Old National profit slips on merger, consolidation costs

Old National Bancorp on Monday reported a first-quarter profit of $20.9 million, a 29-percent decrease from the same quarter of 2014.

The Evansville-based bank, which has about 20 branches in the Indianapolis area, said earnings were decreased by several one-time charges "relating to several strategic initiatives aimed at improving the long-term operating leverage of the company." Those included $4.4 million in severance costs, $2.6 million related to branch consolidations, and $4 million in merger and integration expenses.

Earnings, adjusted for non-recurring costs, came to 24 cents per share, meeting the average estimate of six analysts surveyed by Zacks Investment Research.

The holding company for Old National Bank brought in revenue of $146.3 million in the period, falling short of the average analyst forecast of $147.3 million.

"We were very pleased to report annual core loan growth of 7 percent, record loan origination numbers and very strong credit quality," Old National CEO Bob Jones said in a written statement. "While our first quarter earnings were impacted by anticipated one-time merger and integration costs, and costs related to our ongoing franchise optimization plan, we are confident that we remain well-positioned for future growth."

Old National has made several acquisitions in the past year, including Founders Financial Corp. of Grand Rapids, Michigan, and Lafayette Savings Bank of Lafayette. In February, it announced plans to close 19 branches in 2015, including five in the Indianapolis area.

Old National Bancorp shares fell 1.1 percent Monday morning, to $14.10 each. The stock is down more than 5 percent since the beginning of the year.

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