Filed Pursuant to Rule 424(b)(3)
File No. 333-151499

 

SUBJECT TO COMPLETION, DATED SEPTEMBER 21, 2009

 

PROSPECTUS SUPPLEMENT

(To Prospectus Dated June 6, 2008)

 

$150,000,000

 

Common Stock

 

 

We are offering $150,000,000 of our common stock. Our common stock is listed on the New York Stock Exchange (the “NYSE”) under the symbol “ONB.” On September 18, 2009, the last reported sales price of our common stock on the NYSE was $11.27 per share.

 

You should read this prospectus supplement and the accompanying prospectus carefully before you invest. Investing in our common stock involves risks. See “Risk Factors” beginning on page S-10 of this prospectus supplement and in the documents we file with the Securities and Exchange Commission (the “Commission”) that are incorporated by reference in this prospectus supplement and the accompanying prospectus for certain risks and uncertainties you should consider before investing in our common stock.

 

 

The underwriters have the option to purchase up to an additional           shares of our common stock at the public offering price, less underwriting discounts and commissions, within 30 days from the date of this prospectus supplement solely to cover over-allotments, if any.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

These securities are not savings accounts, deposits or other obligations of any bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation (the “FDIC”) or any other governmental agency.

 

The underwriters expect to deliver the shares of common stock to purchasers on or about          , 2009.

 

 

Sole Book-Running Manager

 

Sandler O’Neill + Partners, L.P.

 

Co-Managers

 

 

 

The date of this prospectus supplement is          , 2009.

TABLE OF CONTENTS

 

 

This document consists of two parts. The first part is the prospectus supplement, which describes the specific terms of this offering and certain other matters and also adds to and updates information contained in the prospectus. The second part is the prospectus, which gives more general information about securities we may offer from time to time, some of which may not apply to this offering. You should read both this prospectus supplement and the accompanying prospectus, together with additional information described under the heading “Where You Can Find More Information.”

 

Unless otherwise mentioned or unless the context requires otherwise, all references in this prospectus supplement to “Old National Bancorp,” “Old National,” “we,” “us,” “our” or similar references mean Old National Bancorp and its consolidated subsidiaries.

 

If the information in this prospectus supplement differs in any way from the information set forth in the accompanying prospectus, you should rely on the information set forth in this prospectus supplement.

 

Currency amounts in this prospectus supplement are stated in U.S. dollars.

 

You should rely only on the information contained in or incorporated by reference in this prospectus supplement and the accompanying prospectus. This prospectus supplement and the accompanying prospectus may be used only for the purpose for which they have been prepared. No one is authorized to give information other than that contained in this prospectus supplement, the accompanying prospectus and in the documents incorporated by reference herein and therein. We have not authorized any other person to provide you with different or inconsistent information. If anyone provides you with different or inconsistent information, you should not rely on it.

 

We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information appearing in this prospectus supplement, the accompanying prospectus or any document incorporated by reference herein or therein is accurate as of any date other than the date of the applicable document. Our business, financial condition, results of operations and prospects may have changed since that date. Neither this prospectus supplement nor the accompanying prospectus constitutes an offer of, or an invitation to subscribe for and purchase, any of the common stock and may not be used for or in connection with an offer or solicitation by anyone in any jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation.

 

The following is a cautionary note about forward-looking statements. This prospectus supplement and the accompanying prospectus (including any information we include or incorporate by reference in this prospectus supplement or the accompanying prospectus) contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can include statements about estimated cost savings, plans and objectives for future operations, and expectations about performance as well as economic and market conditions and trends. These statements often can be identified by the use of words like “expect,” “may,” “could,” “intend,” “project,” “estimate,” “believe” or “anticipate.” We may include forward-looking statements in filings with the Commission, such as this prospectus supplement and the accompanying prospectus, in other documents we have filed with the Commission that are incorporated by reference herein and therein, in other written materials, and in oral statements made by our senior management to analysts, investors, representatives of the media and others. It is intended that these forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the forward-looking statement is made or to reflect the occurrence of unanticipated events. By their nature, forward-looking statements are based on assumptions and are subject to risks, uncertainties and other factors. Actual results may differ materially from those contained in a forward-looking statement.

 

Risks and uncertainties that could affect our future performance include, but are not limited to: our ability to execute our business plan; economic, market, operational, liquidity, credit and interest rate risks associated with our business; economic conditions generally and in the financial services industry; increased competition in the financial services industry, either nationally or regionally, resulting in, among other things, credit quality deterioration; the volatility and direction of market interest rates; governmental legislation and regulation, including changes in accounting regulation or standards; a weakening of the economy that could materially impact credit quality trends and our ability to generate loans; changes in the securities markets; new litigation or changes to existing litigation; changes in fiscal, monetary and tax policies; our ability to execute our business plan; and our ability to achieve loan and deposit growth.

 

Additional information regarding important risks, uncertainties and other factors that could cause our future financial performance to differ materially from that described in our forward-looking statements is available in our annual report on Form 10-K for the year ended December 31, 2008, and subsequent reports we file with the Commission, which are incorporated by reference in this prospectus supplement and the accompanying prospectus. See “Where You Can Find More Information” for information on how to obtain a copy of our annual report and other reports. Investors should consider these risks, uncertainties and other factors when considering any forward-looking statement.

 

SUMMARY

 

SUMMARY SELECTED CONSOLIDATED FINANCIAL DATA

										At or for the Six
		At or for the Quarter								Month Period
		ended June 30,								ended June 30,								At or for the Year ended December 31,
(Dollars in thousands, except per share data)		2009				2008				2009				2008				2008				2007				2006				2005				2004
		(Unaudited)								(Unaudited)
Balance Sheet Data
Total assets		$	8,012,175			$	7,601,786			$	8,012,175			$	7,601,786			$	7,873,890			$	7,846,126			$	8,149,515			$	8,492,022			$	8,898,304
Securities			2,599,668				2,027,336				2,599,668				2,027,336				2,265,777				2,308,500				2,376,110				2,516,473				3,012,751
Loans (1)			4,546,686				4,743,362				4,546,686				4,743,362				4,777,514				4,699,356				4,716,637				4,937,631				4,987,326
Deposits			5,798,508				5,372,417				5,798,508				5,372,417				5,422,287				5,663,383				6,321,494				6,465,636				6,418,709
Other borrowings			810,305				783,396				810,305				783,396				834,867				656,722				747,545				954,925				1,306,953
Shareholders’ equity			634,589				649,015				634,589				649,015				730,865				652,881				642,369				649,898				704,092
Results of Operations
Total interest income		$	89,182			$	97,365			$	177,165			$	201,499			$	392,522			$	461,368			$	451,713			$	425,239			$	417,120
Total interest expense			28,415				36,021				57,200				80,365				149,197				242,177				238,996				206,087				185,363
Provision for loan losses			11,968				5,700				29,268				27,605				51,464				4,118				7,000				23,100				22,400
Noninterest income			45,606				43,513				87,841				90,389				166,969				155,138				153,920				161,602				162,888
Noninterest expense			86,751				74,834				164,215				145,770				297,229				277,998				264,690				263,811				309,403
Income before income taxes and discontinued operations			7,654				24,323				14,323				38,148				61,601				92,213				94,947				93,843				62,842
Income tax expense (benefit)			(1,981	)			4,848				(4,717	)			(667	)			(877	)			17,323				15,574				15,254				2,529
Income from continuing operations			9,635				19,475				19,040				38,815				62,478				74,890				79,373				78,589				60,313
Income (loss) from discontinued operations			—				—				—				—				—				—				—				(14,825	)			2,751
Net income			9,635				19,475				19,040				38,815				62,478				74,890				79,373				63,764				63,064
Preferred stock dividends and discount accretion			—				—				(3,892	)			—				(298	)			—				—				—				—
Net income available to common stockholders			9,635				19,475				15,148				38,815				62,180				74,890				79,373				63,764				63,064

(1)		Includes residential loans and leases held for sale.

