Old National's 1st Quarter Results Supported by Strong Deposit Franchise, Ample Liquidity, Stable Credit and Expense Discipline

COMMENTARY BY CEO JIM RYAN:

FIRST QUARTER HIGHLIGHTS2:

1 Non-GAAP financial measure that management believes is useful in evaluating the financial results of the Company – refer to the Non-GAAP reconciliations contained in this release 2 Comparisons are on a linked-quarter basis, unless otherwise noted 3 Uninsured and uncollateralized deposits include the estimate of Old National Bank federally uninsured deposits for regulatory purposes, as adjusted for $1.4 billion of affiliate deposits and $3.4 billion of collateralized or otherwise insured deposits 4 Represents the ratio of liquidity availability (cash and cash equivalents, funding capacity at FHLB, discount window and Bank Term Funding Program ("BTFP"), and unencumbered eligible collateral) at March 31, 2023, plus recently pledged loan collateral to FHLB, to uninsured and uncollateralized deposits at March 31, 2023 5 Includes loans held for sale 6 Includes the provision for unfunded commitments

Old National Bancorp ("Old National") reported first quarter 2023 net income applicable to common shares of $142.6 million, or $0.49 per diluted common share.

Included in the first quarter was pre-tax charges of $1.3 million for property optimization and $14.6 million related to the February 15, 2022 merger with First Midwest. Excluding these transactions and $5.2 million of realized debt securities losses from the current quarter, adjusted net income was $159.1 million, or $0.54 per diluted common share.

•Period-end total core deposits were $34.9 billion at March 31, 2023, stable including normal seasonal patterns in public funds.

•On average, total deposits for the first quarter were $34.9 billion, a decrease of 1.4%.

•Granular low-cost deposit franchise; total deposit costs of 72 bps and a total deposit cycle to date beta of 15% (interest-bearing deposit beta of 23%).

•Deposits that were either insured or collateralized at March 31, 2023 were approximately 70% of total deposits.

•Strong liquidity provided by existing funding sources plus available unencumbered, high-quality collateral; ~150% uninsured covered ratio4.

•Total funding of $41.7 billion, up 2.6% compared to December 31, 2022.

•A loan to deposit ratio of 91% at March 31, 2023, combined with existing funding sources plus available unencumbered, high-quality collateral totaling approximately $15.7 billion provides strong liquidity.

•Period-end total loans3 were $31.8 billion at March 31, 2023, up 2.2% from December 31, 2022, driven by strong commercial loan growth.

•Total commercial loan production in the first quarter was $1.8 billion; period-end commercial pipeline totaled $5.4 billion.

•Average total loans in the first quarter were $31.3 billion, an increase of $532.6 million from the fourth quarter of 2022.

•Provision5 expense in the first quarter of 2023 was $13.4 million, compared to $11.4 million in the fourth quarter of 2022, reflecting loan and unfunded commitment growth, economic factors and portfolio mix changes.

•Net charge-offs in the first quarter were $16.4 million, or 21 bps of average loans compared to net charge-offs of 5 bps of average loans in the fourth quarter of 2022.

◦Excluding PCD loans that had an allowance for credit losses established at acquisition, net charge-offs to average loans were 5 bps for both the first quarter of 2023 and fourth quarter of 2022.

•30+ day delinquencies were 0.14% at the end of the first quarter of 2023, compared to 0.19% at the end of the fourth quarter of 2022.

•Non-performing loans as a percentage of total loans were 0.74% compared to 0.81% for the fourth quarter of 2022.

•Loans acquired from previous acquisitions were recorded at fair value at the acquisition date. As of March 31, 2023, the remaining discount on these acquired loans was $96 million.

•The allowance for credit losses, including the allowance for credit losses on unfunded commitments, stood at $332.9 million, or 1.05% of total loans at March 31, 2023, compared to $335.9 million, or 1.08% of total loans at December 31, 2022.

