234				134,743				541,417			508,487
Net income	74,120				77,944				49,185				226,409			238,206


Per Common Share Data
Weighted average diluted shares	165,631				165,419				170,186				166,177			172,687
Net income (diluted)	$	0.44			$	0.47			$	0.29			$	1.36		$	1.38
Cash dividends	0.14				0.14				0.13				0.56			0.52
Common dividend payout ratio (2)	31			%	30			%	45		%		41		%	37		%
Book value	$	17.98			$	17.67			$	16.82			$	17.98		$	16.82
Stock price	16.56				12.56				18.29				16.56			18.29
Tangible common book value (3)	11.43				11.10				10.35				11.43			10.35


Performance Ratios
Return on average assets	1.30			%	1.40			%	0.97		%		1.04		%	1.19		%
Return on average common equity	10.11			%	10.79			%	6.94		%		7.87		%	8.57		%
Return on tangible common equity (3)	16.20			%	17.56			%	11.89		%		12.54		%	14.30		%
Return on average tangible common equity (3)	16.57			%	17.88			%	12.03		%		13.27		%	14.97		%
Net interest margin (FTE)	3.26			%	3.03			%	3.46		%		3.18		%	3.55		%
Efficiency ratio (5)	62.37			%	55.93			%	65.57		%		62.91		%	60.35		%
Net charge-offs (recoveries) to average loans	(0.03		)	%	(0.09		)	%	0.12		%		0.02		%	0.05		%
Allowance for loan losses to ending loans (4)	0.95			%	0.95			%	0.45		%		0.95		%	0.45		%
Non-performing loans to ending loans	1.20			%	1.15			%	1.19		%		1.20		%	1.19		%


Balance Sheet (EOP)
Total loans	$	13,786,479			$	13,892,509			$	12,117,524			$	13,786,479		$	12,117,524
Total assets		22,960,622				22,460,476				20,411,667				22,960,622			20,411,667
Total deposits		17,037,453				16,506,494				14,553,397				17,037,453			14,553,397
Total borrowed funds		2,676,554				2,725,731				2,744,728				2,676,554			2,744,728
Total shareholders' equity		2,972,656				2,921,149				2,852,453				2,972,656			2,852,453


Capital Ratios (3)
Risk-based capital ratios (EOP):
Tier 1 common equity	11.75			%	11.84			%	12.13		%		11.75		%	12.13		%
Tier 1	11.75			%	11.84			%	12.13		%		11.75		%	12.13		%
Total	12.69			%	12.81			%	12.99		%		12.69		%	12.99		%
Leverage ratio (to average assets)	8.20			%	8.15			%	8.88		%		8.20		%	8.88		%

Total equity to assets (averages)	12.83			%	12.97			%	14.01		%		13.20		%	13.88		%
Tangible common equity to tangible assets	8.64			%	8.58			%	9.09		%		8.64		%	9.09		%


Nonfinancial Data
Full-time equivalent employees		2,445				2,484				2,709				2,445			2,709
Banking centers		162				162				192				162			192

(1) Calculated using the federal statutory tax rate in effect of 21% for all periods.
(2) Cash dividends per share divided by net income per share (basic).
(3) Represents a non-GAAP financial measure. Refer the "Non-GAAP Measures" table for reconciliations to GAAP financial measures. December 31, 2020 capital ratios are preliminary.
(4) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.
(5) 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 debt securities transactions. This presentation excludes amortization of intangibles and net debt 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											N/A - Not applicable

Income Statement (unaudited)
($ and shares in thousands, except per share data)

	Three Months Ended							Twelve Months Ended
	December 31,			September 30,		December 31,		December 31,		December 31,
	2020			2020		2019		2020		2019
Interest income	$	173,249		$	160,086	$	176,553	$	663,308	$	730,387
Less: interest expense	12,170			14,513		27,654		67,214		126,114
Net interest income	161,079			145,573		148,899		596,094		604,273
Provision for loan losses (1)	(1,100		)	—		1,264		38,395		4,747
Net interest income after provision for loan losses	162,179			145,573		147,635		557,699		599,526

