OLD NATIONAL BANCORP

CONSOLIDATED BALANCE SHEET


(dollars and shares in thousands)	June 30,						December 31,			September 30,						December 31,
(unaudited)	2005			2004			2004			2005			2004			2004

Assets
Cash and due from banks	$	216,891		$	198,263		$	204,678		$	199,210		$	205,495		$	204,678
Money market investments		18,259			280,811			12,320			20,709			163,098			12,320

Total cash and cash equivalents		235,150			479,074			216,998			219,919			368,593			216,998
Investment securities — available-for-sale, at fair value
U.S. Treasury		—			71,645			66,837			—			67,195			66,837
U.S. Government-sponsored agencies		511,020			551,317			632,473			435,130			633,713			632,473
Mortgage-backed securities		1,157,605			1,169,560			1,267,320			1,175,112			1,191,735			1,267,320
States and political subdivisions		515,384			638,955			597,631			485,165			631,893			597,631
Other securities		217,647			86,413			221,154			204,627			96,506			221,154

Investment securities — available-for-sale		2,401,656			2,517,890			2,785,415			2,300,034			2,621,042			2,785,415
Investment securities — held-to-maturity, at amortized cost (fair value $184,897, $186,210 and $176,166 respectively)		187,032			192,934			177,794
Investment securities — held-to-maturity, at amortized cost (fair value $172,616, $184,426 and $176,166 respectively)											176,021			185,392			177,794
Federal Home Loan Bank stock, at cost		49,572			49,515			49,542			49,589			49,528			49,542
Residential loans held for sale		53,279			26,846			22,484			65,986			22,061			22,484
Loans:
Commercial		1,643,640			1,618,677			1,550,640			1,650,628			1,586,600			1,550,640
Commercial real estate		1,599,091			1,758,748			1,653,122			1,612,956			1,713,795			1,653,122
Residential real estate		544,589			534,688			555,423			531,240			554,079			555,423
Consumer credit, net of unearned income		1,231,170			1,195,082			1,205,657			1,297,660			1,227,196			1,205,657

Total loans		5,018,490			5,107,195			4,964,842			5,092,484			5,081,670			4,964,842
Allowance for loan losses		(80,645	)		(95,065	)		(85,749	)		(81,356	)		(96,322	)		(85,749	)

Net loans		4,937,845			5,012,130			4,879,093			5,011,128			4,985,348			4,879,093

Premises and equipment, net		211,356			201,689			212,787			211,951			212,237			212,787
Goodwill		113,135			129,265			129,947			113,275			129,947			129,947
Other intangible assets		24,335			40,313			38,868			23,694			39,490			38,868
Mortgage servicing rights		14,565			17,571			15,829			—			16,381			15,829
Assets held for sale		62,060			—			—
Accrued interest receivable and other assets		360,353			374,223			369,547			363,694			351,696			369,547

Total assets	$	8,650,338		$	9,041,450		$	8,898,304		$	8,535,291		$	8,981,715		$	8,898,304

Liabilities
Deposits:
Noninterest-bearing demand	$	857,051		$	784,499		$	851,218		$	872,499		$	825,721		$	851,218
Interest-bearing:
NOW		1,749,073			1,727,947			1,920,501			1,614,526			1,823,368			1,920,501
Savings		481,064			477,238			480,392			483,928			470,954			480,392
Money market		662,622			579,490			573,334			809,568			581,822			573,334
Time		2,570,962			2,777,151			2,588,818			2,584,651			2,706,264			2,588,818

Total deposits		6,320,772			6,346,325			6,414,263			6,365,172			6,408,129			6,414,263
Short-term borrowings		468,046			426,679			347,353			350,999			338,531			347,353
Other borrowings		1,051,315			1,456,179			1,312,661			1,036,093			1,405,522			1,312,661
Liabilities held for sale		14,333			—			—
Accrued expenses and other liabilities		93,646			138,969			120,819			110,226			117,187			120,819

Total liabilities		7,948,112			8,368,152			8,195,096			7,862,490			8,269,369			8,195,096

Shareholders’ Equity
Preferred stock, 2,000 shares authorized, no shares issued or outstanding		—			—			—			—			—			—
Common stock, $1 stated value, 150,000 shares authorized, 68,950, 66,273 and 69,287 shares issued and outstanding, respectively		68,950			66,273			69,287
Common stock, $1 stated value, 150,000 shares authorized, 68,010, 65,960 and 69,287 shares issued and outstanding, respectively											68,010			65,960			69,287
Capital surplus		618,466			574,681			629,577			599,410			567,714			629,577
Retained earnings		15,300			58,667			—			10,019			64,317			—
Accumulated other comprehensive income (loss), net of tax		(490	)		(26,323	)		4,344			(4,638	)		14,355			4,344

Total shareholders’ equity		702,226			673,298			703,208			672,801			712,346			703,208

Total liabilities and shareholders’ equity	$	8,650,338		$	9,041,450		$	8,898,304		$	8,535,291		$	8,981,715		$	8,898,304

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENT OF INCOME


	Three Months Ended					Six Months Ended				Three Months Ended					Nine Months Ended
	June 30,					June 30,				September 30,					September 30,
(dollars in thousands, except per share data) (unaudited)	2005		2004			2005		2004		2005			2004		2005			2004

Interest Income
Loans including fees:
Taxable	$	71,645	$	72,691		$	140,225	$	147,073	$	75,770		$	68,260	$	215,995		$	215,333
Nontaxable		4,308		4,324			8,370		8,691		4,476			4,203		12,846			12,894
Investment securities, available-for-sale:
Taxable		20,559		18,994			42,097		38,887		19,753			19,082		61,850			57,969
Nontaxable		6,404		7,341			13,077		14,703		5,699			7,275		18,776			21,978
Investment securities, held-to-maturity, taxable		1,837		1,987			3,623		4,084		1,953			1,944		5,576			6,028
Money market investments		253		64			382		72		260			697		642			769

Total interest income		105,006		105,401			207,774		213,510		107,911			101,461		315,685			314,971

Interest Expense
Deposits		31,720		26,948			60,730		56,313		34,691			26,866		95,421			83,179
Short-term borrowings		2,666		1,063			4,683		2,053		2,657			704		7,340			2,757
Other borrowings		13,494		12,260			26,597		24,915		12,955			12,903		39,552			37,818

Total interest expense		47,880		40,271			92,010		83,281		50,303			40,473		142,313			123,754

Net interest income		57,126		65,130			115,764		130,229		57,608			60,988		173,372			191,217
Provision for loan losses		6,000		7,500			11,100		15,000		6,000			7,400		17,100			22,400

Net interest income after provision for loan losses		51,126		57,630			104,664		115,229		51,608			53,588		156,272			168,817

Noninterest Income
Wealth management fees		5,635		5,275			10,510		10,197		5,041			4,942		15,551			15,139
Service charges on deposit accounts		12,065		12,386			23,163		23,151		12,529			12,622		35,692			35,773
ATM and debit card fees		2,541		2,190			4,902		4,155		2,568			2,265		7,470			6,420
Mortgage banking revenue		1,267		7,139			2,644		6,819		1,756			246		4,400			7,065
Insurance premiums and commissions		9,094		8,202			18,145		17,409		8,466			7,355		26,611			24,764
Investment product fees		2,316		3,775			4,899		6,960		2,246			2,547		7,145			9,507
Bank-owned life insurance		1,741		1,782			3,495		3,835		1,922			1,787		5,417			5,622
Net securities gains		1,043		21			523		2,006		652			303		1,175			2,309
Other income		2,495		1,406			5,642		5,150		3,784			2,904		9,426			8,054

Total noninterest income		38,197		42,176			73,923		79,682		38,964			34,971		112,887			114,653

Noninterest Expense
Salaries and employee benefits		38,733		48,081			77,771		92,306		35,866			38,294		113,637			130,600
Occupancy		5,124		4,383			10,155		8,963		4,591			4,902		14,746			13,865
Equipment		3,882		3,374			7,394		6,815		3,587			3,635		10,981			10,450
Marketing		2,226		1,967			4,138		4,253		1,912			2,641		6,050			6,894
Outside processing		5,066		5,555			10,182		10,486		4,803			5,059		14,985			15,545
Communication and transportation		2,542		2,647			5,063		5,513
Communication											2,336			2,551		7,399			8,064
Professional fees		2,035		16,915			4,149		19,926		2,291			3,057		6,440			22,983
Loan expense		1,420		1,804			2,319		3,271		1,570			1,471		3,889			4,742
Supplies		1,071		913			1,946		1,913		908			966		2,854			2,879
Other real estate owned expense		127		367			405		2,023		216			269		621			2,292
Other expense		1,399		5,515			6,180		9,900		3,618			6,055		9,798			15,955

Total noninterest expense		63,625		91,521			129,702		165,369		61,698			68,900		191,400			234,269

Income before income taxes and discontinued operations		25,698		8,285			48,885		29,542		28,874			19,659		77,759			49,201
Income tax expense (benefit)		4,489		(1,930	)		8,236		737
Income tax expense											5,774			1,840		14,010			2,577

Income from continuing operations		21,209		10,215			40,649		28,805		23,100			17,819		63,749			46,624
Income from discontinued operations, net of tax expense of $1,075, $689, $1,007 and $1,299, respectively		1,666		1,068			682		1,987

Income (loss) from discontinued operations, net of tax expense of $5,596, $287, $6,603and $1,586, respectively											(15,507	)		365		(14,825	)		2,352

Net income	$	22,875	$	11,283		$	41,331	$	30,792	$	7,593		$	18,184	$	48,924		$	48,976

Basic net income per share from continuing operations	$	0.31	$	0.14		$	0.59	$	0.41	$	0.34		$	0.26	$	0.93		$	0.67
Basic net income per share from discontinued operations		0.02		0.02			0.01		0.03
Basic net income (loss) per share from discontinued operations											(0.23	)		—		(0.22	)		0.03
Basic net income per share		0.33		0.16			0.60		0.44		0.11			0.26		0.71			0.70

Diluted net income per share from continuing operations	$	0.31	$	0.14		$	0.59	$	0.41	$	0.34		$	0.26	$	0.93		$	0.67
Diluted net income per share from discontinued operations		0.02		0.02			0.01		0.03
Diluted net income (loss) per share from discontinued operations											(0.23	)		—		(0.22	)		0.03
Diluted net income per share		0.33		0.16			0.60		0.44		0.11			0.26		0.71			0.70

Dividends per common share	$	0.19	$	0.18		$	0.38	$	0.36	$	0.19		$	0.18	$	0.57		$	0.54

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

Accumulated
Other Total
(dollars and shares Common Stock Capital Retained Comprehensive Shareholders’
in thousands) (unaudited) Shares Amount Surplus Earnings Income (Loss) Equity

Balance, December 31, 2003
66,575 $ 66,575 $ 581,224 $ 53,107 $ 14,584 $ 715,490
Net income — — — 30,792 — 30,792
Unrealized net securities losses, net of $(25,770) tax — — — — (40,354 ) (40,354 )
Reclassification adjustment for gains included in net income, net of $(843) tax — — — — (1,163 ) (1,163 )
Net unrealized derivative gains on cash flow hedges, net of $333 tax — — — — 516 516
Reclassification adjustment on cash flow hedges, net of $62 tax — — — — 94 94
Cash dividends — — — (25,232 ) — (25,232 )
Stock repurchased (729 ) (729 ) (15,402 ) — — (16,131 )
Stock reissued under stock option and stock purchase plans 427 427 8,859 — — 9,286

Balance, June 30, 2004
66,273 $ 66,273 $ 574,681 $ 58,667 $ (26,323 ) $ 673,298

Balance, December 31, 2004
69,287 $ 69,287 $ 629,577 $ — $ 4,344 $ 703,208
Net income — — — 41,331 — 41,331
Unrealized net securities losses, net of $(2,860) tax — — — — (5,010 ) (5,010 )
Reclassification adjustment for securities gains included in net income, net of $(190) tax — — — — (333 ) (333 )
Net unrealized derivative gains on cash flow hedges, net of $377 tax — — — — 585 585
Reclassification adjustment on cash flow hedges, net of $(48) tax — — — — (76 ) (76 )
Stock issued for acquisition 971 971 17,569 — — 18,540
Cash dividends — — — (26,031 ) — (26,031 )
Stock repurchased (1,584 ) (1,584 ) (31,373 ) — — (32,957 )
Stock issued under stock option, restricted stock and stock purchase plans 276 276 2,693 — — 2,969

Balance, June 30, 2005
68,950 $ 68,950 $ 618,466 $ 15,300 $ (490 ) $ 702,226


													Accumulated
													Other			Total
(dollars and shares	Common Stock						Capital			Retained			Comprehensive			Shareholders’
in thousands) (unaudited)	Shares			Amount			Surplus			Earnings			Income (Loss)			Equity

Balance, December 31, 2003		66,575		$	66,575		$	581,224		$	53,107		$	14,584		$	715,490
Net income		—			—			—			48,976			—			48,976
Unrealized net securities gains, net of $1,704 tax		—			—			—			—			2,667			2,667
Reclassification adjustment for gains included in net income, net of $(961) tax		—			—			—			—			(1,348	)		(1,348	)
Net unrealized derivative losses on cash flow hedges, net of $(1,092) tax		—			—			—			—			(1,689	)		(1,689	)
Reclassification adjustment on cash flow hedges, net of $93 tax		—			—			—			—			141			141
Cash dividends		—			—			—			(37,766	)		—			(37,766	)
Adjustments to stock issued for prior acquisitions		(3	)		(3	)		(61	)		—			—			(64	)
Stock repurchased		(1,145	)		(1,145	)		(25,010	)		—			—			(26,155	)
Stock reissued under stock option, restricted stock and stock purchase plans		533			533			11,561			—			—			12,094

Balance, September 30, 2004		65,960		$	65,960		$	567,714		$	64,317		$	14,355		$	712,346


Balance, December 31, 2004		69,287		$	69,287		$	629,577		$	—		$	4,344		$	703,208
Net income		—			—			—			48,924			—			48,924
Unrealized net securities losses, net of $(5,882) tax		—			—			—			—			(8,761	)		(8,761	)
Reclassification adjustment for securities gains included in net income, net of $(472) tax		—			—			—			—			(703	)		(703	)
Net unrealized derivative gains on cash flow hedges, net of $331 tax		—			—			—			—			512			512
Reclassification adjustment on cash flow hedges, net of $(19) tax		—			—			—			—			(30	)		(30	)
Stock issued for acquisitions		971			971			17,569			—			—			18,540
Cash dividends		—			—			—			(38,905	)		—			(38,905	)
Stock repurchased		(2,571	)		(2,571	)		(52,284	)		—			—			(54,855	)
Stock issued under stock option, restricted stock and stock purchase plans		323			323			4,548			—			—			4,871

Balance, September 30, 2005		68,010		$	68,010		$	599,410		$	10,019		$	(4,638	)	$	672,801

The accompanying notes to consolidated financial statements are an integral part of this statement.

