SECURITIES & EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number 0-10888 OLD NATIONAL BANCORP (Exact name of Registrant as specified in its charter) INDIANA 35-1539838 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 420 Main Street, Evansville, Indiana 47708 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code, (812) 464-1200 Former name, former address and former fiscal year, if changed since last reports. Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to the filing requirements for at least the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock. The Registrant has one class of common stock (no par value) with approximately 24.8 million shares outstanding at March 31, 1996.
OLD NATIONAL BANCORP FORM 10-Q INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Page No. Consolidated Balance Sheet March 31, 1996 and 1995, and December 31, 1995 . . 3 Consolidated Statement of Income Three months ended March 31, 1996 and 1995. . 4 Consolidated Statement of Cash Flows Three months ended March 31, 1996 and 1995. . 5 Notes to Consolidated Financial Statements . 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . 8 PART II OTHER INFORMATION . . . . . . . . . . . . . . . . 12 SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . 14 INDEX OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . 15 2
<TABLE> <CAPTION> OLD NATIONAL BANCORP CONSOLIDATED BALANCE SHEET March 31, March 31, December 31, ($ in thousands) (unaudited) 1996 1995 1995 Assets <S> <C> <C> <C> Cash and due from banks. . . . . . . . . . $141,976 $132,919 $175,116 Money market investments . . . . . . . . . 80,543 58,327 85,961 Investment Securities: U.S. Treasury . . . . . . . . . . . . . . 180,465 227,838 188,267 U.S. Government agencies and corporations. . . . . . . . . . . . 730,248 713,339 739,169 Obligations of states and political subdivisions. . . . . . . . . . . . . . 429,989 421,067 435,905 Other . . . . . . . . . . . . . . . . . . 29,703 31,432 26,839 ---------- ---------- ---------- Total Investment Securities . . . . . . 1,370,405 1,393,676 1,390,180 ---------- ---------- ---------- Loans Commercial. . . . . . . . . . . . . . . . 758,645 716,551 765,418 Mortgage. . . . . . . . . . . . . . . . . 1,594,553 1,553,924 1,579,596 Consumer credit, net of unearned income . 680,520 643,548 687,552 Financial . . . . . . . . . . . . . . . . 23,167 2,425 5,167 ---------- ---------- ---------- Total Loans . . . . . . . . . . . . . . 3,056,885 2,916,448 3,037,733 Allowance for loan losses . . . . . . . (40,550) (42,007) (39,806) ---------- ---------- ---------- Net Loans . . . . . . . . . . . . . . . 3,016,335 2,874,441 2,997,927 Other assets . . . . . . . . . . . . . . . 176,764 167,384 173,444 ---------- ---------- ---------- Total Assets. . . . . . . . . . . . . . $4,786,023 $4,626,747 $4,822,628 ========== ========== ========== Liabilities Deposits Noninterest bearing demand. . . . . . . . $444,144 $431,552 $469,208 Interest bearing: Savings, daily interest checking and money market accounts . . . . . . . 1,537,044 1,404,218 1,562,320 Certificates of deposit of $100,000 and over . . . . . . . . . . . 277,449 231,836 276,010 Other time. . . . . . . . . . . . . . . 1,664,413 1,641,609 1,666,137 ---------- ---------- ---------- Total Deposits. . . . . . . . . . . . . 3,923,050 3,709,215 3,973,675 ---------- ---------- ---------- Short-term borrowings. . . . . . . . . . . 301,026 395,059 280,281 Subordinated debentures. . . . . . . . . . 30,585 36,350 31,515 Medium term notes. . . . . . . . . . . . . 45,000 32,000 50,000 Other liabilities. . . . . . . . . . . . . 60,489 46,296 59,080 ---------- ---------- ---------- Total Liabilities . . . . . . . . . . . . 4,360,150 4,218,920 4,394,551 ---------- ---------- ---------- Shareholders' Equity Common stock. . . . . . . . . . . . . . . 24,843 24,264 24,955 Capital surplus . . . . . . . . . . . . . 240,273 223,348 245,420 Retained earnings . . . . . . . . . . . . 155,741 163,227 147,367 Net unrealized gain (loss) on investments securities. . . . . . . . . . . . . . . 5,016 (3,012) 10,335 ---------- ---------- ---------- Total Shareholders' Equity. . . . . . . . 425,873 407,827 428,077 ---------- ---------- ---------- Total Liabilities and Shareholders' Equity. . . . . . . . . . . . . . . . . $4,786,023 $4,626,747 $4,822,628 ========== ========== ========== </TABLE> The accompanying notes are an integral part of this statement. 3
