Old National Bancorp | research notes

Old National Bancorp: A Leading Midwest Bank

Introduction

Old National Bancorp (NASDAQ: ONB) is a financial holding company and the parent company of Old National Bank, a leading Midwestern bank headquartered in Evansville, Indiana. With over 200 branches across Indiana, Kentucky, Michigan, Wisconsin, and Illinois, the company offers a wide range of financial products and services to consumers, businesses, and institutions.

History and Expansion

Old National Bank was founded in 1834 in Evansville, Indiana, as the State Bank of Indiana. Over the years, through a series of acquisitions and mergers, the bank expanded its reach throughout the Midwest. The company became Old National Bancorp in 2007.

Financial Performance

Old National Bancorp has consistently delivered strong financial results. In 2022, the company reported net income of $526.3 million, a 5.8% increase from the previous year. Total assets amounted to $27.4 billion, and the company's Tier 1 capital ratio was 13.2%.

Products and Services

Old National Bank provides a comprehensive suite of financial products and services, including:

• Checking and savings accounts
• Loans (personal, business, and mortgage)
• Wealth management
• Cash management
• Treasury services
• Investment banking

Technology and Innovation

Old National Bancorp is committed to innovation and leverages technology to enhance its customer experience. The company offers a range of digital banking solutions, including mobile banking, online banking, and bill pay. Old National Bank is also exploring artificial intelligence and other advanced technologies to streamline its operations.

Corporate Responsibility

Old National Bancorp actively supports its local communities through philanthropic giving and volunteerism. The company invests in programs related to education, economic development, and community well-being.

Recognition

Old National Bank has been recognized for its financial performance, customer service, and community involvement. The company has received numerous awards, including:

• Forbes' Best Banks in America (2022)
• Greenwich Excellence Awards for Best-in-Class Customer Service (2022)
• J.D. Power Retail Banking Satisfaction Study Award (2022)

Conclusion

Old National Bancorp is a well-established and financially strong bank that plays a vital role in the Midwest economy. With its commitment to innovation, customer service, and community involvement, the company is positioned for continued success in the future.

Business Model of Old National Bancorp

Old National Bancorp is a regional bank holding company that offers a comprehensive range of financial products and services to individuals, businesses, and government entities. Its business model is based on the following core pillars:

• Community Banking: Old National has a strong presence in its regional markets and focuses on building long-term relationships with its customers.
• Diversified Lending: The company has a diversified loan portfolio across various sectors, including commercial, consumer, and mortgage lending.
• Wealth Management: Old National offers a wide range of wealth management services, including investment advisory, trust services, and financial planning.
• Capital Markets and Treasury Services: The company provides capital markets and treasury management services to corporate and institutional clients.

Advantages to Competitors

Old National Bancorp has several advantages over its competitors:

• Market Share: The company has a significant market share in its regional markets, which provides it with a competitive edge in attracting and retaining customers.
• Customer Focus: Old National places a high priority on customer satisfaction and strives to provide personalized service to its clients.
• Diversified Revenue Streams: The company's diversified revenue streams from various financial services reduce its reliance on any single product or service.
• Efficiency and Scale: Old National has a large and efficient banking network, which allows it to operate at a lower cost than many of its competitors.
• Strong Capital Position: The company maintains a strong capital position, which supports its growth initiatives and provides financial stability during market downturns.
• Technological Innovation: Old National invests heavily in technology to enhance its digital capabilities and provide convenient and innovative services to its customers.

These advantages have allowed Old National Bancorp to establish itself as a leading regional bank in its markets and to compete effectively with both national and local competitors.

Old National Bancorp Outlook

Financial Performance

• Revenue: Steady growth over the past five years, with a 5% increase in revenue in 2022. Revenue is expected to continue increasing in the upcoming years.
• Net Income: Strong profitability with a net income of $538 million in 2022, up 8% year-over-year. Net income is projected to remain stable or increase slightly in the future.
• Earnings Per Share (EPS): EPS has grown consistently in recent years, reaching $3.12 in 2022. EPS is expected to continue increasing in the coming years.
• Return on Assets (ROA): ROA has been consistently above industry average, at 1.31% in 2022. This indicates efficient use of assets and strong profitability.
• Return on Equity (ROE): ROE has also been above industry average, at 12.13% in 2022. This suggests a high return on investment for shareholders.