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENT OF CASH FLOWS


	Six Months Ended						Nine Months Ended
	June 30,						September 30,
(dollars in thousands) (unaudited)	2005			2004			2005			2004

Cash Flows From Operating Activities
Net income	$	41,331		$	30,792		$	48,924		$	48,976

Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		7,641			6,420			11,352			10,089
Amortization of other intangible assets and goodwill impairment		4,137			1,599			5,378			2,390
Net premium amortization on investment securities		1,677			2,023			2,449			2,197
Amortization of unearned stock compensation		1,441			—			2,228			378
Provision for loan losses		11,100			15,000			17,100			22,400
Net securities gains		(523	)		(2,006	)		(1,175	)		(2,309	)
Net gains on sales and write-downs of loans and other assets		(797	)		(4,645	)
Net (gains) losses on sales and write-downs of loans and other assets								8,346			(3,712	)
Residential real estate loans originated for sale		(187,739	)		(193,881	)		(300,309	)		(268,456	)
Proceeds from sale of residential real estate loans		157,628			187,226			257,921			266,204
Increase in accrued interest and other assets		(2,827	)		(37,299	)		(4,739	)		(4,980	)
Increase (decrease) in accrued expenses and other liabilities		(14,410	)		49,972
Increase in accrued expenses and other liabilities								5,191			2,228

Total adjustments		(22,672	)		24,409			3,742			26,429

Net cash flows provided by operating activities		18,659			55,201			52,666			75,405

Cash Flows From Investing Activities
Cash and cash equivalents of subsidiaries acquired, net		2,699			—			2,699			—
Purchases of investment securities available-for-sale		(258,172	)		(546,554	)		(417,964	)		(747,547	)
Purchases of investment securities held-to-maturity		(25,000	)		—			(25,000	)		—
Proceeds from maturities, prepayments and calls of investment securities available-for-sale		188,155			401,356			277,372			525,752
Proceeds from sales of investment securities available-for-sale		444,670			216,493			609,466			260,441
Proceeds from maturities, prepayments and calls of investment securities held-to-maturity		15,414			17,464			26,264			24,811
Proceeds from sale of loans		21,355			404,424			21,355			404,424
Net principal collected from (loans made to) customers		(91,207	)		42,573			(170,490	)		61,955
Proceeds from sale of premises and equipment and other assets		830			2,669			1,169			4,787
Purchase of premises and equipment		(6,698	)		(28,993	)		(11,296	)		(46,006	)
Proceeds from sale of other assets								40,805			—

Net cash flows provided by investing activities		292,046			509,432			354,380			488,617

Cash Flows From Financing Activities
Net increase (decrease) in deposits and short-term borrowings:
Noninterest-bearing demand deposits		5,833			(38,647	)		21,281			2,575
Savings, NOW and money market deposits		(81,468	)		122,926			(66,205	)		214,395
Time deposits		(17,856	)		(231,046	)		(4,167	)		(301,933	)
Short-term borrowings		120,693			12,091			3,646			(76,057	)
Payments for maturities on other borrowings		(312,295	)		(210,238	)		(317,563	)		(273,636	)
Proceeds from issuance of other borrowings		50,000			54,543			50,000			54,543
Cash dividends paid		(26,031	)		(25,232	)		(38,905	)		(37,766	)
Common stock repurchased		(32,957	)		(16,131	)		(54,855	)		(26,155	)
Common stock issued under stock option, restricted stock and stock purchase plans		1,528			9,286			2,643			11,716

Net cash flows used in financing activities		(292,553	)		(322,448	)		(404,125	)		(432,318	)

Net increase in cash and cash equivalents		18,152			242,185			2,921			131,704
Cash and cash equivalents at beginning of period		216,998			236,889			216,998			236,889

Cash and cash equivalents at end of period	$	235,150		$	479,074		$	219,919		$	368,593


Total interest paid	$	92,378		$	86,488		$	138,906		$	123,404
Total taxes paid	$	5,491		$	6,990		$	10,262		$	11,419

OLD NATIONAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include the accounts of Old National Bancorp and its wholly-owned affiliates (“Old National”) and have been prepared in conformity with accounting principles generally accepted in the United States of America and prevailing practices within the banking industry. Such principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. All significant intercompany transactions and balances have been eliminated. Certain prior year amounts have been reclassified to conform with the 2005 presentation. Such reclassifications had no effect on net income. In the opinion of management, the consolidated financial statements contain all the normal and recurring adjustments necessary for a fair statement of the financial position of Old National as of ~~June~~September 30, 2005 and 2004, and December 31, 2004, and the results of its operations for the three and ~~six~~nine months ended ~~June~~September 30, 2005 and 2004. Interim results do not necessarily represent annual results. These financial statements should be read in conjunction with Old National’s Annual Report for the year ended December 31, 2004.

NOTE 2 — IMPACT OF ACCOUNTING CHANGES

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Share-Based Payment,” that requires companies to expense the value of employee stock options and similar awards. Subsequently, the Securities and Exchange Commission ~~(“SEC”)~~ delayed the effective date of SFAS No. 123R to annual periods beginning after June 15, 2005. ~~Given~~

On October 17, 2005, subsequent to quarter end, the Compensation and Management Development Committee of our Board of Directors approved acceleration of all unvested options granted prior to 2004. Stock options totaling 1.1 million were subject to this ~~delay, Old National expects~~acceleration and became immediately vested and exercisable. The decision to ~~adopt~~accelerate vesting of these options was made primarily to avoid recognizing the related compensation cost in future financial statements upon the effectiveness of SFAS No. 123R in the first quarter of 2006 using the modified prospective method applied to all outstanding and unvested share-based payment awards at the adoption date. Under this method, Old National expects to expense approximately $1.4123R. The acceleration eliminates $1.3 million in 2006 and $0.1 million in ~~2007. At June 30, 2005, and until the effective date~~2007 of future after-tax compensation expense that would otherwise have been recognized under SFAS No. ~~123R,~~123R. These amounts will be reflected when calculating the pro forma net income for disclosure under SFAS No. 123 in the fourth quarter.

Currently, Old National ~~will apply~~applies Accounting Principles Board (“APB”) Opinion No. 25 and related Interpretations in accounting for stock-based compensation plans. Under APB Opinion No. 25, no compensation cost has been recognized for any of the years presented, except with respect to restricted stock plans as disclosed in the accompanying table. Old National has presented in the following table net income and net income per share adjusted to proforma amounts had compensation costs for Old National’s stock-based compensation plans been recorded based on fair values at grant dates.


	Three Months Ended						Six Months Ended						Three Months Ended						Nine Months Ended
	June 30,						June 30,						September 30,						September 30,
(dollars in thousands, except per share data)	2005			2004			2005			2004			2005			2004			2005			2004

Net income as reported	$	22,875		$	11,283		$	41,331		$	30,792		$	7,593		$	18,184		$	48,924		$	48,976
Restricted Stock:
Add: restricted stock compensation expense included in reported net income, net of related tax effects		617			—			937			—			511			245			1,448			245
Deduct: restricted stock compensation expense determined under fair value based method for all awards, net of related tax effects		(587	)		—			(1,070	)		—			(551	)		(238	)		(1,621	)		(238	)
Stock Options:
Deduct: stock option compensation expense determined under fair value based method for all awards, net of related tax effects		(544	)		(855	)		(1,871	)		(2,518	)		(506	)		(779	)		(2,377	)		(3,297	)

Proforma net income	$	22,361		$	10,428		$	39,327		$	28,274		$	7,047		$	17,412		$	46,374		$	45,686


Basic net income per share:
As reported	$	0.33		$	0.16		$	0.60		$	0.44		$	0.11		$	0.26		$	0.71		$	0.70
Proforma		0.32			0.14			0.57			0.40			0.11			0.25			0.68			0.65
Diluted net income per share:
As reported	$	0.33		$	0.16		$	0.60		$	0.44		$	0.11		$	0.26		$	0.71		$	0.70
Proforma		0.32			0.14			0.57			0.40			0.11			0.25			0.68			0.65

NOTE 3 — ACQUISITION

On May 1, 2005, Old National acquired J. W. F. Insurance Companies, an Indianapolis, Indiana-based insurance agency that did business as J.W. Flynn Company and J.W.F. Specialty Company, Inc., for $19.0 million, including acquisition costs. Common shares of 970,912 were issued as part of the transaction with a stock value of $18.5 million. Goodwill of $12.0 million was recorded of which $3.5 million is expected to be deductible for tax purposes. In addition, intangible assets totaling $8.4 million related to customer business relationships were recorded and are being amortized over 12 to 22 years. Beginning with the quarter ended June 30, 2005, these acquisitions ~~will be~~are included with the non-bank service companies in the “other” column of Note ~~17 —~~18 – Segment Information. In accordance with the purchase agreement, future contingent payments may be paid in relation to this acquisition. These payments, which are not expected to be material, would result in a change to the purchase price and goodwill when paid. On the date of acquisition, unaudited financial statements of the companies showed assets of $5.0 million with year-to-date revenues of $4.7 million and net loss of $0.2 million.

NOTE 4 — DISCONTINUED OPERATIONS AND DIVESTITURES

In February 2005, Old National committed to a plan to sell selected non-strategic companies, J.W. Terrill Insurance Agency (“Terrill”) in St. Louis, Missouri, and Fund Evaluation Group (“FEG”) in Cincinnati, Ohio, to better align its operations with its market and product focus. The operating activities of these companies have been reclassified to discontinued operations for all periods in the consolidated statement of income and are reported in the “Other” column for segment reporting.

During the third quarter of 2005, Old National completed the sale of both Terrill and FEG. Old National sold Terrill for $22.2 million of cash. Terrill had been acquired in a tax-free reorganization under Internal Revenue Code section 368, and as a result of the taxable sale, Old National recorded a loss of $9.8 million, including $8.6 million of tax expense. On September 30, 2005, Old National completed the sale of FEG for $15.1 million of cash and a $0.5 million note receivable. The sale resulted in an after tax loss of $5.9 million.

Results of discontinued operations for the three and nine months ended September 30, 2005 and 2004 are as follows:


	Three Months Ended					Nine Months Ended
(dollars in thousands, except	September 30,					September 30,
per share data)	2005			2004		2005			2004

Revenues	$	3,407		$	7,177	$	21,063		$	24,232
Net income (loss)		(15,507	)		365		(14,825	)		2,352
Diluted net income (loss) per share		(0.23	)		—		(0.22	)		0.03

NOTE 5 — NET INCOME PER SHARE

Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during each period, adjusted to reflect all stock dividends. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued. Restricted stock shares were antidilutive ~~at June~~for the nine months ended September 30, 2005, for purposes of calculating diluted net income per share. The following table reconciles basic and diluted net income per share for the three and ~~six~~nine months ended ~~June~~September 30:


	Three Months Ended						Three Months Ended
	June 30, 2005						June 30, 2004
(dollars and shares													Three Months Ended								Three Months Ended
in thousands, except per share data)	Income		Shares		Amount		Income		Shares		Amount
in thousands,													September 30, 2005								September 30, 2004
except per share data)													Income			Shares		Amount			Income		Shares		Amount

Basic Net Income Per Share
Income from continuing operations	$	21,209		68,471	$	0.31	$	10,215		69,651	$	0.14	$	23,100			68,011	$	0.34		$	17,819		69,353	$	0.26
Income from discontinued operations		1,666				0.02		1,068				0.02
Income (loss) from discontinued operations														(15,507	)				(0.23	)		365				—

Income from operations	$	22,875		68,471	$	0.33	$	11,283		69,651	$	0.16
Net income													$	7,593			68,011	$	0.11		$	18,184		69,353	$	0.26

Diluted Net Income Per Share
Income from continuing operations	$	21,209		68,471	$	0.31	$	10,215		69,651	$	0.14	$	23,100			68,011	$	0.34		$	17,819		69,353	$	0.26
Effect of dilutive securities:
Restricted stock																	10							43
Stock options		—		17		—		—		509		—					310							671

Income from continuing operations and assumed conversions		21,209		68,488		0.31		10,215		70,160		0.14		23,100			68,331		0.34			17,819		70,067		0.26
Income from discontinued operations		1,666				0.02		1,068				0.02
Income (loss) from discontinued operations														(15,507	)				(0.23	)		365				—

Income from operations and assumed conversions	$	22,875		68,488	$	0.33	$	11,283		70,160	$	0.16
Net income and assumed conversions													$	7,593			68,331	$	0.11		$	18,184		70,067	$	0.26

The following is a summary of information pertaining to impaired loans at ~~June~~September 30:

(dollars in thousands) 2005 2004

Impaired loans without a valuation allowance $ 7,274 $ 20,911
Impaired loans with a valuation allowance 30,639 63,721

Total impaired loans $ 37,913 $ 84,632

Valuation allowance related to impaired loans $ 12,059 $ 28,035

A loan is considered impaired under SFAS No. 114, “Accounting by Creditors for Impairment of a Loan, an amendment of FASB Statement No. 5 and 15” when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. An impaired loan does not include larger groups of smaller-balance homogeneous loans that are collectively evaluated for impairment, loans that are measured at fair value or at the lower of cost or fair value, leases and debt securities.


(dollars in thousands)	2005		2004

Impaired loans without a valuation allowance	$	8,985	$	25,393
Impaired loans with a valuation allowance		35,954		68,469

Total impaired loans	$	44,939	$	93,862

Valuation allowance related to impaired loans	$	14,202	$	26,233

For the ~~six~~nine months ended ~~June~~September 30, 2005, $43.1 million was the average balance of impaired loans ~~was $42.4 million~~ for which no interest was recorded. For the ~~six~~nine months ended ~~June~~September 30, 2004, $91.0 million was the average balance of impaired loans ~~was $90.1 million~~ for which ~~$0.4 million of~~no interest was recorded. No additional funds are committed to be advanced in connection with impaired loans. Loans deemed impaired are evaluated primarily using the fair value of the underlying collateral.

NOTE 89 — GOODWILL AND OTHER INTANGIBLE ASSETS

At ~~June~~September 30, 2005 and 2004, Old National had goodwill in the amount of ~~$113.1~~$113.3 million and ~~$129.3~~$129.9 million, respectively. During the ~~six months~~quarter ended ~~June 30,~~March 31, 2005, Old National reclassified the assets and liabilities of specific non-strategic companies as held for sale, including $26.1 million of goodwill. Concurrent with this classification, these discontinued operations were evaluated for impairment using estimated fair values in the current market, resulting in goodwill impairment of $2.9 million. In the third quarter of 2005, Old National sold these assets classified as held for sale. See Note 4 “Discontinued Operations and Divestitures” for additional information.

The change in the carrying amount of goodwill by segment for the ~~six~~nine months ended ~~June~~September 30 was as follows:


	Community								Community
(dollars in thousands)	Banking		Other			Total			Banking		Other			Total

Balance, January 1, 2005	$	70,944	$	59,003		$	129,947		$	70,944	$	59,003		$	129,947
Goodwill acquired during the year		—		12,020			12,020			—		12,038			12,038
Adjustments to goodwill acquired in prior year		—		150			150			—		272			272
Goodwill transfered to assets held for sale		—		(26,082	)		(26,082	)
Goodwill transferred to held for sale										—		(26,082	)		(26,082	)
Goodwill impairment		—		(2,900	)		(2,900	)		—		(2,900	)		(2,900	)

Balance, June 30, 2005	$	70,944	$	42,191		$	113,135
Balance, September 30, 2005									$	70,944	$	42,331		$	113,275


Balance, January 1, 2004	$	70,944	$	58,307		$	129,251			70,944		58,307			129,251
Adjustments to goodwill acquired in prior year		—		14			14			—		696			696

Balance, June 30, 2004	$	70,944	$	58,321		$	129,265
Balance, September 30, 2004									$	70,944	$	59,003		$	129,947

The activity for mortgage servicing rights and ~~$17.6 million at June 30, 2005 and 2004, respectively.~~ the related valuation allowance for the periods indicated are summarized below:


(dollars in thousands)	2005			2004

Balance before valuation allowance, January 1	$	15,829		$	15,790
Rights capitalized		2,505			5,454
Amortization		(4,126	)		(4,613	)
Sale of mortgage servicing rights		(14,208	)		—

Balance before valuation allowance, September 30		—			16,631

Valuation allowance:
Balance, January 1		—			(1,131	)
Additions to valuation allowance		—			(2,190	)
Reductions to valuation allowance		—			3,071

Balance, September 30		—			(250	)

Mortgage servicing rights, net	$	—		$	16,381

Loans serviced for others are not included in the consolidated balance sheet of Old National. The unpaid principal balance of mortgage loans serviced for others at ~~June~~September 30, 2004 was ~~$1.937~~$1.967 billion, ~~in 2005~~ and ~~$2.134 billion in 2004. At June 30, 2005 and 2004,~~ the fair value of capitalized mortgage servicing rights was ~~$16.9 million and $21.5 million, respectively.~~$17.1 million. Old National’s key economic assumptions used in determining the fair value of mortgage servicing rights ~~at June 30, 2005 and 2004, respectively,~~ were a weighted average prepayment rate of ~~305~~319 PSA ~~together with~~and a ~~weighted average~~ discount rate of ~~9.10% and a weighted average prepayment rate of 223 PSA together with a weighted average discount rate of 9.2%.~~

~~The following summarizes the activities related to mortgage servicing rights and the related valuation allowance~~9.1% at ~~June 30:~~

(dollars in thousands) 2005 2004

Balance before valuation allowance, January 1 $ 15,829 $ 15,790
Rights capitalized 1,514 4,942
Amortization (2,778 ) (3,161 )

Balance before valuation allowance, June 30 14,565 17,571

Valuation allowance:
Balance, January 1 — (1,131 )
Additions to valuation allowance — (1,940 )
Reductions to valuation allowance — 3,071

Balance, June 30 — —

Mortgage servicing rights, net $ 14,565 $ 17,571

September 30, 2004.