<TABLE> <CAPTION> OLD NATIONAL BANCORP CONSOLIDATED STATEMENT OF INCOME Three Months Ended ($ in thousands except share March 31, and per share data) (Unaudited) 1996 1995 Interest income <S> <C> <C> Loans including fees: Taxable . . . . . . . . . . . . . $67,574 $62,233 Non-taxable. . . . . . . . . . . . 896 876 Investment securities: Taxable. . . . . . . . . . . . . . 14,913 15,219 Non-taxable. . . . . . . . . . . . 5,737 5,796 Federal funds sold and securities purchased under agreement to resell. 1,490 648 Deposits with banks . . . . . . . . 146 76 ------- ------- Total Interest Income . . . . . . 90,756 84,848 ------- ------- Interest Expense Savings, daily interest checking and money market accounts . . . . . . 11,671 10,390 Certificates of deposit of $100,000 and over . . . . . . . . . . . . . 3,896 2,925 Other time deposits. . . . . . . . . 23,418 20,329 Federal funds purchased. . . . . . . 221 1,153 Securities sold under agreements to repurchase . . . . . . . . . . . . 2,343 2,432 Other borrowings . . . . . . . . . . 2,602 2,968 ------- ------- Total Interest Expense. . . . . . 44,151 40,197 ------- ------- Net Interest Income . . . . . . . 46,605 44,651 Provision for loan losses. . . . . . 1,979 1,100 ------- ------- Net Interest Income After Provision For Loan Losses. . . . . . . . . 44,626 43,551 ------- ------- Noninterest Income Trust fees. . . . . . . . . . . . . . 2,503 2,356 Service charges on deposit accounts . 3,614 3,230 Loan servicing fees . . . . . . . . . 1,254 1,379 Securities gains (losses), net. . . . 54 -- Other income. . . . . . . . . . . . . 2,703 2,426 ------- ------- Total Noninterest Income. . . . . . 10,128 9,391 ------- ------- Noninterest Expense Salaries and employee benefits. . . . 19,320 18,788 Occupancy expense . . . . . . . . . . 2,240 2,132 Equipment expense . . . . . . . . . . 2,686 2,710 FDIC insurance expense. . . . . . . . 193 2,149 Data processing expense . . . . . . . 1,203 1,463 Other expenses. . . . . . . . . . . . 9,005 8,525 ------- ------- Total Noninterest Expense . . . . . 34,647 35,767 ------- ------- Income before income taxes. . . . . . 20,107 17,175 Provision for income taxes. . . . . . 6,026 4,698 ------- ------- Net Income. . . . . . . . . . . . . $14,081 $12,477 ======= ======= Net Income Per Common Share Primary . . . . . . . . . . . . . . $ 0.56 $ 0.49 ======= ======= Fully Diluted . . . . . . . . . . . $ 0.55 $ 0.48 ======= ======= Weighted average common shares outstanding: Primary . . . . . . . . . . . . 24,967,510 25,674,766 ========== ========== Fully Diluted . . . . . . . . . 26,333,141 27,297,539 ========== ========== </TABLE> The accompanying notes are an integral part of this statement 4
<TABLE> <CAPTION> OLD NATIONAL BANCORP CONSOLIDATED STATEMENT OF CASH FLOWS Three Months Ended March 31, ($ in thousands) (unaudited) 1996 1995 <S> <C> <C> Cash flows from operating activities: Net income . . . . . . . . . . . . . . . . . . . $ 14,081 $ 12,477 -------- -------- Adjustments to reconcile net income to cash provided from operating activities: Depreciation. . . . . . . . . . . . . . . . . . 2,008 1,946 Amortization of intangible assets . . . . . . . 360 350 Net premium amortization on investment securities. 642 137 Provision for loan losses . . . . . . . . . . . 1,979 1,100 Gain on sale of investment securities . . . . . (54) -- Gain on sale of assets. . . . . . . . . . . . . (12) (273) Decrease in interest receivable . . . . . . . . 2,201 1,392 Increase in other assets. . . . . . . . . . . . (4,605) (820) Increase in accrued expenses and other liabilities . . . . . . . . . . . . . . 4,855 3,620 -------- -------- Total adjustments . . . . . . . . . . . . . . 7,374 7,452 -------- -------- Net cash flows provided by operating activities. 21,455 19,929 -------- -------- Cash flows from investing activities: Purchase of investment securities held-to-maturity. -- (16,476) Purchase of investment securities available-for-sale. (84,731) (78,000) Proceeds from maturities and paydowns of investment securities held-to-maturity . . . . . . . . . . . -- 34,724 Proceeds from maturities and paydowns of investment securities available-for-sale . . . . . . . . . . 92,577 36,715 Proceeds from sales of investment securities available- for-sale. . . . . . . . . . . . . . . . . . . . . 2,576 -- Net principal collected from (loans made to) customers: Commercial . . . . . . . . . . . . . . . . . . . (11,193) 22,135 Mortgage . . . . . . . . . . . . . . . . . . . . (28,233) (35,498) Consumer . . . . . . . . . . . . . . . . . . . . 5,822 (18,017) Proceeds from sale of mortgage loans . . . . . . . 13,290 4,860 Proceeds from sale of premises and equipment . . . 