Old National Bancorp (NASDAQ:ONB), based in Evansville, Indiana, has entered into an additional forward sale agreement with Citibank, N.A., following the full exercise of an underwriters' option to purchase extra shares in a recent public offering. The additional agreement, dated Monday, covers an extra 2,857,143 shares of common stock.
On Monday, the company had already entered into a forward sale agreement for 19,047,619 shares of common stock in connection with an underwriting agreement for its public offering. The underwriters, led by Citigroup (NYSE:C) Global Markets Inc., were granted a 30-day option to acquire up to 2,857,143 additional shares, which they have now exercised in full.
The newly exercised option and subsequent additional forward sale agreement are on terms substantially similar to the original forward sale agreement. This arrangement allows Old National Bancorp to potentially settle the forward sale agreements with physical delivery of shares, net share settlement, or combination thereof, at the company's discretion.
The company's common stock is listed on the NASDAQ Global Select Market under the ticker "ONB", with its depositary shares, each representing a 1/40th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A and Series C, also listed under the tickers "ONBPP" and "ONBPO" respectively.
In other recent news, Old National Bancorp has made significant strides with its third-quarter financial results for 2024 and the acquisition of Bremer Financial Corp. The earnings per share (EPS) were reported to be in line with market expectations, with a GAAP EPS of $0.44 and an adjusted EPS of $0.46. This was supported by a 10.1% annualized growth in core deposits and a 4.1% increase in commercial loans.
Moreover, Old National Bancorp's acquisition of Bremer Financial Corp, a privately held company based in St. Paul, Minnesota, has led to an increase in the stock price target from Piper Sandler. The acquisition, valued at approximately $1.4 billion, is expected to significantly enhance Old National Bancorp's market position, especially in the Twin-Cities area.
Piper Sandler, noting the strategic benefits of the acquisition, has maintained an Overweight rating for Old National Bancorp. The financial terms of the deal are attractive, with Old National Bancorp paying just 1.0 times the tangible book value for Bremer Financial Corp.
Despite potential concerns about Old National Bancorp's readiness to manage a larger asset size post-acquisition, the financial benefits are considered to outweigh these questions. Old National Bancorp has also expressed plans to rebuild capital quickly with the potential for share buybacks next year. These recent developments suggest a strategic approach towards growth and risk management for Old National Bancorp.
InvestingPro Insights
Old National Bancorp's recent stock offering expansion aligns with its strong market performance and financial stability. According to InvestingPro data, the company's market capitalization stands at $7.32 billion, reflecting its substantial presence in the banking sector. The bank's price-to-earnings ratio of 14.02 suggests a reasonable valuation relative to its earnings.
InvestingPro Tips highlight Old National Bancorp's impressive stock performance, with a significant 62.2% price total return over the past year and a robust 37.98% return in the last six months. This upward trajectory is further emphasized by the stock trading near its 52-week high, with the current price at 96.55% of that peak.
Notably, Old National Bancorp has maintained dividend payments for 42 consecutive years, demonstrating a commitment to shareholder returns. This consistency is particularly relevant given the recent stock offering, as it may reassure investors about the company's financial health and shareholder-friendly policies.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Old National Bancorp, providing deeper insights into the company's financial outlook and market position.
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