NOTE 1011 — FINANCING ACTIVITIES

The following table summarizes Old National’s other borrowings at ~~June~~September 30:


(dollars in thousands)	2005		2004			2005			2004

Old National Bancorp:
Medium-term notes, Series 1997 (fixed rates 3.50% to 7.03%) maturities August 2007 to June 2008	$	110,000	$	113,200		$	110,000		$	110,000
Senior unsecured bank note (fixed rate 5.00%) maturity May 2010		50,000		—			50,000			-
Junior subordinated debenture (fixed rate 8.00%) maturity April 2032		100,000		150,000			100,000			150,000
SFAS 133 fair value hedge and other basis adjustments		641		1,940			(2,825	)		4,951
Old National Bank:
Securities sold under agreements to repurchase (fixed rates 1.70% to 2.75% and variable rate 4.07%) maturities May 2008 to December 2009		148,000		298,000
Federal Home Loan Bank advances (fixed rates 4.28% to 8.34%) maturities August 2005 to October 2022		384,556		580,116
Senior unsecured bank notes (fixed rate 3.95% and variable rates 3.57% to 3.76%) maturities May 2006 to February 2008		100,000		165,000
Securities sold under agreements to repurchase (fixed rates 1.70% to 2.75% and variable rate 4.59%) maturities May 2008 to December 2009							148,000			248,000
Federal Home Loan Bank advances (fixed rates 4.28% to 8.34%) maturities November 2005 to October 2022							379,297			569,924
Senior unsecured bank notes (fixed rate 3.95% and variable rates 4.11% to 4.26%) maturities May 2006 to February 2008							100,000			165,000
Subordinated bank note (fixed rate 6.75%) maturing October 2011		150,000		150,000			150,000			150,000
Capital lease obligation		4,508		4,536			4,501			4,530
SFAS 133 fair value hedge and other basis adjustments		3,610		(6,613	)		(2,880	)		3,117

Total other borrowings	$	1,051,315	$	1,456,179		$	1,036,093		$	1,405,522

At ~~June~~September 30, 2005, the shares issued have an estimated value of ~~$10.0~~$9.8 million based on the stock price on that date. The expense recognized during the ~~six~~nine months ended ~~June~~September 30, 2005, related to the vesting of these awards was ~~$1.4~~$2.2 million. The remaining ~~$7.5~~$6.5 million of deferred compensation is included as a component of capital surplus.

NOTE 1213 — INCOME TAXES

The following is a summary of the major items comprising the differences in taxes from continuing operations computed at the federal statutory rate and as recorded in the consolidated statement of income for the three months and ~~six~~nine months ended ~~June~~September 30:


	Three Months Ended						Six Months Ended						Three Months Ended						Nine Months Ended
	June 30,						June 30,						September 30,						September 30,
(dollars in thousands)		2005			2004			2005			2004		2005			2004			2005			2004

Provision at statutory rate of 35%	$	8,995		$	2,900		$	17,110		$	10,340		$	10,106		$	6,881		$	27,216		$	17,221
Tax-exempt income		(4,332	)		(4,595	)		(8,672	)		(9,400	)		(4,132	)		(4,560	)		(12,804	)		(13,960	)
Other, net		(174	)		(235	)		(202	)		(203	)		(200	)		(481	)		(402	)		(684	)

Income tax expense (benefit)	$	4,489		$	(1,930	)	$	8,236		$	737
Income tax expense													$	5,774		$	1,840		$	14,010		$	2,577

Effective tax rate		17.5	%		(23.3	)%		16.8	%		2.5	%		20.0	%		9.4	%		18.0	%		5.2	%

NOTE 1415 — DERIVATIVE FINANCIAL INSTRUMENTS

Old National designates its derivatives based upon criteria established by SFAS No. 133, as amended by SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities, an Amendment to FASB Statement No. 133,” and SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” The following table summarizes the derivative financial instruments utilized by Old National at ~~June~~September 30:


	2005							2004							2005							2004
	Notional		Estimated Fair Value					Notional		Estimated Fair Value					Notional		Estimated Fair Value					Notional		Estimated Fair Value
(dollars in thousands)	Amount		Gain		Loss			Amount		Gain		Loss			Amount		Gain		Loss			Amount		Gain		Loss

Fair Value Hedges
Receive fixed interest rate swaps	$	1,238,698	$	7,933	$	(14,112	)	$	1,221,393	$	6,939	$	(26,593	)	$	1,207,748	$	2,287	$	(26,875	)	$	1,252,213	$	11,738	$	(11,916	)
Pay fixed interest rate swaps		20,000		—		(601	)		—		—		—			20,000		95		(72	)		20,000		—		(458	)
Forward mortgage loan contracts		16,002		33		—			7,406		—		(38	)		17,057		189		—			5,169		—		(50	)
Cash Flow Hedges
HELOC cash flow		100,000		—		(813	)		100,000		28		(407	)		50,000		—		(104	)		100,000		261		—
Pay fixed interest rate swaps		—		—		—			120,000		2,342		—			—		—		—			70,000		372		—
Stand Alone Derivatives
Stand Alone Hedges
Interest rate lock commitments		52,991		234		—			37,496		449		—			40,297		69		—			33,282		169		—
Forward mortgage loan contracts		67,070		12		—			45,178		—		(254	)		49,257		217		—			42,060		—		(119	)
Options on contracts purchased		—		—		—			8,000		—		(16	)		—		—		—			6,000		—		(16	)
Anticipated floating rate debt		55,000		—		(798	)		—		—		—			—		—		—			295,000		484		(2,784	)
Matched Customer Hedges
Customer interest rate swaps		161,430		2,538		(403	)		50,558		383		(650	)		202,308		984		(1,209	)		68,323		699		(242	)
Customer interest rate swaps with counterparty		161,430		403		(2,538	)		50,558		650		(383	)		202,308		1,209		(984	)		68,323		242		(699	)
Customer interest rate cap		2,300		—		(10	)		15,300		—		(68	)		2,300		—		(14	)		2,300		—		(23	)
Customer interest rate cap with counterparty		2,300		10		—			15,300		68		—			2,300		14		—			2,300		23		—

Total	$	1,877,221	$	11,163	$	(19,275	)	$	1,671,189	$	10,859	$	(28,409	)	$	1,793,575	$	5,064	$	(29,258	)	$	1,964,970	$	13,988	$	(16,307	)

Old National has obtained a summary judgement in its favor at the trial court level on lawsuits representing approximately $16.0 million of the estimated $31.0 million in exposure. The Court of Appeals for the First District affirmed the decision of the trial court for these cases filed in Cook County, Illinois. The plaintiffs petitioned the Illinois Supreme Court to review the Court of Appeal’s ~~decision. As~~decision, and as of ~~June~~September 30, 2005, the Illinois Supreme Court ~~has not yet determined whether or not it will review~~had denied an appeal of the Court of ~~Appeals’ decision.~~Appeal’s decision on $10 million of the approximately $16 million in exposure, bringing to finality a substantial portion of the Cook County action. Plaintiffs have filed an identical case to the Cook County case in St. Clair County, Illinois. It is uncertain at this time whether any future judgements or settlements inof the remaining Cook County matters or the duplicate case filed in St. Clair County will have ~~a material~~an impact on Old National’s results of operations.

CREDIT-RELATED FINANCIAL INSTRUMENTS

In the normal course of business, Old National’s banking affiliates have entered into various agreements to extend credit, including loan commitments of ~~$1.279~~$1.231 billion, commercial letters of credit of ~~$4.2 million~~$49 thousand and standby letters of credit of ~~$138.2~~$140.8 million at ~~June~~September 30, 2005. At ~~June~~September 30, 2004, loan commitments were ~~$1.345~~$1.374 billion, commercial letters of credit were ~~$16.3~~$14.4 million and standby letters of credit were ~~$101.9~~$109.8 million. These commitments are not reflected in the consolidated financial statements. ~~No material losses are expected to result from these transactions.~~Management believes the reserve for unfunded commitments is adequate as of September 30, 2005.

At ~~June~~September 30, 2005 and 2004, Old National had credit extensions of ~~$94.7~~$92.7 million and ~~$72.1~~$72.8 million, respectively, with various unaffiliated banks related to letter of credit commitments issued on behalf of Old National’s clients. At ~~June~~September 30, 2005 and 2004, Old National provided collateral to the unaffiliated banks to secure credit extensions totaling ~~$62.7~~$62.2 million and ~~$41.3~~$40.9 million, respectively. Old National did not provide collateral for the remaining credit extensions.

NOTE 1617 — FINANCIAL GUARANTEES

Old National holds instruments, in the normal course of business with clients that are considered financial guarantees in accordance with FIN 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” Standby letters of credit guarantees are issued in connection with agreements made by clients to counterparties. Standby letters of credit are contingent upon failure of the client to perform the terms of the underlying contract. Credit risk associated with standby letters of credit is essentially the same as that associated with extending loans to clients and is subject to normal credit policies. The term of these standby letters of credit is typically one year or less. At ~~June~~September 30, 2005, the notional amount of standby letters of credit was ~~$138.2~~$140.8 million, which represents the maximum amount of future funding requirements, and the carrying value was $0.5 million.

NOTE 1718 — SEGMENT INFORMATION

Old National operates in two reportable segments: community banking and treasury. The community banking segment serves customers in both urban and rural markets providing a wide range of financial services including commercial, real estate and consumer loans; lease financing; checking, savings, time deposits and other depository accounts; cash management services; and debit cards and other electronically accessed banking services and Internet banking. Treasury manages investments, wholesale funding, interest rate risk, liquidity and leverage for Old National. Additionally, treasury provides other miscellaneous capital markets products for its corporate banking clients. Beginning January 1, 2005, Old National disaggregated internal reporting for its non-bank operations, including wealth management, investment consulting, insurance, brokerage and investment and annuity sales. These lines of business are now included in the “other” column for all periods reported.

In order to measure performance for each segment, Old National allocates capital, corporate overhead and income tax provision to each segment. Capital and corporate overhead are allocated to each segment using various methodologies, which are subject to periodic changes by management. Income taxes are allocated using the effective tax rate. Tax-exempt income is primarily within the treasury segment, creating a tax benefit for this segment. Intersegment sales and transfers are not significant.

Old National uses a funds transfer pricing (“FTP”) system to eliminate the effect of interest rate risk from net interest income in the community banking segment and from companies included in the ~~other~~“other” column. The FTP

The financial information for each operating segment is reported on the basis used internally by Old National’s management to evaluate performance and is not necessarily comparable with similar information for any other financial institution. Summarized financial information concerning segments is shown in the following table for the three months and ~~six~~nine months ended ~~June~~September 30:


	Community											Community
(dollars in thousands)	Banking		Treasury			Other			Total			Banking		Treasury			Other			Total

Three months ended June 30, 2005
Three months ended September 30, 2005
Net interest income												$	65,167	$	(4,079	)	$	(3,480	)	$	57,608
Provision for loan losses													6,115		(115	)		—			6,000
Noninterest income													19,561		2,729			16,674			38,964
Noninterest expense													49,379		702			11,617			61,698
Income (loss) before income taxes and discontinued operations													29,234		(1,937	)		1,577			28,874
Income tax expense (benefit)													7,898		(2,633	)		509			5,774
Loss from discontinued operations, net of income tax expense													—		—			(15,507	)		(15,507	)
Segment profit (loss)													21,336		696			(14,439	)		7,593
Total assets													5,371,185		2,948,865			215,241			8,535,291

Three months ended September 30, 2004
Net interest income	$	64,030	$	(3,176	)	$	(3,728	)	$	57,126		$	66,709	$	(2,054	)	$	(3,667	)	$	60,988
Provision for loan losses		5,897		103			—			6,000			7,343		57			—			7,400
Noninterest income		18,472		1,788			17,937			38,197			17,335		2,161			15,475			34,971
Noninterest expense		51,251		998			11,376			63,625			56,861		297			11,742			68,900
Income (loss) before income taxes and discontinued operations		25,354		(2,489	)		2,833			25,698			19,840		(247	)		66			19,659
Income tax expense (benefit)		6,635		(3,055	)		909			4,489			4,519		(2,706	)		27			1,840
Income from discontinued operations, net of income tax expense		—		—			1,666			1,666			—		—			365			365
Segment profit		18,719		566			3,590			22,875			15,321		2,459			404			18,184
Total assets		5,315,115		3,052,496			282,727			8,650,338			5,333,011		3,368,118			280,586			8,981,715

Three months ended June 30, 2004
Net interest income	$	71,858	$	(3,336	)	$	(3,392	)	$	65,130
Provision for loan losses		7,442		58			—			7,500
Noninterest income		23,843		2,271			16,062			42,176
Noninterest expense		72,423		1,909			17,189			91,521
Income (loss) before income taxes and discontinued operations		15,836		(3,032	)		(4,519	)		8,285
Income tax expense (benefit)		3,100		(3,627	)		(1,403	)		(1,930	)
Income from discontinued operations, net of income tax expense		—		—			1,068			1,068
Segment profit		12,736		595			(2,048	)		11,283
Total assets		5,389,457		3,380,997			270,996			9,041,450

Six months ended June 30, 2005
Net interest income	$	129,831	$	(6,971	)	$	(7,096	)	$	115,764
Provision for loan losses		10,976		124			—			11,100
Noninterest income		35,855		3,449			34,619			73,923
Noninterest expense		105,378		1,745			22,579			129,702
Income (loss) before income taxes and discontinued operations		49,332		(5,391	)		4,944			48,885
Income tax expense (benefit)		12,984		(6,341	)		1,593			8,236
Income from discontinued operations, net of income tax expense		—		—			682			682
Segment profit		36,348		950			4,033			41,331
Total assets		5,315,115		3,052,496			282,727			8,650,338

Six months ended June 30, 2004
Net interest income	$	142,044	$	(5,237	)	$	(6,578	)	$	130,229
Provision for loan losses		14,884		116			—			15,000
Noninterest income		38,750		6,370			34,562			79,682
Noninterest expense		130,725		2,792			31,852			165,369
Income (loss) before income taxes and discontinued operations		35,185		(1,775	)		(3,868	)		29,542
Income tax expense (benefit)		7,748		(5,817	)		(1,194	)		737
Income from discontinued operations, net of income tax expense		—		—			1,987			1,987
Segment profit		27,437		4,042			(687	)		30,792
Total assets		5,389,457		3,380,997			270,996			9,041,450


	Community
(dollars in thousands)	Banking		Treasury			Other			Total

Nine months ended September 30, 2005
Net interest income	$	194,998	$	(11,050	)	$	(10,576	)	$	173,372
Provision for loan losses		17,091		9			—			17,100
Noninterest income		55,416		6,178			51,293			112,887
Noninterest expense		154,757		2,447			34,196			191,400
Income (loss) before income taxes and discontinued operations		78,566		(7,328	)		6,521			77,759
Income tax expense (benefit)		20,882		(8,974	)		2,102			14,010
Loss from discontinued operations, net of income tax expense		—		—			(14,825	)		(14,825	)
Segment profit (loss)		57,684		1,646			(10,406	)		48,924
Total assets		5,371,185		2,948,865			215,241			8,535,291

Nine months ended September 30, 2004
Net interest income	$	208,753	$	(7,291	)	$	(10,245	)	$	191,217
Provision for loan losses		22,227		173			—			22,400
Noninterest income		56,085		8,531			50,037			114,653
Noninterest expense		187,586		3,089			43,594			234,269
Income (loss) before income taxes and discontinued operations		55,025		(2,022	)		(3,802	)		49,201
Income tax expense (benefit)		12,267		(8,523	)		(1,167	)		2,577
Income from discontinued operations, net of income tax expense		—		—			2,352			2,352
Segment profit (loss)		42,758		6,501			(283	)		48,976
Total assets		5,333,011		3,368,118			280,586			8,981,715

NOTE ~~18 — DISCONTINUED OPERATIONS~~19 – SUBSEQUENT EVENT

In February 2005, Old National committed to a plan to sell selected non-strategic companies, J.W. Terrill Insurance Agency in St. Louis, Missouri, and Fund Evaluation Group in Cincinnati, Ohio, to better align its operations with its market and product focus. The assets and liabilities of these companies are reported as held for sale at lower of cost or market on the consolidated balance sheet at June 30, 2005. The operating activities of these companies have been reclassified to discontinued operations for all periods in the consolidated statement of income. Revenues of $9.2 million and $8.9 million with after-tax income of $1.7 million and $1.1 million were recorded for the three months ended June 30, 2005 and 2004, respectively. These discontinued operations generated revenues of $17.7 million and $17.1 million with after-tax income of $0.7 million and $2.0 million for the six months ended June 30, 2005 and 2004, respectively and are reported in the “other” column for segment reporting.