158 229 Purchase of premises and equipment . . . . . . . . (3,503) (2,306) -------- -------- Net cash flows used in investing activities . . . (13,237) (51,634) Cash flows from financing activities: Net increase (decrease) in deposits and short-term borrowings: Noninterest bearing demand. . . . . . . . . . . . (25,064) (10,673) Savings, daily interest checking and money market deposits . . . . . . . . . . . . . (25,276) (57,664) Certificates of deposit of $100,000 and over. . . 1,439 18,538 Other time deposits . . . . . . . . . . . . . . . (1,724) 89,828 Short-term borrowings . . . . . . . . . . . . . . 20,745 (60,212) Payment of medium-term notes . . . . . . . . . . . (5,000) -- Cash dividends paid. . . . . . . . . . . . . . . . (5,721) (5,097) Common stock repurchased . . . . . . . . . . . . . (8,126) (16,590) Common stock reissued, net of shares used to convert subordinated debentures. . . . . . . . . . . . . 1,951 1,981 -------- -------- Net cash flows provided by financing activities. (46,776) (39,889) -------- -------- Net decrease in cash and cash equivalents. . . . . (38,558) (71,594) Cash and cash equivalents at beginning of period . 261,077 262,840 -------- -------- Cash and cash equivalents at end of period . . . . $222,519 $191,246 ======== ======== Total interest paid. . . . . . . . . . . . . . . $ 46,023 $ 38,762 ======== ======== Total taxes paid . . . . . . . . . . . . . . . . $ 1,000 $ 800 ======== ======== The accompanying notes are an integral part of this statement. </TABLE> 5
Old National Bancorp Notes to Consolidated Financial Statements 1. Basis of Presentation The accompanying consolidated financial statements include the accounts of the Old National Bancorp and its affiliate entities (ONB). All significant intercompany transactions and balances have been eliminated. In the opinion of management, the consolidated financial statements contain all the normal and recurring adjustments necessary to present fairly the financial position of ONB as of March 31, 1996 and 1995 and December 31, 1995, and the results of its operations and its cash flows for the three months ended March 31, 1996 and 1995. All prior period information has been restated for the effects of business combinations accounted for as pooling-of-interests. 2. Net Income Per Common Share Net income per common share computations are based on the weighted average number of common shares outstanding during the periods presented. A 5% stock dividend was paid February 20, 1996 to shareholders of record on February 5, 1996. All share and per share data presented herein have been restated for the effects of this stock dividend. Net income on a fully diluted basis is computed as above and assumes the conversion of ONB's 8% convertible subordinated debentures (Note 5). For the fully diluted computation, net income is adjusted for the assumed reduction in interest expense, net of income tax effect, and an additional 1.4 million common shares are assumed to be issued in connection with the conversion of the remaining outstanding debentures. 3. Merger Activities Pending Mergers On December 12, 1995, ONB and The National Bank of Carmi (Carmi) of Carmi, Illinois announced the execution of a letter of intent to merge and subsequently executed a definitive merger agreement. ONB will issue common shares in exchange for all of the outstanding common shares of Carmi. The transaction will be accounted for as a pooling-of-interests. The merger is subject to the approvals of Carmi's shareholders. As of March 31, 1996, Carmi's financial statements reflected $66.5 million in total assets, net loans of $31.2 million, total deposits of $57.9 million and net income for the three months then ended of $136 thousand. This merger is expected to be consummated May 31, 1996. On April 8, 1996, ONB and Workingmens Capital Holdings (Workingmens) of Bloomington, Indiana announced the execution of a definitive merger agreement. ONB will issue common shares in exchange for all of the outstanding common shares of Workingmens. The transaction will be accounted for as a pooling-of- interests. The merger is subject to the approvals of Workingmen's shareholders and requlatory authorities. As of March 31, 1996 Workingmens consolidated financial statements reflected $213.7 million in total assets, net loans of $183.7 million, total deposits of $154.5 million and net income 6