										At or for the Six
		At or for the								Month Period
		Quarter ended								ended
		June 30,								June 30,								At or for the Year ended December 31,
		2009				2008				2009				2008				2008				2007				2006				2005				2004
		(Unaudited)								(Unaudited)
Per Share Data
Basic net income per share from continuing operations		$	0.15			$	0.30			$	0.23			$	0.59			$	0.95			$	1.14			$	1.20			$	1.16			$	0.87
Basic net income per share from discontinued operations			—				—				—				—				—				—				—				(0.22	)			0.04
Basic net income per share			0.15				0.30				0.23				0.59				0.95				1.14				1.20				0.94				0.91
Diluted net income per share from continuing operations			0.15				0.30				0.23				0.59				0.95				1.14				1.20				1.15				0.86
Diluted net income per share from discontinued operations			—				—				—				—				—				—				—				(0.22	)			0.04
Diluted net income per share			0.15				0.30				0.23				0.59				0.95				1.14				1.20				0.93				0.90
Dividends declared per common share			0.07				0.23				0.30				0.23				0.69				1.11				0.84				0.76				0.72
Book value per common share			9.55				9.80				9.55				9.80				9.56				9.86				9.66				9.61				10.16
Tangible book value per common share (1)			6.48				6.95				6.48				6.95				6.74				6.98				7.64				7.59				7.73
Selected Ratios
Return on average assets			0.47	%			1.03	%			0.47	%			1.02	%			0.82	%			0.94	%			0.97	%			0.74	%			0.69	%
Return on average common equity			6.02				11.58				4.73				11.54				9.49				11.67				12.43				9.31				8.83
Average equity to average assets			7.79				8.86				8.54				8.81				8.67				8.04				7.81				7.94				7.83
Net interest margin			3.59				3.85				3.61				3.76				3.82				3.28				3.15				3.09				3.08
Efficiency ratio (2)			77.50				68.37				74.91				66.10				69.18				71.01				68.54				65.58				73.92
Asset Quality Ratios
Non-performing loans to total loans (3)			1.71	%			1.43	%			1.71	%			1.43	%			1.34	%			0.87	%			0.88	%			1.13	%			1.10	%
Under-performing assets to total loans and foreclosed properties (3)			1.86				1.54				1.86				1.54				1.46				0.96				1.00				1.24				1.31
Non-performing assets to total assets			1.06				0.96				1.06				0.96				0.89				0.58				0.58				0.72				0.74
Net charge-off to average loans (3)			1.18				1.35				1.13				0.94				0.87				0.44				0.37				0.60				0.61
Allowance for loan losses to loans (4)			1.69				1.31				1.69				1.31				1.41				1.20				1.44				1.61				1.73
Capital Ratios
Tier 1 capital to risk-weighted assets			10.25	%			11.23	%			10.25	%			11.23	%			12.73	%			10.60	%			11.12	%			10.64	%			11.19	%
Total capital to risk-weighted assets			12.59				14.10				12.59				14.10				15.06				13.34				14.47				14.40				14.92
Tier 1 capital to average assets (leverage)			7.10				8.22				7.10				8.22				9.50				7.72				8.01				7.67				7.69
Tangible common equity to tangible assets (5)			5.51				6.21				5.51				6.21				5.81				6.03				6.34				6.15				6.13

(1)		Tangible book value per common share is a non-GAAP financial measure and is defined as GAAP shareholders’ equity minus goodwill, intangible assets and preferred stock, divided by the number of common shares outstanding. We have included information concerning tangible book value per common share because it is a basis upon which we assess our financial performance and it is a financial measure commonly used in our industry. Tangible book value per common share as presented in this prospectus supplement may not be comparable to similarly titled measures used by other companies in our industry. The reconciliation of the non-GAAP tangible book value per common share calculation is as follows:

(2)		The efficiency ratio is a non-GAAP financial measure of operating expense control and efficiency of operations. Management believes this ratio better focuses attention on the operating efficiency of Old National over time than does a GAAP-based ratio, and is useful in comparing period-to-period operating performance of our core business operations. This ratio is used by management as part of its assessment of its performance in managing noninterest expenses. The efficiency ratio as presented in this prospectus supplement may not be comparable to similarly titled measures used by other companies in our industry. It is defined as noninterest expense as a percent of the sum of net interest income on a fully tax equivalent basis and noninterest income. The reconciliation of the non-GAAP efficiency ratio is as follows:

(3)		Includes residential loans and leases held for sale.
(4)		Excludes residential loans and leases held for sale.
(5)		Tangible common equity to tangible assets is a non-GAAP financial measure and is defined as GAAP shareholders’ equity minus goodwill, intangible assets and preferred stock as a percent of the sum of total assets plus trust overdrafts minus goodwill and intangible assets. We have included information concerning the tangible common equity to tangible assets ratio because it is a basis upon which we assess our financial performance and it is a financial measure commonly used in our industry. The tangible common equity to tangible assets ratio as presented in this prospectus supplement may not be comparable to similarly titled measures used by other companies in our industry. The reconciliation of the non-GAAP tangible common equity to tangible assets calculation is as follows:

 

THE OFFERING

Common Stock Offered		shares of common stock, no par value per share (           shares if the underwriters’ option to purchase additional shares is exercised in full). For a description of our common stock, see “Description of Capital Stock—Common Stock” in the prospectus accompanying this prospectus supplement.
Common Stock to be Outstanding after this Offering (1)		shares of common stock (           shares of common stock if the underwriters’ option to purchase additional shares is exercised in full), in each case based on 66,473,234 shares of common stock outstanding as of September 18, 2009.
Use of Proceeds		We intend to use the net proceeds of this offering for general corporate purposes and to support our ongoing and future anticipated growth, which may include opportunistic acquisitions of other financial institutions (including the possible acquisition of assets and liabilities of failed financial institutions in FDIC-sponsored or assisted transactions). See “Use of Proceeds.”
NYSE Symbol		ONB.
Risk Factors		An investment in our common stock is subject to risks. Please refer to “Risk Factors” and other information included or incorporated by reference in this prospectus supplement and the accompanying prospectus for a discussion of certain risks and other uncertainties you should consider before investing in shares of our common stock.

(1)		The number of shares of common stock outstanding immediately after the closing of this offering is based on 66,473,234 shares of common stock outstanding as of September 18, 2009, which excludes 6,170,061 shares consisting of 105,700 restricted stock units and 6,064,361 shares of common stock reserved for issuance upon exercise of outstanding options and available for issuance under employee benefit plans.

 

An investment in our common stock is subject to certain risks. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. Before you decide to invest in our common stock, you should consider the risk factors below relating to this offering as well as the risk factors described in our annual report on Form 10-K for the year ended December 31, 2008, as supplemented by our quarterly reports on Form 10-Q for the quarterly periods ended March 31, 2009 and June 30, 2009, and in the other documents incorporated by reference in this prospectus supplement and the accompanying prospectus. Risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations, our financial results and the trading price of our common stock.

 

Risks Associated with Our Business and Industry

 

Deteriorating credit quality, particularly in commercial, construction and real estate loans, has adversely impacted Old National and may continue to adversely impact Old National.

 

In early 2008, we began to experience a downturn in the overall credit performance of our loan portfolio, as well as acceleration in the deterioration of general economic conditions. This deterioration, as well as a significant increase in national and regional unemployment levels and decreased sources of liquidity, are the primary drivers of the increased stress being placed on most borrowers and is negatively impacting their ability to repay.

 

We expect credit quality to remain challenging and at elevated levels of risk for at least the remainder of 2009. Continued deterioration in the quality of our credit portfolio could significantly increase nonperforming loans, require additional increases in loan loss reserves, elevate charge-off levels and have a material adverse effect on our capital, financial condition and results of operations.

 

Declines in asset values may result in impairment charges and adversely affect the value of our investments, financial performance and capital.

 

We maintain an investment portfolio that includes, but is not limited to, mortgage-backed securities, municipal bonds and pooled trust preferred securities. The market value of investments in our portfolio has become increasingly volatile over the past two years. The market value of investments may be affected by factors other than the underlying performance of the issuer or composition of the bonds themselves, such as ratings downgrades, adverse changes in the business climate and a lack of liquidity for resales of certain investment securities. We periodically, but not less than quarterly, evaluate investments and other assets for impairment indicators. We may be required to record additional impairment charges if our investments suffer a decline in value that is considered other-than-temporary. If we determine that a significant impairment has occurred, we would be required to charge against earnings the credit-related portion of the other-than-temporary impairment, which could have a material adverse effect on our results of operations in the periods in which the write-offs occur.

 

Negative conditions in the general economy and financial services industry may limit our access to additional funding and adversely affect liquidity.

 

An inability to raise funds through deposits, borrowings and other sources could have a substantial negative effect on our liquidity. Our access to funding sources in amounts adequate to finance our activities could be impaired by factors that affect us specifically or the financial services industry in general. Factors that could detrimentally affect our access to liquidity sources include a decrease in the level of our business activity due to a market downturn or adverse regulatory action against us. Our ability to borrow could also be impaired by factors that are not specific to us, such as a severe disruption of the financial markets or negative news and expectations about the prospects for the financial services industry as a whole, as evidenced by recent turmoil in the domestic and worldwide credit markets.

We may be required to pay significantly higher FDIC premiums or special assessments that could adversely affect our earnings.

 

Market developments have significantly depleted the insurance fund of the FDIC and reduced the ratio of reserves to insured deposits. As a result, we may be required to pay significantly higher premiums or additional special assessments that could adversely affect our earnings. In the second quarter of 2009, the FDIC implemented a special assessment that resulted in approximately $4.0 million of additional expense during the quarter. It is possible that the FDIC may impose additional special assessments in the future as part of its restoration plan.