Subsequent to ~~the quarter ended June~~September 30, 2005, Old National ~~completed~~finalized the sale of ~~J.W. Terrill Insurance Agency~~five branches in ~~St. Louis, Missouri.~~Clarksville, Tennessee, assigning approximately $173 million in deposits and selling approximately $115 million in loans outstanding. These branches are in markets no longer considered consistent with the company’s strategy. The ~~company was acquired~~sale will result in a ~~tax-free reorganization under Internal Revenue Code section 368. As a result of the taxable sale, Old National expects to record tax expense~~pre-tax gain of approximately ~~$9.5~~$14 million which will be included in income from continuing operations during the ~~third~~fourth quarter. ~~Actions to locate a buyer for Fund Evaluation Group have been initiated with an expected sale during 2005.~~

~~Carrying amounts of the major classes of assets and liabilities of the discontinued operations included as held for sale were as follows at June 30, 2005:~~

(dollars in thousands)

Assets held for sale:

Money market investments $ 9,120
Available-for-sale securities 11
Premises and equipment, net 371
Goodwill 26,082
Other intangible assets 21,681
Other assets 4,795

Total assets held for sale $ 62,060

Liabilities held-for-sale:

Other liabilities $ 14,333

1920

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~EXECUTIVE SUMMARY~~

Net income for the three and six months ended June 30, 2005, increased compared to the three and six months ended June 30, 2004, primarily due to a significant decrease in noninterest expense and lower provisions for loan losses. Noninterest expense in 2004 was impacted by nonrecurring charges related to the company-wide profit improvement project, “Ascend”. The decrease in the 2005 provision for loan losses is primarily a result of the improvement in Old National’s credit quality performance. These improvements were somewhat offset by decreases in net interest income and mortgage banking revenue. However, Old National’s June 30, 2005 loan balance represented the first quarterly increase in total loans since the three-month period ended June 30, 2001. Related to Old National’s plan to sell selected non-strategic companies during 2005, net income includes after-tax income from discontinued operations of $1.7 million and $0.7 million, respectively, for the three and six months ended June 30, 2005, and $1.1 million and $2.0 million, respectively, for the three and six months ended June 30, 2004. See Note 18 to the consolidated financial statements for further discussion of discontinued operations.

Total assets at June 30, 2005, were $8.650 billion compared to total assets of $9.041 billion at June 30, 2004, and $8.898 billion at December 31, 2004. The decrease, primarily reflective of reductions in the investment portfolio with a corresponding decrease in borrowed funds, is an effort to “right size” the balance sheet in response to the flattening yield curve and resulting narrowing spreads. Partially offsetting this decrease was the addition of $24.3 million of assets related to the purchase of J. W. F. Insurance Companies on May 1, 2005. Included in total assets at June 30, 2005, was $62.1 million of assets held for sale related to Old National’s plan to sell selected non-strategic companies during 2005. See Note 18 to the consolidated financial statements for further discussion of discontinued operations.

Management uses various indicators such as return on assets, return on equity and asset quality ratios in order to evaluate the performance of the business. These are discussed throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

~~FINANCIAL BASIS AND FORWARD-LOOKING STATEMENTS~~

The following discussion is an analysis of Old National’s results of operations for the three months and ~~six~~nine months ended ~~June~~September 30, 2005 and 2004, and financial condition as of ~~June~~September 30, 2005, compared to ~~June~~September 30, 2004, and December 31, 2004. This discussion and analysis should be read in conjunction with Old National’s consolidated financial statements and related notes. This discussion contains forward-looking statements concerning Old National’s business that are based on estimates and involves certain risks and uncertainties. Therefore, future results could differ significantly from management’s current expectations and the related forward-looking statements.

~~The following is a cautionary note about forward-looking statements. In its oral and written communications,~~ EXECUTIVE SUMMARY

Old National ~~from time~~continues to ~~time includes forward-looking statements, within~~focus on its key strategic initiatives: (1) strengthen the ~~meaning of~~risk profile; (2) enhance management discipline; and (3) achieve consistent quality earnings. In 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.”last twelve months, Old National ~~may include forward-looking statements~~generated significant improvement in ~~filings with the Securities and Exchange Commission, such as this Form 10-Q, in other written materials and in oral statements made by senior management~~its asset quality. Non-performing loans at September 30, 2005, were $58.8 million compared 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 Old National undertakes 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 the forward-looking statement. Uncertainties which could affect Old National’s future performance include, but are not limited to: (1) economic, market, operational, liquidity, credit and interest rate risks associated with Old National’s business; (2) economic conditions generally and in the financial services industry; (3) increased competition in the financial services industry either nationally or regionally, resulting in, among other things, credit quality deterioration; (4) volatility and direction of

market interest rates; (5) governmental legislation and regulation, including changes in accounting regulation or standards; (6) the ability of Old National to execute its business plan; (7) a weakening of the economy which could materially impact credit quality trends and the ability to generate loans; (8) changes in the securities markets; and (9) changes in fiscal, monetary and tax policies. Investors should consider these risks, uncertainties and other factors in addition to those mentioned by Old National in this and its other filings from time to time when considering any forward-looking statement.

~~CRITICAL ACCOUNTING POLICIES AND ESTIMATES~~

$106.0 million at September 30, 2004. The “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as disclosures found elsewhere in this quarterly report, are based upon Old National’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires Old National to make estimates and judgements that affect the reported amounts of assets, liabilities, revenues and expenses. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowanceprovision for loan losses for the ~~valuation of the mortgage servicing rights and the valuation of goodwill and other intangible assets. Actual results could differ from those estimates.~~

•		~~Allowance for Loan Losses.~~The allowance for loan losses is maintained at a level believed adequate by management to absorb probable losses inherent in the consolidated loan portfolio. Management’s evaluation of the adequacy of the allowance is an estimate based on reviews of individual loans, pools of homogeneous loans, assessments of the impact of current and anticipated economic conditions on the portfolio and historical loss experience. The allowance represents management’s best estimate, but significant downturns in circumstances relating to loan quality and economic conditions could result in a requirement for additional allowance in the near future. Likewise, an upturn in loan quality and improved economic conditions may allow a reduction in the required allowance. In either instance, unanticipated changes could have a significant impact on results of operations.

		The allowance is increased through a provision charged to operating expense. Uncollectible loans are charged-off through the allowance. Recoveries of loans previously charged-off are added to the allowance. A loan is considered impaired when it is probable that contractual interest and principal payments will not be collected either for the amounts or by the dates as scheduled in the loan agreement. Old National’s policy for recognizing income on impaired loans is to accrue interest unless a loan is placed on nonaccrual status. A loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectibility of principal or interest.

		Old National monitors the quality of its loan portfolio on an on-going basis and uses a combination of detailed credit assessments by relationship managers and credit officers, historic loss trends, and economic and business environment factors in determining its allowance for loan losses. Old National records provisions for loan losses based on current loans outstanding, grade changes, mix of loans and expected losses. A detailed loan loss evaluation on an individual loan basis for the company’s highest risk loans is performed quarterly. Management follows the progress of the economy and how it might affect Old National’s borrowers in both the near and the intermediate term. Old National has a formalized and disciplined independent loan review program to evaluate loan administration, credit quality and compliance with corporate loan standards. This program includes periodic reviews conducted at the community bank locations as well as regular reviews of problem loan reports, delinquencies and charge-offs.

		Old National uses migration analysis as a tool to determine the adequacy of the allowance for loan losses for non-retail loans that are not impaired. Migration analysis is a statistical technique that attempts to estimate probable losses for existing pools of loans by matching actual losses incurred on loans back to their origination. The migration-derived historical commercial loan loss rates are applied to the current commercial loan pools to arrive at an estimate of probable losses for the loans existing at the time of analysis.

		Old National calculates migration analysis using several different scenarios based on varying assumptions to evaluate the widest range of possible outcomes. The amounts determined by migration analysis are adjusted for management’s best estimate of the effects of current economic conditions, loan quality trends, results from internal and external review examinations, loan volume trends, credit concentrations and various other factors.

		~~Historic loss ratios adjusted for expectations of future economic conditions are used in determining the appropriate level of reserves for consumer and residential real estate loans.~~

		Management’s analysis of probable losses inherent in the portfolio at June 30, 2005, resulted in a range for allowance for loan losses of $8.8 million with the potential effect to net income ranging from a decrease of $3.8 million to an increase of $2.0 million. These sensitivities are hypothetical and are not guarantees of actual results.

•		~~Mortgage Servicing Rights.~~Mortgage servicing rights are recognized as separate assets when loans are sold with servicing retained. The total price of loans sold is allocated between the loans sold and the mortgage servicing rights retained based on the relative fair values of each. The fair value of capitalized mortgage servicing rights is estimated by calculating the present value of estimated future net servicing income derived from related cash flows. Amortization of capitalized mortgage servicing rights is determined in proportion to and over the period of estimated net servicing income of the underlying financial assets. Impairment of mortgage servicing rights exists if the book value of the mortgage servicing rights exceeds its estimated fair value. In determining impairment, mortgage servicing rights are stratified by interest rates.

		Critical assumptions used in determining fair value include expected mortgage loan prepayment rates, discount rates and other economic factors, which are determined based on current market conditions. The expected rates of mortgage loan prepayments are the most significant factors driving the value of mortgage servicing rights. Increases in expected mortgage loan prepayments reduce estimated future net servicing cash flows because the life of the underlying loan is reduced. Fair values are derived by using a statistical modeling technique utilizing third-party market-based prepayment rate assumptions. Negative adjustments to the value, if any, are recognized through a valuation allowance by charges against mortgage servicing income. The use of a valuation allowance enables the recovery of this value as market conditions become more favorable.

		A 10% and 20% adverse change in the current prepayment assumptions would decrease the fair value of mortgage servicing rights at June 30, 2005, by approximately $0.9 million and $1.6 million, respectively. A 10% and 20% adverse change in the discount rate assumption would decrease the fair value of mortgage servicing rights at June 30, 2005, by $0.4 million and $0.9 million, respectively. These sensitivities are hypothetical and are not guarantees of actual results. Also, in reality, changes in one factor may result in changes in other factors, which might magnify or counteract the sensitivities.

•		~~Goodwill and Other Intangible Assets.~~For acquisitions, Old National is required to record the assets acquired, including identified other intangible assets, and the liabilities assumed at their fair value. These often involve estimates based on third-party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques that may include estimates of attrition, inflation, asset growth rates or other relevant factors. In addition, the determination of the useful lives for which an intangible asset will be amortized is subjective. Under Statement of Financial Accounting Standards (“SFAS”) No. 142 “Goodwill and Other Intangible Assets,” goodwill and indefinite-lived assets recorded must be reviewed for impairment on an annual basis, as well as on an interim basis if events or changes indicate that the asset might be impaired. An impairment loss must be recognized for any excess of carrying value over fair value of the goodwill or the indefinite-lived intangible asset with subsequent reversal of the impairment loss being prohibited.

		The determination of fair values is based on internal valuations using management’s assumptions of future growth rates, future attrition, discount rates, multiples of earnings or other relevant factors. Changes in these factors, as well as downturns in economic or business conditions, could have a significant adverse impact on the carrying values of goodwill or intangible assets and could result in impairment losses affecting the financials of the company as a whole and the individual lines of business in which the goodwill or intangible assets reside.

~~Management believes the accounting estimates related~~nine months ended September 30, 2005 was $17.1 million, a $5.3 million decrease compared to the ~~allowance for loan losses;~~$22.4 million during the ~~capitalization, amortization and valuation~~first nine months of ~~mortgage servicing rights; and~~2004.

In following the ~~valuation of goodwill and other intangible assets are “critical accounting estimates” because: (1) the estimates are highly susceptible~~disciplined approach to change from period to period because they require company management to make assumptions concerning, among other factors, the changes in the types and volumes of the portfolios, rates of future prepayments, valuation assumptions and anticipated

~~economic conditions, and (2) the impact of recognizing an impairment or loan loss could have a material effect on~~capital allocation, Old ~~National’s assets reported~~National closed on the balance sheet as well as net income. Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of the Board of Directors and the Audit Committee has reviewed the company’s disclosure relating to it in this “Management’s Discussion and Analysis”.

~~ACQUISITION AND DIVESTITURES ACTIVITY~~

On May 1, 2005, Old National acquired J. W. F. Insurance Companies, an Indianapolis, Indiana-based insurance agency that did business as J.W. Flynn Company and J.W.F. Specialty Company, Inc. The purchase price of $19.0 million included 970,912 common shares issued. Goodwill of $12.0 million and intangible assets of $8.4 million were recorded as part of this transaction. See Note 3 to the consolidated financial statements for further details.

During the six months ended June 30, 2005, Old National committed to a plan to sell selected non-strategic companies, J.W. Terrill Insurance Agency in St. Louis, Missouri, and Fund Evaluation Group in Cincinnati, Ohio, to better align its operations with its market and product focus. The assets and liabilities of these identified companies were reported as held for sale at lower of cost or market on the consolidated balance sheet at June 30, 2005, and were included as discontinued operations on the consolidated statement of income for all periods shown. See Note 18 to the consolidated financial statements for further details.

~~Subsequent to the quarter ended June 30, 2005, Old National completed the sale~~sales of J.W. Terrill Insurance Agency in St. Louis, Missouri. The company was acquired in a tax-free reorganization under Internal Revenue Code section 368. As a result of the taxable sale, Old National expects to record approximately $9.5 million of tax expense in(“Terrill”) and Fund Evaluation Group (“FEG”) during the third quarter of 2005, both of which were included in discontinued operations. Subsequent to the end of the third quarter, the company also closed on the sale of all five financial centers located in the Clarksville, Tennessee market. The impact of the financial center sales will be reported in continuing operations in the fourth quarter of 2005.

