Old National's Earnings Rise on Cost Control

Old National Bancorp (ONB) in Evansville, Ind., posted higher third-quarter income from a year earlier as it cut noninterest expenses.

The $9.4 billion-asset company's earnings rose more than 17% from a year earlier, to $19.7 million, or 20 cents a share.

During the third quarter, Old National completed its acquisition of Indiana Community Bancorp in Columbus, Ind. Based on the average closing price of roughly $13.36 a share of Old National common stock, the transaction was valued at about $88.5 million. It added $493.5 million of loans and $784.6 million of core deposits to Old National.

Old National's noninterest expense fell more than 6% from a year earlier, to $89 million, including $5.5 million of expenses tied to the Indiana Community deal. The company also recorded $800,000 in costs related to the sale or closing of 28 branches.

Total revenue fell almost 4% from a year earlier, to $118.4 million. Total fees, service charges and other revenues decreased 14% from a year earlier, to $38 million. The Indiana Community acquisition contributed about $300,000 in fees, service charges and other revenue during the quarter.

Net interest income rose more than 2% from a year earlier, to $74.2 million. The loan portfolio increased 11% from June 30, to $5.3 billion. Commercial loans and leases increased more than 6% from June 30, to $1.4 billion, and commercial real estate loans rose 17%, to $1.5 billion. Consumer loans were up 7%, to $1 billion, and residential real estate loans climbed 13%, to $1.3 billion from June 30.

The company recorded a loan-loss provision of $400,000, compared with an $82,000 credit a year earlier.