Balance Sheet

• Total Assets: Assets have grown steadily over the past five years, reaching $25.7 billion in 2022. Total assets are expected to continue increasing in the upcoming years.
• Total Deposits: Deposits have also grown consistently, reaching $20.9 billion in 2022. Deposit growth is expected to remain strong in the future.
• Loan Portfolio: The loan portfolio has grown steadily over the past few years, reaching $17.3 billion in 2022. Loan growth is expected to continue at a moderate pace.
• Non-Performing Loan Ratio: The non-performing loan ratio has remained low, at 0.26% in 2022. This indicates a well-managed loan portfolio.

Growth Strategy

• Organic Growth: Old National Bancorp plans to focus on organic growth by expanding its branch network, offering new products and services, and growing its customer base.
• Acquisitions: The company has made several acquisitions in recent years to expand its geographic reach and product offerings. Acquisitions are expected to continue to be a part of the growth strategy.
• Digital Banking: Old National Bancorp is investing heavily in digital banking to enhance customer convenience and efficiency.

Competitive Landscape

• Competition from Larger Banks: Old National Bancorp faces competition from larger banks with more resources and a wider geographic reach.
• Regional Banks and Credit Unions: The company also competes with regional banks and credit unions that offer similar products and services.
• FinTech Companies: FinTech companies are offering innovative financial products and services that may disrupt the traditional banking industry.

Risks

• Interest Rate Risk: Changes in interest rates can impact Old National Bancorp's net interest margin and profitability.
• Credit Risk: The loan portfolio is subject to credit risk, which could result in losses if borrowers fail to repay their loans.
• Regulatory Risk: The banking industry is heavily regulated, and changes in regulations could impact the company's operations and profitability.

Outlook

Old National Bancorp is well-positioned for continued growth in the upcoming years. The company has a strong financial performance, a robust balance sheet, and a solid growth strategy. However, it faces challenges from larger banks, regional competitors, and FinTech companies. The company's ability to manage these risks and execute its growth strategy will determine its future success.

Similar Companies to Old National Bancorp

1. Fifth Third Bancorp

• Website: https://www.53.com/
• Review: Fifth Third Bancorp is a well-established financial institution with a strong presence in the Midwest and Southeast regions of the US. Known for its commitment to community banking and personal service, customers appreciate their extensive branch network, convenient online and mobile banking options, and competitive loan and deposit products.

2. KeyBank

• Website: https://www.key.com/
• Review: KeyBank is another large regional bank with operations across the Midwest and Northeast. Customers value their comprehensive financial services, including checking and savings accounts, mortgages, investment options, and business banking solutions. They also have a strong commitment to technology and innovation, offering a user-friendly online banking platform and mobile app.

3. PNC Financial Services Group

• Website: https://www.pnc.com/
• Review: PNC is a leading financial services provider with a national footprint. Customers choose PNC for its broad range of banking products and services, including consumer banking, corporate and institutional banking, and wealth management. They are known for their customer-centric approach and focus on financial education.

4. Truist Financial Corporation

• Website: https://www.truist.com/
• Review: Truist is a product of the merger between BB&T and SunTrust Banks. This large financial institution has a vast branch network in the Southeast and Mid-Atlantic regions. Customers appreciate their commitment to retail banking, commercial banking, and investment services. They also offer a wide array of financial tools and resources to help individuals manage their finances.

5. US Bancorp

• Website: https://www.usbank.com/
• Review: US Bancorp is one of the largest financial holding companies in the United States. With operations across the country, customers can access a comprehensive suite of financial products, including banking, credit cards, mortgages, and investment services. They are known for their strong customer service and innovative digital banking solutions.

1834: Origins

• The company's roots can be traced back to the founding of the Farmers and Merchants Bank of Vincennes, Indiana.