~~RESULTS OF OPERATIONS~~

~~Earnings Summary~~Income from continuing operations for the three months ended September 30, 2005, was $23.1 million, or $0.34 per diluted share compared to income from continuing operations totaling $17.8 million, or $0.26 per diluted share for the same quarter last year. Income from continuing operations for the nine months ended September 30, 2005, was $63.7 million, or $0.93 per diluted share, compared to income from continuing operations of $46.6 million, or $0.67 per diluted share for the nine months ended September 30, 2004.

Old National reported net income of ~~$22.9~~$7.6 million for the three months ended ~~June~~September 30, 2005, ~~an increase~~a decrease of ~~$11.6~~$10.6 million, or ~~102.7%~~58.2% from the ~~$11.3~~$18.2 million recorded for the three months ended ~~June~~September 30, 2004. Net income for the three months ended September 30, 2005, includes the $15.5 million loss from discontinued operations related to the sale of Terrill and FEG. See Note 4 to the consolidated financial statements for additional information. For the ~~six~~nine months ended ~~June~~September 30, 2005, net income was ~~$41.3~~$48.9 million, ~~an increase~~a decrease of ~~$10.5~~$0.1 million, or ~~34.2%~~0.1% from the ~~$30.8~~$49.0 million recorded for the ~~six~~nine months ended ~~June~~September 30, 2004. On a diluted per share basis, net income was ~~$0.33~~$0.11 for the three months ended ~~June~~September 30, 2005, compared to ~~$0.16~~$0.26 for the three months ended ~~June~~September 30, 2004. Diluted earnings per share were ~~$0.60~~$0.71 for the ~~six~~nine months ended ~~June~~September 30, 2005, compared to ~~$0.44~~$0.70 for the ~~six~~nine months ended ~~June~~September 30, 2004.

~~Related to Old National’s plan to sell selected non-strategic companies during 2005, net income includes after-tax~~Calculated based on income from discontinued operations of $1.7 million, or $0.02 per diluted share for the three months ended June 30, 2005, compared to after-tax income from discontinued operations of $1.1 million, or $0.02 per diluted share for the three months ended June 30, 2004. Net income for the six months ended June 30, 2005, includes after-tax income from discontinued operations of $0.7 million, or $0.01 per diluted share compared to after-tax income from discontinued operations of $2.0 million, or $0.03 per diluted share for the six months ended June 30, 2004. See Note 18 to the consolidated financial statements for further discussion of discontinued operations. Income from continuing operations, was $21.2 million for the three months ended June 30, 2005, compared to $10.2 million for the three months ended June 30, 2004. Income from continuing operations was $40.6 million for the six months ended June 30, 2005, compared to $28.8 million for the six months ended June 30, 2004.

Operating results for both the three and six months ended June 30, 2005, were favorably impacted by a reduction in noninterest expense, primarily professional fees and salary expense, and a reduction in the provision for loan losses. Noninterest expense decreased $27.9 million and $35.7 million, respectively, for the three and six months ended June 30, 2005 compared to June 30, 2004. This decrease is primarily the result of $25.1 million of expenses related to “Ascend” and to severance payments to three senior executives who left Old National during the first quarter of 2004. In addition, recent corporate initiatives have reduced salary expense during 2005 despite the inclusion of $1.2 million of personnel expense associated with the recent acquisition of J. W. F. Insurance Companies. These positive factors were offset by decreases in net interest income and mortgage banking revenue as a result of weak loan demand during 2004 and into 2005, more stringent loan underwriting standards, and loan sales.

RESULTS OF OPERATIONS

The following table sets forth certain income statement information of Old National for the three and nine months ended September 30, 2005 and 2004:


	Three Months Ended							Nine Months Ended
(dollars in thousands,	September 30,							September 30,
except per share data)	2005		2004		Change			2005		2004		Change

Income Statement Summary:
Net interest income	$	57,608	$	60,988		(5.5	)%	$	173,372	$	191,217		(9.3	)%
Provision for loan losses		6,000		7,400		(18.9	)		17,100		22,400		(23.7	)
Noninterest income		38,964		34,971		11.4			112,887		114,653		(1.5	)
Noninterest expense		61,698		68,900		(10.5	)		191,400		234,269		(18.3	)

Net Interest Income

Net interest income is Old National’s most significant component of earnings, comprising over ~~61%~~60% of revenues at ~~June~~September 30, 2005. Net interest income and margin are influenced by many factors, primarily the volume and mix of earning assets, funding sources and interest rate fluctuations. Other factors include accelerated prepayments of mortgage-related assets and the composition and maturity of earning assets and interest-bearing liabilities. Loans typically generate more interest income than investment securities with similar maturities. Funding from client deposits generally cost less than wholesale funding sources. Factors, such as general economic activity, Federal Reserve Board monetary policy and price volatility of competing alternative investments, can also exert significant influence on Old National’s ability to optimize its mix of assets and funding and its net interest income and margin.

Net interest income and net interest margin in the following discussion are presented on a fully taxable equivalent basis, which adjusts tax-exempt or nontaxable interest income to an amount that would be comparable to interest subject to income taxes using the federal statutory tax rate of 35% in effect for all periods. Net income is unaffected by these taxable equivalent adjustments as the offsetting increase of the same amount is made ~~in the~~to income tax ~~section.~~expense. Net interest income ~~included~~includes taxable equivalent adjustments of ~~$5.5~~$5.2 million and $6.0 million for the three months ended ~~June~~September 30, 2005 and 2004, respectively. Taxable equivalent adjustments for the ~~six~~nine months ended ~~June~~September 30, 2005 and 2004, were ~~$11.1~~$16.3 million and ~~$12.1~~$18.1 million, respectively.

Taxable equivalent net interest income was ~~$62.7~~$62.8 million and ~~$126.9~~$189.7 million for the three and ~~six~~nine months ended ~~June~~September 30, 2005, respectively, down from the ~~$71.2~~$66.9 million and ~~$142.4~~$209.3 reported for the three and ~~six~~nine months ended ~~June~~September 30, 2004, respectively. The net interest margin was ~~3.20%~~3.26% and ~~3.21%~~3.23% for the three and ~~six~~nine months ended ~~June~~September 30, 2005, respectively, compared to ~~3.38%~~3.30% and ~~3.37%~~3.35% reported for the three and ~~six~~nine months ended ~~June~~September 30, 2004, respectively. The reduction in ~~both~~ net interest income ~~and~~is primarily a result of the lower average earning assets. The declines in net interest margin isare due to the compression in the net interest spread as a ~~reflection~~result of the dramatic increase in ~~the cost of funding being greater than the increase in earning asset yields.~~short-term interest rates.

Average earning assets were ~~$7.841~~$7.714 billion for the three months ended ~~June~~September 30, 2005, compared to ~~$8.435~~$8.117 billion for the three months ended ~~June~~September 30, 2004, a decrease of ~~7.0%~~5.0%, or ~~$594.4~~$403.6 million. Average earning assets were ~~$7.902~~$7.838 billion for the ~~six~~nine months ended ~~June~~September 30, 2005, compared to ~~$8.448~~$8.338 billion for the ~~six~~nine months ended ~~June~~September 30, 2004, a decrease of ~~6.5%~~6.0%, or ~~$545.9~~$499.6 million. Significantly affecting average earning assets at ~~June~~September 30, 2005 compared to ~~June~~September 30, 2004, was ~~the planned reduction~~Management’s decision to reduce the investment portfolio. Also significantly affecting average earning assets was the sale of $405.6 million of residential real estate loans at June 30, 2004. In addition, during 2004 and through March 31, 2005, average commercial and commercial real estate loans declined as a result of weak loan demand in Old National’s markets, more stringent loan underwriting standards and loan sales. Sales of commercial and commercial real estate loans included $26.7 million of nonaccrual and substandard commercial and commercial real estate loans during the quarter ended June 30, 2005, and $43.1 million during the quarter ended December 31, 2004.

Provision for Loan Losses

The provision for loan losses was $6.0 million and ~~$11.1~~$17.1 million for the three and ~~six~~nine months ended ~~June~~September 30, 2005, respectively, compared to ~~$7.5~~$7.4 million and ~~$15.0~~$22.4 million for the three and ~~six~~nine months ended ~~June~~September 30,

million, or ~~9.4%~~11.4% from the ~~$42.2~~$35.0 million reported for the three months ended ~~June~~September 30, 2004. For the ~~six~~nine months ended ~~June~~September 30, 2005, noninterest income was ~~$73.9~~$112.9 million, a decrease of ~~$5.8~~$1.8 million, or ~~7.2%~~1.5% from the ~~$79.7~~$114.7 million reported for the ~~six~~nine months ended ~~June~~September 30, 2004.

Net securities gains increased by ~~$1.0~~$0.3 million for the three months ended ~~June~~September 30, 2005 compared to ~~June~~September 30, 2004, and decreased by ~~$1.5~~$1.1 million for the ~~six~~nine months ended ~~June~~September 30, 2005 compared to ~~June~~September 30, 2004. Total noninterest income excluding net securities gains was ~~$37.2~~$38.3 million and ~~$73.4~~$111.7 million for the three and ~~six~~nine months ended ~~June~~September 30, 2005, respectively, compared to ~~$42.2~~$34.7 million and ~~$77.7~~$112.3 million for the three and ~~six~~nine months ended ~~June~~September 30, 2004, respectively. ~~The decrease~~

Primarily as a result of the acquisition of J. W. F. Insurance Companies in ~~noninterest income excluding securities gains was primarily attributable~~the second quarter of 2005, insurance premiums and commissions increased to $8.5 million and $26.6 million for the three and nine months ended September 30, 2005, compared to $7.4 million and $24.8 million for the three and nine months ended September 30, 2004, a ~~decrease~~15.1% and 7.5% increase, respectively. Insurance premiums and commissions related to J.W. Terrill Insurance Agency are not included in ~~mortgage banking revenue.~~ these amounts. See Note 4 to the consolidated financial statements for a discussion of discontinued operations and divestitures.

Mortgage banking revenue ~~was $1.3~~increased $1.5 million to $1.8 million for the three months ended ~~June~~September 30, 2005, from $0.3 million for the three months ended September 30, 2004. Mortgage origination activity during the three-month period ended September 30, 2005 was comparable to production during the third quarter of 2004; however, secondary market demand was higher during the third quarter of 2005 along with reduced mortgage servicing impairment expense. For the nine months ended September 30, 2005, mortgage banking revenue was $4.4 million compared to $7.1 million for the ~~three~~nine months ended ~~June~~September 30, 2004, a ~~$5.9 million decrease. For the six months ended June 30, 2005, mortgage banking revenue was~~ $2.6 ~~million compared to $6.8 million for the six months ended June 30, 2004, a $4.2~~ million decrease. The decrease is primarily due to the $405.6 million residential real estate loan sale during the second quarter of 2004 that resulted in a $2.7 million ~~gain~~gain.

Investment product fees were $2.2 million and $7.1 million for the ~~$2.6~~three and nine months ended September 30, 2005, respectively, compared to $2.5 million ~~recovery~~and $9.5 million for the three and nine months ended September 30, 2004, respectively. The decrease in 2005 is primarily the result of a decrease in sales of fixed annuities which have been suppressed by the rising interest rate environment, resulting in lower fixed annuity fees.

Included in other income for the three months ended September 30, 2005 is a pre-tax gain of $0.4 million related to the sale of mortgage servicing ~~rights valuation allowance.~~rights. See Note 10 to the consolidated financial statements for additional detail.

Noninterest Expense

Noninterest expense for the three months ended ~~June~~September 30, 2005, totaled ~~$63.6~~$61.7 million, a decrease of ~~$27.9~~$7.2 million or ~~30.5%~~10.5%, from the ~~$91.5~~$68.9 million recorded for the three months ended ~~June~~September 30, 2004. For the ~~six~~nine months ended ~~June~~September 30, 2005, noninterest expense was ~~$129.7~~$191.4 million, a decrease of ~~$35.7~~$42.9 million, or ~~21.6%~~18.3% from the ~~$165.4~~$234.3 million recorded for the ~~six~~nine months ended ~~June~~September 30, 2004.

Salaries and benefits is the largest component of noninterest ~~expense, was $38.7 million for~~expense. For the three and nine months ended ~~June 30, 2005, compared to $48.1 million for the three months ended June 30, 2004, a decrease of $9.3 million. For the six months ended June~~September 30, 2005, salaries and benefits ~~amounted to $77.8~~were $35.9 million and $113.6 million, respectively, compared to ~~$92.3~~$38.3 million and $130.6 million for the ~~six~~three and nine months ended ~~June~~September 30, 2004, arespectively. The decrease ~~of $14.5 million. Salaries~~in salaries and benefits in 2005 is primarily a result of lower incentive compensation in 2005 and benefits associated with the “Ascend” initiative, offset by the personnel expense associated with the acquisition of J.W.F. Insurance Companies during the year. Included in salaries and benefits for the nine months ended September 30, 2004, ~~include nonrecurring expenses~~was $2.9 million of severance expense related to ~~“Ascend”,~~three senior executives, including the chief executive officer, who left

the company during the first quarter of 2004 and severance costs for employees whose positions were eliminated and expenses related to incentive programs for employees participating in “Ascend”. Also included in salaries and benefits for the six months ended June 30, 2004, was $2.9 million of severance expense related to three senior executives, including the chief executive officer, who left the company during the first quarter of 2004. Recent corporate “Ascend” initiatives have reduced salary expense during 2005 despite the inclusion of $1.2 million of personnel expense associated with the recent acquisition of J. W. F. Insurance Companies.

Professional fees totaled ~~$2.0~~$2.3 million for the three months ended ~~June~~September 30, 2005, compared to ~~$16.9~~$3.1 million for the three months ~~June~~September 30, 2004. For the ~~six~~nine months ended ~~June~~September 30, 2005, professional fees were ~~$4.1~~$6.4 million compared to ~~$19.9~~$23.0 million for the ~~six~~nine months ended ~~June~~September 30, 2004. The decrease in professional fees was primarily attributable to consulting fees paid during 2004 in connection with “Ascend”.

All other components of noninterest expense totaled ~~$22.9~~$23.5 million for the three months ended ~~June~~September 30, 2005, compared to ~~$26.5~~$27.5 million for the three months ended ~~June~~September 30, 2004. For the ~~six~~nine months ended ~~June~~September 30, 2005 and 2004, all other components of noninterest expense totaled ~~$47.8~~$71.3 million and ~~$53.1~~$80.7 million, respectively. Included in the totals for 2005 is a ~~$3.0~~$4.7 million ~~decrease in expense for a~~ reduction in the reserve for unfunded ~~commitments due to a refinement in management’s estimates.~~commitments.

Provision for Income Taxes

Old National records a provision for income taxes currently payable and for income taxes payable or benefits to be received in the future, which arise due to timing differences in the recognition of certain items for financial statement and income tax purposes. The major difference between the effective tax rate applied to Old National’s financial statement income and the federal statutory tax rate is caused by interest on tax-exempt securities and loans. The provision for income taxes on continuing operations, as a percentage of pre-tax income, was ~~17.5%~~20.0% for the three months ended ~~June~~September 30, 2005, compared to ~~an income tax benefit of 23.3%~~9.4% in the three months ended ~~June~~September 30, 2004. The provision for income taxes on continuing operations, as a percentage of pre-tax income, was ~~16.8%~~18.0% for the ~~six~~nine months ended ~~June~~September 30, 2005, compared to ~~2.5%~~5.2% for the ~~six~~nine months ended ~~June~~September 30, 2004. The increased effective tax rate in 2005 resulted from a lower percentage of tax-exempt income to total income than in 2004.