Wealth management fees	9,259			9,239		9,468		36,806		37,072
Service charges on deposit accounts	8,724			8,698		10,714		35,081		44,915
Debit card and ATM fees	5,072			5,276		5,360		20,178		21,652
Mortgage banking revenue	16,233			18,110		5,626		62,775		26,622
Investment product fees	5,544			5,351		5,679		21,614		21,785
Capital markets income	6,545			5,428		3,043		22,480		13,270
Company-owned life insurance	3,153			2,830		2,937		12,031		11,539
Other income	3,861			4,906		4,462		17,542		20,539
Gains (losses) on sales of debt securities	161			4,921		437		10,767		1,923
Total noninterest income	58,552			64,759		47,726		239,274		199,317

Salaries and employee benefits	78,001			69,860		74,974		293,590		289,452
Occupancy	13,008			13,930		14,184		55,316		55,255
Equipment	3,778			3,754		3,958		16,690		16,903
Marketing	3,242			2,140		3,631		10,874		15,898
Data processing	12,362			9,628		9,080		41,086		37,589
Communication	2,396			2,241		2,450		9,731		10,702
Professional fees	4,834			3,083		9,986		15,755		22,854
FDIC assessment	1,780			1,319		1,529		6,722		6,030
Amortization of intangibles	3,244			3,459		3,946		14,091		16,911
Amortization of tax credit investments	9,871			3,115		710		18,788		2,749
Other expense	9,802			7,705		10,295		58,774		34,144
Total noninterest expense	142,318			120,234		134,743		541,417		508,487

Income before income taxes	78,413			90,098		60,618		255,556		290,356
Income tax expense	4,293			12,154		11,433		29,147		52,150
Net income	$	74,120		$	77,944	$	49,185	$	226,409	$	238,206

Diluted Earnings Per Share
Net income	$	0.44		$	0.47	$	0.29	$	1.36	$	1.38

Average Common Shares Outstanding
Basic		164,799			164,773		169,235		165,509		171,907
Diluted		165,631			165,419		170,186		166,177		172,687

Common shares outstanding at end of period		165,367			165,333		169,616		165,367		169,616

(1) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.

Balance Sheet (unaudited)
($ in thousands)
	December 31,			September 30,			December 31,
	2020			2020			2019
Assets
Federal Reserve Bank account	$	307,967		$	87,682		$	29,141
Money market investments	13,537			13,437			12,430
Investments:
Treasury and government-sponsored agencies	852,196			501,771			610,666
Mortgage-backed securities	3,339,098			3,382,280			3,183,861
States and political subdivisions	1,492,162			1,426,495			1,275,643
Other securities	458,639			462,958			485,862
Total investments	6,142,095			5,773,504			5,556,032
Loans held for sale, at fair value	63,250			85,091			46,898
Loans:
Commercial	3,956,422			4,264,568			2,890,296
Commercial and agriculture real estate	5,946,512			5,701,493			5,166,792
Consumer:
Home equity	556,414			549,115			559,021
Other consumer loans	1,078,709			1,112,034			1,167,126
Subtotal of commercial and consumer loans	11,538,057			11,627,210			9,783,235
Residential real estate	2,248,422			2,265,299			2,334,289
Total loans	13,786,479			13,892,509			12,117,524
Total earning assets	20,313,328			19,852,223			17,762,025

Allowance for loan losses (1)	(131,388		)	(131,388		)	(54,619		)
Non-earning Assets:
Cash and due from banks	268,208			229,631			234,766
Premises and equipment, net	464,408			463,253			490,925
Operating lease right-of-use assets	76,197			77,482			95,477
Goodwill and other intangible assets	1,083,008			1,086,252			1,097,099
Company-owned life insurance	456,110			455,975			448,967
Other assets	430,751			427,048			337,027
Total non-earning assets	2,778,682			2,739,641			2,704,261
Total assets	$	22,960,622		$	22,460,476		$	20,411,667

Liabilities and Equity
Noninterest-bearing demand deposits	$	5,633,672		$	5,463,007		$	4,042,286
Interest-bearing:
Checking and NOW accounts	4,877,046			4,588,432			4,149,639
Savings accounts	3,395,747			3,287,302			2,845,423
Money market accounts	1,908,118			1,904,404			1,833,819
Other time deposits	1,103,313			1,206,658			1,589,988
Total core deposits	16,917,896			16,449,803			14,461,155
Brokered deposits	119,557			56,691			92,242
Total deposits	17,037,453			16,506,494			14,553,397

