Old National Bancorp in Evansville, Ind., reported higher second-quarter profit as a result of recent acquisitions and on better fee income.
The $12.1 billion-asset bank's net income rose 39% to $26.2 million, or 22 cents per share, from a year earlier. That was two cents less than the average estimate of analysts polled by Bloomberg.
The earnings reflect Old National's acquisitions of Tower Financial in Fort Wayne, Ind., United Bancorp in Ann Arbor, Mich., LSB Financial in Lafayette, Ind., and Founders Financial in Grand Rapids, Mich., all completed since the beginning of the second quarter of 2014.
Net interest income rose 9% to $92.1 million, with purchase accounting discounts from its acquisitions contributing $15.6 million during the quarter. Net interest margin compressed 32 basis points to 3.75%.
Old National also cited loan growth in several markets, with notable increases coming in Indianapolis; Kalamazoo, Mich.; and Louisville, Ky.
Fee income rose 43.5% to $54.4 million, partly because of a reduction in the size of an FDIC indemnification asset and due to higher wealth-management fees.
Noninterest expense rose 11.8% to $109.7 million on costs related to the mergers. Old National also recorded a $4 million charge for branch sales and to close 16 branches. The efficiency ratio worsened to 70.52%.