 

Governmental regulation, legislation and accounting industry pronouncements could adversely affect us.

 

We are subject to extensive state and federal regulation, supervision and legislation that govern almost all aspects of our operations. This regulatory scheme, which is primarily intended to protect consumers, depositors and the government’s deposit insurance fund and to accomplish other governmental policy objectives (e.g., combating terrorism), is expected to change—perhaps significantly—following the Obama administration’s June 2009 financial regulatory reform proposal and a recent policy statement issued by Treasury calling for stronger capital and liquidity standards for banking firms. In addition, we are subject to changes in accounting rules and interpretations. We cannot predict what effect any presently contemplated or future changes in financial market regulation or accounting rules and interpretations will have on us. Any such changes may negatively affect our financial performance, our ability to expand our products and services and our ability to increase the value of our business and, as a result, could be materially adverse to our shareholders.

 

We are subject to certain risks in connection with our strategy of growing through mergers and acquisitions.

 

Mergers and acquisitions have contributed significantly to our growth in the past 20 years, and continue to be a key component of our business model. Accordingly, it is possible that we could acquire other financial institutions, financial service providers or branches of banks in the future. Our ability to engage in future mergers and acquisitions depends on our ability to identify suitable merger partners, finance and complete such transactions on acceptable terms, and our ability to receive the necessary regulatory approvals and, when required, shareholder approvals. Our success also depends on, among other things, our ability to realize anticipated cost savings and revenue enhancements from acquisitions and to combine the businesses of the acquired companies in a manner that permits growth without materially disrupting existing customer relationships or resulting in decreased revenues due to a loss of customers. If we are not able to successfully achieve these objectives, the anticipated benefits of such acquisitions may not be realized fully or at all or may take longer to realize than expected. Additionally, if the integration efforts following acquisitions are not successfully managed, the failure of these integration efforts could result in loan losses, deposit attrition, operating costs, loss of key employees, disruption of our ongoing business or inconsistencies in standards, controls, procedures and policies that could adversely affect our ability to maintain relationships with customers and employees or to achieve the anticipated benefits of such acquisitions or result in unanticipated losses.

 

In the current economic environment, we continue to evaluate opportunities to acquire the assets and liabilities of failed financial institutions in FDIC-sponsored or assisted transactions. These acquisitions involve risks similar to acquiring existing financial institutions even though, in certain cases, the FDIC might provide assistance to mitigate certain risks such as sharing in exposure to loan losses and providing indemnification against certain liabilities of the failed institution. However, because these acquisitions are structured in a manner that would not allow us the time normally associated with evaluating and preparing for integration of an acquired institution, we may face additional risks in FDIC-sponsored or assisted transactions.

Risks Related to this Offering

 

The price of our common stock may be volatile, which may result in losses for investors.

 

General market price declines or market volatility in the future could adversely affect the price of our common stock. In addition, the following factors, among others, may cause the market price for shares of our common stock to fluctuate:

 

 

We may not be able to pay dividends on our common stock in the future in accordance with past practice.

 

We have traditionally paid a quarterly dividend to our common shareholders. Our ability to pay dividends is subject to legal and regulatory restrictions. Any payment of dividends in the future will depend, in large part, on our earnings, capital requirements, financial condition, and other factors considered relevant by our Board of Directors, including the ability of our subsidiaries to make distributions to us, which ability may be restricted by statutory, contractual or other constraints. Our Board of Directors reduced the quarterly dividend payable on our common stock from $0.23 per share in the first quarter of 2009 to $0.07 per share in the second quarter of 2009 to preserve capital and strengthen our tangible common equity levels. In July of 2009, our Board of Directors declared a dividend of $0.07 per share for the third quarter of 2009 that was paid on September 15, 2009 to shareholders of record on September 1, 2009. There can be no assurance that we will pay dividends to our shareholders in the future, or, if dividends are paid, that we will increase our dividend to historical or other levels or that we will not further reduce our dividend. In addition, any further reduction in our dividends, or our failure to increase dividends, could adversely affect the market price of our common stock.

 

As a bank holding company, our ability to declare and pay dividends is dependent on certain federal regulatory considerations. Old National Bancorp is a separate and distinct legal entity from its subsidiaries. We receive substantially all of our revenue from dividends paid to us by our national bank subsidiary, Old National Bank. These dividends to us are the principal source of funds to pay dividends on our common stock and interest and principal on our debt. Federal banking laws regulate the amount of dividends that may be paid by banking subsidiaries, such as Old National Bank, without the prior approval of such bank’s primary regulator (which is, in the case of Old National Bank, the OCC). A national bank must obtain prior OCC approval to declare a dividend if the total of all dividends (common and preferred), including the proposed dividend, declared by the bank in any calendar year will exceed its net retained income of that year to date plus the retained net income of the preceding two calendar years. At December 31, 2006, Old National Bank had received regulatory approval to declare a special dividend of up to $76 million in the first quarter of 2007. We used the cash obtained from the dividend to fund our purchase of St. Joseph Capital Corporation during the first quarter of 2007. In March 2009, Old National Bank received regulatory approval to declare a special dividend of $40 million in that month. We used the cash from the dividend, together with other cash obtained

by us, to repurchase, on March 31, 2009, the $100 million aggregate liquidation amount of our Series T Preferred Stock we had sold to Treasury on December 12, 2008 under Treasury’s Capital Purchase Program. As a result of such special dividends, Old National Bank requires approval of regulatory authorities for the payment of dividends to us. Such approvals were obtained for the payment of dividends in 2008 and for the first, second and third quarters of 2009.

 

The Federal Reserve and the OCC have issued policy statements generally requiring bank holding companies and insured banks only to pay dividends out of current operating earnings.

 

In addition, Old National Bank would be prohibited from paying a dividend to us if it became “undercapitalized” for purposes of the OCC’s “prompt corrective action” regulations. An “undercapitalized” institution is currently defined as one having a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 4.0%, or a core capital, or leverage, ratio of less than 4.0%. Throughout 2008 and the first two quarters of 2009, Old National Bank was in compliance with all regulatory capital requirements and considered to be “well capitalized.”

 

If we defer payments of interest on our outstanding junior subordinated debt securities or if certain defaults relating to those debt securities occur, we will be prohibited from declaring or paying dividends or distributions on, and from making liquidation payments with respect to, our common stock.

 

As of June 30, 2009, we had outstanding $108 million aggregate principal amount of junior subordinated debt securities issued in connection with the sale of trust preferred securities by certain of our subsidiaries that are statutory business trusts. We also have guaranteed those trust preferred securities. There are currently three separate series of these junior subordinated debt securities outstanding. The terms of the junior subordinated debentures and the related indentures prohibit us, subject to limited exceptions, from declaring or paying any dividends or distributions on, or redeeming, repurchasing, acquiring or making any liquidation payments with respect to, any of our capital stock at any time when (i) there shall have occurred and be continuing an event of default under the applicable indenture or any event, act or condition that with notice or lapse of time or both would constitute an event of default under the applicable indenture; or (ii) we are in default with respect to payment of any obligations under the related guarantee; or (iii) we have deferred payment of interest on the junior subordinated debt securities outstanding under the applicable indenture. In that regard, we are entitled, at our option but subject to certain conditions, to defer payments of interest on the junior subordinated debt securities of each series from time to time for up to five years. Moreover, without notice to, or consent from, the holders of our common stock, we may issue additional series of junior subordinated debt securities in the future with terms similar to those of our existing junior subordinated debt securities or enter into other financing agreements that limit our ability to purchase or to pay dividends or distributions on our capital stock, including our common stock.

 

There may be future sales or other dilution of our equity that may adversely affect the market price of our common stock.

 

We are presently not restricted from issuing additional common stock or preferred stock, including any securities that are convertible into or exchangeable for, or represent the right to receive, common stock or preferred stock or any substantially similar securities. The market price of our common stock could decline as a result of sales of common stock or preferred stock or similar securities made after this offering or the perception that such sales could occur.

 

The issuance of any series of preferred stock could adversely affect holders of our common stock, which may negatively impact your investment.

 

Our Board of Directors may authorize the issuance of classes or series of preferred stock without any action on the part of the holders of our common stock. The Board of Directors also has the power, without the approval of holders of our common stock, to set the terms of any such classes or series of preferred stock that may be issued, including dividend rights and preferences over the common stock with respect to dividends or upon our dissolution, winding-up or liquidation, and other terms. If we issue preferred stock in the future that has a preference over our common stock with respect to the payment of dividends or upon our dissolution,

winding up or liquidation, or if we issue preferred stock with voting rights that dilute the voting power of our common stock, the rights of holders of our common stock or the market price of our common stock could be adversely affected.

