Old National Bancorp. (NASDAQ:ONB) Q4 2015 Earnings Conference Call - Final Transcript

Feb 01, 2016 • 11:00 am ET


Old National Bancorp. (NASDAQ:ONB) Q4 2015 Earnings Conference Call - Final Transcript


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Welcome to the Old National Bancorp Fourth Quarter and Full Year 2015 Earnings Conference Call. This call is being recorded and has been made accessible to the public in accordance with the SEC's Regulation FD. The call, along with the corresponding presentation slides will be archived for 12 months on the Investor Relations page at oldnational.com. A replay of the call will also be available beginning at 7:00 A.M. Central Time on February 2 through February 16. To access the replay, dial 1-855-859-2056, conference ID code 24105575.

Those participating today will be analysts and members of the financial community. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a question-and-answer session.

At this time, the call will be turned over to Lynell Walton for opening remarks. Ms. Walton?

Lynell Walton

Thank you, Victoria. Good morning, and welcome to Old National Bancorp's fourth quarter and full year 2015 earnings conference call. Joining me today are Jim Sandgren; Chris Wolking; Daryl Moore; Bob Jones; and Joan Kissel.

(Forward-Looking Cautionary Statements) Additionally, as you review slide five, certain non-GAAP financial measures will be discussed on this conference call. References to non-GAAP measures are only provided to assist you in understanding Old National's results and performance trends and should not be relied upon as a financial measure of actual results. Reconciliations for such non-GAAP measures are appropriately referenced and included within the presentation.

Our strong fourth quarter capped a successful year for Old National and I will begin our discussion with reviewing some of those highlights on slide six. Our reported net income of $32 million for the fourth quarter represents over a 9% increase over the fourth quarter of 2014. Our loan balances increased to $102 million or 6% annualized from the third quarter, representing a third consecutive quarter of solid loan growth for the company. This growth in outstanding balances continues in both our legacy and newly acquired markets throughout our footprint.

We continue to see improvement in our operational expenses as they declined over 5% from the prior quarter. We consolidated four branches in December and executed on various other efficiency initiatives which should result in a continued decline in these expenses going forward. Our capital levels continue to be strong. We did repurchase 306,000 shares during the fourth quarter which completed our current board authorization.

Our tangible book value per share increased 2.3% in the quarter and our recent stock dividend increase announced last week -- we also have a very attractive dividend yield at 4.2% as of Friday's closing market.

Moving to slide seven with annual highlights, this story remains much the same. Our net income of $116.7 million in 2015 surpassed that of 2014 by 12.6% despite a $5.4 million pretax reduction in interchange income under the Durbin amendment. Loans grew by over 5% during the year and total revenues increased 12%. We completed many efficiency initiatives during the quarter, the most impactful of those are listed on the slide, which resulted in