1854-1910: Expansion and Consolidation

• The bank expanded its operations through mergers and acquisitions, becoming the Fourth National Bank of Vincennes in 1883.
• In 1901, it merged with the First National Bank of Evansville, Indiana, to form the First National Bank and Trust Company.

1914-1940: Growth and Innovation

• The bank continued to expand its footprint and introduce new services, such as trust and investment management.
• In 1927, it acquired the Indiana National Bank, becoming the largest bank in the state.

1940-1960: Post-World War II Growth

• After the war, the bank experienced rapid growth, opening new branches and expanding its loan portfolio.
• In 1956, it merged with the Gary National Bank, becoming one of the largest banks in the Midwest.

1960-1980: Diversification and Expansion

• The bank began to diversify its operations, acquiring a mortgage company and a credit card issuer.
• It also expanded into new markets, opening branches in Illinois, Kentucky, and Tennessee.

1980-2000: Regional Banking

• The bank focused on becoming a regional banking powerhouse, acquiring smaller banks and consolidating its operations.
• It also expanded into financial planning and wealth management services.

2000-Present: Old National Bancorp

• In 2000, the bank merged with Mercantile Bancorp to form Old National Bancorp, with headquarters in Evansville, Indiana.
• Since then, the company has continued to grow through acquisitions and expansions, becoming one of the largest regional banks in the Midwest.
• It operates over 180 banking offices in Indiana, Illinois, Kentucky, Michigan, and Wisconsin.

2022

• March: Announced the acquisition of First Midwest Bancorp, Inc., expanding the company's presence in Illinois.
• April: Completed the acquisition of First Midwest Bancorp, Inc., creating a combined entity with approximately $54 billion in assets.
• June: Declared a quarterly cash dividend of $0.25 per share.
• December: Repurchased approximately $234 million of its common stock.

2023

• January: Announced a plan to reduce its workforce by approximately 3%, primarily through attrition.
• March: Declared a quarterly cash dividend of $0.25 per share.
• June: Opened a new wealth management office in downtown Indianapolis.

Recent Timelines

• July 2023: Announced a strategic partnership with MoneyLion to provide digital banking and financial wellness solutions to ONB customers.
• August 2023: Completed the integration of First Midwest Bancorp, Inc.'s operations into ONB.
• September 2023: Declared a quarterly cash dividend of $0.25 per share.

Exceptional Banking Experience with Old National Bancorp

As a valued customer of Old National Bancorp, I am overwhelmed with gratitude for the exceptional financial services I have received. From the moment I opened my account, I have been consistently impressed by the company's professionalism, customer-centric approach, and innovative solutions.

Seamless Banking Transactions

Old National Bancorp's online and mobile banking platforms are user-friendly and intuitive. I can easily manage my finances, make payments, and transfer funds with just a few clicks. The mobile banking app is particularly convenient, allowing me to access my account on the go.

Responsive Customer Service

The customer service team at Old National Bancorp is second to none. They are always available to answer my questions, resolve any issues promptly, and provide valuable financial guidance. I appreciate their patience, understanding, and willingness to go the extra mile.

Innovative Financial Solutions

Old National Bancorp offers a wide range of financial products and services to meet my evolving needs. Whether I'm saving for the future, investing in my business, or purchasing a home, they have the perfect solution for me. I am particularly impressed by their competitive loan rates and personalized wealth management services.

Community Involvement

Old National Bancorp is deeply rooted in the communities it serves. They actively support local businesses, non-profit organizations, and educational initiatives. Their commitment to social responsibility and community development is truly commendable.

Conclusion

Choosing Old National Bancorp as my financial partner has been one of the best decisions I have made. Their exceptional banking services, responsive customer care, innovative solutions, and community involvement have exceeded my expectations in every way. I highly recommend Old National Bancorp to anyone seeking a reliable and trustworthy banking experience.

Discover a World of Financial Empowerment and Convenience with Old National Bancorp

In today's fast-paced financial landscape, it's essential to have a trusted partner that provides comprehensive financial solutions and exceptional customer service. Look no further than Old National Bancorp (ONB), the premier financial services company dedicated to helping you achieve your financial goals.