 

Anti-takeover provisions could negatively impact our shareholders.

 

Provisions of Indiana law, federal regulations and our articles of incorporation and by-laws could make it more difficult for a third party to acquire control of us or have the effect of discouraging a third party from attempting to acquire control of us. In addition, we are required to obtain regulatory approval before we can acquire control of another company.

 

The Bank Holding Company Act of 1956 requires any “bank holding company” (as defined in that Act) to obtain the approval of the Federal Reserve prior to acquiring more than 5% of our outstanding common stock. Any person other than a bank holding company is required to obtain prior approval of the Federal Reserve to acquire 10% or more of our common stock under the Change in Bank Control Act of 1978. Any holder of 25% or more of our outstanding common stock, other than an individual, is subject to regulation as a bank holding company under the Bank Holding Company Act of 1956.

 

The net proceeds, after underwriting discounts and estimated expenses, to us from the sale of the common stock offered hereby will be approximately $           million. If the underwriters exercise their over-allotment option in full, we estimate that our net proceeds will be approximately $           million. We intend to use the net proceeds from this offering for general corporate purposes and to support our ongoing and future anticipated growth, which may include opportunistic acquisitions of other financial institutions (including the possible acquisition of assets and liabilities of failed financial institutions in FDIC-sponsored or assisted transactions).

 

The following table shows our capitalization as of June 30, 2009 on an actual basis and on an as-adjusted basis to give effect to the receipt of the net proceeds from the offering. The as-adjusted capitalization assumes full exercise of the underwriters’ over-allotment option, that           shares of common stock are sold at a public offering price of $           per share, and that the net proceeds from the offering, after deducting the underwriting discounts and estimated offering expenses payable by us, are approximately $           million.

 

 

 

 

For purposes of the table above, the number of shares issued and outstanding at June 30, 2009 does not include an aggregate of 6,180,061 shares consisting of 105,700 restricted stock units and 6,074,361 shares of common stock reserved for issuance upon exercise of outstanding options and available for issuance under employee benefit plans.

 

Our common stock is listed on the NYSE under the symbol “ONB.” The following table sets forth, for the quarters shown, the range of high and low composite prices of our common stock on the NYSE and the cash dividends declared on the common stock.

 

 

 

 

As of September 18, 2009, we had 66,473,234 shares of common stock outstanding (excluding an aggregate of 6,170,061 shares consisting of 105,700 restricted stock units and 6,064,361 shares of common stock reserved for issuance upon exercise of outstanding options and available for issuance under employee benefit plans). The last reported sales price of our common stock on the NYSE on September 18, 2009 was $11.27 per share.

 

We have traditionally paid a quarterly dividend to common shareholders. Our ability to pay dividends is subject to legal and regulatory restrictions. Any payment of dividends in the future will depend, in large part, on our earnings, capital requirements, financial condition and other factors considered relevant by our Board of Directors.

 

Our Board of Directors reduced the quarterly dividend payable on our common stock from $0.23 per share in the first quarter of 2009 to $0.07 per share in the second quarter of 2009 to preserve capital and strengthen our tangible common equity levels. In July of 2009, our Board of Directors declared a dividend of $0.07 per share for the third quarter of 2009 that was paid on September 15, 2009 to shareholders of record on September 1, 2009. There can be no assurance that we will pay dividends to our shareholders in the future, or, if dividends are paid, that we will increase our dividend to historical or other levels or that we will not further reduce our dividends. In addition, any further reduction in our dividends, or our failure to increase dividends, could adversely affect the market price of our common stock.

 

As previously discussed in the section entitled “Risk Factors,” dividends from Old National Bank are the primary source of funds for payment of dividends to our shareholders and there are federal banking law limitations on the amount of dividends that Old National Bank can pay to us without regulatory approval. As a result of special dividends paid in the first quarter of 2007 and the first quarter of 2009, Old National Bank requires approval of regulatory authorities for the payment of dividends to us. Such approvals were obtained for the payment of dividends in 2008 and for the first, second and third quarters of 2009. Under Indiana law, we are generally prohibited from paying a dividend or making any other distribution if, after making such

distribution, we would be unable to pay our debts as they become due in the usual course of business, or if our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if we were dissolved at the time of the distribution, to satisfy preferential rights of holders of preferred stock ranking senior in right of payment to the capital stock on which the distribution is made.

 

The terms of our outstanding junior subordinated debt securities issued in connection with our trust preferred securities and the related indentures prohibit us, subject to limited exceptions, from paying cash dividends on or repurchasing our common or preferred stock at any time when we have elected to defer the payment of interest on such debt securities or if certain events of default under the terms of those debt securities have occurred and are continuing. See “Risk Factors — Risks Related to this Offering — If we defer payments of interest on our outstanding junior subordinated debt securities or if certain defaults relating to those debt securities occur, we will be prohibited from declaring or paying dividends or distributions on, and from making liquidation payments with respect to, our common stock.”

 

The following is a general discussion of certain U.S. federal income tax considerations with respect to the acquisition, ownership and disposition of shares of our common stock applicable to non-U.S. holders who acquire such shares in this offering and hold such shares as a capital asset (generally, property held for investment). For purposes of this discussion, a “non-U.S. holder” means a beneficial owner of shares of our common stock (other than an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes) that is not, for U.S. federal income tax purposes, any of the following:

 

 

This discussion is based on current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated thereunder, judicial opinions, published positions of the Internal Revenue Service, and other applicable authorities, all of which are subject to change (possibly with retroactive effect). This discussion does not address all aspects of U.S. federal income taxation that may be important to a particular non-U.S. holder in light of that non-U.S. holder’s individual circumstances, nor does it address any aspects of U.S. federal estate and gift, state, local, or non-U.S. taxes. This discussion may not apply, in whole or in part, to particular non-U.S. holders in light of their individual circumstances or to holders subject to special treatment under the U.S. federal income tax laws (such as insurance companies, tax-exempt organizations, financial institutions, brokers or dealers in securities, “controlled foreign corporations”, “passive foreign investment companies”, non-U.S. holders that hold our common stock as part of a straddle, hedge, conversion transaction or other integrated investment, and certain U.S. expatriates).

 

If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of our common stock, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partners in a partnership holding our common stock should consult their tax advisor as to the particular U.S. federal income tax consequences applicable to them.

 

THIS SUMMARY IS FOR GENERAL INFORMATION ONLY AND IS NOT INTENDED TO CONSTITUTE A COMPLETE DESCRIPTION OF ALL TAX CONSEQUENCES FOR NON-U.S. HOLDERS RELATING TO THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SHARES OF OUR COMMON STOCK. PROSPECTIVE HOLDERS OF SHARES OF OUR

COMMON STOCK SHOULD CONSULT WITH THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL, FOREIGN INCOME AND OTHER TAX LAWS) OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SHARES OF OUR COMMON STOCK.

 

Dividends.  In general, any distributions we make to a non-U.S. holder with respect to its shares of our common stock that constitute a dividend for U.S. federal income tax purposes will be subject to U.S. withholding tax at a rate of 30% of the gross amount, unless the non-U.S. holder is eligible for a reduced rate of withholding tax under an applicable tax treaty and the non-U.S. holder provides proper certification of its eligibility for such reduced rate. A distribution will constitute a dividend for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits as determined for U.S. federal income tax purposes. Any distribution not constituting a dividend will be treated first as reducing the adjusted tax basis in the non-U.S. holder’s shares of our common stock and, to the extent it exceeds the adjusted tax basis in the non-U.S. holder’s shares of our common stock, as gain from the sale or exchange of such shares of our common stock.

 

Dividends we pay to a non-U.S. holder that are effectively connected with its conduct of a trade or business within the United States (and, if a tax treaty applies, are attributable to a U.S. permanent establishment) will not be subject to U.S. withholding tax, as described above, if the non-U.S. holder complies with applicable certification and disclosure requirements. Instead, such dividends generally will be subject to U.S. federal income tax on a net income basis, in the same manner as if the non-U.S. holder were a resident of the United States. Dividends received by a foreign corporation that are effectively connected with its conduct of trade or business within the United States may be subject to an additional branch profits tax at a rate of 30% (or such lower rate as may be specified by an applicable tax treaty).

 

Gain on Sale or Other Disposition of Common Stock.  In general, a non-U.S. holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other disposition of the non-U.S. holder’s shares of our common stock unless:

 

 

Gain that is effectively connected with the conduct of a trade or business in the United States (or so treated) generally will be subject to U.S. federal income tax, net of certain deductions, at regular U.S. federal income tax rates. If the non-U.S. holder is a foreign corporation, the branch profits tax described above also may apply to such effectively connected gain. An individual non-U.S. holder who is subject to U.S. federal income tax because the non-U.S. holder was present in the United States for 183 days or more during the year of sale or other disposition of our common stock will be subject to a flat 30% tax on the gain derived from such sale or other disposition, which may be offset by United States source capital losses.

