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The CEO of Evansville, Ind.-based Old National Bancorp said the bank is “focused on business operations as usual.”
Chairman and CEO James Ryan III said during Tuesday's first-quarter earnings conference that the allegations against Brendon Falconer, who has been the CFO of the $49.5 billion bank since 2019, He said he would not comment on details.he was there
“We will provide further updates as needed,” Ryan said.
Mr. Falconer's first court hearing was scheduled for April 29.
“We already have a very talented finance, accounting and treasury team in place, including our Treasurer Mike Lloyd and Chief Accounting Officer Angela Putnam. With over 10 years of experience at the firm, John Moran, you may already know, I worked as a Wall Street analyst covering banks such as Old National, where he served as Interim Chief Financial Officer. I have taken over the role and I have complete confidence in John and the whole team.”
Mr. Moran is also the company's chief strategy officer. Prior to joining Old National, from 2019 to 2021, he served as CFO of NBT Bancorp, a $13.3 billion financial institution located in Norwich, New York. Early in his career, he worked as an analyst covering banks.
Mr. Ryan and Mark Sander, president and chief operating officer, said in the earnings call that Old National's management remains focused on positioning the bank's lending for above-average growth, while also focusing on bank consolidation. He also said that he is doing so.
Old National last year entered into a deal to acquire the $3 billion-asset Capstar in an all-stock deal valued at $344.4 million at the time of the announcement. The acquisition was completed as planned, with the buyer receiving approximately $2 billion in financing and approximately $3 billion in security deposits.
It will also accelerate expansion in the Tennessee market, where Old National entered the Nashville-based wealth management business in 2022. Shortly after, it added a commercial banking team in Tennessee's largest market. Ryan said Tuesday that the agreement also serves as a springboard for further expansion in the Southeast.
He said the bank may focus on integrating with Capstar for now, but will consider ways to bring in more capital later this year.
“I think that could be a key part of our discussions as we get into the second half of this year. Unchecked capital grows pretty quickly,” Ryan said. “So I think there's an opportunity to think about capital a little bit differently than in years past.”
However, the bank has achieved steady loan growth while many of its peers have struggled to maintain momentum amid high interest rates and thus high borrowing costs.
Total loans totaled $33.6 billion at the end of the first quarter, an increase of 6% from the same period last year. Total deposits at the end of the period rose 8% to $37.7 billion. Higher deposit costs in the quarter (an industry-wide trend driven by higher interest rates) impacted net interest income, partially offset by loan growth.
Fully taxable net interest income was $362.7 million, down 6% from the prior year period.
Piper Sandler analyst Scott Schieffers called the loan growth “unusual for this period” and summed up Old National's performance as “solid.”
The bank reported first-quarter net income applicable to common stock of $116.3 million, or 40 cents per share, down from $142.6 million, or 49 cents, in the year-ago period. Compared to the prior year, revenues decreased primarily due to Federal Deposit Insurance Corporation special assessments, CapStar merger costs, and legacy pension plan distributions related to prior acquisitions.