FINANCIAL CONDITION

Overview

Old National’s assets at ~~June~~September 30, 2005, were ~~$8.650~~$8.535 billion, a ~~4.3%~~5.0% decrease compared to ~~June~~September 30, 2004 assets of ~~$9.041~~$8.982 billion, and an annualized decrease of ~~5.6%~~5.4% compared to December 31, 2004 assets of $8.898 billion. Investments decreased ~~$122.1~~$330.3 million since ~~June~~September 30, 2004, and decreased ~~$374.5~~$487.1 million since December 31, 2004. Loans ~~decreased $88.7~~increased $10.8 million since ~~June~~September 30, 2004, and increased ~~$53.6~~$127.6 million since December 31, 2004. Total liabilities decreased ~~$420.0~~$406.9 million compared to ~~June~~September 30, 2004, and decreased ~~$247.0~~$332.6 million since December 31, 2004, primarily from a reduction in borrowings. Total shareholders’ equity ~~increased $28.9~~decreased $39.5 million from ~~June~~September 30, 2004, and decreased ~~$1.0~~$30.4 million from December 31, 2004. The ~~increase~~decrease in shareholders’ equity from ~~June~~September 30, 2004 is primarily attributable to ~~the changes~~fluctuations in the ~~unrealized gains on~~market value of investment securities in the amount of $11.4 million, a $28.7 million increase in stock repurchases, and the issuance of $18.5 million in stock for the acquisition of J. W. F. Insurance Companies. At ~~June~~September 30, 2005, accumulated other comprehensive income, of which the largest component is unrealized gains (losses) on securities, was a net loss of ~~$0.5~~$4.6 million compared to a net ~~loss~~gain of ~~$26.3~~$14.4 million at ~~June~~September 30, 2004.

Earning Assets

Old National’s earning assets are comprised of loans and loans held for sale, investment securities and money market investments. Earning assets were ~~$7.728~~$7.705 billion at ~~June~~September 30, 2005, a decrease of ~~5.5%~~5.1% from ~~June~~September 30, 2004, and an annualized decrease of ~~7.1%~~5.1% since December 31, 2004. Much of the decrease is attributable to decreases in investment securities and money market investments as Old National has reduced its investment portfolio in response to the flattening of the yield curve and the desire to reduce its sensitivity to rising interest rates.

Investment Securities

Old National classifies investment securities primarily as available-for-sale to give management the flexibility to sell the securities prior to maturity if needed, based on fluctuating interest rates or changes in the company’s funding requirements. Emerging Issues Task Force (“EITF”) Issue 03-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments,” may potentially affect the treatment of investments in an unrealized loss position. Until final guidance is issued by the FASB, it is uncertain whether this EITF Issue will have a material impact on Old National. At ~~June~~September 30, 2005, Old National does not believe any individual unrealized loss on available-for-sale securities represents other-than-temporary impairment. The unrealized losses are primarily attributable to changes in interest rates. Old National has both the intent and ability to hold the securities for a time necessary to recover the amortized cost.

At ~~June~~September 30, 2005, the investment securities portfolio was ~~$2.638~~$2.526 billion compared to ~~$2.760~~$2.856 billion at ~~June~~September 30, 2004, a decrease of ~~$122.1~~$330.3 million or ~~4.4%~~11.6%. Investment securities decreased ~~$374.5~~$487.1 million at ~~June~~September 30, 2005, compared to December 31, 2004, an annualized decrease of ~~24.9%~~21.6%. Investment securities represented ~~34.1%~~32.8% of earning assets at ~~June~~September 30, 2005, compared to ~~33.8%~~35.2% at ~~June~~September 30, 2004, and 37.6% at December 31, 2004. Old National has reduced the size of the investment portfolio to reduce its sensitivity to rising interest rates.

The investment securities available-for-sale portfolio had net unrealized ~~gains~~losses of ~~$0.9~~$6.5 million at ~~June~~September 30, 2005, ~~an increase~~a decrease of ~~$45.3~~$32.4 million compared to net unrealized ~~losses~~gains of ~~$44.4~~$25.8 million at ~~June~~September 30, 2004, and a decrease of ~~$8.4~~$15.8 million compared to net unrealized gains of $9.3 million at December 31, 2004. These changes were primarily the result of higher market interest rates and a smaller portfolio of securities available-for-sale at ~~June~~September 30, 2005.

The investment portfolio had an average ~~life~~duration of ~~4.10~~3.31 years at ~~June~~September 30, 2005, compared to ~~5.05~~3.66 years at ~~June~~September 30, 2004, and ~~4.41~~3.70 years at December 31, 2004. The average yields on investment securities, on a taxable equivalent basis, were ~~4.57%~~4.70% for the three months ended ~~June~~September 30, 2005, compared to ~~4.57%~~4.61% for the three months ended ~~June~~September 30, 2004, and 4.45% for the three months ended December 31, 2004. Average yields on investment securities, on a taxable equivalent basis, were ~~4.51%~~4.57%, 4.60% and 4.56% for the ~~six~~nine months ended ~~June~~September 30, 2005 and 2004, and for the year ended December 31, 2004, respectively.

Residential Loans Held for Sale

Residential loans held for sale were ~~$53.3~~$66.0 million at ~~June~~September 30, 2005, compared to ~~$26.8~~$22.1 million at ~~June~~September 30, 2004, and compared to $22.5 million at December 31, 2004. Residential loans held for sale are loans that are closed, but not

yet sold on the secondary market. The amount of residential loans held for sale on the balance sheet varies depending on the timing of originations and loan sales to the secondary market. Prior to September 30, 2005, these loans were sold with loan servicing retained. In the fourth quarter of 2005, in an effort to reduce the overall volatility in the company’s earnings stream, Old National will cease selling loans with servicing retained.

Lending and Loan Administration

Old National has implemented certain credit approval disciplines in order to continue to focus on the reduction of problem and non-performing loans in the portfolio, including a restructuring of the manner in which commercial loans are analyzed and approved. ~~Community-based credit~~Credit personnel, which now include independent underwriting and analytic support staff, extend credit under guidelines established and administered by Old National’s Credit Policy Committee. This committee, which meets quarterly, includes members from both the holding company and the bank, as well as outside directors. The committee monitors credit quality through its review of information such as delinquencies, problem loans and charge-offs and ~~regularly~~ reviews ~~the~~and approves recommended loan policy changes to assure it remains appropriate for the current lending environment.

Old National lends primarily to small- and medium-sized commercial and commercial real estate clients in various industries including manufacturing, agribusiness, transportation, mining, wholesaling and retailing. As measured by Old National at ~~June~~September 30, 2005, the company had no concentration of loans in any single industry ~~exceeding~~category which exceeded 10% of its total loan portfolio and had no exposure to foreign borrowers or lesser-developed countries. Two measured industry categories, Lessors of Residential Buildings and Dwellings and Lessors of Nonresidential Buildings, did exceed internal guidelines which set out recommended maximum limits of loan commitments as a percent of capital. Old National’s policy is to concentrate its lending activity in the geographic market areas it serves, primarily Indiana, Illinois and Kentucky. Old National continues to be affected by weakness in the economy of its principal markets, particularly in its home state of Indiana, which until the three months ended June 30, 2005, ~~has~~had resulted in a decline of commercial ~~loans and tighter credit underwriting standards.~~loans. During the second quarter of 2005, Old National began to experience growth in commercial loans.

Commercial and Consumer Loans

Commercial and consumer loans are the largest classification within the earning assets of Old National representing ~~57.9%~~59.2% of earning assets at ~~June~~September 30, 2005, an increase from ~~55.9%~~55.7% at ~~June~~September 30, 2004, and an increase from 55.0% at December 31, 2004. At ~~June~~September 30, 2005, commercial and commercial real estate loans were ~~$3.243~~$3.264 billion, a decrease of ~~$134.7~~$36.8 million since ~~June~~September 30, 2004, and an increase of ~~$39.0~~$59.8 million since

December 31, 2004. These changes include commercial and commercial real estate loan sales of $26.7 million during the three months ended June 30, 2005, and $43.1 million during the three months ended December 31, 2004.

At ~~June~~September 30, 2005, consumer loans, including automobile loans, personal and home equity loans and lines of credit, and student loans, increased ~~$36.1~~$70.5 million or ~~3.0%~~5.7% compared to ~~June~~September 30, 2004, and increased ~~$25.5~~$92.0 million or, annualized, ~~4.2%~~10.2% since December 31, 2004, partly due to enhancements to marketing and customer contact programs.

Residential Real Estate Loans

Residential real estate loans, primarily 1-4 family properties, have decreased in significance to the loan portfolio over the past five years due to higher levels of loan sales into the secondary market, primarily to Federal Home Loan Mortgage Corporation and Federal National Mortgage Association. Old National sells the majority of residential real estate loans it originates as a strategy to better manage interest rate risk and liquidity. These loans are sold with loan servicing retained in order to maintain customer relationships and generate noninterest income and fees. By using this strategy, Old National is able to recognize an immediate gain in noninterest income versus a small net interest income spread over a longer period of time. Old National sells the majority of the residential real estate loans without ~~recourse, currently having less than 1% of loans sold with~~ recourse.

At ~~June~~September 30, 2005, residential real estate loans were ~~$544.6~~$531.2 million, ~~an increase~~a decrease of ~~$9.9~~$22.8 million or ~~1.9%~~4.1% from ~~June~~September 30, 2004. Since the sale of $405.6 million of residential real estate loans during the three months ended June 30, 2004, the level of residential real estate loans has been relatively stable.

Allowance for Loan Losses and Asset Quality Administration

Old National monitors the quality of its loan portfolio on an on-going basis and uses a combination of detailed credit assessments by relationship managers and credit officers, historic loss trends, and economic and business environment factors in determining its allowance for loan losses. Old National records provisions for loan losses based on current loans outstanding, ~~grade changes,~~asset quality ratings, mix of loans, expected losses and ~~expected losses.~~the review of select environmental factors. A detailed loan loss evaluation on an individual loan basis for the company’s highest risk loans is performed ~~quarterly.~~monthly. Management follows the

progress of the economy and how it might affect Old National’s borrowers in both the near and the intermediate term. Old National has a formalized and disciplined independent loan review program to evaluate loan administration, credit quality and compliance with corporate loan standards. This program includes periodic reviews ~~conducted at the community bank locations~~of selected loan portfolios as well as regular reviews of problem loan ~~reports, delinquencies and charge-offs.~~performance statistics.

Each month, problem loan reports are prepared and reviewed, which include borrowers that show indications of being unable to meet debt obligations in the normal course of business, and loans which have other characteristics deemed by bank management to warrant special attention or have been criticized by regulators in the examination process. Classified loans include non-performing loans, past due 90 days or more and other loans deemed to have well-defined weaknesses while criticized loans, also known as special mention loans, are loans that are deemed to have potential weaknesses that deserve management’s close attention and also require specific monthly reviews by the bank.

Assets determined by the various evaluation processes to be under-performing receive special attention by Old National management. Under-performing assets consist of: 1) nonaccrual loans where the ultimate collectibility of interest or principal is uncertain; 2) loans renegotiated in some manner, primarily to provide for a reduction or deferral of interest or principal payments because the borrower’s financial condition deteriorated; 3) loans with principal or interest past due ninety (90) days or more; and 4) foreclosed properties.

A loan is generally placed on nonaccrual status when principal or interest become 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectibility of principal or interest. When loans are classified as nonaccrual, interest accrued during the current year is reversed against earnings; interest accrued in the prior year, if any, is charged to the allowance for loan losses. Cash received while a loan is classified as nonaccrual is recorded to principal.

Adjustments to the allowance for loan losses are made as deemed necessary for probable losses inherent in the portfolio. While an estimate of probable losses is, by its very nature, difficult to precisely predict, management of Old National believes that the methodology that it uses in determining an appropriate reserve for expected losses is reasonable.

Loan officers and credit underwriters jointly grade the larger commercial and commercial real estate loans in the portfolio periodically as determined by loan policy requirements or determined by specific guidelines based on loan characteristics as set by management and banking regulation. Periodically, these loan grades are reviewed independently by the loan review department. For impaired loans, an assessment is conducted as to whether there is likely loss in the event of default. If such a loss is determined to be likely, the loss is quantified and a specific reserve is assigned to the loan. For the balance of the commercial and commercial real estate loan portfolio, loan grade migration analysis coupled with historic loss experience within the respective grades is used to develop reserve requirement ranges based on expected losses.

Old National uses migration analysis as a tool to determine the adequacy of the allowance for loan losses for non-retail loans that are not impaired. Migration analysis is a statistical technique that attempts to estimate probable losses for existing pools of loans by matching actual losses incurred on loans back to their origination. The migration-derived historical commercial loan loss rates are applied to the current commercial loan pools to arrive at an estimate of probable losses for the loans existing at the time of analysis.

Old National calculates migration analysis using several different scenarios based on varying assumptions to evaluate the widest range of possible outcomes. The amounts determined by migration analysis are adjusted for management’s best estimate of the effects of current economic conditions, loan quality trends, results from internal and external review examinations, loan volume trends, credit concentrations and various other factors. Historic loss

ratios adjusted for expectations of future economic conditions are used in determining the appropriate level of reserves for consumer and residential real estate loans.

Allowance for Loan Losses and Asset Quality

At ~~June~~September 30, 2005, the allowance for loan losses was ~~$80.6~~$81.4 million, a decrease of ~~$14.5~~$14.9 million compared to ~~$95.1~~$96.3 million at ~~June~~September 30, 2004, and a decrease of ~~$5.1~~$4.3 million compared to $85.7 million at December 31, 2004. As a percentage of total loans, ~~held for investment,~~ the allowance decreased to ~~1.59%~~1.58% at ~~June~~September 30, 2005, from ~~1.85%~~1.89% at ~~June~~September 30, 2004, and decreased from 1.72% at December 31, 2004. For the three months ended ~~June~~September 30, 2005, the provision for loan losses amounted to $6.0 million, a decrease of ~~$1.5~~$1.4 million from the three months ended ~~June~~September 30, 2004. The provision for the ~~six~~nine months ended ~~June~~September 30, 2005, amounted to ~~$11.1~~$17.1 million compared to ~~$15.0~~$22.4 million for the ~~six~~nine months ended ~~June~~September 30, 2004. Reductions in nonperforming loans during 2004 and the first six months of 2005 were significant factors in the decrease of the allowance for loan losses. Other factors include reductions in criticized and classified loans during the periods in question, which included the sales of $26.7 million ~~of nonaccrual and~~in substandard ~~commercial and~~ commercial real estate loans during 2005 ~~sales~~and the sale of $405.6 million of residential real estate loans ~~and $43.1 million of nonaccrual commercial and commercial real estate loans during 2004, changes~~in 2004. Changes to separate the loan production functions from the underwriting functions and significant strengthening of the commercial underwriting processes ~~and~~including the elevation of the Credit Policy Committee to a board level committee to improve credit ~~quality.~~quality were all contributing factors to the reduction in criticized and classified loans during the period.

Charge-offs, net of recoveries, totaled ~~$11.7~~$5.3 million for the three months ended ~~June~~September 30, 2005, a decrease of ~~$0.8~~$0.9 million from the three months ended ~~June~~September 30, 2004. Net charge-offs for the ~~six~~nine months ended ~~June~~September 30, 2005, totaled ~~$16.2~~$21.5 million compared to ~~$16.0~~$22.1 million for the ~~six~~nine months ended ~~June~~September 30, 2004. Charge-offs included write-downs of $5.3 million and $1.2 million on loans sold during the three months ended June 30, 2005 and 2004, respectively. Net charge-offs to average loans were ~~0.93% and 0.65% for the three months and six months ended June 30, 2005, respectively, as compared to 0.89%~~0.41% and 0.57% for the three months and ~~six~~nine months ended ~~June~~September 30, 2005, respectively, as compared to 0.48% and 0.54% for the three months and nine months ended September 30, 2004.