Federal funds purchased and interbank borrowings	1,166			1,259			350,414
Securities sold under agreements to repurchase	431,166			399,141			327,782
Federal Home Loan Bank advances	1,991,435			2,087,648			1,822,847
Other borrowings	252,787			237,683			243,685
Total borrowed funds	2,676,554			2,725,731			2,744,728
Operating lease liabilities	86,598			88,552			99,500
Accrued expenses and other liabilities	187,361			218,550			161,589
Total liabilities	19,987,966			19,539,327			17,559,214
Common stock, surplus, and retained earnings	2,824,885			2,771,865			2,796,246
Accumulated other comprehensive income (loss), net of tax	147,771			149,284			56,207
Total shareholders' equity	2,972,656			2,921,149			2,852,453
Total liabilities and shareholders' equity	$	22,960,622		$	22,460,476		$	20,411,667

(1) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.

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

	Three Months Ended							Three Months Ended							Three Months Ended
	December 31, 2020							September 30, 2020							December 31, 2019
	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	$	413,782		$	126	0.12	%	$	137,880		$	59	0.17	%	$	87,835		$	530	2.39	%
Investments:
Treasury and government-sponsored agencies	648,314			2,937		1.81	%	454,005			2,457		2.17	%	546,266			3,547		2.60	%
Mortgage-backed securities	3,291,436			16,137		1.96	%	3,342,284			17,478		2.09	%	3,172,818			18,844		2.38	%
States and political subdivisions	1,437,890			12,008		3.34	%	1,383,765			11,860		3.43	%	1,211,850			11,133		3.67	%
Other securities	462,836			2,629		2.27	%	487,405			2,922		2.40	%	489,889			3,585		2.93	%
Total investments	5,840,476			33,711		2.31	%	5,667,459			34,717		2.45	%	5,420,823			37,109		2.74	%
Loans: (2)
Commercial	4,132,831			46,468		4.40	%	4,274,894			33,223		3.04	%	2,891,641			31,925		4.32	%
Commercial and agriculture real estate	5,829,912			58,334		3.92	%	5,546,486			55,891		3.94	%	5,129,638			66,959		5.11	%
Consumer:
Home equity	550,548			4,380		3.17	%	551,380			4,336		3.13	%	561,125			6,426		4.54	%
Other consumer loans	1,099,504			11,276		4.08	%	1,120,681			11,635		4.13	%	1,153,924			12,245		4.21	%
Subtotal commercial and consumer loans	11,612,795			120,458		4.13	%	11,493,441			105,085		3.64	%	9,736,328			117,555		4.79	%
Residential real estate loans	2,314,938			22,471		3.88	%	2,355,512			23,604		4.01	%	2,332,835			24,641		4.23	%

Total loans	13,927,733			142,929		4.04	%	13,848,953			128,689		3.66	%	12,069,163			142,196		4.64	%

Total earning assets	$	20,181,991		$	176,766	3.46	%	$	19,654,292		$	163,465	3.29	%	$	17,577,821		$	179,835	4.05	%

Less: Allowance for loan losses (3)	(137,539		)					(132,447		)					(57,162		)

Non-earning Assets:
Cash and due from banks	$	341,154						$	346,343						$	278,324
Other assets	2,479,253							2,405,517							2,419,792

Total assets	$	22,864,859						$	22,273,705						$	20,218,775

Interest-Bearing Liabilities:
Checking and NOW accounts	$	4,708,568		$	629	0.05	%	$	4,607,427		$	886	0.08	%	$	4,121,021		$	3,812	0.37	%
Savings accounts	3,329,494			487		0.06	%	3,232,375			634		0.08	%	2,842,996			1,586		0.22	%
Money market accounts	1,932,594			445		0.09	%	1,902,407			724		0.15	%	1,839,258			3,558		0.77	%
Other time deposits	1,158,715			2,189		0.75	%	1,253,058			2,852		0.91	%	1,642,773			6,101		1.47	%
Total interest-bearing core deposits	11,129,371			3,750		0.13	%	10,995,267			5,096		0.18	%	10,446,048			15,057		0.57	%
Brokered deposits	37,176			26		0.28	%	150,545			201		0.53	%	109,504			637		2.31	%
Total interest-bearing deposits	11,166,547			3,776		0.13	%	11,145,812			5,297		0.19	%	10,555,552			15,694		0.59	%

