Old National Bancorp (ONB) Q3 2025 Earnings Call Summary

1Key Financial Results and Metrics

Earnings Per Share (EPS): GAAP EPS of $0.46; adjusted EPS of $0.59 (up 11% quarter-over-quarter and 28% year-over-year).

Return on Average Tangible Common Equity: 20%.

Return on Assets (ROA): 1.3%.

Efficiency Ratio: Below 50%, indicating improved operational efficiency.

Credit Metrics: Notable reduction in criticized and classified loans by 6%, with normalized charge-offs.

Capital Position: Common Equity Tier 1 (CET1) ratio over 11%, tangible book value per share increased by 17% annualized.

2Strategic Updates and Business Highlights

Successful completion of the systems conversion and branding for the Bremer Bank partnership, now fully integrated as Old National.

Continued focus on organic growth rather than pursuing new mergers and acquisitions; emphasis on investing in talent and operational efficiency.

Core deposits grew significantly, with a 5.8% annualized increase in core deposits excluding brokered deposits.

Positive trends in fee income, particularly in capital markets, driven by strong performance in swap fees.

3Forward Guidance and Outlook

Loan Growth: Anticipated growth of 4% to 5% for the full year 2025, with expectations for continued success in deposit strategy.

Net Interest Income (NII): Expected to remain stable to improving, with guidance reflecting potential rate cuts and stable deposit costs.

Fee Income Guidance: Increased expectations for fee income based on strong Q3 performance, though normalization is anticipated in Q4.

Efficiency Improvements: Full realization of cost savings from the Bremer integration expected in Q1 2026.

4Bad News, Challenges, or Points of Concern

Credit Environment: While credit metrics are stable, there are industry-wide concerns about potential credit cracks, although management believes these are manageable.

Loan Portfolio Management: Some strategic payoffs and reductions in Bremer loans may pressure growth, but these are seen as normal attrition.

Market Dynamics: Competitive pressures in deposit gathering and potential economic uncertainties could impact future performance.

5Notable Q&A Insights

Loan Growth Dynamics: Management clarified that the loan growth guidance includes contributions from Bremer and that any runoff from Bremer loans is expected to normalize.

Capital Management: There is a balance between returning capital to shareholders through buybacks and maintaining a strong capital position; management is open to increasing buyback activity as confidence in capital levels grows.

Credit Outlook: Management expressed confidence in the stability of credit metrics, with ongoing monitoring to ensure no surprises.

Hiring Strategy: Plans to continue hiring talent to capitalize on market opportunities, with a focus on organic growth rather than aggressive expansion into new markets. Overall, Old National Bancorp reported strong financial performance in Q3 2025, with positive growth in key metrics and a strategic focus on organic growth and efficiency. However, management remains cautious about potential credit challenges and market dynamics that could impact future performance.