for the three months then ended of $459 thousand. This merger is expected to be consummated in late 1996. 4. Investments The market value and amortized cost of investment securities as of March 31, 1996 are set forth below ($ in thousands): Market Value Amortized Cost Held to Maturity, at amortized cost $ -- $ -- Available for Sale, at market value 1,370,405 1,362,189 ---------- ---------- $1,370,405 $1,362,189 ========== ========== 5. Borrowings ONB's has outstanding $30.6 million of 8% convertible subordinated debentures which are due September 15, 2012, unless previously converted or redeemed. The debentures are convertible at any time prior to maturity into shares of common stock of ONB at a conversion rate of 44.643 shares for each one thousand dollars principal amount of debentures. Interest on the debentures is payable on March 15 and September 15 of each year. The debentures are redeemable in whole or in part at the option of ONB at a premium to par value. Beginning September 15, 1998, debenture holders are entitled to an annual sinking fund of $2.5 million principal amount of debentures annually less conversions and redemptions. The debentures are subordinated in right of payment to all senior indebtedness of ONB. As of March 31, 1996, 1.4 million authorized and unissued common shares were reserved for conversion of the debentures. ONB has registered Series A Medium Term Notes in the principal amount of $50 million. As of March 31, 1996, a total of $45 million of the notes were outstanding, with maturities ranging from one to seven years and fixed interest rates ranging from 5.5% to 7.1%. As of March 31, 1996, ONB has $45 million in unsecured lines of credit with unaffiliated banks. These lines of credit include various informal arrangements to maintain compensating balances. The compensating balances are maintained for the benefit of the parent company by affiliate banks which normally maintain correspondent balances with unaffiliated banks. As of March 31, 1996, there were no outstanding balances under these lines. 6. Impact of Accounting Changes Effective January 1, 1996, ONB adopted the provisions of Statement of Financial Accounting Standards (SFAS) No 122, "Accounting for Mortgage Servicing Rights". This statement modifies the accounting for mortgage servicing rights to allow the recognition of a servicing asset whether they are purchased or originated. Effective January 1, 1996, ONB adopted the provisions of SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of". The adoption of both above statements did not have a material impact on ONB's financial condition and its results of operations. 7
PART I. FINANCIAL INFORMATION ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following management's discussion and analysis is presented to provide information concerning the financial condition of ONB as of March 31, 1996, as compared to March 31, 1996 and December 31, 1995, and the results of operations for the three months ended March 31, 1996 and 1995. Financial Condition ONB's total assets at March 31, 1996 were $4.786 billion, a 3.4% increase since March 1995 and a 0.8% decrease since December 1995. Earning assets, which consist primarily of money market investments, investment securities and loans, grew 3.2% over the prior year. During the past year, the mix of earning assets has changed as loans grew 4.8% while money market investments and investment securities declined 0.1%. The investment portfolio maturities have helped fund loan growth. Since December 1995, earning assets decreased slightly (0.1%) with loans growing 0.6% and investment securities and money market investments declining 1.7%. At March 31, 1996, underperforming assets (defined as loans 90 days or more past due, nonaccrual and restructured loans and other real estate) rose to $15.8 million from $13.0 million as of December 31, 1995. As of these dates, underperforming assets in total were 0.52% and 0.43%, respectively, of total loans and other real estate. <TABLE> <CAPTION> Past Due Total as % 90 Other of Total Loans Days Nonaccrual Restructured Real and Other Or More Loans Loans Estate Total $ Real Estate -------- --------- ------------ ------ -------- -------------- <S> <C> <C> <C> <C> <C> <C> March 31, 1996 $4,362 $10,057 $ 868 $532 $15,819 0.52% December 31,1995 4,781 6,623 1,120 515 13,039 0.43 </TABLE> As of March 31, 1996, the recorded investment in loans for which impairment has been recognized in accordance with SFAS No. 114 and 118 was $5.4 million with no related allowance and $50.6 million with $14.3 million of related allowance. ONB's policy for recognizing income on impaired loans is to accrue earnings unless a loan becomes nonaccrual. When loans are classified as nonaccrual, interest accrued during the current year is reversed against earnings; interest accrued in the prior year, if any, is charged to the allowance for loan losses. Cash received while a loan is classified nonaccrual is recorded to principal. For the three months ended March 31, 1996, the average balance of impaired loans was $54.6 million and $1.0 million of interest was recorded. ONB's consolidated loan portfolio is well diversified and contains no concentrations of credit in any particular industry exceeding 10% of its portfolio. ONB has minimal exposure to commercial real estate, construction 8