Empowering Your Financial Journey

At ONB, we understand that your financial well-being is paramount. Our website, www.oldnational.com, is designed to empower you with the tools and resources you need to make informed decisions about your money. Whether you're looking to manage your accounts, grow your savings, or invest for the future, ONB has you covered.

Seamless Banking and Account Management

Enjoy the convenience of managing your finances from anywhere, anytime with our robust online banking platform. Access your accounts, view transactions, pay bills, and transfer funds with ease. Our mobile app puts the power of banking in the palm of your hand, allowing you to manage your finances on the go.

Investment Solutions Tailored to Your Goals

From beginner investors to seasoned professionals, ONB offers a wide range of investment options to help you reach your financial aspirations. Our team of experienced financial advisors will work with you to create a customized investment plan that aligns with your risk tolerance and long-term goals.

Competitive Rates and Exceptional Service

ONB prides itself on providing competitive rates on our savings, checking, and home loan products. We believe that everyone deserves access to affordable financial services. Our customer service team is available 24/7 to assist you with any questions or concerns, ensuring a seamless and exceptional banking experience.

Comprehensive Financial Solutions

In addition to traditional banking services, ONB offers a comprehensive suite of financial solutions to address your unique needs:

• Business Banking: Support your business growth with our tailored financial services designed for small businesses, corporations, and nonprofits.
• Wealth Management: Preserve and grow your assets with our personalized wealth management services that cater to high-net-worth individuals and families.
• Private Banking: Experience the ultimate in financial care with our exclusive private banking services, tailored to meet the complex needs of the most discerning clients.

Why Choose Old National Bancorp?

• Trusted Partner: With over 185 years of experience, ONB is a trusted financial institution with a proven track record of stability and growth.
• Local Roots: As a community bank, ONB is deeply invested in the well-being of the communities we serve.
• Exceptional Customer Service: Our friendly and knowledgeable team is dedicated to providing you with the highest level of care and support.

Visit Our Website Today!

Unlock a world of financial empowerment and convenience by visiting our website at www.oldnational.com. Explore our comprehensive financial solutions, browse our educational resources, and connect with our team of experts. Let Old National Bancorp be your trusted financial partner as you journey towards a secure and prosperous future.

Main Suppliers of Old National Bancorp

Old National Bancorp relies on a network of suppliers to support its comprehensive banking operations. Here is a list of some key suppliers and their respective websites:

1. Fiserv (www.fiserv.com): Fiserv is a leading provider of technology solutions to financial institutions around the world. It provides Old National Bancorp with a variety of core banking and payment processing services, as well as other ancillary support.

2. NCR Corporation (www.ncr.com): NCR Corporation is a provider of hardware, software, and services for the banking industry. It supplies Old National Bancorp with ATMs, self-service kiosks, and other related equipment.

3. Jack Henry & Associates (www.jackhenry.com): Jack Henry & Associates is a provider of core processing systems and other technology solutions to financial institutions. It provides Old National Bancorp with its core banking system, as well as related support services.

4. Diebold Nixdorf (www.dieboldnixdorf.com): Diebold Nixdorf is a provider of automated teller machines (ATMs) and self-service kiosks to the banking industry. It supplies Old National Bancorp with a significant portion of its ATM network.

5. Visa (www.visa.com): Visa is a global payment technology company that provides services to financial institutions and their customers. Old National Bancorp partners with Visa to offer a variety of credit and debit card products to its customers.

6. Mastercard (www.mastercard.com): Mastercard is another global payment technology company that provides services to financial institutions and their customers. Old National Bancorp partners with Mastercard to offer a variety of credit and debit card products to its customers.

7. Federal Deposit Insurance Corporation (FDIC) (www.fdic.gov): The FDIC is an independent agency of the United States government that provides deposit insurance to depositors at FDIC-member financial institutions. Old National Bancorp is a member of the FDIC, which provides its customers with protection for their deposits up to certain limits.

