Edgar Filing: OLD NATIONAL BANCORP /IN/

425

Filed by Old National Bancorp

Pursuant to Rule 425 under the Securities Act of 1933

Subject Company: Founders Financial Corporation

SEC Registration Statement No.: 333-198642

The following excerpts relating to Old National Bancorp’s pending acquisition of Founders Financial Corporation are from the slide presentation for a conference call held by executive officers of Old National on October 27, 2014 in connection with Old National’s announcement of its financial results for the quarter ended September 30, 2014, a copy of which has been made available on Old National’s corporate website.

Third-Quarter 2014 Earnings

October 27, 2014

Additional Information for Shareholders of Founders Financial Corporation

The information in this presentation does not constitute an offer to sell or the solicitation of an offer to buy

any securities or a solicitation of any vote or approval.

In connection with the proposed merger, Old National

Bancorp (“Old National”) has filed with the Securities and Exchange Commission (“SEC”) a Registration

Statement on Form S-4 (Registration Statement No. 333-198642) that includes a Proxy Statement of Founders

Financial Corporation (“Founders”) and a Prospectus of Old National, as well as other relevant documents

concerning the proposed transaction.

The SEC declared the Form S-4 Registration Statement effective on

September 23, 2014. A definitive Proxy Statement/Prospectus was

mailed to Founders shareholders on or

about September 29, 2014.

Founders shareholders are urged to read the Registration Statement and the

definitive Proxy Statement/Prospectus regarding the merger and any other relevant documents filed with the

SEC, as well as any amendments or supplements to those documents, because they contain important

information.

A free copy of the definitive Proxy Statement/Prospectus, as well as other filings containing

information about Old National, may be obtained at the SEC’s Internet site (http://www.sec.gov).

You will also

be able to obtain these documents, free of charge, from Old National at www.oldnational.com

under the tab

“Investor Relations”

and then under the heading “Financial Information.”

Old National and Founders and certain of their directors and executive officers may be deemed to be

participants in the solicitation of proxies from the shareholders of Founders in connection with the proposed

merger.

Information about the directors and executive officers of Old National is set forth in the proxy

statement for Old National’s 2014 annual meeting of shareholders, as filed with the SEC on a Schedule 14A

on March 14, 2014. Additional information regarding the interests of those participants and other persons

who may be deemed participants in the transaction may be obtained by reading the definitive Proxy

Statement/Prospectus regarding the proposed merger.

Free copies of this document may be obtained as

described in the preceding paragraph.

Forward-Looking Statement

This presentation contains certain forward-looking statements within the meaning of the Private Securities

Litigation Reform Act of 1995. These statements include, but are not limited to, descriptions of Old National

Bancorp’s (“Old National’s”) financial condition, results of operations, asset and credit quality trends and

profitability and statements about the expected timing, completion, financial benefits and other effects of Old

National’s pending mergers with LSB Financial Corp. (“LSB”) and Founders Financial Corporation (“Founders”).

Forward-looking statements can be identified by the use of the words “anticipate,”

“believe,”

“expect,”

“intend,”

“could”

and “should,”

and other words of similar meaning. These forward-looking statements express

management’s current expectations or forecasts of future events and, by their nature, are subject to risks and

uncertainties and there are a number of factors that could cause

actual results to differ materially from those in

such statements. Factors that might cause such a difference include, but are not limited to: expected cost

savings, synergies and other financial benefits from the pending

mergers might not be realized within the

expected timeframes and costs or difficulties relating to integration matters might be greater than expected; the

requisite shareholder and regulatory approvals for the pending merger with Founders might not be obtained;

market, economic, operational, liquidity, credit and interest rate risks associated with Old National’s business;

competition; government legislation and policies (including the impact of the Dodd-Frank Wall Street Reform

and Consumer Protection Act and its related regulations); ability of Old National to execute its business plan;

changes in the economy which could materially impact credit quality trends and the ability to generate loans and

gather deposits; failure or circumvention of our internal controls; failure or disruption of our information

systems; significant changes in accounting, tax or regulatory practices or requirements; new legal obligations or

liabilities or unfavorable resolutions of litigations; other matters discussed in this presentation and other factors

identified in our Annual Report on Form 10-K and other periodic filings with the SEC. These forward-looking

statements are made only as of the date of this presentation, and Old National does not undertake an obligation

to release revisions to these forward-looking statements to reflect events or conditions after the date of this

presentation.

Non-GAAP Financial Measures

These slides contain non-GAAP financial measures. For

purposes of Regulation G, a non-GAAP financial measure is a

numerical measure of the registrant's historical or future

financial performance, financial position or cash flows that

excludes amounts, or is subject to adjustments that have the

effect of excluding amounts, that are included in the most

directly comparable measure calculated and presented in

accordance with GAAP in the statement of income, balance

sheet or statement of cash flows (or equivalent statements) of

the registrant; or includes amounts, or is subject to adjustments

that have the effect of including amounts, that are excluded

from the most directly comparable measure so calculated and

presented. In this regard, GAAP refers to generally accepted

accounting principles in the United States. Pursuant to the

requirements of Regulation G, Old National Bancorp has

provided reconciliations within the slides, as necessary, of the

non-GAAP financial measure to the most directly comparable

GAAP financial measure.