lending or leveraged buyouts and no exposure in credits to foreign or lesser- developed countries. Total deposits at March 31, 1996, increased $213.8 million or 5.8% compared to March 1995 with growth in all deposit categories. Savings, daily interest checking and money market accounts increased $132.8 million and comprised the largest dollar growth while certificates of deposit of $100,000 or over had the largest percentage increase at 19.7%. Higher deposit rates and new marketing efforts attracted deposits during 1995. Since December 1995, total deposits decreased $50.6 million or 1.3% with the decline split between noninterest-bearing demand accounts and savings, daily interest checking and money market accounts. Seasonality and a strong stock market contributed to the first quarter deposit decrease. Deposit growth since March 1995 has allowed ONB to reduce short-term borrowing comprised of Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings by $94.0 million in addition to funding loan growth. ONB also issued additional medium term notes in 1995 to provide additional funding. Since December 1995, ONB's short-term borrowings increased $20.7 million and helped offset the decline in deposits. Capital Total shareholders' equity rose by $18.0 million since March 1995 and has decreased $2.2 million since December 1995. During the first quarter of 1996, net unrealized gain on investment securities decreased $5.3 million as interest rates increased and the market value of ONB's investment portfolio declined. In addition ONB repurchased $8.1 million of common stock and paid a quarterly cash dividend of $0.23 per share. ONB's consolidated capital position remains strong as evidenced by the following comparisons of key industry ratios: <TABLE> <CAPTION> Minimum Regulatory March 31, March 31, December 31, Risk Based Capital: Ratios 1996 1995 1995 ---------- --------- --------- ------------ <S> <C> <C> <C> <C> Tier 1 Capital to Total Assets (Leverage Ratio) 3.00% 8.51% 8.54% 8.37% Tier 1 Capital to Risk Adjusted Total Assets 4.00 13.44 13.60 13.39 Total Capital to Risk Adjusted Total Assets 8.00 15.62 16.03 15.60 Shareholders' Equity to Total Assets N/A 8.89 8.81 8.88 </TABLE> Each of ONB's affiliate banks have capital ratios which exceed regulatory minimums. Liquidity and Asset/Liability Management ONB continually monitors its liquidity and actively manages its asset/liability position. The purpose of liquidity management is to match the sources of funds with anticipated customer borrowings and withdrawals and other obligations. The primary purpose of asset/liability management is to minimize the effect on net income of changes in interest rates and to maintain 9
a prudent match within specified time periods of rate-sensitive assets and rate-sensitive liabilities. As of March 31, 1996, ONB's rate-sensitive assets were 89% of rate-sensitive liabilities in the 1-180 day maturity category and 105% in the 181-365 day category. These figures compared to 80% and 96% on December 31, 1995 and 81% and 95% on March 31, 1995. During 1995, the rate sensitivity was impacted by the increased lending in 1995 and changes with the deposit mix and maturities. These positions are within acceptable ranges as determined from time-to-time by management. ONB's funds management committee meets monthly to closely monitor and effect changes as needed in the consolidated rate-sensitivity position. Results of Operations Net Income Net income for the three months ended March 31, 1996 was $14.1 million, a 12.9% increase over the same period in 1995. Primary net income per common share for the first quarter of 1996 was $0.56, compared to $0.49 for the first quarter of 1995, a 14.3% increase. ONB's return on average assets (ROA) for the first quarter of 1996 was 1.18%. This compared to 1.08% for the same period in 1995. The improvement in ROA is due to improved net interest income, higher noninterest income and lower noninterest expenses. Net Interest Income Net interest income on a taxable equivalent basis for the first quarter of 1996 was 4.2% higher than the same period for the prior year. Higher levels of earning assets resulted in the net interest income growth. The net interest margin was 4.41% in the first quarter of 1996 versus 4.42% in 1995's first quarter. Provision for Loan Losses The provision for loan losses was $2.0 million in the first