Old National Bank (
Old National Bank is one of those companies that you probably
never heard of and if it weren't for TARP and the warrants that
were issued in conjunction with TARP, I would have most likely
overlooked it as well.
Back in 2009, ONB was given a gracious gift by the government in
the form of a cheap buyback of their warrants. In short, the
bank was able to buy back their stock warrants that were owned by
the treasury for about 20% of their real value, saving them
millions of dollars. This ended up costing the taxpayer, but all
worked out well for this regional bank.
Three years later, ONB is being recognized by the Ethisphere
Institute as one of the World's Most Ethical Companies (not that
they did anything wrong with TARP) and has been delivering strong
earnings results over the past year. In the financial sector,
regionals like ONB are sometimes preferred because they don't
typically carry the same risks as thier much larger multi-national
Company Description & Developments
Headquartered in Evansville, Indiana, Old National Bancorp is the
largest financial services bank holding company headquartered in
Indiana with assets of $8.6 billion. The company boasts a 178-year
history of solid performance as an Indiana bank.
They own multiple financial services operations in Indiana,
Illinois, and Kentucky and offer a range of financial services that
include commercial and retail banking, trust, brokerage,
correspondent banking, and insurance.
In January, ONB Old National Bancorp increased their cash
dividend 28.6% to 09 cents per quarter and approved a 2
million share stock repurchase plan for the next year.
ONB is a small-cap (1.20 billion) company that is trading at about
12.82 times forward (expectations for next quarter) earnings and
has a PEG ratio of 3.2. ONB has been a Zacks Rank 1 strong
buy since April 3rd.
Total sales increased 36% compared to the same period in 2010;
earnings increased from $0.44 in FY2010 to $0.76 in FY2011.
They are expected to earn $0.99 for the full year (FY2012)
according to the Zacks Consensus Estimate.
Of the 11 analysts who cover Old National, the consensus is for the
company to grow earnings by 30.38% in the current year (FY2012) and
roughly 9% in FY2013. The financial services company has
exceeded analysts' expectations to the upside 4 quarters in a row;
with an average upside surprise of 26.29% over the past year.
In terms of the magnitude of analyst estimate trends, we are
seeing all of the consensus estimates the same or higher than they
were 90 days ago for the current and next quarter as well as FY2012
and FY2013. Positive adjustments to earnings estimates have been
minor. ONB is expected to earn 24 cents when they report on
Market Performance & Technicals
Old National's stock has risen over 50% since October 2011 lows.
The stock has only breached its 50 moving average twice since
eclipsing it on October 4th.
Shares still remain above both the 50 and 200 day moving
averages of $12.40 and $11.09 respectively. Look for support
at both of those levels and in between them at $11.70 area
Volume is moderate and has been averaging 550k daily. ODFL
has outperformed the S&P 500's performance over the past year
by more than 13%. It lagged it by almost 2% in the past 3
months, but outperformed the index last month by almost 3%.
Jared A Levy is the Momentum Stock Strategist for Zacks.com. He
is also the Editor in charge of the market-beating
Zacks Whisper Trader Service.
OLD NATL BCP (
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