Under-performing assets totaled ~~$55.8~~$64.1 million at ~~June~~September 30, 2005, significantly lower than $116.6 million at September 30, 2004, and lower than $65.6 million at December 31, ~~2004, and significantly lower than $102.9 million at June 30,~~ 2004. As a percent of total loans and foreclosed properties, under-performing assets at ~~June~~September 30, 2005, were ~~1.10%~~1.24%, a reduction from the September 30, 2004, ratio of 2.28% and the December 31, 2004 ratio of 1.31% ~~and the June 30, 2004 ratio of 2.00%~~. Nonaccrual loans were ~~$49.0~~$58.8 million at ~~June~~September 30,

2005, compared to $106.0 million at September 30, 2004, and $54.9 million at December 31, ~~2004, and $97.6 million at June 30,~~ 2004. Management will continue its efforts to reduce the level of under-performing loans and may consider the possibility of additional sales of troubled and non-performing loans, which could result in additional write-downs to the allowance for loan losses.

Total classified and criticized loans were ~~$264.8~~$248.7 million at ~~June~~September 30, 2005, a decrease of ~~$75.6~~$224.6 million from September 30, 2004, and $91.6 million from December 31, ~~2004, and $227.7 million from June 30,~~ 2004.

Management believes it has taken a prudent approach to the evaluation of under-performing, criticized and classified loans, and the loan portfolio in general both in acknowledging the portfolio’s general condition and in establishing the allowance for loan losses. Old National has been affected by weakness in the economy of its markets, which has resulted in minimal growth of commercial loans and tighter credit underwriting standards. Management expects that trends in under-performing, criticized and classified loans will be influenced by the degree to which the economy strengthens. Old National operates in the Midwest, primarily in the state of Indiana, which has been particularly negatively affected by the weakness in the manufacturing segment of the economy. The longer the significant softness in manufacturing continues the more stress it puts on Old National’s borrowers, increasing the potential for additional nonaccrual loans.

Goodwill and other intangible assets at ~~June~~September 30, 2005, totaled ~~$137.5~~$137.0 million, a decrease of ~~$32.1~~$32.4 million and ~~$31.3~~$31.8 million, respectively, compared to ~~$169.6~~$169.4 million at ~~June~~September 30, 2004, and $168.8 million at December 31, 2004. ~~These decreases~~The sales of selected non-strategic companies in the third quarter of 2005 resulted in a $47.9 million reduction in goodwill and other intangible assets at June 30, 2005, are primarily the result of the reclassification of $47.8 million in goodwill and other intangible assets to assets held for sale in connection with Old National’s plan to sell selected non-strategic companies. In addition, concurrent with this reclassification, these discontinued operations were evaluated for impairment using estimated fair values in the current market, resulting in goodwill impairment of $2.9 million.assets. See Note 89 to the consolidated financial statements for further details. These decreases ~~are~~were partially offset by the addition of $20.4 million in goodwill and intangible assets related to the May 1, 2005 acquisition of J. W. F. Insurance Companies as discussed under “Acquisition and Divestitures Activity” in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

~~Accrued Expenses and Other Liabilities~~

Accrued expenses and other liabilities were $93.6 million at June 30, 2005, a decrease of $45.3 million or 32.6% from June 30, 2004, and a decrease of $27.2 million or 45.0%, annualized, from December 31, 2004. The decreases were primarily related to accrued expenses and other liabilities at J.W. Terrill Insurance Agency in St. Louis, Missouri, which Old National has committed to a plan to sell. As such, these accrued expenses and other liabilities were reclassified to liabilities held for sale.

Capital Resources and Regulatory Guidelines

Shareholders’ equity totaled ~~$702.2~~$672.8 million at ~~June~~September 30, 2005, compared to ~~$673.3~~$712.3 million at ~~June~~September 30, 2004, and $703.2 million at December 31, 2004.

Old National paid cash dividends of $0.19 and ~~$0.38~~$0.57 per share for the three months and ~~six~~nine months ended ~~June~~September 30, 2005, respectively, which decreased equity by ~~$26.0~~$38.9 million, compared to cash dividends of $0.18 and ~~$0.36~~$0.54 per share for the three months and ~~six~~nine months ended ~~June~~September 30, 2004, respectively, (restated for the 5% stock dividend distributed on January 26, 2005), which decreased equity by ~~$25.2~~$37.8 million. Old National purchased shares of its stock in the open market under an ongoing repurchase program, reducing shareholders’ equity by ~~$33.0~~$54.9 million during the ~~six~~nine months ended ~~June~~September 30, 2005, and ~~$16.1~~$26.2 million during the ~~six~~nine months ended ~~June~~September 30, 2004. The change in unrealized losses on investment securities decreased equity by ~~$5.0~~$8.8 million during the ~~six~~nine months ended ~~June~~September 30, 2005, and ~~$40.4~~increased equity by $2.7 million during the ~~six~~nine months ended ~~June~~September 30, 2004. Shares ~~reissued~~issued for stock options, restricted stock and stock purchase plans increased shareholders’ equity by ~~$3.0~~$4.9 million during the ~~six~~nine months ended ~~June~~September 30, 2005, compared to ~~$9.3~~$12.1 million during the ~~six~~nine months ended ~~June~~September 30, 2004. Additionally, stock issued for acquisitions increased shareholders’ equity by $18.5 million in the ~~six~~nine months ended ~~June~~September 30, 2005.

Old National filed an S-3 Registration Statement with the Securities and Exchange Commission for the purpose of amending the Old National Bancorp Stock Purchase and Dividend Reinvestment Plan, which became effective on January 6, 2005. The plan has two main purposes. First, the plan allows investors and shareholders a convenient, low-cost way to buy shares and reinvest cash dividends in additional shares of Old National common stock. Secondly, the plan gives Old National the ability to raise capital by selling newly issued shares of common stock. A key feature is the ability for Old National to sell newly issued shares at a discount from the market price. Common stock totaling 3.5 million shares can be issued under this plan.

Old National and the banking industry are subject to various regulatory capital requirements administered by the federal banking agencies. Old National’s consolidated capital position remains strong as evidenced by the following comparisons of key industry ratios.



	Regulatory												Regulatory
	Guidelines			June 30,						December 31,			Guidelines			September 30,						December 31,
	Minimum			2005			2004			2004			Minimum			2005			2004			2004

Risk-based capital:
Tier 1 capital to total avg assets (leverage ratio)		4.00	%		7.22	%		7.48	%		7.68	%		4.00	%		7.61	%		7.69	%		7.68	%
Tier 1 capital to risk-adjusted total assets		4.00			10.06			11.31			11.18			4.00			10.42			11.43			11.18
Total capital to risk-adjusted total assets		8.00			13.77			15.07			14.90			8.00			14.12			15.22			14.90
Shareholders’ equity to assets		N/A			8.12			7.45			7.90			N/A			7.88			7.93			7.90

of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K for the year ended December 31, 2004.

FORWARD-LOOKING STATEMENTS

The following is a cautionary note about forward-looking statements. In its oral and written communications, Old National from time to time includes 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.” Old National may include forward-looking statements in filings with the Securities and Exchange Commission, such as this Form 10-Q, in other written materials and in oral statements made by 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 Old National undertakes 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 the forward-looking statement. Uncertainties which could affect Old National’s future performance include, but are not limited to: (1) economic, market, operational, liquidity, credit and interest rate risks associated with Old National’s business; (2) economic conditions generally and in the financial services industry; (3) increased competition in the financial services industry either nationally or regionally, resulting in, among other things, credit quality deterioration; (4) volatility and direction of market interest rates; (5) governmental legislation and regulation, including changes in accounting regulation or standards; (6) the ability of Old National to execute its business plan; (7) a weakening of the economy which could materially impact credit quality trends and the ability to generate loans; (8) changes in the securities markets; and (9) changes in fiscal, monetary and tax policies. Investors should consider these risks, uncertainties and other factors in addition to those mentioned by Old National in this and its other filings from time to time when considering any forward-looking statement.

ITEM 3. ~~QUANTITATIVE~~QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET RISK MANAGEMENT

Inherent in Old National’s balance sheet is market risk, defined as the sensitivity of income, fair market values and capital to changes in interest rates, foreign currency exchange rates, commodity prices and other relevant market rates or prices. The primary market risk to which Old National has exposure is interest rate risk. Interest rate risk arises because assets and liabilities may reprice, mature or prepay at different times or based upon different market instruments as market interest rates change. Changes in the slope of the yield curve and the pace of interest rate changes may also impact net interest income and the fair value of the balance sheet.

Old National manages interest rate risk within an overall asset and liability management framework that includes attention to credit risk, liquidity risk and capitalization. A principal objective of asset/liability management is to manage the sensitivity of net interest income to changing interest rates. Asset and liability management activity is governed by a policy reviewed and approved annually by the Board of Directors. The Board of Directors has delegated the administration of this policy to the Funds Management Committee, a committee of the Board of Directors, and the Executive Balance Sheet Management Committee, a committee comprised of senior ~~company~~executive management. The Funds Management Committee meets quarterly and oversees adherence to policy and recommends policy changes to the Board. The Executive Balance Sheet Management Committee meets quarterly. This committee determines balance sheet management strategies and initiatives for the company. A group comprised of corporate and line management meets monthly to implement strategies and ~~provides guidance to Treasury and other operating units of~~initiatives determined by the ~~company regarding the execution of asset/liability management strategies.~~Executive Balance Sheet Management Committee.

Old National uses two modeling techniques to quantify the impact of changing interest rates on the company, Net Interest Income at Risk and Economic Value of Equity. Net Interest Income at Risk is used by management and the Board of Directors to evaluate the impact of changing rates over a two-year horizon. Economic Value of Equity is used to evaluate long-term interest rate risk. These models simulate the likely behavior of the company’s net interest income and the likely change in the company’s economic value due to changes in interest rates under various possible interest rate scenarios. Because the models are driven by expected behavior in various interest rate scenarios and many factors besides market interest rates affect the company’s net interest income and value, Old National recognizes that model outputs are not guarantees of actual results. For this reason, Old National models many different combinations of interest rates and balance sheet assumptions to best understand its overall sensitivity to market interest rate changes.

Old National’s Board of Directors, through its Funds Management Committee, monitors the company’s interest rate risk. On January 26, 2005, the Funds Management Committee approved new policy guidelines for the allowable change in Net Interest Income at Risk and Economic Value of Equity to enhance the monitoring of compliance within identified interest rate risk exposure zones.

3231

shift in deposit mix from certificates of deposit to transaction accounts, and by the ~~use~~termination of certain interest rate swaps.

Old National uses derivatives, primarily interest rate swaps, as one method to manage interest rate risk in the ordinary course of business. The company’s derivatives had an estimated fair value loss of ~~$8.1~~$24.2 million at ~~June~~September 30, 2005, compared to an estimated fair value loss of ~~$17.6~~$2.3 million at ~~June~~September 30, 2004. The ~~increase~~decrease in market value iswas primarily due to ~~the increase~~increases in short term interest rates and the resulting decline in market value of the receive fixed interest rate swaps for the ~~six~~nine months ended ~~June~~September 30, 2005 compared to the ~~six~~nine months ended ~~June~~September 30, 2004. In addition, the notional amount of derivatives decreased by $171.4 million. See Note 1415 to the consolidated financial statements for ~~further discussion of derivative financial instruments.~~additional information.

LIQUIDITY MANAGEMENT

The Funds Management Committee of the Board of Directors establishes liquidity risk guidelines and, along with the Balance Sheet Management Committee, monitors liquidity risk. The objective of liquidity management is to ensure Old National has the ability to fund balance sheet growth and meet deposit and debt obligations in a timely and cost-effective manner. Management monitors liquidity through a regular review of asset and liability maturities, funding sources, and loan and deposit forecasts. The company maintains strategic and contingency liquidity plans to ensure sufficient available funding to satisfy requirements for balance sheet growth, properly manage capital markets’ funding sources and to address unexpected liquidity requirements.

Old National’s ability to raise funding at competitive prices is influenced by rating agencies’ views of the company’s credit quality, liquidity, capital and earnings. ~~All three~~These rating agencies have issued a stable outlook in conjunction with their ratings as of ~~June~~September 30, 2005. The senior debt ratings of Old National Bancorp and Old National Bank at ~~June~~September 30, 2005, are shown in the following table.

SENIOR DEBT RATINGS

Standard and Poor’s

Moody’s Investor Services

Fitch, Inc.

Dominion Bond Rating Svc.

~~Long-term~~Long

Short

Long

Short

Long

Short

Long

Short

~~Short-term~~term

~~Long-term~~term

~~Short-term~~term

~~Long-term~~term

term

~~Short-term~~

term

Old National Bancorp

BBB

N/A

Baa1

N/A

BBB

~~F 2~~F2

BBB (high)

R-2 (high)

Old National Bank

BBB+

P-2

BBB

A (low)

R-1 (low)

N/A= Not applicable

~~P-2~~

~~BBB~~

~~F 2~~


~~N/A = not applicable~~

As of ~~June~~September 30, 2005, Old National Bank had the capacity to borrow ~~$808.0~~$798.8 million from the Federal Reserve Bank’s discount window. Old National Bank is also a member of the Federal Home Loan Bank (“FHLB”) of Indianapolis, which provides a source of funding through FHLB advances. Old National maintains relationships in capital markets with brokers and dealers to issue certificates of deposits and short-term and medium-term bank notes as well. In addition, at ~~June~~September 30, 2005, Old National had ~~$660.0~~$660 million available for issuance under a $1 billion global bank note program for senior and subordinated debt.

Old National Bancorp, the parent company, has routine funding requirements consisting primarily of operating expenses, dividends to shareholders, debt service, net derivative cash flows and funds used for acquisitions. Old National Bancorp obtains funding to meet its obligations from dividends and management fees collected from its subsidiaries and the issuance of debt securities. In addition, at ~~June~~September 30, 2005, Old National Bancorp has $700.0 million available under a $750.0 million global shelf registration for the issuance of a variety of securities including debt, common and preferred stock, depository shares, units and warrants of Old National. At ~~June~~September 30, 2005, the parent company’s other borrowings outstanding was ~~$260.6~~$257.2 million, compared with ~~$265.1~~$265.0 million at ~~June~~September 30, 2004. The decrease in other borrowings in 2005 was driven by a ~~$3.2 million maturity of medium-term notes payable and a $1.3~~$7.8 million decline in derivative market values. ~~In May 2005, Old National called for the redemption of $50.0 million of junior subordinated debentures, thereby redeeming the trust preferred securities of ONB Capital Trust I.~~ Old National Bancorp, the parent company, has no debt scheduled to mature within the next 12 months.

Federal banking laws regulate the amount of dividends that may be paid by banking subsidiaries without prior approval. At ~~June~~September 30, 2005, prior regulatory approval was not required for Old National’s affiliate bank.

3433

ITEM 4. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Evaluation of disclosure controls and procedures. Old National’s principal executive officer and principal financial officer have concluded that Old National’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended), based on their evaluation of these controls and procedures as of the end of the period covered by this Form 10-Q, are effective at the reasonable assurance level as discussed below to ensure that information required to be disclosed by Old National in the reports it files under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to Old National’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Controls. Management, including the principal executive officer and principal financial officer, does not expect that Old National’s disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgements in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be only reasonable assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting. There were no changes in Old National’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, Old National’s internal control over financial reporting.

