On the same day Evansville-based Old National Bancorp (Nasdaq: ONB) detailed its quarterly earnings, the company also announced two major developments. They include the $93 million sale of its Old National Insurance subsidiary and the closing on its $460 million merger with Anchor BanCorp Wisconsin Inc. Chief Executive Officer Bob Jones calls it a "very solid" quarter and says Old National is positioned for continued growth in 2016.
During a conference call this morning with investors, Jones says the ONI sale attracted interest from multiple potential buyers.
Old National says ONB Insurance Group Inc. will be renamed ONI Risk Partners once the acquisition by Prime Risk Partners closes, which is expected to take place in the second quarter. The deal also includes the sale of Old National Insurance’s third-party administrator subsidiaries, Employee Plans LLC and JWF Specialty. Jones says "the sale of our insurance group should improve our efficiency ratio, allow us to increase our tangible book value and helps fund the cash portion of the Anchor partnership." As of March 31, Old National Insurance employed 279. Current Old National Insurance CEO Tom Flynn will stay on with ONI Risk Partners, which will remain headquartered in Indianapolis. "Prime Risk is an excellent partner for the clients and employees of Old National Insurance. They are committed to investing in the future of Old National Insurance and the communities it serves," said Jones. "We anticipate tremendous synergy between our companies as we move forward, which will allow Old National clients to continue to work with the same insurance representatives they have grown to trust and enjoy the same great products and service they have come to expect."
The merger with Anchor means the Old National now has more than $42 billion in total assets and includes nearly four dozen banking centers in Wisconsin, which is a new market. Executives say cost savings projections of more than 30 percent announced last year at the time of the deal remain on track. "This partnership is off to a great start and our optimism for the benefits that our shareholders will derive is very strong," said Jones in the quarterly earnings report.
The company is reporting fiscal first quarter net income of $27 million, compared to $21 million during the same quarter one year earlier. The results include $1.4 million in pre-tax charges connected to the Anchor anchor deal. Jones says Old National is continuing to demonstrate positive momentum, despite an economy that is acting "schizophrenic."
Old National has transformed itself over the last few year with moves including the acquisitions of LSB Financial Corp. in Lafayette, Michigan-based United Bancorp Inc. and Tower Financial Corp. in Fort Wayne, as well as completing the remainder of a 36-location sell-off of Midwest banking centers.
Old National now has 160 branches throughout the Midwest.
During a conference call this morning with investors, Old National CEO Bob Jones says the ONI sale attracted interest from multiple potential buyers.