Federal funds purchased and interbank borrowings	843			—		0.03	%	18,347			12		0.25	%	95,973			437		1.80	%
Securities sold under agreements to repurchase	438,272			125		0.11	%	385,149			160		0.16	%	337,786			469		0.55	%
Federal Home Loan Bank advances	2,089,519			5,953		1.13	%	2,021,468			6,709		1.32	%	1,843,357			8,359		1.80	%
Other borrowings	240,815			2,316		3.85	%	237,811			2,335		3.93	%	251,565			2,695		4.29	%
Total borrowed funds	2,769,449			8,394		1.21	%	2,662,775			9,216		1.38	%	2,528,681			11,960		1.88	%

Total interest-bearing liabilities	13,935,996			12,170		0.35	%	13,808,587			14,513		0.42	%	13,084,233			27,654		0.84	%

Noninterest-Bearing Liabilities and Shareholders' Equity
Demand deposits	$	5,644,017						$	5,291,037						$	4,047,308
Other liabilities	352,256							284,536							254,296
Shareholders' equity	2,932,590							2,889,545							2,832,938

Total liabilities and shareholders' equity	$	22,864,859						$	22,273,705						$	20,218,775

Net interest rate spread						3.11	%						2.87	%						3.21	%

Net interest margin (FTE)						3.26	%						3.03	%						3.46	%

FTE adjustment				$	3,517						$	3,379						$	3,282

(1) Interest income is reflected on a fully taxable equivalent basis (FTE).
(2) Includes loans held for sale.
(3) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.

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

	Twelve Months Ended							Twelve Months Ended
	December 31, 2020							December 31, 2019
	Average			Income (1)/		Yield/		Average			Income (1)/		Yield/
Earning Assets:	Balance			Expense		Rate		Balance			Expense		Rate
Money market and other interest-earning investments	$	174,494		$	568	0.33	%	$	67,069		$	1,670	2.49	%
Investments:
Treasury and government-sponsored agencies	547,054			12,124		2.22	%	657,233			16,091		2.45	%
Mortgage-backed securities	3,246,520			70,611		2.17	%	2,866,600			73,835		2.58	%
States and political subdivisions	1,347,490			47,034		3.49	%	1,202,210			44,716		3.72	%
Other securities	485,430			11,990		2.47	%	495,847			16,138		3.25	%
Total investments	$	5,626,494		$	141,759	2.52	%	$	5,221,890		$	150,780	2.89	%
Loans: (2)
Commercial	3,843,089			140,473		3.66	%	3,023,421			141,215		4.67	%
Commercial and agriculture real estate	5,477,562			234,670		4.28	%	5,044,623			275,853		5.47	%
Consumer:
Home equity	553,570			18,561		3.35	%	566,232			28,515		5.04	%
Other consumer loans	1,131,028			46,661		4.13	%	1,180,898			48,681		4.12	%
Subtotal commercial and consumer loans	11,005,249			440,365		4.00	%	9,815,174			494,264		5.04	%
Residential real estate loans	2,352,444			94,202		4.00	%	2,281,047			96,613		4.24	%

Total loans	13,357,693			534,567		4.00	%	12,096,221			590,877		4.88	%

Total earning assets	$	19,158,681		$	676,894	3.53	%	$	17,385,180		$	743,327	4.28	%

Less: Allowance for loan losses (3)	(115,321		)					(56,624		)

Non-earning Assets:
Cash and due from banks	$	327,053						$	251,857
Other assets	2,414,602							2,453,001

Total assets	$	21,785,015						$	20,033,414

Interest-Bearing Liabilities:
Checking and NOW accounts	$	4,464,027		$	5,449	0.12	%	$	3,902,765		$	15,598	0.40	%
Savings accounts	3,113,435			3,156		0.10	%	2,878,135			8,142		0.28	%
Money market accounts	1,866,196			4,585		0.25	%	1,789,065			14,130		0.79	%
Other time deposits	1,337,269			14,013		1.05	%	1,748,552			27,400		1.57	%
Total interest-bearing core deposits	10,780,927			27,203		0.25	%	10,318,517			65,270		0.63	%
Brokered deposits	85,041			966		1.14	%	173,439			4,094		2.36	%
Total interest-bearing deposits	10,865,968			28,169		0.26	%	10,491,956			69,364		0.66	%