 

We believe we are not and do not anticipate becoming a “United States real property holding corporation” for U.S. federal income tax purposes. In general, a corporation is a “United States real property holding corporation” if the fair market value of its “United States real property interests” (as defined in Section 897 of the Code) equals or exceeds 50% of the sum of the fair market value of its real property interests and its other assets used or held for use in a trade or business. If we are considered to be a United

States real property holding corporation during the relevant time period, a non-U.S. holder may be subject to U.S. federal income tax on any gain realized in connection with the sale, exchange or other taxable disposition of our shares and the gross proceeds from such sale, exchange or other taxable disposition could be reduced by a 10% withholding tax, which withholding tax will be creditable against the U.S. tax due on the gain.

 

Backup Withholding, Information Reporting and Other Reporting Requirements.  We must report annually to the Internal Revenue Service and to each non-U.S. holder the amount of dividends paid to, and the tax withheld with respect to, each non-U.S. holder. These reporting requirements apply regardless of whether withholding was reduced or eliminated by an applicable tax treaty. Copies of this information reporting may also be made available under the provisions of a specific tax treaty or agreement with the tax authorities in the country in which the non-U.S. holder resides or is established.

 

A non-U.S. holder will generally be subject to backup withholding for dividends on our common stock paid to such holder unless such holder certifies under penalties of perjury that, among other things, it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that such holder is a U.S. person as defined under the Code).

 

Information reporting and backup withholding generally are not required with respect to the amount of any proceeds from the sale or other disposition of our common stock by a non-U.S. holder outside the United States through a foreign office of a foreign broker that does not have certain specified connections to the United States. However, if a non-U.S. holders sells or otherwise disposes its shares of our common stock through a U.S. broker or the U.S. offices of a foreign broker, the broker will generally be required to report the amount of proceeds paid to the non-U.S. holder to the Internal Revenue Service and also backup withhold on that amount unless such non-U.S. holder provides appropriate certification to the broker of its status as a non-U.S. person or otherwise establishes an exemption (and the payor does not have actual knowledge or reason to know that such holder is a U.S. person as defined under the Code). Information reporting will also apply if a non-U.S. holder sells its shares of our common stock through a foreign broker deriving more than a specified percentage of its income from U.S. sources or having certain other connections to the United States, unless such broker has documentary evidence in its records that such non-U.S. holder is a non-U.S. person and certain other conditions are met, or such non-U.S. holder otherwise establishes an exemption (and the payor does not have actual knowledge or reason to know that such holder is a U.S. person as defined under the Code).

 

Backup withholding is not an additional income tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder generally can be credited against the non-U.S. holder’s U.S. federal income tax liability, if any, or refunded, provided that the required information is furnished to the Internal Revenue Service in a timely manner. Non-U.S. holders should consult their tax advisors regarding the application of the information reporting and backup withholding rules to them.

 

We are offering the shares of our common stock described in this prospectus supplement in an underwritten offering in which Sandler O’Neill & Partners, L.P. is acting as representative of the underwriters. We have entered into an underwriting agreement with Sandler O’Neill & Partners, L.P., acting as representative of the underwriters named below, with respect to the common stock being offered. Subject to the terms and conditions contained in the underwriting agreement, each underwriter has severally agreed to purchase the respective number of shares of our common stock set forth opposite its name below.

 

 

The underwriting agreement provides that the underwriters’ obligations to purchase shares of our common stock are subject to certain conditions. Subject to these conditions, the underwriters are severally committed to purchase and pay for all shares of our common stock offered by this prospectus supplement, if any such shares are taken. However, the underwriters are not obligated to take or pay for the shares of our common stock covered by the underwriters’ over-allotment option described below, unless and until such option is exercised.

 

Over-Allotment Option.  We have granted the underwriters an option, exercisable no later than 30 days after the date of the underwriting agreement, to purchase up to an aggregate of           additional shares of our common stock at the public offering price, less the underwriting discounts and commissions set forth on the cover page of this prospectus supplement. We will be obligated to sell these shares of common stock to the underwriters to the extent the over-allotment option is exercised. The underwriters may exercise this option only to cover over-allotments, if any, made in connection with the sale of our common stock offered by this prospectus supplement and the accompanying prospectus.

 

Commissions and Expenses.  The underwriters propose to offer our common stock directly to the public at the public offering price set forth on the cover page of this prospectus supplement and to dealers at the public offering price less a concession not in excess of $      per share. The underwriters may allow, and the dealers may re-allow, a concession not in excess of $      per share on sales to other brokers and dealers. After the public offering of our common stock, the underwriters may change the public offering price, concessions and other selling terms.

 

The following table shows the per share and total underwriting discounts and commissions that we will pay to the underwriters and the proceeds we will receive before expenses. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares of our common stock.

 

 

We estimate the expenses payable by us in connection with this offering, exclusive of underwriting discounts and commissions and other expenses of the underwriters, will be approximately $     .

 

Lock-Up Agreement.  Except for shares held by American National Trust & Investment Management Company d/b/a Old National Trust Company, our trust subsidiary, in a fiduciary capacity, we and each of our directors and named executive officers have agreed, for a period of 90 days after the date of this prospectus supplement, not to sell, offer, agree to sell, contract to sell, hypothecate, pledge, grant any option to sell, make any short sale or otherwise dispose of or hedge, directly or indirectly, any common shares or securities

convertible into, or exchangeable or exercisable for, any shares of common stock or warrants or other rights to purchase our shares of common stock or other similar securities without, in each case, the prior written consent of Sandler O’Neill & Partners, L.P. These restrictions are expressly agreed to preclude us, and our directors and named executive officers, from engaging in any hedging or other transactions or arrangements that are designed to, or which reasonably could be expected to, lead to or result in a sale, disposition or transfer, in whole or in part, of any of the economic consequences of ownership of our common shares, whether such transaction would be settled by delivery of shares of common stock or other securities, in cash or otherwise. The 90-day restricted period described above will be automatically extended if (1) during the last 17 days of the 90-day restricted period, we issue an earnings release or material news or a material event relating to us occurs or (2) prior to the expiration of the 90-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 90-day restricted period, in which case the restricted period will continue to apply until the expiration of the 18-day period beginning on the date on which the earnings release is issued or the material news or material event related to us occurs.

 

Indemnity.  We have agreed to indemnify each underwriter, persons who control each underwriter, and their respective partners, directors, officers, employees and agents, against certain liabilities, including liabilities under the Securities Act of 1933, and to contribute to payments that the underwriters may be required to make in respect of these liabilities.

 

Stabilization.  In connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids.

 

 

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock in the open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of our common stock. These transactions may be effected on the NYSE, in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.

Our Relationship with the Underwriters.  Sandler O’Neill & Partners, L.P., Keefe, Bruyette & Woods, Inc. and SunTrust Robinson Humphrey, Inc. and some of their respective affiliates have performed and expect to continue to perform financial advisory, banking, investment banking and other commercial services for us in the ordinary course of their respective businesses, and may have received, and may continue to receive, compensation for such services.

 

In addition, SunTrust Robinson Humphrey, Inc. is the arranger and sole bookrunner under our $30 million revolving credit facility and SunTrust Bank, an affiliate of SunTrust Robinson Humphrey, Inc., is the administrative agent and a lender under the facility. As of September 18, 2009, there are no amounts outstanding under the facility.

 

Our common stock is being offered by the underwriters, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of certain legal matters by counsel for the underwriters and other conditions.

 

 

The validity of the shares of common stock we are offering will be passed upon for us by Krieg DeVault llp, Indianapolis, Indiana. Certain legal matters will be passed upon for the underwriters by Sidley Austin llp, New York, New York.

 

 

The consolidated financial statements of Old National Bancorp and its subsidiaries at December 31, 2007 and December 31, 2008 and for each of the three years in the period ended December 31, 2008 and the effectiveness of Old National Bancorp’s internal control over financial reporting as of December 31, 2008 have been audited by Crowe Horwath LLP, an independent registered public accounting firm, as set forth in their report thereon appearing in Old National Bancorp’s annual report on Form 10-K for the year ended December 31, 2008 and incorporated by reference in this prospectus supplement. Such consolidated financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

 

We file annual, quarterly and current reports, proxy statements and other information with the Commission. You may read and copy any document that we file with the Commission at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. Our filings with the Commission are also available to the public through the Commission’s website at http://www.sec.gov. In addition, since our common stock is listed on the NYSE, you can read our Commission filings at the offices of the NYSE, 20 Broad Street, New York, NY 10005.