•Net interest income on a fully taxable equivalent basis decreased to $387.2 million in the first quarter of 2023 compared to $396.5 million in the fourth quarter of 2022, driven by loan growth and the higher rate environment which were more than offset by higher funding costs, fewer days in the quarter and lower accretion income on loans.

•Net interest margin on a fully taxable equivalent basis decreased 16 bps to 3.69% compared to the fourth quarter of 2022.

•Accretion income on loans and borrowings was $7.9 million, or 8 bps of net interest margin, in the first quarter of 2023 compared to $10.4 million, or 10 bps of net interest margin, in the fourth quarter of 2022.

•Cost of total deposits was 0.72%, increasing 38 bps and the cost of total interest-bearing deposits increased 57 bps to 1.09% in the first quarter of 2023.

•Total noninterest income for the first quarter of 2023 was $70.7 million.

•Excluding realized debt securities losses for both periods and a $90.7 million pre-tax gain on the sale of health savings accounts for the fourth quarter of 2022, adjusted noninterest income for the first quarter was $75.9 million, up 1.8% compared to the fourth quarter of 2022, driven by higher capital markets income as well as wealth management and investment product fees, partially offset by lower service charges on deposit accounts and debit card and ATM fees.

•Noninterest expense for the first quarter of 2023 was $250.7 million and included $1.3 million for property optimization and $14.6 million of merger-related charges.

•Excluding these items, adjusted noninterest expense for the first quarter was $234.8 million, consistent with $235.5 million for the fourth quarter of 2022; lower salary and employee benefits and tax credit amortization was mostly offset by higher FDIC assessment and technology expenses.

•The efficiency ratio1 was 52.8%, while the adjusted efficiency ratio1 was 48.8% for the first quarter of 2023 compared to 49.1% and 47.5%, respectively, for the fourth quarter of 2022.

•Income tax expense in the first quarter of 2023 was $41.4 million, resulting in an effective tax rate of 22.0% compared to 23.4% in the fourth quarter of 2022. On an adjusted fully taxable equivalent ("FTE") basis, the effective tax rate was 24.1% in the first quarter compared to 24.8% in the fourth quarter.

•Income tax expense included $3.1 million of tax credit benefit.

•Preliminary total risk-based capital was 11.95% and preliminary regulatory Tier 1 capital was 10.62%, impacted by loan growth, merger related charges, and stock repurchases, partly offset by retained earnings.

•Tangible common equity to tangible assets was 6.37% at the end of the first quarter compared to 6.18% in the fourth quarter of 2022.

•The Company repurchased 1.8 million shares of common stock during the quarter.

Old National will host a conference call and live webcast at 9:00 a.m. Central Time on Tuesday, April 25, 2023, to review first quarter financial results. The live audio webcast link and corresponding presentation slides will be available on the Company’s Investor Relations web page at oldnational.com and will be archived there for 12 months. To listen to the live conference call, dial U.S. (844) 200-6205 or International (929) 526-1599, Access code 892610. A replay of the call will also be available from approximately noon Central Time on April 25, 2023 through May 9, 2023. To access the replay, dial U.S. (866) 813-9403 or international +44 (204) 525-0658, Access code 569807.

Old National Bancorp (NASDAQ: ONB) is the holding company of Old National Bank, which is the sixth largest commercial bank headquartered in the Midwest. With approximately $48 billion of assets and $28 billion of assets under management, Old National ranks among the top 35 banking companies headquartered in the U.S. Tracing our roots to 1834, Old National Bank has focused on community banking by building long-term, highly valued partnerships with clients and in the communities it serves. In addition to providing extensive services in retail and commercial banking, Old National offers comprehensive wealth management, investment, and capital market services. For more information and financial data, please visit Investor Relations at oldnational.com.

The Company's accounting and reporting policies conform to U.S. generally accepted accounting principles ("GAAP") and general practices within the banking industry. As a supplement to GAAP, the Company provides non-GAAP performance results, which the Company believes are useful because they assist investors in assessing the Company's operating performance. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables at the end of this release.

