Old National Bancorp of Evansville, Ind., said Wednesday that its fourth-quarter results would take a hit from a $12 million loss on a "non-real-estate loan participation."
The disclosure came as the $8 billion-asset company gave investors a glimpse of its fourth-quarter and yearend results, which it is expected to fully release Feb. 1.
Other than the $12 million loss, which it described as not being a "systemic issue," credit quality improved during the quarter, with nonperforming loans totaling $67 million, down 9% from the third quarter, but up 5% from a year earlier.
Old National said its provision for loan losses is expected to be $22 million, up 30% from a year earlier, with nearly all of the provision going toward covering chargeoffs, which are expected to be between $21 million and $22 million.
Also, Old National expects to take a $9 million to $10 million other-than-temporary impairment charge on its pooled trust securities and mortgage-backed securities portfolio.
In a Wednesday research note, Stephen Geyen, an analyst at Stifel, Nicolaus & Co. Inc., called the preannouncement "disappointing" but said he still believes the company's "fundamental results" will remain favorable compared with those of other Midwestern banks and that Old National remains poised to be an acquirer in Indiana.