 

The Commission allows us to “incorporate by reference” in the prospectus supplement and the accompanying prospectus the information we file with the Commission, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus supplement and the accompanying prospectus. Some information contained in this prospectus supplement updates the information incorporated by reference, and information that we file subsequently with the Commission will automatically update this prospectus supplement and the accompanying prospectus. In other words, in the case of a conflict or inconsistency between information set forth in this prospectus supplement or the accompanying prospectus and information incorporated by reference in this prospectus supplement or the accompanying prospectus, you should rely on the information contained in the document that was filed later. We incorporate by reference the following documents (excluding any portions of such documents that have been “furnished” but not “filed” for purposes of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act”):

 

 

 

We also incorporate by reference any filings we make with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act (excluding any portions of any such documents that are “furnished” but not “filed” for purposes of the Exchange Act) until we sell all of the securities offered by this prospectus supplement or terminate this offering.

 

You may request a copy of any of the documents referred to above, other than an exhibit to a filing unless that exhibit is specifically incorporated by reference in that filing, at no cost, by contacting Old National in writing or by telephone at: Old National Bancorp, Attn: Corporate Secretary, P.O. Box 718, Evansville, Indiana 47705, Tel: (812) 464-1294. You may also obtain copies of our periodic reports and other filings with the Commission by clicking on the Investor Relations link at our website at http://www.oldnational.com/About-Us/Index.asp. Except for those Commission filings incorporated by reference in this prospectus supplement and the accompanying prospectus, none of the other information on our website is a part of this prospectus supplement or the accompanying prospectus.

PROSPECTUS

 

 

OLD NATIONAL BANCORP

 

 

 

We will provide the specific terms of these securities in supplements to this prospectus. You should read this prospectus and the applicable prospectus supplement carefully before you invest.

 

Our common stock is listed on the New York Stock Exchange under the symbol “ONB.”

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

 

The securities are not deposits or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation, the Bank Insurance Fund or any other governmental agency.

 

 

 

This prospectus is dated June 6, 2008.

TABLE OF CONTENTS

 

 

This prospectus is part of a registration statement that Old National Bancorp and ONB Capital Trust III, ONB Capital Trust IV, ONB Capital Trust V and ONB Capital Trust VI filed with the Securities and Exchange Commission using a “shelf” registration process. Under this shelf registration process, we may sell any combination of the securities described in this prospectus in one or more offerings. Each of ONB Capital Trust III, ONB Capital Trust IV, ONB Capital Trust V and ONB Capital Trust VI is referred to in this prospectus as an “ONB Trust” and are collectively referred to as the ONB Trusts.

 

This prospectus provides you with a general description of the securities we and the ONB Trusts may issue. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. Such prospectus supplement may also add, update or change information contained in this prospectus. If there is any inconsistency between the information in the prospectus and the applicable prospectus supplement, you should rely on the information in the prospectus supplement. You should read this prospectus and the applicable prospectus supplement together with the additional information described under the heading “Where You Can Find More Information.”

 

The registration statement that contains this prospectus, including the exhibits to the registration statement, contains additional information about us and the ONB Trusts and the securities offered under this prospectus. You can find the registration statement at the web site maintained by the Securities and Exchange Commission, or the “SEC,” at http://www.sec.gov or at the SEC office mentioned under the heading “Where You Can Find More Information.”

 

When we refer to “Old National,” “we,” “our” or “us” in this prospectus under the headings “Old National Bancorp” and “Consolidated Ratio of Earnings to Fixed Charges and Consolidated Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends,” we mean Old National Bancorp and its subsidiaries unless the context indicates otherwise. When we refer to “we,” “our” or “us” in this prospectus in this section or under the heading “Where You Can Find More Information,” we mean each of Old National and the ONB Trusts, as applicable. When such terms are used elsewhere in this prospectus, we refer only to Old National Bancorp unless the context indicates otherwise.

 

 

Old National files annual, quarterly and current reports and proxy statements and other information with the SEC. Old National’s SEC filings are available at the SEC’s website at http://www.sec.gov. You may also read and copy any document Old National files at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on the SEC’s public reference room. You may also inspect Old National’s reports at the New York Stock Exchange, 20 Broad Street, New York, New York 10005.

 

For further information about us and the securities we are offering, you should refer to our registration statement and its exhibits. This prospectus summarizes material provisions of contracts and other documents that we refer you to. Since the prospectus may not contain all the information that you may find important, you should review the full text of these documents.

 

We “incorporate by reference” into this prospectus the information Old National files with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus. Some information contained in this prospectus updates the information incorporated by reference, and information that Old National files subsequently with the SEC will automatically update this prospectus. In other words, in the case of a conflict or inconsistency between information set forth in this prospectus and/or information incorporated by reference into this prospectus, you should rely on the information contained in the document that was filed later. We incorporate by reference the following documents (excluding any portions of such documents that have been “furnished” but not “filed” for purposes of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act”):

 

 

 

We also incorporate by reference reports Old National files in the future under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act (excluding any portions of any such documents that are “furnished” but not “filed” for purposes of the Exchange Act), including reports filed after the date of the initial filing of the registration statement and before the effectiveness of the registration statement, until we sell all of the securities offered by this prospectus or terminate this offering.

 

You may request a copy of any of the documents referred to above, other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that filing, at no cost, by contacting Old National in writing or by telephone at:

 

Old National Bancorp
P.O. Box 718
Evansville, Indiana 47708
(812) 464-1363
Attention: Corporate Secretary

 

You should rely only on the information incorporated by reference or presented in this prospectus or the applicable prospectus supplement. Neither we, nor any underwriters or agents, have authorized anyone else to provide you with different information. We may only use this prospectus to sell securities if it is accompanied by a prospectus supplement. We are only offering these securities in states where the offer is permitted. You should not assume that the information in this prospectus or the applicable prospectus supplement is accurate as of any date other than the dates on the front of those documents.

 

The following is a cautionary note about forward-looking statements. This prospectus (including any information we include or incorporate into this prospectus and in an accompanying prospectus supplement) contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can include statements about estimated cost savings, plans and objectives for future operations, and expectations about performance as well as economic and market conditions and trends. These statements often can be identified by the use of words like “expect,” “may,” “could,” “intend,” “project,” “estimate,” “believe” or “anticipate.” We may include forward-looking statements in filings with the SEC, such as this prospectus, in other written materials, and in oral statements made by our senior management to analysts, investors, representatives of the media and others. It is intended that these forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the forward-looking statement is made or to reflect the occurrence of unanticipated events. By their nature, forward-looking statements are based on assumptions and are subject to risks, uncertainties and other factors. Actual results may differ materially from those contained in a forward-looking statement.

 

Risks and uncertainties that could affect our future performance include, among others: our ability to execute our business plan; economic, market, operational, liquidity, credit and interest rate risks associated with our business; economic conditions generally and in the financial services industry; increased competition

in the financial services industry either nationally or regionally, resulting in, among other things, credit quality deterioration; volatility and direction of market interest rates; governmental legislation and regulation, including changes in accounting regulation or standards; a weakening of the economy that could materially impact credit quality trends and the ability to generate loans; changes in the securities markets; new litigation or changes to existing litigation; changes in fiscal, monetary and tax policies; our ability to execute our business plan; and our ability to achieve loan and deposit growth.

 

Additional information regarding important risk and other factors that could cause our future financial performance to differ materially from that described in our forward-looking statements is available in our annual report on Form 10-K for the year ended December 31, 2007, and subsequent reports we file with the SEC, which are incorporated by reference in this prospectus. See “Where You Can Find More Information” above for information on how to obtain a copy of our annual report and other reports. Investors should consider these risks, uncertainties and other factors when considering any forward-looking statement.

 

We are a financial holding company that provides financial services primarily in Indiana, eastern and southeastern Illinois, and central and western Kentucky. Through our bank subsidiary, Old National Bank, we provide a wide range of services, including commercial and consumer loan and depository services, investment and brokerage services, lease financing and other traditional banking services. We also own financial services companies that provide services to supplement our banking business, including fiduciary and wealth management services, insurance and other financial services.

 

We were incorporated in 1982 in the State of Indiana as the holding company of Old National Bank in Evansville, Indiana. Old National Bank has provided banking services since 1834. In 2001, we completed the consolidation of 21 bank charters, thus enabling consistent products offerings under a common name throughout our financial center locations.

 

Since our formation in 1982, we have acquired more than 40 financial institutions and financial services companies. Future acquisitions and divestitures will be driven by a disciplined financial process and will be consistent with our existing focus on community banking, client relationships and consistent quality earnings. Targeted geographic markets for acquisitions include mid-size markets within or near our existing locations with average to above average growth rates. As with previous acquisitions, the consideration paid by us in future acquisitions will be in the form of cash, debt or our common stock. The amount and structure of such consideration is based on reasonable growth and cost savings assumptions and a thorough analysis of the impact on both long- and short-term financial results.

