OLD NATIONAL BANCORP 
By 4th Quarter Highlights:
- Earnings per share of $.23
- Period end commercial loans (excluding covered loans) increase 3.3%
- Total revenues increase 17.9%
- Improvement in overall credit quality
2012 Highlights:
- Full year net income increases 26% over 2011; highest net income since 2002
- Net loan charge-off ratio decreases 65% from 2011 levels; lowest net charge-off ratio since 1999
- Indiana Community acquisition closed September 15, 2012
- Period end total loans (excluding covered loans and current acquisition) increase $284.3 million or 6.9%
EVANSVILLE, Ind., Jan. 28, 2013 (GLOBE NEWSWIRE) -- Today Old National Bancorp (NYSE:ONB) reported 4th quarter net income of $23.0 million, or $.23 per share. These 4th quarter results compare favorably to the net income of $19.7 million, or $.20 per share, that Old National reported in 3rd quarter 2012, and net income of $22.2 million, or $.23 per share, that Old National reported in 4th quarter 2011.
Net income for the 12 months ended December 31, 2012, was $91.7 million, or $.95 per share. These results represent a $19.2 million, or 26% increase, to full-year 2011 net income of $72.5 million and a 25% increase to full-year 2011 earnings per share of $.76.
As was announced in a press release dated January 24, 2013, Old National Bancorp's Board of Directors declared an increase in its common stock dividend to $.10 per share on the Company's outstanding shares. This new dividend level represents an 11.1% increase over the previous cash dividend level of $.09 per common share. This dividend is payable March 15, 2013, to shareholders of record on March 1, 2013. For purposes of broker trading, the ex-date of the cash dividend is February 27, 2013.
Bob Jones, Old National's President and CEO stated, "I am extremely proud of the 2012 financial results for Old National. Producing the highest net income seen by the Company in a decade clearly demonstrates the success of our recent acquisitions and the importance of organic loan growth while maintaining a watchful eye on credit and expenses. Additionally, we closed on two of our branch sales on January 18 and anticipate the third sale closing later in the 1st quarter of this year. With the hard work of our dedicated associates producing these strong results, as well as the recently announced pending purchase of 24 branches from Bank of America, we're certainly starting off 2013 with positive momentum."
Committed to our Strategic Imperatives
Old National's strong performance can be attributed to our unwavering commitment to the following strategic imperatives:
- Strengthen the risk profile.
- Enhance management discipline.
- Achieve consistent quality earnings.
1. STRENGTHEN THE RISK PROFILE
Credit Quality
Old National reported provision expense in the 4th quarter of 2012 of $2.2 million, compared to $.4 million in the 3rd quarter of 2012 and the $1.0 million in the 4th quarter of 2011. For the full year 2012, Old National reported $5.0 million of provision for loan losses compared to $7.5 million in 2011. Old National's net charge-offs for 4th quarter 2012 were $2.2 million, or .17% of total loans, compared to $.4 million, or .03% of total loans in 3rd quarter 2012 and $8.5 million, or .71% of total loans, in 4th quarter 2011. For the full year 2012, Old National reported net charge-offs of $8.3 million, or .17% of total loans, compared to $21.7 million, or .49% of total loans, in 2011.
Excluding covered loans, provision expense for the 4th quarter of 2012 was $1.8 million, compared to ($.3) million in 3rd quarter 2012 and $.1 million in 4th quarter 2011. Old National's net charge-offs for the 4th quarter, excluding covered loans, were $3.2 million, compared to ($.4) million reported in 3rd quarter 2012 and significantly lower than the $8.2 million in net charge-offs reported in 4th quarter 2011. Excluding covered loans, for the full year 2012, Old National reported provision expense of ($1.0) million compared to $6.5 million in 2011. Additionally, net loan charge-offs for the full year 2012 fell to .16% - a substantial decrease from Old National's full year 2011 mark of .53%.
Excluding covered loans, Old National's allowance for loan losses at December 31, 2012, was $49.0 million, or 1.02% of total loans, compared to an allowance of $50.4 million, or 1.05% of total loans at September 30, 2012, and $57.1 million, or 1.38% of total loans, at December 31, 2011. Excluding covered loans, the coverage of allowance to non-performing loans stood at 31% at December 31, 2012, compared to 29% at September 30, 2012.
"2012 was a year of notable improvement in our credit quality ratios, with the most recent quarter exhibiting meaningful progress," stated Daryl Moore, Old National's Chief Credit Officer. "We've not only experienced solid performance in our core portfolio, but we have made notable progress in working through the loan portfolio of our recent acquisitions. As is typical, we anticipate some variability of the portfolio during 2013. We will continue to closely monitor borrower's financial statements and the potential changes of individual loans."
The following table presents certain credit quality metrics related to Old National's loan portfolio:
| ($ in millions) | 2009 | 2010 | 2011 | 2012 | 3Q12 | 3Q12* | 4Q12 | 4Q12* |
| Non-Performing Loans(NPLs) | $67.0 | $70.9 | $299.5 | $263.5 | $295.7 | $172.0 | $263.5 | $159.5 |
| Problem Loans (Including NPLs) | $157.1 | $174.3 | $404.3 | $355.4 | $408.7 | $260.0 | $355.4 | $233.4 |
| Special Mention Loans | $103.5 | $84.0 | $103.2 | $122.6 | $149.6 | $135.3 | $122.6 | $113.3 |
| Net Charge-Off Ratio | 1.40% | .75% | .49% | .16% | .03% | (.03%) | .17% | .26% |
| Provision for Loan Losses | $63.3 | $30.8 | $7.5 | $5.0 | $.4 | ($.3) | $2.2 | $1.8 |
| *Excludes covered loans. |
2. ENHANCE MANAGEMENT DISCIPLINE
Expense Management
Old National reported total noninterest expenses of $99.4 million for the 4th quarter of 2012, compared to $89.0 million in the 3rd quarter of 2012 and $93.7 million for the 4th quarter of 2011. Noninterest expenses for the 4th quarter of 2012 included $3.7 million of Indiana Community-related expenses (of which $2.0 million were integration and conversion charges), $2.6 million in branch optimization expense, $1.9 million for the extinguishment of debt and a $1.0 million contribution to the ONB Foundation. Noninterest expenses for the 3rd quarter of 2012 included $5.5 million of Indiana Community-related expenses - of which $4.9 million were integration and conversion charges, and $.8 million in branch optimization expense.
Capital Management
Old National's capital position remained well above industry requirements at December 31, 2012, with regulatory tier 1 and total risk-based capital ratios of 13.7% and 14.8%, respectively, compared to 12.9% and 14.1% at September 30, 2012, and 13.5% and 15.0% at December 31, 2011. This strong capital position allowed the company to be active during the quarter in the board-authorized buyback program, as Old National repurchased 250,000 shares in the open market during the quarter.
The ratio of tangible common equity to tangible assets stood at 9.01% at December 31, 2012, compared to 9.05% at September 30, 2012, and 8.97% at December 31, 2011. Refer to Table 1 for Non-GAAP reconciliations.
