Old National Bank which still maintains one Berrien County branch in the Niles market is reporting 1st quarter earnings of $86.8-million, or $0.52 per share. The bank formerly had branches on both M-139 in Benton Harbor and at Cleveland & Hilltop in St. Joseph before permanently closing both of those locations.
Old National in based in Evansville, Indiana, where Chairman and CEO Jim Ryan says, “Old National’s positive first quarter results were driven by record first-quarter commercial loan production, strong mortgage revenue and excellent credit quality.” Ryan adds, “We also continue to work with our small business and non-profit clients who are affected by the pandemic to help them gain access to Paycheck Protection Program funds and also to complete the loan forgiveness process.”
Net income of $86.8 million for Old National produced earnings per diluted share of $0.52. Included in the first quarter were pre-tax charges of $1.5 million for the ONB Way. Excluding those charges from the current quarter and netting out debt securities gains, adjusted net income was $86.4 million, or $0.52 per diluted share.
Bank officials report that strong commercial loan production continues at Old National. Period-end total loans were $13,975.5 million at March 31, 2021, an increase of $125.8 million, or 3.6-percent annualized, when compared to the $13,849.7 million at December 31, 2020.
Paycheck Protection Program (PPP) loans totaled $1,124.1 million at March 31, 2021, compared to $943.0 million at December 31, 2020. Excluding the $181.1 million increase in PPP loans during the quarter, total loans decreased $55.3 million, or 1.7-percent annualized.
Excluding PPP loans, total commercial and industrial loans increased $59.0 million, or 2.6-percent annualized, and total commercial loan production in the first quarter was $718.0 million; with period-end pipeline values totaling $2.6 billion.
Consumer loans decreased $56.2 million to $1,579.0 million and residential mortgage loans decreased $45.1 million to $2,203.3 million.
Average total loans in the first quarter were $13,832.2 million, a decrease of $95.6 million from the fourth quarter of 2020. Excluding PPP loans, average total loans in the first quarter increased $117.6 million from the fourth quarter of 2020.
Government stimulus actions continue to bolster deposit balances for Old National, where they report period-end total deposits at $17,849.8 million at March 31, 2021, an increase of $812.3 million, or 19.1-percent annualized, when compared to the $17,037.5 million at December 31, 2020. Additionally, interest-bearing checking deposits increased $56.7 million to $4,933.8 million at March 31, 2021. As a result, on average, total deposits in the first quarter were $17,341.8 million, compared to $16,810.6 million in the fourth quarter of 2020.
A decrease in PPP fees negatively impacted net interest income and margin while deposit and funding costs continue to decline, with net interest income decreasing to $148.1 million in the first quarter of 2021 compared to $161.1 million in the fourth quarter of 2020.
The net interest margin on a fully taxable equivalent basis decreased 32 basis points to 2.94-percent compared to 3.26-percent in the fourth quarter of 2020.
PPP interest and net fees combined were $12.6 million, or 10 basis points of net interest margin, in the first quarter of 2021 compared to $22.6 million, or 26 basis points of net interest margin, in the fourth quarter of 2020.
Bank officials report that strong credit quality remains a hallmark of the Old National franchise, as Old National recorded a provision recapture in the first quarter of 2021 of $17.4 million, compared to $1.1 million in provision recapture recorded in the fourth quarter of 2020.
Net recoveries in the first quarter were $5 thousand, compared to net recoveries of $1.1 million in the fourth quarter of 2020. The bank’s 30-89 day delinquencies were 0.12-percent at the end of the first quarter, and non-performing loans decreased as a percentage of total loans to 1.13-percent.
Noninterest income decreased due to lower capital markets income, with total noninterest income for the first quarter of 2021 at $56.7 million, a decrease of $1.8 million from the fourth quarter of 2020.
Officials added that first quarter expense discipline helped drive positive operating leverage for Old National.