 

As a legal entity separate and distinct from our bank and financial services subsidiaries, our principal sources of revenues are dividends and fees from our bank and financial service company subsidiaries. Our subsidiaries that operate in the banking, insurance and securities business can pay dividends only if they are in compliance with the applicable regulatory requirements imposed on them by federal and state regulatory authorities. Our principal executive offices are located at 1 Main Street, Evansville, Indiana 47708, and our telephone number at that address is (812) 464-1434.

 

Each ONB Trust is a statutory trust that Old National has formed under Delaware law. For each ONB Trust there is a trust agreement signed by Old National as depositor, by The Bank of New York Trust Company, N.A., (as successor to J.P. Morgan Trust Company, National Association (as successor, in the case of ONB Trust III and ONB Trust IV, to Bank One Trust Company, NA)), as property trustee, and by BNYM (Delaware) (as successor to Chase Manhattan Bank USA, National Association (as successor, in the case of ONB Trust III and ONB Trust IV, to Bank One Delaware, Inc.)), as Delaware trustee. For each ONB Trust there is also a certificate of trust filed with the Delaware Secretary of State. When Old National is ready to issue and sell securities through an ONB Trust, the trust agreement relating to the applicable ONB Trust will be amended to read substantially like the form of amended and restated trust agreement that is filed with the

SEC as an exhibit to the registration statement of which this prospectus is a part. Each trust agreement will be qualified as an indenture under the Trust Indenture Act of 1939.

 

The Issuance and Sale of the Capital Securities and Common Securities

 

Old National has created each ONB Trust solely to:

 

 

Because the only assets of each ONB Trust will be junior subordinated debentures that Old National issues to it, Old National’s payments on the junior subordinated debentures will be the only source of funds to be paid to purchasers or owners of the capital securities and common securities. Each of the ONB Trusts is a separate legal entity, so the assets of one will not be available to satisfy the obligations of any other similar trust Old National now, or in the future, may create.

 

Old National will acquire and own all of the common securities of each ONB Trust and the remaining ownership interests in the applicable ONB Trust will be the capital securities of the ONB Trust that may be sold to the public. The common securities and the capital securities will have substantially the same terms, including the same priority of payment and liquidation amount, and will receive proportionate payments from the ONB Trust in respect of distributions and payments upon liquidation, redemption or otherwise at the same times. However, if Old National defaults on the junior subordinated debentures that it issues to that ONB Trust and does not cure the default within the times specified in the indenture governing the issuance of the junior subordinated debentures, Old National’s rights to payments as holder of the common securities will be subordinated to the rights of the holders of the capital securities. See “Description of Capital Securities — Subordination of Common Securities.”

 

Unless Old National indicates otherwise in the applicable prospectus supplement, each ONB Trust will have a term of approximately 50 years. However, an ONB Trust may terminate earlier as provided in the applicable trust agreement and the prospectus supplement.

 

Each ONB Trust’s business and affairs will be conducted by its trustees, whom Old National, as holder of the common securities, will appoint. The trustees for each ONB Trust will be:

 

 

In addition, two or more individuals who are employees or officers of, or who are affiliated with, Old National will act as administrators of each ONB Trust.

 

Old National refers to the property trustee and the Delaware trustee together as the “issuer trustees.” The property trustee will act as sole indenture trustee under each trust agreement for purposes of compliance with the Trust Indenture Act. Unless Old National indicates otherwise in the applicable prospectus supplement, The Bank of New York Trust Company, N.A. will also act as trustee under the junior subordinated debenture indenture and as trustee under Old National’s guarantee agreement relating to the capital securities. See “Description of Junior Subordinated Debentures” and “Description of Guarantees.”

 

As the holder of the common securities of each ONB Trust, Old National will ordinarily have the right to appoint, remove or replace either issuer trustee for each ONB Trust. However, if an event of default with

respect to the corresponding junior subordinated debentures issued to that ONB Trust has occurred and is continuing, then the holders of a majority in liquidation amount of that ONB Trust’s outstanding capital securities will be entitled to appoint, remove or replace either or both issuer trustees. In no event will the holders of the capital securities have the right to vote to appoint, remove or replace the administrators. Old National retains that right exclusively as the holder of the common securities. The duties and obligations of each issuer trustee are governed by the applicable trust agreement.

 

Pursuant to the indenture and the trust agreements, Old National promises to pay all fees and expenses related to each ONB Trust and the offering of the capital securities and will pay, directly or indirectly, all ongoing costs, expenses and liabilities of each ONB Trust, except obligations under the capital securities and the common securities.

 

The ONB Trusts have no separate financial statements. Separate financial statements would not be material to holders of the capital securities because the ONB Trusts have no independent operations. They exist solely for the limited functions summarized above. Old National will guarantee the capital securities as described later in this prospectus.

 

The principal executive office of each ONB Trust is c/o Old National Bancorp, One Main Street, Evansville, Indiana 47708, and its telephone number is (812) 464-1434.

 

As a registered bank holding company and financial holding company, we are subject to inspection, examination and supervision by the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956. As a national bank, our bank subsidiary, Old National Bank, is subject to extensive supervision, examination and regulation by the Office of the Comptroller of the Currency. Because we are a holding company, our rights and the rights of our creditors and securityholders, including the holders of the securities we are offering under this prospectus, to participate in the assets of any of our subsidiaries upon the subsidiary’s liquidation or reorganization will be subject to the prior claims of the subsidiary’s creditors, except to the extent that we may ourselves be a creditor with recognized claims against the subsidiary. In addition, there are various statutory and regulatory limitations on the extent to which our bank subsidiary, Old National Bank, can finance or otherwise transfer funds to us or to our nonbank subsidiaries, whether in the form of loans, extensions of credit, investments or asset purchases. Those transfers by Old National Bank to us or any nonbanking subsidiary are limited in amount to 10% of Old National Bank’s capital and surplus and, with respect to us and all such nonbank subsidiaries, to an aggregate of 20% of Old National Bank’s capital and surplus. Furthermore, loans and extensions of credit are required to be secured in specified amounts and are required to be on terms and conditions consistent with safe and sound banking practices.

 

In addition, there are regulatory limitations on the payment of dividends directly or indirectly to us from Old National Bank. In February 2007, Old National Bank declared and paid a special dividend of $76 million to us in connection with the cash acquisition of St. Joseph Capital Corporation. The special dividend was approved by regulatory authorities. As a result, since payment of the special dividend, Old National Bank has exceeded the earnings limitation on the payment of dividends and has been required to obtain approval of regulatory authorities for the payment of additional dividends. Since the end of the first quarter of 2007, Old National Bank has requested and been approved by regulatory authorities to pay additional regular quarterly dividends to us in the aggregate amount of $110 million. Federal regulatory agencies also have the authority to further limit Old National Bank’s payment of dividends based on other factors, such as maintenance of adequate capital of Old National Bank.

 

Under the policies of the Board of Governors of the Federal Reserve System, we are expected to act as a source of financial and managerial strength to Old National Bank and to commit resources to support Old National Bank in circumstances where we might not do so absent such a policy. In addition, subordinated loans by us to Old National Bank would be subordinate in right of payment to depositors and other creditors of Old National Bank. Further, in the event of our bankruptcy, any commitment by us to our regulators to

maintain the capital of Old National Bank would be assumed by the bankruptcy trustee and entitled to priority of payment.

 

For a discussion of the material elements of the regulatory framework applicable to bank holding companies, financial holding companies and their subsidiaries, and specific information relevant to us, refer to our annual report on Form 10-K for the year ended December 31, 2007, and any subsequent reports filed by us with the SEC, which are incorporated by reference in this prospectus. This regulatory framework is intended primarily for the protection of depositors and the deposit insurance funds that insure deposits of banks, rather than for the protection of security holders. A change in the statutes, regulations or regulatory policies applicable to us or our subsidiaries may have a material effect on our business.

 

Unless we indicate otherwise in an applicable prospectus supplement, the net proceeds from the sale of the offered securities will be added to our general funds and may be used for:

 

 

Until the net proceeds have been used, they may be temporarily invested in securities or held in deposits of our affiliated banks.

 

Each ONB Trust will use the proceeds from the sale of its capital securities and its common securities to acquire junior subordinated debentures from us.

 

The following table sets forth our consolidated ratio of earnings to fixed charges and our consolidated ratio of earnings to combined fixed charges and preferred stock dividends on a historical basis for the periods indicated. For purposes of computing these ratios, earnings represent income before taxes and fixed charges. Fixed charges, excluding interest on deposits, consist of interest expense, excluding interest on deposits, and one-third of rental expense for all operating leases, which we believe to be representative of the interest portion of rent expense. Fixed charges, including interest on deposits, consist of interest expense, one third of rental expense and interest on deposits. The term “preferred stock dividends” is the amount of pre-tax earnings that is required to pay dividends on Old National’s outstanding preferred stock. As of the date of this prospectus, we had no preferred stock outstanding.