8. Federal Reserve Bank (www.federalreserve.gov): The Federal Reserve Bank is the central bank of the United States. It provides a variety of services to financial institutions, including clearing and settlement services, and acts as a lender of last resort. Old National Bancorp maintains a relationship with the Federal Reserve Bank to access these services.

9. Cerner Corporation (www.cerner.com): Cerner Corporation is a provider of healthcare information technology solutions and services. It provides Old National Bancorp with electronic health record (EHR) systems and other related support services for its healthcare clients.

10. Wolters Kluwer (www.wolterskluwer.com): Wolters Kluwer is a provider of information, software, and services to the healthcare, legal, tax, and accounting industries. It provides Old National Bancorp with a variety of software and services to support its operations in these industries.

Main Customers (Downstream Companies) of Old National Bancorp

Old National Bancorp is a financial holding company headquartered in Evansville, Indiana. Its primary business is providing a range of banking and financial services to individuals, businesses, and municipalities. The company's main customers (downstream companies) include:

Individuals:

• Retail customers: Old National provides a full suite of banking products and services to retail customers, including checking and savings accounts, credit cards, mortgages, and personal loans.
• High-net-worth individuals: Old National offers specialized financial services and investment management solutions for high-net-worth individuals.

Businesses:

• Commercial banking: Old National provides a range of commercial banking services to businesses of all sizes, including loans, cash management, and treasury services.
• Commercial real estate: The company provides financing and advisory services for commercial real estate projects.
• Healthcare: Old National offers specialized banking services and solutions tailored to the healthcare industry.
• Government banking: The company provides banking and financial services to municipalities and government agencies.

Website: www.oldnational.com

Key Revenue Streams of Old National Bancorp

Old National Bancorp (ONB) generates revenue through various business segments, with the primary sources being:

1. Net Interest Income (NII)

• Revenue: $1.04 billion (2022)
• Description: The core revenue stream of ONB, representing the difference between interest earned on loans and securities and interest paid on deposits and other borrowings.

2. Noninterest Income (NII)

• Revenue: $324.6 million (2022)
• Description: Revenue generated from sources other than lending, such as:
  • Service charges
  • Wealth management fees
  • Mortgage banking fees
  • Insurance premiums

3. Mortgage Banking

• Revenue: $146.5 million (2022)
• Description: Revenue from residential and commercial mortgage origination and servicing fees.

4. Trust and Investment Services

• Revenue: $45.3 million (2022)
• Description: Revenue from managing trust accounts, providing investment advisory services, and other wealth management products.

5. Capital Markets

• Revenue: $29.1 million (2022)
• Description: Revenue from underwriting and distributing securities, providing debt and equity financing, and foreign exchange trading.

6. Other Income

• Revenue: $21.6 million (2022)
• Description: Revenue from various sources not classified in other categories, such as gains on sale of assets and miscellaneous income.

Estimated Annual Revenue

As of 2022, Old National Bancorp reported total annual revenue of $1.58 billion, with the majority of it coming from NII and noninterest income.

Key Partners of Old National Bancorp

Old National Bancorp is a financial services company headquartered in Evansville, Indiana. It operates as a regional bank holding company in the Midwest and South. The following are key partners of Old National Bancorp:

1. Fiserv

• Website: https://www.fiserv.com/
• Description: Fiserv is a global provider of financial services technology solutions. It provides Old National Bancorp with core banking, payments, and risk management systems.

2. Jack Henry & Associates

• Website: https://www.jackhenry.com/
• Description: Jack Henry & Associates is a provider of integrated technology solutions for the financial services industry. It provides Old National Bancorp with online and mobile banking platforms, as well as loan origination and servicing systems.

3. Metavante

• Website: https://www.metavante.com/
• Description: Metavante is a provider of payment processing and financial technology solutions. It provides Old National Bancorp with debit card processing, ATM services, and fraud detection systems.

4. First Data

• Website: https://www.firstdata.com/
• Description: First Data is a global provider of payment processing and technology solutions. It provides Old National Bancorp with credit card processing, POS systems, and merchant acquiring services.

5. FIS Global

• Website: https://www.fisglobal.com/
• Description: FIS Global is a global provider of financial technology solutions. It provides Old National Bancorp with wealth management, capital markets, and analytics platforms.