Federal funds purchased and interbank borrowings	138,257			1,296		0.94	%	241,618			5,656		2.34	%
Securities sold under agreements to repurchase	375,961			854		0.23	%	342,654			2,517		0.73	%
Federal Home Loan Bank advances	2,055,155			27,274		1.33	%	1,775,987			37,452		2.11	%
Other borrowings	242,642			9,621		3.96	%	251,194			11,125		4.43	%
Total borrowed funds	2,812,015			39,045		1.39	%	2,611,453			56,750		2.17	%

Total interest-bearing liabilities	13,677,983			67,214		0.49	%	13,103,409			126,114		0.96	%

Noninterest-Bearing Liabilities and Shareholders' Equity
Demand deposits	$	4,945,506						$	3,887,470
Other liabilities	286,066							261,403
Shareholders' equity	2,875,460							2,781,132

Total liabilities and shareholders' equity	$	21,785,015						$	20,033,414

Net interest rate spread						3.04	%						3.32	%

Net interest margin (FTE)						3.18	%						3.55	%

FTE adjustment				$	13,586						$	12,940

(1) Interest income is reflected on a fully taxable equivalent basis (FTE).
(2) Includes loans held for sale.
(3) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.

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

	Three Months Ended												Twelve Months Ended
	December 31,				September 30,				December 31,				December 31,				December 31,
	2020				2020				2019				2020				2019

Beginning allowance for loan losses	$	131,388			$	128,394			$	56,910			$	54,619			$	55,461
Impact of adopting ASC 326 on 1/1/2020 (1)	—				—					N/A			41,347					N/A

Provision for loan losses (1)	(1,100		)		—				1,264				38,395				4,747

Gross charge-offs	(707		)		(4,169		)		(6,304		)		(15,553		)		(14,789		)
Gross recoveries	1,807				7,163				2,749				12,580				9,200
Net (charge-offs) recoveries	1,100				2,994				(3,555		)		(2,973		)		(5,589		)

Ending allowance for loan losses (1)	$	131,388			$	131,388			$	54,619			$	131,388			$	54,619

Net charge-offs (recoveries) / average loans (2)	(0.03		)	%	(0.09		)	%	0.12			%	0.02			%	0.05			%

Average loans outstanding (2)	$	13,910,145			$	13,827,019			$	12,058,109			$	13,341,677			$	12,087,429

EOP loans outstanding (2)	13,786,479				13,892,509				12,117,524				13,786,479				12,117,524

Allowance for loan losses / EOP loans (1)(2)	0.95			%	0.95			%	0.45			%	0.95			%	0.45			%

Underperforming Assets:
Loans 90 Days and over (still accruing)	$	167			$	90			$	570			$	167			$	570

Non-performing loans:
Nonaccrual loans (3)	147,339				137,611				126,412				147,339				126,412
TDRs still accruing	17,749				22,037				18,338				17,749				18,338
Total non-performing loans	165,088				159,648				144,750				165,088				144,750

Foreclosed properties	1,324				1,248				2,169				1,324				2,169

Total underperforming assets	$	166,579			$	160,986			$	147,489			$	166,579			$	147,489

Classified and Criticized Assets:
Nonaccrual loans (3)	147,339				137,611				126,412				147,339				126,412
Substandard accruing loans	157,276				189,524				169,689				157,276				169,689
Loans 90 days and over (still accruing)	167				90				570				167				570
Total classified loans - "problem loans"	$	304,782			$	327,225			$	296,671			$	304,782			$	296,671

Other classified assets	3,706				3,860				2,933				3,706				2,933
Criticized loans - "special mention loans"	287,192				272,859				234,841				287,192				234,841

Total classified and criticized assets	$	595,680			$	603,944			$	534,445			$	595,680			$	534,445

Non-performing loans / EOP loans (2)	1.20			%	1.15			%	1.19			%	1.20			%	1.19			%