 

 

The debt securities will be direct unsecured general obligations of Old National and will be either senior or subordinated debt. The debt securities will be issued under separate indentures between Old National and The Bank of New York Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association (as successor, in the case of the senior indenture, to Bank One, NA)), as trustee. Senior debt securities will be issued under a senior debt indenture and subordinated debt securities will be issued under a subordinated debt indenture. The senior debt indenture and the subordinated debt indenture are sometimes referred to in this prospectus individually as an “indenture” and collectively as the “indentures.” The senior debt indenture and form of subordinated debt indenture have been filed with the SEC as exhibits to the registration statement of which this prospectus forms a part.

 

The following briefly summarizes the material provisions of the indentures and the debt securities. The summary is not complete. You should read the more detailed provisions of the applicable indenture for provisions that may be important to you. So that you can easily locate these provisions, the numbers in parenthesis below refer to sections in the applicable indenture or, if no indenture is specified, to sections in each of the indentures. Whenever particular sections or defined terms of the applicable indenture are referred to, such sections or defined terms are incorporated into this prospectus by reference, and the statement in this prospectus is qualified by that reference.

 

General

 

The debt securities may be issued in one or more series. The particular terms of each series of debt securities, as well as any modifications or additions to the general terms of the debt securities as described in this prospectus which may be applicable in the case of a particular series of debt securities, will be described in the prospectus supplement relating to that series of debt securities. Accordingly, for a description of the terms of a particular series of debt securities, reference must be made both to the prospectus supplement relating to that series and to the description of debt securities set forth in this prospectus.

 

The senior debt securities will be direct, unsecured and unsubordinated obligations of Old National. The subordinated debt securities will be unsecured and will be subordinated to all of Old National’s senior indebtedness as described below under “— Subordination of Subordinated Debt Securities.” Because Old National is a holding company, the right of Old National, and therefore the right of creditors of Old National (including the holders of the debt securities), to participate in any distribution of the assets of any subsidiary of Old National upon its liquidation or reorganization or otherwise is necessarily subject to the prior claims of creditors of the subsidiary, except to the extent that claims of Old National itself as a creditor of the subsidiary may be recognized. As of March 31, 2008, Old National’s subsidiaries had outstanding approximately $6.6 billion of obligations, including approximately $5.3 billion of deposit liabilities, to which the debt securities would be effectively subordinate. In addition, as of March 31, 2008, Old National had outstanding approximately $150 million of indebtedness which would rank senior to the subordinated debt securities.

 

The prospectus supplement relating to the particular series of debt securities being offered will specify whether they are senior or subordinated debt securities and the other terms of those debt securities, including, but not limited to, the following:

 

 

 

Neither indenture limits the aggregate principal amount of debt securities that may be issued under it and each indenture provides that the debt securities may be issued under it from time to time in one or more series up to the aggregate principal amount which may be authorized from time to time by Old National. (Section 301) All debt securities issued under an indenture will rank equally and ratably with any other debt securities issued under that indenture. No service charge will be made for any transfer or exchange of debt securities, but Old National may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer of exchange. (Section 305)

 

Some of the debt securities may be issued under an indenture as original issue discount securities to be sold at a discount below their stated principal amount. Certain United States federal income tax consequences and other special considerations applicable to any original issue discount securities will be described in the prospectus supplement relating to those debt securities.

 

Unless otherwise indicated in the prospectus supplement relating to a particular series of debt securities, the principal of and any premium or interest on debt securities issued in certificated form will be payable, and, subject to certain limitations, the transfer of debt securities will be registrable, at the offices of the trustee designated for that purpose in Chicago, Illinois and The City of New York, provided that at the option of Old National, interest may be paid by check, wire transfer or any other means permitted in the form of those debt securities. Unless otherwise indicated in an applicable prospectus supplement, payment of any installment of interest on a debt security will be made to the person in whose name the debt security is registered at the close of business on the regular record date for the interest payment, provided that interest payable at maturity or upon earlier redemption or repayment will be payable to the person to whom principal is payable. In the case of global debt securities (which will be registered in the name of the depositary or its nominee), payment will be made to the depositary or its nominee in accordance with the then-existing arrangements between the paying agent(s) for the global debt securities and the depositary. (Sections 305, 307 and 1002)

 

Neither indenture contains any provision that limits the ability of Old National to incur indebtedness (either directly or through merger or consolidation) or, except as described under “— Limitation on Liens” and “— Merger and Consolidation” in relation to senior debt securities, that would afford holders of debt securities protection in the event of a highly leveraged or similar transaction involving Old National. Reference is made

to the prospectus supplement relating to the applicable series of debt securities for information with respect to any deletions from, modifications of or additions to, the events of default or covenants that may be included in the terms of that series of debt securities.

 

Each indenture provides Old National with the ability to “reopen” a previously issued series of debt securities and to issue additional debt securities of that series.

 

Subordination of Subordinated Debt Securities

 

The subordinated indenture provides that the subordinated debt securities will be subordinated and junior in right of payment to all senior indebtedness of Old National. This means that no payment of principal, including redemption payments, premium, if any, or interest on the subordinated debt securities may be made if:

 

 

Upon any distribution of Old National’s assets to creditors upon any termination, winding-up, liquidation or reorganization, whether voluntary or involuntary, or in bankruptcy, insolvency or other proceedings, all principal, premium, if any, and interest due or to become due on all senior indebtedness of Old National must be paid in full before the holders of subordinated debt securities are entitled to receive or retain any payment. Subject to the payment in full of senior indebtedness of Old National then outstanding, the rights of the holders of the subordinated debt securities will be subrogated to the rights of the holders of senior indebtedness of Old National to receive payments or distributions applicable to senior indebtedness until all amounts owing on the subordinated debt securities are paid in full.

 

The term “senior indebtedness” means:

 

(1) all indebtedness of Old National for borrowed or purchased money;

 

(2) all obligations of Old National arising from off-balance sheet guarantees and direct credit substitutes;

 

(3) all capital lease obligations of Old National;

 

(4) all obligations of Old National issued or assumed as the deferred purchase price of property, all conditional sale obligations of Old National and all obligations of Old National under any conditional sale or title retention agreement, but excluding trade accounts payable arising in the ordinary course of business;

 

(5) all obligations, contingent or otherwise, of Old National in respect of any letters of credit, banker’s acceptances, security purchase facilities or similar credit transactions;

 

(6) all obligations of Old National associated with derivative products such as interest rate and foreign exchange contracts, commodity contracts and similar arrangements;

 

(7) all obligations of the type referred to in clauses (1) through (6) above of other persons for the payment of which Old National is responsible or liable as obligor, guarantor or otherwise; and

 

(8) all obligations of the type referred to in clauses (1) through (7) above of other persons secured by any lien on any property or asset of Old National, whether or not such obligation is assumed by Old National,

 

in each case, whether outstanding on the date the subordinated indenture became effective, or created, assumed or incurred after that date, except for:

 

(a) the subordinated debt securities and any indebtedness or guarantee of Old National that by its terms ranks equally with, or junior to, the subordinated debt securities; and

(b) any indebtedness between or among Old National and (i) any ONB Trust or a trustee of such ONB Trust or (ii) any other trust, or a trustee of such trust, partnership or other entity affiliated with Old National that is a financing vehicle of Old National in connection with the issuance by such financing vehicle of preferred securities or other securities guaranteed by Old National pursuant to an instrument that ranks equally with, or junior to, the guarantee.

 

The subordinated indenture does not limit the issuance of additional senior indebtedness.

 

Limitation on Liens

 

Under the senior indenture, we may not, and may not permit any subsidiary to, create or suffer to permit or exist any lien of any kind, as security for borrowed money so long as any of the senior debt securities are outstanding, upon the shares of capital stock of any significant subsidiary without effectively providing that the debt securities will be secured equally and ratably with or prior to the indebtedness or other obligations secured by such lien. (Section 1007 of the senior indenture) Under the senior indenture, a “significant subsidiary” is a direct or indirect subsidiary of Old National the total assets of which equal or exceed 25% of the total assets of Old National as shown on Old National’s consolidated balance sheet at the end of the fiscal quarter prior to the date of determination. The subordinated indenture does not contain any limitation on liens.

 

Limitation on Sale of Stock

 

Under the senior indenture, we may not, and may not permit any significant subsidiary to, sell, assign, transfer or otherwise dispose of, and will not permit any significant subsidiary to issue (other than to Old National) any capital stock of such significant subsidiary or securities convertible into, or options, warrants or rights to subscribe for or to purchase, any capital stock of any such significant subsidiary except with respect to sales of shares of capital stock of the significant subsidiary:

 

 

The subordinated indenture does not contain any limitation on the sale of stock of a significant subsidiary.