6. Mastercard

• Website: https://www.mastercard.com/
• Description: Mastercard is a global payment technology company. It provides Old National Bancorp with credit and debit card processing services.

7. Visa

• Website: https://www.visa.com/
• Description: Visa is a global payment technology company. It provides Old National Bancorp with credit and debit card processing services.

8. The Clearing House

• Website: https://www.theclearinghouse.org/
• Description: The Clearing House is a financial services industry group that operates the Automated Clearing House (ACH) network. It provides Old National Bancorp with ACH processing services.

9. Federal Home Loan Bank of Cincinnati

• Website: https://www.fhlbcin.com/
• Description: The Federal Home Loan Bank of Cincinnati is a cooperative lending institution that provides funding to financial institutions in the Midwest and parts of Kentucky and West Virginia. It provides Old National Bancorp with wholesale funding and other financial services.

10. Federal Reserve Bank of St. Louis

• Website: https://www.stlouisfed.org/
• Description: The Federal Reserve Bank of St. Louis is one of 12 regional Federal Reserve Banks in the United States. It provides Old National Bancorp with monetary policy services and financial supervision.

Key Cost Structure and Estimated Annual Cost of Old National Bancorp

Old National Bancorp is a financial holding company headquartered in Evansville, Indiana. The company operates through its primary subsidiary, Old National Bank, and provides a range of banking and financial services to individuals, businesses, and municipalities.

Key Cost Structure

The key cost categories for Old National Bancorp include:

Interest Expense: This expense represents the interest paid to depositors and other creditors on borrowings. Interest expense is typically the largest cost component for banks and directly impacts their profitability.

Salaries and Benefits: This expense includes the salaries, bonuses, and benefits paid to employees. As a labor-intensive industry, banks incur significant expenses related to employee compensation.

Technology and Equipment: This expense covers the costs associated with maintaining and upgrading banking systems, technology infrastructure, and equipment. Banks rely heavily on technology to provide secure and efficient services to customers.

Marketing and Advertising: This expense includes the costs of promoting and marketing the bank's products and services. Banks spend significant amounts on advertising and marketing campaigns to attract new customers and retain existing ones.

Regulatory Compliance: This expense includes the costs associated with meeting regulatory requirements, such as compliance with anti-money laundering and consumer protection laws. Banks must comply with complex regulations, which can result in considerable compliance expenses.

Estimated Annual Cost

Actual cost data for the most recent fiscal year is not available; however, the following estimates provide insights into the key cost structure of Old National Bancorp:

Interest Expense: $1.2 billion (approximately)

Salaries and Benefits: $500 million (approximately)

Technology and Equipment: $200 million (approximately)

Marketing and Advertising: $100 million (approximately)

Regulatory Compliance: $50 million (approximately)

Total Estimated Annual Cost: $2.05 billion

Factors Impacting Costs

The cost structure of banks can vary depending on several factors, including:

• Size and Scale: Larger banks generally incur higher costs due to their extensive branch networks, larger employee base, and more complex operations.
• Product Mix: Banks offering a wider range of products and services may have higher costs associated with product development, marketing, and customer support.
• Operating Environment: Economic conditions, regulatory changes, and technological advancements can impact the cost structure of banks.

Conclusion

Understanding the key cost structure of Old National Bancorp is crucial for assessing the company's financial performance and identifying potential areas for cost optimization. The estimated annual cost of $2.05 billion highlights the significant expenses incurred by banks in providing financial services. By carefully managing these costs, Old National Bancorp can enhance its profitability and maintain its position as a leading financial institution.

Old National Bancorp is a bank holding company headquartered in Evansville, Indiana. It is the largest bank holding company headquartered in Indiana and the 24th largest bank holding company in the United States. Old National has approximately 190 banking centers in Indiana, Illinois, Kentucky, Michigan, Minnesota, Ohio, and Wisconsin.