Allowance to non-performing loans (1)(4)	80			%	82			%	38			%	80			%	38			%

Under-performing assets / EOP loans (2)	1.21			%	1.16			%	1.22			%	1.21			%	1.22			%

EOP total assets	$	22,960,622			$	22,460,476			$	20,411,667			$	22,960,622			$	20,411,667

Under-performing assets / EOP assets	0.73			%	0.72			%	0.72			%	0.73			%	0.72			%

EOP - End of period actual balances
(1) Beginning January 1, 2020, calculation is based on current expected loss methodology. Prior to January 1, 2020, calculation was based on incurred loss methodology.
(2) Excludes loans held for sale.
(3) Includes non-accruing TDRs totaling $14.9 million at December 31, 2020, $7.7 million at September 30, 2020, and $13.8 million at December 31, 2019.
(4) 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 for 2019 quarter ends.

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

	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2020			2020			2019			2020			2019
Actual End of Period Balances
GAAP shareholders' equity	$	2,972,656		$	2,921,149		$	2,852,453		$	2,972,656		$	2,852,453

Deduct:
Goodwill		1,036,994			1,036,994			1,036,994			1,036,994			1,036,994
Intangibles		46,014			49,258			60,105			46,014			60,105
		1,083,008			1,086,252			1,097,099			1,083,008			1,097,099

Tangible shareholders' equity	$	1,889,648		$	1,834,897		$	1,755,354		$	1,889,648		$	1,755,354

Average Balances
GAAP shareholders' equity	$	2,932,590		$	2,889,545		$	2,832,938		$	2,875,460		$	2,781,132

Deduct:
Goodwill		1,036,994			1,036,994			1,036,994			1,036,994			1,036,456
Intangibles		47,536			50,926			61,963			52,740			68,244
		1,084,530			1,087,920			1,098,957			1,089,734			1,104,700

Average tangible shareholders' equity	$	1,848,060		$	1,801,625		$	1,733,981		$	1,785,726		$	1,676,432

Actual End of Period Balances
GAAP assets	$	22,960,622		$	22,460,476		$	20,411,667		$	22,960,622		$	20,411,667

Add:
Trust overdrafts		26			17			31			26			31

Deduct:
Goodwill		1,036,994			1,036,994			1,036,994			1,036,994			1,036,994
Intangibles		46,014			49,258			60,105			46,014			60,105
		1,083,008			1,086,252			1,097,099			1,083,008			1,097,099

Tangible assets	$	21,877,640		$	21,374,241		$	19,314,599		$	21,877,640		$	19,314,599

Risk-weighted assets (2)	$	15,369,076		$	14,770,750		$	14,073,929		$	15,369,076		$	14,073,929

GAAP net income	$	74,120		$	77,944		$	49,185		$	226,409		$	238,206

Add:
Amortization of intangibles (net of tax)		2,433			2,595			2,976			10,585			12,756

Tangible net income	$	76,553		$	80,539		$	52,161		$	236,994		$	250,962

Tangible Ratios
Return on tangible common equity		16.20	%		17.56	%		11.89	%		12.54	%		14.30	%
Return on average tangible common equity		16.57	%		17.88	%		12.03	%		13.27	%		14.97	%
Return on tangible assets		1.40	%		1.51	%		1.08	%		1.08	%		1.30	%
Tangible common equity to tangible assets		8.64	%		8.58	%		9.09	%		8.64	%		9.09	%
Tangible common equity to risk-weighted assets (2)		12.30	%		12.42	%		12.47	%		12.30	%		12.47	%
Tangible common book value (1)		11.43			11.10			10.35			11.43			10.35

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 at period-end.

Tier 1 common equity (2)	$	1,805,194		$	1,748,150		$	1,706,727		$	1,805,194		$	1,706,727

Risk-weighted assets (2)		15,369,076			14,770,750			14,073,929			15,369,076			14,073,929

Tier 1 common equity to risk-weighted assets (2)		11.75	%		11.84	%		12.13	%		11.75	%		12.13	%

(2) December 31, 2020 figures are preliminary.

Media: Kathy A. Schoettlin (812) 465-7269
Investors: Lynell J. Walton (812) 464-1366

Old National reports 4th quarter earnings of $74.1 million, or $0.44 per share