Old National Bancorp. (NASDAQ:ONB) Q1 2016 Earnings Conference Call - Final Transcript

May 02, 2016 • 11:00 am ET

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Old National Bancorp. (NASDAQ:ONB) Q1 2016 Earnings Conference Call - Final Transcript

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Q & A
Operator
operator

(Operator Instructions) Chris McGratty, KBW.

Analyst
Christopher McGratty

Bob, a question on capital. You're swapping this lower term business for some efficiency gains, but you've given up some earnings with the sale. I'm interested in kind of the derivative of this.

Do you feel, now with Anchor closed, you do have a presence in Wisconsin? You did comment that some of the other potential acquirers might be sidelined. Did this create a window for you guys to be a little bit more aggressive with M&A?

Executive
Robert G. Jones

It takes a buyer and a seller to be aggressive. Honestly, Chris, we're just not seeing the books. And I think, more important, I go back to the comments I made which is, we're going to be very selective in any potential future deals.

I think we've built the franchise we want to build. We clearly think there are still opportunities in Wisconsin, the northern part of Indiana and clearly Louisville and Lexington.

But we also know that many of our investors and analysts view our tangible book as an area that, as I said, the highest we've been since 2003. We'd like to continue that trend of building that tangible book at the same time.

Analyst
Christopher McGratty

And on the buyback, can you remind us what might be authorized at this point, and whether you might consider it?

Executive
Robert G. Jones

Easy statement, zero. Our Board, we have no authorized buyback at this time.

Analyst
Christopher McGratty

Maybe the last question, Chris, for you. On 37, you talk about the expected accruable, and I think in your prepared remarks you talked about just a step down from just the natural maturing of the book.

Given that the mark on Anchor's still kind of -- from being finalized, is the right way to think about that $11 million that was produced in the first quarter, will that step down, irrespective of Anchor inclusion or will it get a pop, and then kind of moderate from there?

Executive
Christopher A. Wolking

Yes, consistent with what we've seen over past years, we expected this step down. We're pretty clear on that slide as to what's left. I think importantly, though, with the Anchor transaction, it's got a large loan portfolio, so the original marks that we talked about were 2.6 on the credit side and 2.8 on the market side.

That obviously is going to contribute some degree of accretion going forward, as well.

Operator
operator

Jon Arfstrom, RBC Capital Markets.

Analyst
Jon G. Arfstrom

Just a question on Anchor, just maybe it's following up on what Chris was asking. But how much of that loan portfolio do you think needs to run off over time?

Executive
Robert G. Jones

In terms of credit quality -- I'm not sure, Jon, I follow the question. In terms of?

Analyst
Jon G. Arfstrom

Just what -- I mean, I guess, what I'm getting at is your plan for lending for the company. Are there, and -- but I guess initially, are there any areas you feel you need to move out or be more aggressive with the runoff in terms of the loan book?

Executive
Christopher A. Wolking

That's a great question, now