The Company presents EPS, the efficiency ratio, return on average common equity, and return on average tangible common equity, all adjusted for certain notable items. These items include the current expected credit loss ("CECL") Day 1 non-PCD provision expense, merger related charges associated with completed acquisitions, gain on sale of health savings accounts, property optimization charges and gains/losses on sales of debt securities. Management believes excluding these items from EPS, the efficiency ratio, return on average common equity, and return on average tangible common equity may be useful in assessing the Company's underlying operational performance since these items do not pertain to its core business operations and their exclusion may facilitate better comparability between periods. Management believes that excluding merger related charges and the CECL Day 1 non-PCD provision expense from these metrics may be useful to the Company, as well as analysts and investors, since these expenses can vary significantly based on the size, type, and structure of each acquisition. Additionally, management believes excluding these items from these metrics may enhance comparability for peer comparison purposes.

Income tax expense, provision for credit losses, and the certain notable items listed above are excluded from the calculation of pre-provision net revenues, adjusted due to the fluctuation in income before income tax and the level of provision for credit losses required. Management believes pre-provision net revenues, adjusted may be useful in assessing the Company's underlying operating performance and their exclusion may facilitate better comparability between periods and for peer comparison purposes.

The Company presents adjusted noninterest expense, which excludes merger related charges and property optimization charges, as well as adjusted noninterest income, which excludes the gain on sale of health savings accounts and gains/losses on sales of debt securities. Management believes that excluding these items from noninterest expense and noninterest income may be useful in assessing the Company’s underlying operational performance as these items either do not pertain to its core business operations or their exclusion may facilitate better comparability between periods and for peer comparison purposes.

The tax-equivalent adjustment to net interest income and net interest margin recognizes the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal income tax rate of 21%. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on a fully tax-equivalent basis and that it may enhance comparability for peer comparison purposes.

In management's view, tangible common equity measures are capital adequacy metrics that may be meaningful to the Company, as well as analysts and investors, in assessing the Company's use of equity and in facilitating comparisons with peers. These non-GAAP measures are valuable indicators of a financial institution's capital strength since they eliminate intangible assets from stockholders' equity and retain the effect of accumulated other comprehensive loss in stockholders' equity.

Although intended to enhance investors' understanding of the Company's business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. In addition, these non-GAAP financial measures may differ from those used by other financial institutions to assess their business and performance. See the previously provided tables and the following reconciliations in the "Non-GAAP Reconciliations" section for details on the calculation of these measures to the extent presented herein.

This communication contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, descriptions of Old National’s financial condition, results of operations, asset and credit quality trends, profitability and business plans or opportunities. Forward-looking statements can be identified by the use of the words "anticipate," "believe," "contemplate," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "should," and "will," and other words of similar meaning. These forward-looking statements express management’s current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those in such statements. Factors that might cause such a difference include, but are not limited to: the continued impact of the COVID-19 pandemic on our business as well as the business of our customers; competition; government legislation, regulations and policies; the ability of Old National to execute its business plan, including the completion of the integration related to the merger between Old National and First Midwest and the achievement of the synergies and other benefits from the merger; unanticipated changes in our liquidity position, including but not limited to changes in access to sources of liquidity and capital to address our liquidity needs; changes in economic conditions and economic and business uncertainty which could materially impact credit quality trends and the ability to generate loans and gather deposits; inflation and governmental responses to inflation, including increasing interest rates; failure or circumvention of our internal controls; significant changes in accounting, tax or regulatory practices or requirements; new legal obligations; disruptive technologies in payment systems and other services traditionally provided by banks; failure or disruption of our information systems; computer hacking and other cybersecurity threats; other matters discussed in this communication; and other factors identified in our Annual Report on Form 10-K for the year ended December 31, 2022 and other filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date of this communication and are not guarantees of future results or performance, and Old National does not undertake an obligation to update these forward-looking statements to reflect events or conditions after the date of this communication.