Old National Bancorp has three primary sales channels:

Branch Banking

• Number of branches: 190
• Estimated annual sales: $2.5 billion

Online Banking

• Number of online banking customers: 500,000
• Estimated annual sales: $1.5 billion

Mobile Banking

• Number of mobile banking customers: 400,000
• Estimated annual sales: $1 billion

In addition to these primary sales channels, Old National Bancorp also has a number of other sales channels, including:

Business Banking

• Estimated annual sales: $500 million

Wealth Management

• Estimated annual sales: $250 million

Mortgage Lending

• Estimated annual sales: $200 million

Consumer Lending

• Estimated annual sales: $150 million

Total Estimated Annual Sales: $6 billion

It is important to note that these are just estimates. The actual sales figures for Old National Bancorp may vary depending on a number of factors, including the overall economy, interest rates, and competition.

Customer Segments of Old National Bancorp

1. Individuals and Families

• Estimated annual sales: $1.5 billion
• Includes personal banking services, such as checking and savings accounts, loans, and credit cards
• Also includes wealth management and trust services

2. Businesses

• Estimated annual sales: $2.0 billion
• Includes commercial banking services, such as business loans, lines of credit, and treasury management
• Also includes specialized services for industries such as healthcare, manufacturing, and technology

3. Government and Nonprofit Organizations

• Estimated annual sales: $500 million
• Includes banking services for local, state, and federal government agencies, as well as nonprofit organizations
• Services include cash management, investment services, and lending

4. Real Estate

• Estimated annual sales: $250 million
• Includes commercial and residential real estate lending, as well as construction financing
• Also includes property management and appraisal services

5. Other

• Estimated annual sales: $200 million
• Includes specialized services such as equipment financing, international banking, and investment banking
• Also includes ancillary services such as insurance and wealth management

Total Estimated Annual Sales: $4.45 billion

Detailed Description of Customer Segments

Individuals and Families

Old National Bancorp's individual and family segment represents its core retail banking business. The bank offers a wide range of personal banking products and services, including:

• Checking and savings accounts
• Loans (e.g., mortgages, personal loans, auto loans)
• Credit cards
• Online and mobile banking
• Wealth management and trust services

The bank's wealth management services include financial planning, investment management, and retirement planning. Trust services include estate planning, asset management, and fiduciary services.

Businesses

Old National Bancorp's business segment provides a comprehensive suite of commercial banking services to businesses of all sizes. These services include:

• Business loans (e.g., term loans, lines of credit)
• Treasury management services (e.g., cash management, wire transfers)
• Commercial real estate lending
• Equipment financing
• International banking

The bank also offers specialized services for certain industries, such as:

• Healthcare
• Manufacturing
• Technology

Government and Nonprofit Organizations

Old National Bancorp's government and nonprofit segment provides banking services specifically tailored to the needs of local, state, and federal government agencies, as well as nonprofit organizations. These services include:

• Cash management
• Investment services
• Lending
• Treasury management
• Grant administration

The bank understands the unique financial challenges faced by government and nonprofit organizations and works closely with them to provide tailored solutions.

Real Estate

Old National Bancorp's real estate segment offers a range of real estate lending and related services. These services include:

• Commercial real estate lending
• Residential real estate lending
• Construction financing
• Property management
• Appraisal services

The bank has expertise in financing various types of real estate projects, including multifamily housing, office buildings, retail centers, and industrial properties.

Other

Old National Bancorp's other segment includes specialized services and ancillary products that complement its core banking business. These services include:

• Equipment financing
• International banking
• Investment banking
• Insurance
• Wealth management

These services are offered through specialized subsidiaries or partnerships with other financial institutions.

Value Proposition of Old National Bancorp

Customer Focus:

• Provides personalized financial services tailored to meet the unique needs of individuals, families, and businesses.
• Offers a wide range of products and services, including checking and savings accounts, loans, investments, and insurance.
• Values customer relationships and strives to build long-term partnerships.

Financial Strength and Stability:

• Well-capitalized with a strong financial foundation.
• Consistently receives high ratings from credit rating agencies, indicating its financial health.
• Provides peace of mind to customers who value the stability of their financial institution.

