EVANSVILLE — Old National Bancorp’s performance continues on a strong and consistent path, partly because of its FDIC-assisted acquisition of Integra Bank July 29, according to ONB’s third quarter earnings report released Monday.
Bob Jones, Old National president and chief executive officer, said Old National’s third-quarter net income of $16.8 million, or $.18 per share, was up a whopping 41.2 percent over third-quarter 2010’s net income of $11.9 million, or $.13 per share.
Old National’s revenue was up 24.7 percent over third quarter 2010, according to the report.
The earnings results exceeded analysts’ consensus estimates for the quarter, and are consistent with the net income of $17.0 million, or $.18 per share, that Old National reported in second quarter 2011.
Jones said Old National’s credit quality remains well controlled and its capital position remains strong.
Old National’s board of directors has declared a cash dividend of $.07 per common share.
Jones said the FDIC-assisted acquisition of Integra was accretive to the third quarter results after the absorption of $6.8 million in acquisition-related expenses.
If you exclude these acquisition expenses and a $2.0 million litigation reserve, Old National’s third quarter 2011 earnings would have been $22.7 million, or $0.24 per share.
“The fact that we increased net income by more than 41 percent over third quarter 2010, while continuing to grow revenue, manage noninterest expenses and control credit quality, illustrates that Old National is operating from a position of strength, despite continuing economic headwinds,” Jones said.
“These results are even more significant when you consider the nearly $9 million we absorbed in acquisition expenses and the litigation reserve.”
Old National Chief Financial Officer Chris Wolking said, “While it’s true that Old National continues to operate in a very challenging environment for loan growth, we do continue to enjoy organic growth in our residential real estate portfolio, which increased $119.9 million during third quarter 2011, of which $51.6 million came from the (Integra) acquisition.”
Jones said Old National will continue to strategically pursue additional merger and acquisition opportunities that align well with its strategic imperatives and enable the company to continue its mission as a basic, service-focused community bank.
Through October 2011, Old National has consolidated 13 of the 52 former Integra banking centers it acquired.
An additional 20 branches are scheduled for consolidating in fourth quarter 2011.
Old National has announced plans to sell the deposits of four former Integra branches located in the Chicago area to First Midwest Bank.
First Midwest has agreed to pay Old National 50 basis points on the transaction deposits of the four locations, estimated to be approximately $. 5 million.
The sale is expected to close in the fourth quarter.
Old National recorded an indemnification asset of $167.9 million as of July 29, 2011, which represents the present value of the estimated losses on covered loans to be reimbursed to Old National by the FDIC.