Old National Bancorp Shares Popped: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Old National Bancorp (NYS: ONB) were banking big gains today, rising as much as 12% in intraday trading on heavier than average volume.
So what: It's earnings season, so it's a good bet that a big stock move has something to do with better or worse than expected second-quarter results. That's exactly the case for Old National. The bank reported $0.18 in earnings per share, which was a substantial jump from the second quarter of last year and topped analysts' estimates by $0.02. Management also reminded investors that the bank is growing thanks to the acquisition of Integra Bank at the end of July -- a deal that includes a loss-sharing agreement with the Federal Deposit Insurance Corporation.
Now what: Investors are still leery of most bank stocks and Old National isn't an exception. Though the stock generally traded at a book value multiple of two or more prior to the financial crisis, it now trades closer to one times book value. With a strong capital position, an improving loan book, and a 2.7% dividend yield, this could be a bank worth watching.
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