Executing the Plan –

3Q14 Highlights

•

Execution of our M&A strategy of adding higher-growth markets

Ann Arbor, MI –

United Bancorp acquisition closed and fully converted

Lafayette, IN –

Gained regulatory and shareholder approval for LSB Financial

Corp. acquisition

Grand Rapids, MI –

Gained regulatory approval for Founders Financial

Corporation acquisition

Continue to

Grow Core

Revenue

•

Organic loan growth of $86.9 million

, or 6.5% annualized, over 2Q14 and

organic growth of $281.2 million

, or 5.8%, over 3Q13

•

Core revenue growth

of 9.0% from 3Q13

•

Organic growth in Banking, Wealth Management and Insurance

Reduce

Operating

Expenses

Transform

the

Franchise

Into Higher-

Growth

Markets

•

Operational expenses

increased $0.6

million from 3Q13

•

Expected Tower cost savings of 35%+ on track as announced –

50% to be

realized in 2014 —

converted April 25, 2014

•

Expected United Bancorp, Inc. cost savings of 32% on track as announced –

25% to be realized in 2014 —

converted August 22, 2014

Excluding change in FDIC covered loans and loans acquired in the

Tower and United acquisitions

Excluding changes in securities gains, accretion income and amortization of the indemnification asset

Refer to slide 12 for a definition of operational expenses

3Q14 Financials

Net income of $29.1 million or $.26 per share

–

44% increase over $.18 per share in 2Q14

–

13% increase over $.23 per share in 3Q13

Included in 3Q14 are the following pre-tax

items

–

$3.6 million in merger and integration charges

–

$19.1 million amortization of the indemnification

asset

–

$34.3 million in accretion income

Income in excess of contractual interest

*Other Expenses include:

In 3Q13, $2.7 million for branch closures, $1.2 million in contribution to ONB Foundation, $.5 million provision for unfunded

commitments and $.3 million in pension adjustments

In 2Q14, $.4 million in accelerated retirement expenses and $.4 million in state tax receivable write-off

In 3Q14, $1.0 million reversal of hospitalization expense, a $0.7 adjustment in incentive of stock-based compensation, $.4

provision for unfunded commitments and a $.3 million impairment on a branch held for sale

$89.7

$88.8

$90.3

$4.7

$0.8

$2.3

$6.3

$3.6

$4.5

$2.2

$2.6

$96.7

$98.1

$100.0

3Q13

2Q14

3Q14

$ in millions

Operational

expenses

total

noninterest

expense

less

United

and

Tower

operational

costs,

acquisition

costs

and

other

expenses

Noninterest Expense –

Well Controlled

Reported 3Q14

efficiency ratio of

67.41%

3Q14 efficiency ratio

excluding

acquisition costs of

64.89%¹

Anticipated

acquisition costs in

4Q14 of $3.5 million

to $4.0 million

($1.0)

Non-GAAP financial measure which Management believes is useful in evaluating the financial results of the Company –

see Appendix for Non-GAAP reconciliation

Forward to 2015

Execution is key

–

Core revenue growth

–

Expenses

–

Prudent use of capital

–

Opportunistic M&A

Returned to

community

bank model

2004

2005

Sold non-

strategic

market –

Clarksville, TN

–

5 branches

2006

Sold non-

strategic market

–

O’Fallon, IL –

1 branch

2007

2008

2009

2010

2011

2012

2013

Acquired St.

Joseph Capital –

Entry into

Northern IN

market

February, 2007

Acquired 65

Charter One

branches

throughout

Indiana

March, 2009

Acquired Monroe

Bancorp –

Enhanced

Bloomington, IN

presence

January, 2011

Acquired Indiana

Community –

Entry into

Columbus, IN

September, 2012

FDIC-assisted

acquisition of

Integra Bank

July, 2011

Sold non-

strategic

market –

Chicago-area -

4 branches

Consolidation of

21 branches

Acquired 24

MI / IN branches

July, 2013

Consolidation

of 2 branches

Consolidation

of 8 branches

Consolidation

of 1 branch

Consolidation

of 10 branches

Consolidation

of 12 branches

Consolidation

of 44 branches

Consolidation

of 5 branches

Sold 12

branches

Consolidation

of 22 branches

Acquired 200 + 9 pending

Sold 22

Consolidated 129

Acquired Tower

Financial –

Enhancing Ft.

Wayne, IN

presence April,

2014

Transforming Old National’s Landscape

Acquired

United

Bancorp —

Entering Ann

Arbor, MI July,

2014

Consolidation

of 4 branches

Pending

acquisition of

LSB Financial

Corp.–

Enhancing

Lafayette, IN

presence

Pending

acquisition of

Founders

Financial

Corporation–

Entry into Grand

Rapids , MI

Non-GAAP Reconciliations

3Q13

2Q14

3Q14

Net Interest Income ($ in 000's)

$77,996

$84,482

$108,367

Taxable Equivalent Adjustment

4,362

4,256

4,488

Net Interest Income – Taxable Equivalent

$82,358

$88,738

$112,855

Average Earning Assets

$8,309,417

$8,730,063

$9,444,853

Net Interest Margin

3.75%

3.87%

4.59%

Net Interest Margin – Fully Taxable Equivalent

3.96%

4.07%

4.78%

Efficiency Ratio - As Reported

3Q14

Net Interest Income (FTE) ($ in millions)

$112.9

Noninterest Income Less Security Gains

31.7

Revenue Less Security Gains

144.6

Noninterest Expense

100.0

Intangible Amortization

2.5

Noninterest Expense Less Intangible Amortization

97.4

Efficiency Ratio

67.41%

Efficiency Ratio Excluding Acquisition Costs

3Q14

Net Interest Income (FTE) ($ in millions)

$112.9

Noninterest Income Less Security Gains

31.7

Revenue Less Security Gains

144.6

Noninterest Expense

100.0

Intangible Amortization

2.5

Acquisition Costs

3.6

Noninterest Expense Less Intangible Amortization and Acquisition Costs

93.8

Efficiency Ratio

64.89%