quarter of 1996 compared to $1.1 million in the first quarter of 1995. ONB's net charge offs were 0.16% of average loans for the quarter versus 0.06% in the first quarter of 1995. The 1996 provision and net charge-offs are comparable to our results for the full year of 1995 and do not reflect a significant deterioration of the loan portfolio or the economies in the communities in which ONB serves. The allowance for loan losses is continually monitored and evaluated both within each affiliate bank and at the holding company level so as to provide adequate coverage for potential losses. The allowance for loan losses to end-of-period loans of 1.33% at March 31, 1996 compared to 1.31% at year-end in 1995 and 1.44% at March 31, 1995. The allowance for loan losses covers all underperforming assets by 2.56 times at March 31, 1996 compared to 3.05 times at December 31, 1995. Noninterest Income Total noninterest income increased 7.8% in the three months ended March 31, 1996 as compared to the same period in 1995. In both years security gains comprised of an insignificant portion of noninterest income. The increase resulted from increases in all categories, except for loan servicing fees. Trust fees increased 6.2%, service charges on deposit accounts grew 11.9% and 10
other income rose 11.4%. The growth in other income was mainly from brokerage and annuity sales. Noninterest Expense Noninterest expense decreased 3.1% in the first quarter of 1996 over the same period in 1995. Salaries and benefits, together the largest individual component of noninterest expense, increased 2.8% in the first quarter of 1996 compared to 1995. Most other categories of noninterest expense experienced relatively small changes between the years. FDIC insurance premiums dropped $2.0 million, or 91.0%. Premiums on deposits dropped from approximately 23 basis points per $100 deposits annually to the FDIC's minimum charge of $2,000. For deposits insured by the Savings Association Insurance Fund ("SAIF") the rates did not drop. A one-time recapitalization proposal is being considered by the U.S. Congress. ONB has less than 6% of its deposits insured by SAIF and expects if it passes such a charge to have minimal impact on net income. Provision for Income Taxes The provision for income taxes, as a percentage of pre-tax income, increased in the first quarter to 30.0% compared to 27.3% in 1995. The growth in earning assets has been primarily in taxable loans with tax exempt securities remaining level which has raised ONB's effective tax rate. 11
PART II OTHER INFORMATION ITEM 1. Legal Proceedings NONE ITEM 2. Changes in Securities NONE ITEM 3. Defaults Upon Senior Securities NONE ITEM 4. Submission of Matters to a Vote of Security Holders At the April 18, 1996 Annual Meeting of Shareholders, the following matters were submitted to a vote of the shareholders. Election of Directors - The following directors were elected for a term of one year. Vote Count For Against Abstained Unvoted David L. Barning 16,936,042 66,616 -- -- Richard J. Bond 16,937,277 65,373 -- -- Alan W. Braun 16,931,846 72,166 -- -- John J. Daus, Jr. 16,937,262 65,489 -- -- Wayne A. Davidson 16,937,258 65,671 -- -- Larry E. Dunigan 16,937,283 65,456 -- -- David E. Eckerle 16,937,283 65,363 -- -- Thomas B. Florida 16,937,258 65,391 -- -- Phelps L. Lambert 16,937,257 65,401 -- -- Ronald B. Lankford 16,937,236 65,515 -- -- Lucien H. Meis 16,937,262 65,383 -- -- Louis L. Mervis 16,905,547 99,168 -- -- Dan W. Mitchell 16,926,713 76,050 -- -- John N. Royse 16,934,754 68,090 -- -- Marjorie Z. Soyugenc 16,934,754 68,090 -- -- Charles D. Storms 16,937,277 65,943 -- -- Increase authorized shares of common stock from 30,000,000 to 50,000,000. Votes For - 15,595,686, Votes Against - 903,035, Votes Abstained 569,180. There were no abstentions or broker non-votes inconnection with increase of authorized shares 12
Selection of Independent Public Accountants - Arthur Andersen LLP, Indianapolis, Indiana Votes For - 16,792,568, Votes Against - 123,534, Votes Abstained - 138,816, Unvoted - 12,983. ITEM 5. Other Information See Note 3 to the consolidated financial statements for discussion of pending mergers. ITEM 6. Exhibits and Reports on Form 8-K (a) NONE (b) ONB did not file a current report on Form 8-K during the quarter ended March 31, 1996. 13
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OLD NATIONAL BANCORP (Registrant) By:s/s Steve H. Parker Steve H. Parker Senior Vice President Chief Financial Officer Date: May 15, 1996 14
INDEX OF EXHIBITS Regulation S-K Reference (Item 601) 11 Statement re Computation of Per Share Earnings 27 Financial Data Schedule 15