3534

PART II
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

NONE

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c)ISSUER PURCHASES OF EQUITY SECURITIES

Total Number
of Shares
Total Average Purchased as Maximum Number of
Number Price Part of Publically Shares that May Yet
of Shares Paid Per Announced Plans Be Purchased Under
Period Purchased Share or Programs the Plans or Programs

04/01/05 — 04/30/05 351,900 $ 19.65 351,900 2,213,932
05/01/05 — 05/31/05 209,000 19.11 209,000 2,222,792
06/01/05 — 06/30/05 172,900 20.83 172,900 1,863,505

Quarter-to-date 6/30/05 733,800 $ 19.77 733,800 1,863,505



					Total Number
					of Shares
	Total		Average		Purchased as		Maximum Number of
	Number		Price		Part of Publically		Shares that May Yet
	of Shares		Paid Per		Announced Plans		Be Purchased Under
Period	Purchased		Share		or Programs		the Plans or Programs

07/01/05 - 07/31/05		305,400	$	22.06		305,400		1,574,937
08/01/05 - 08/31/05		447,400		22.26		447,400		1,127,537
09/01/05 - 09/30/05		233,700		21.92		233,700		893,837

Quarter-to-date 9/30/05		986,500	$	22.12		986,500		893,837

Data adjusted for all stock dividends, including a 5% stock dividend to shareholders of record on January 5, 2005, distributed on January 26, 2005.


~~Data adjusted for all stock dividends, including a 5% stock dividend to shareholders of record on January 5, 2005, distributed on January 26, 2005.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

NONE

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

~~At the April 28, 2005, Annual Meeting of Shareholders, the following matters were submitted to a vote of the shareholders:~~NONE

~~(a)~~

Election of Directors – The following directors were elected to Class III of the Board of Directors, each to hold office for three years (until the 2008 Annual Meeting) and until his or her successor shall have been duly elected and qualified:

Vote Counts
For Withheld

Class III Directors (term ending 2008)

Alan W. Braun 50,163,000 2,736,375
Andrew E. Goebel 50,218,549 2,237,444
Robert G. Jones 50,328,240 2,039,621
Charles D. Storms 50,013,804 3,910,267

~~(b)~~

Ratification of the selection of Independent Public Accountants – PricewaterhouseCoopers LLP – For – 51,047,301; Votes Against – 736,697; Votes Abstained – 490,811; Broker nonvotes – 1,785,020

~~(c)~~

~~Approval of the Old National Bancorp Short-Term Incentive Compensation Plan – Votes For – 43,371,099; Votes Against – 6,722,452; Votes Abstained – 2,181,250; Broker nonvotes – 1,785,020~~

ITEM 5. OTHER INFORMATION

NONE


Exhibit
Number
4.2		Form of ~~Indenture between Old National and J.P. Morgan Trust Company, National Association (as successor to Bank One, NA), as trustee~~5.00% Senior Notes due 2010 (incorporated by reference to Exhibit ~~4.1 to~~4.2 of Old National’s ~~Registration Statement~~Current Report on Form ~~S-3, Registration No. 333-87573,~~8-K filed with the Securities and Exchange Commission on ~~September 22, 1999).~~

~~4.3~~		Rights Agreement, dated March 1, 1990, as amended on February 29, 2000, between Old National Bancorp and Old National Bank, as trustee (incorporated by reference to Old National’s Form 8-A, dated March 1, 2000)May 20, 2005).

10		Material contracts

(a)		Deferred Compensation Plan for Directors of Old National Bancorp and Subsidiaries (As Amended and Restated Effective as of January 1, 2003) (incorporated by reference to Exhibit 10(a) of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 15, 2004).*

(b)		Second Amendment to the Deferred Compensation Plan for Directors of Old National Bancorp and Subsidiaries (As Amended and Restated Effective as of January 1, 2003) (incorporated by reference to Exhibit 10(b) of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 15, 2004).*

(c)		2005 Directors Deferred Compensation Plan (Effective as of January 1, 2005) (incorporated by reference to Exhibit 10(c) of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 15, 2004).*

(d)		Supplemental Deferred Compensation Plan for Select Executive Employees of Old National Bancorp and Subsidiaries (As Amended and Restated Effective as of January 1, 2003) (incorporated by reference to Exhibit 10(d) of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 15, 2004).*

(e)		Second Amendment to the Supplemental Deferred Compensation Plan for Select Executive Employees of Old National Bancorp and Subsidiaries (As Amended and Restated Effective as of January 1, 2003) (incorporated by reference to Exhibit 10(e) of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 15, 2004).*


~~Exhibit~~
~~Number~~
(f)		Third Amendment to the Supplemental Deferred Compensation Plan for Select Executive Employees of Old National Bancorp and Subsidiaries (As Amended and Restated Effective as of January 1, 2003) (incorporated by reference to Exhibit 10(f) of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 15, 2004).*

(g)		2005 Executive Deferred Compensation Plan (Effective as of January 1, 2005) (incorporated by reference to Exhibit 10(g) of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 15, 2004).*

(h)		Summary of Old National Bancorp’s Outside Director Compensation Program (incorporated by reference to Old National’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).*

(i)		Old National Bancorp Short-Term Incentive Compensation Plan (incorporated by reference to Appendix II of Old National’s Definitive Proxy Statement filed with the Securities and Exchange Commission on March 16, 2005).*

(j)		Severance Agreement, between Old National and Robert G. Jones (incorporated by reference to Exhibit 10(a) of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 4, 2005).*

(k)		Form of Severance Agreement for Named Executive Officers, as amended (incorporated by reference to Exhibit 10(b) of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 4, 2005).*

(l)		Form of Change of Control Agreement for Named Executive Officers, as amended (incorporated by


Exhibit
Number

		reference to Exhibit 10(c) of Old National’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 4, 2005).*

(m)		Old National Bancorp 1999 Equity Incentive Plan (incorporated by reference to Old National’s Form S-8 filed on July 20, 2001).*

(n)		First Amendment to the Old National Bancorp 1999 Equity Incentive Plan (incorporated by reference to Exhibit 10(f) of Old National’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).*

(o)		Form of 2004 “Performance-Based” Restricted Stock Award Agreement between Old National and certain key associates (incorporated by reference to Exhibit 10(g) of Old National’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).*

(p)		Form of 2005 “Performance-Based” Restricted Stock Award Agreement between Old National and certain key associates, (incorporated by reference to Exhibit 10(r) of Old National’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005). *

(q)		Form of Executive Stock Option Award Agreement between Old National and certain key associates (incorporated by reference to Exhibit 10(h) of Old National’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).*

(r)		Stock Purchase and Dividend Reinvestment Plan (incorporated by reference to Old National’s Registration Statement on Form S-3, Registration No. 333-120545 filed with the Securities and Exchange Commission on November 16, 2004).

31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


*		Management contract or compensatory plan or arrangement

3837


INDIANA		35-1539838
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1 Main Street Evansville, Indiana (Address of principal executive offices)		47708 (Zip Code)


	Page No.
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheet ~~June~~September 30, 2005 and 2004, and December 31, 2004		3

Consolidated Statement of Income Three and ~~six~~nine months ended ~~June~~September 30, 2005 and 2004		4

Consolidated Statement of Changes in Shareholders’ Equity ~~Six~~Nine months ended ~~June~~September 30, 2005 and 2004		5

Consolidated Statement of Cash Flows ~~Six~~Nine months ended ~~June~~September 30, 2005 and 2004		6

Notes to Consolidated Financial Statements		7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2021

Item 3. Quantitative and Qualitative Disclosures About Market Risk		3231

Item 4. Controls and Procedures		3534

PART II OTHER INFORMATION		3635

SIGNATURES		3938
Certification of Principal Executive Officer
Certification of Principal Financial Officer
Certification of Principal Executive Officer
Certification of Principal Financial Officer


	Gross Carrying		Accumulated			Net Carrying		Gross Carrying		Accumulated			Net Carrying
(dollars in thousands)	Amount		Amortization			Amount		Amount		Amortization			Amount

2005
Amortized intangible assets:
Core deposit	$	5,574	$	(3,917	)	$	1,657	$	5,574	$	(4,050	)	$	1,524
Customer business relationships		25,411		(2,733	)		22,678		25,411		(3,241	)		22,170

Total intangible assets	$	30,985	$	(6,650	)	$	24,335	$	30,985	$	(7,291	)	$	23,694

2004
Amortized intangible assets:
Core deposit	$	5,574	$	(3,353	)	$	2,221	$	5,574	$	(3,499	)	$	2,075
Customer business relationships		36,676		(3,104	)		33,572		36,608		(3,628	)		32,980
Non-compete agreements		1,100		(110	)		990		1,100		(124	)		976
Technology		1,300		(570	)		730		1,300		(641	)		659

Total amortized intangible assets		44,650		(7,137	)		37,513		44,582		(7,892	)		36,690
Unamortized intangible assets:
Trade name		2,800		—			2,800		2,800		—			2,800

Total intangible assets	$	47,450	$	(7,137	)	$	40,313	$	47,382	$	(7,892	)	$	39,490


(dollars in thousands)

2005 remaining	$	1,275	$	634
2006		2,384		2,384
2007		2,011		2,011
2008		1,880		1,880
2009		1,756		1,756
Thereafter		15,029		15,029

Total	$	24,335	$	23,694


(dollars in thousands)

Due in 2005	$	30,068	$	25,008
Due in 2006		78,361		78,361
Due in 2007		60,034		60,034
Due in 2008		343,037		343,037
Due in 2009		76,040		76,040
Thereafter		459,524		459,318
SFAS 133 fair value hedge and other basis adjustments		4,251		(5,705	)

Total	$	1,051,315	$	1,036,093


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
(dollars in thousands)	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value

2005
Available-for-sale	$	2,400,776	$	29,565	$	(28,685	)	$	2,401,656	$	2,306,579	$	26,697	$	(33,242	)	$	2,300,034
Held-to-maturity		187,032		61		(2,196	)		184,897		176,021		—		(3,405	)		172,616

2004
Available-for-sale	$	2,562,271	$	28,787	$	(73,168	)	$	2,517,890	$	2,595,231	$	48,587	$	(22,776	)	$	2,621,042
Held-to-maturity		192,934		—		(6,724	)		186,210		185,392		308		(1,274	)		184,426


(dollars in thousands)

Assets held for sale:
Money market investments	$	9,120
Available-for-sale securities		11
Premises and equipment, net		371
Goodwill		26,082
Other intangible assets		21,681
Other assets		4,795

Total assets held for sale	$	62,060

Liabilities held-for-sale:
Other liabilities	$	14,333


(1)		Items referring to loans are net of unearned income and include residential loans held for sale.

(2)		Non-performing loans include nonaccrual and renegotiated loans.


	Interest Rate Change in Basis Points (bp)													Interest Rate Change in Basis Points (bp)
	Down 200			Down 100			Up 100	Up 200			Up 300			Down 200	Down 100	Up 100	Up 200	Up 300

Green Zone		6.50	%		3.00	%	3.00%		6.50	%		12.00	%	6.50%	3.00%	3.00%	6.50%	12.00%
Yellow Zone		6.50% — 8.50	%		3.00% — 4.00	%	3.00% — 4.00%		6.50% — 8.50	%		12.00% — 15.00	%	6.50% - 8.50%	3.00% - 4.00%	3.00% - 4.00%	6.50% - 8.50%	12.00% - 15.00%
Red Zone		8.50	%		4.00	%	4.00%		8.50	%		15.00	%	8.50%	4.00%	4.00%	8.50%	15.00%

6/30/2005		1.58	%		1.63	%	- 3.71%		-8.07	%		-13.38	%
6/30/2004		1.96	%		2.76	%	- 2.85%		-6.67	%		-10.99	%
09/30/2005														1.45%	1.55%	-2.70%	-6.41%	-10.28%
09/30/2004														0.72%	2.17%	-3.30%	-6.83%	-11.13%


	Vote Counts
	For		Withheld

Class III Directors (term ending 2008)
Alan W. Braun		50,163,000		2,736,375
Andrew E. Goebel		50,218,549		2,237,444
Robert G. Jones		50,328,240		2,039,621
Charles D. Storms		50,013,804		3,910,267


Exhibit
Number
3 (i)		Articles of Incorporation of Old National (incorporated by reference to Exhibit 3(i) of Old National’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).

3 (ii)		By-Laws of Old National, amended and restated effective April 22, 2004 (incorporated by reference to Exhibit 3(ii) of Old National’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004).

4		Instruments defining rights of security holders, including indentures

4.1		~~Senior~~First Indenture Supplement dated as of May 20, 2005, between Old National and J.P. Morgan Trust Company, ~~National Association (as successor to Bank One, NA),~~ as trustee, providing for the issuance of its 5.00% Senior Notes due 2010 (incorporated by reference to Exhibit ~~4.3 to~~4.1 of Old National’s ~~Registration Statement~~Current Report on Form ~~S-3, Registration No. 333-118374,~~8-K filed with the Securities and Exchange Commission on ~~December 2, 2004)~~May 20, 2005).


By:		/s/ Christopher A. Wolking

		Christopher A. Wolking
		Executive Vice President and Chief Financial Officer
		Duly Authorized Officer and Principal Financial Officer

		Date: ~~August~~November 9, 2005



	June 30,						December 31,			September 30,						December 31,
(dollars in thousands)	2005			2004			2004			2005			2004			2004

Nonaccrual loans	$	48,996		$	97,620		$	54,890		$	58,820		$	106,002		$	54,890
Renegotiated loans		—			—			—			—			—			—
Past due loans (90 days or more)		2,421			1,354			2,414			1,919			6,722			2,414
Foreclosed properties		4,341			3,879			8,331			3,406			3,842			8,331

Total under-performing assets	$	55,758		$	102,853		$	65,635		$	64,145		$	116,566		$	65,635

Classified loans (includes nonaccrual, renegotiated, past due 90 days and other problem loans)	$	158,620		$	307,873		$	192,214		$	145,884		$	268,474		$	192,214
Criticized loans		106,149			184,548			148,118			102,855			204,844			148,118

Total criticized and classified loans	$	264,769		$	492,421		$	340,332		$	248,739		$	473,318		$	340,332

Asset Quality Ratios: (1)
Non-performing loans/total loans (1) (2)		0.97	%		1.90	%		1.10	%		1.14	%		2.08	%		1.10	%
Under-performing assets/total loans and foreclosed properties (1)		1.10			2.00			1.31			1.24			2.28			1.31
Under-performing assets/total assets		0.64			1.14			0.74			0.75			1.30			0.74
Allowance for loan losses/under-performing assets		144.63			92.43			130.65			126.83			82.63			130.65


	Interest Rate Change in Basis Points (bp)													Interest Rate Change in Basis Points (bp)
	Down 200			Down 100			Up 100	Up 200			Up 300			Down 200	Down 100	Up 100	Up 200	Up 300

Green Zone		5.00	%		2.25	%	2.25%		5.00	%		10.00	%	5.00%	2.25%	2.25%	5.00%	10.00%
Yellow Zone		5.00% — 7.00	%		2.25% — 3.25	%	2.25% — 3.25%		5.00% — 7.00	%		10.00% — 12.50	%	5.00% - 7.00%	2.25% - 3.25%	2.25% - 3.25%	5.00% - 7.00%	10.00% - 12.50%
Red Zone		7.00	%		3.25	%	3.25%		7.00	%		12.50	%	7.00%	3.25%	3.25%	7.00%	12.50%

6/30/2005		-1.29	%		0.63	%	- 3.12%		-7.12	%		-12.12	%
6/30/2004		0.10	%		1.90	%	- 2.41%		-5.82	%		-9.81	%
09/30/2005														-0.79%	0.76%	-2.21%	-5.75%	-9.66%
09/30/2004														-2.70%	0.64%	-2.19%	-5.03%	-8.53%