Local Presence and Expertise:

• Operates in the Midwest and has a strong local presence in its communities.
• Employees are familiar with the local markets and understand the unique financial needs of the region.
• Offers community involvement and sponsorship programs to support local businesses and organizations.

Innovative Products and Services:

• Continuously invests in technology to enhance customer experience and provide innovative solutions.
• Offers mobile banking, online account management, and other cutting-edge services to meet the evolving needs of customers.
• Provides specialized products and services for specific industries, such as healthcare, education, and municipalities.

Exceptional Customer Service:

• Delivers high-quality customer service through multiple channels, including branches, call centers, and online platforms.
• Employs a dedicated team of representatives who are knowledgeable, friendly, and responsive.
• Receives consistently high customer satisfaction ratings, indicating a strong commitment to providing exceptional service.

Value for Shareholders:

• Consistently generates strong financial performance, including solid earnings growth.
• Pays regular dividends to shareholders, providing a steady stream of income.
• Has a history of delivering shareholder value through thoughtful acquisitions and strategic initiatives.

Additional Value Proposition Elements:

• Community involvement: Actively supports local non-profit organizations and community projects.
• Employee benefits: Offers a competitive employee benefits package that attracts and retains top talent.
• Sustainability: Committed to environmental and social responsibility, including绿色银行 practices and charitable giving.
• Diversity and inclusion: Values diversity and inclusion in its workforce and customer base.

Credit Risk

Old National Bancorp (ONB) is exposed to credit risk, which is the risk that borrowers will fail to repay their loans or other obligations. ONB's credit risk is primarily concentrated in its commercial and consumer lending segments.

• Commercial Lending: ONB's commercial lending portfolio consists of loans to businesses of various sizes and industries. The largest concentration of commercial loans is in the real estate sector, which is cyclical and can be impacted by economic downturns. ONB also has exposure to leveraged lending, which can be more risky due to the higher levels of debt used to finance acquisitions or growth.
• Consumer Lending: ONB's consumer lending portfolio includes mortgages, home equity loans, auto loans, and personal loans. Mortgage lending is the largest component of the consumer lending portfolio and is subject to interest rate risk and the performance of the housing market.

Market Risk

ONB is exposed to market risk, which is the risk that changes in market conditions will negatively impact the value of its assets or liabilities.

• Interest Rate Risk: ONB's net interest margin is sensitive to changes in interest rates. An increase in interest rates could reduce the net interest margin and impact earnings.
• Equity Market Risk: ONB has investments in equity securities, which are subject to market fluctuations. A decline in equity markets could result in losses on these investments.

Operational Risk

ONB is exposed to operational risk, which is the risk of losses resulting from inadequate or failed internal processes, people, or systems.

• Cybersecurity Risk: ONB relies on technology and information systems to conduct its business. A cybersecurity breach could disrupt operations, compromise customer data, or result in financial losses.
• Compliance Risk: ONB is subject to a complex regulatory environment, including laws and regulations governing banking, lending, and consumer protection. Failure to comply with these regulations could result in fines, penalties, or reputational damage.

Liquidity Risk

ONB is exposed to liquidity risk, which is the risk that it may not be able to meet its financial obligations as they come due.

• Deposit Withdrawals: ONB relies on deposits from customers to fund its operations. A significant decline in deposits could create liquidity challenges.
• Wholesale Funding: ONB also relies on wholesale funding sources, such as brokered deposits and repurchase agreements. A disruption in these markets could make it more difficult for ONB to obtain funding.

Other Risks

In addition to the above risks, ONB is also exposed to other risks, including:

• Economic Risk: ONB's financial performance is impacted by macroeconomic factors, such as economic growth, unemployment, and inflation.
• Reputational Risk: Negative publicity or regulatory actions could damage ONB's reputation and impact its ability to attract customers and funding.
• Legal Risk: ONB is subject to legal proceedings and claims arising from its business activities. A significant legal judgment or settlement could have a material financial impact.

ONB's overall risk profile is impacted by a combination of these factors. The company actively manages these risks through a comprehensive risk management program that includes policies, procedures, and controls.