Old National Bancorp (ONBPO) 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 28% YoY).

Return on Average Tangible Common Equity: 20%.

Return on Assets (ROA): 1.3%.

Efficiency Ratio: Sub 50%, specifically 48%.

Credit Metrics: Total criticized and classified loans decreased by 6%, with a reduction in thirty-plus day delinquencies.

Capital Position: Common Equity Tier 1 (CET1) ratio over 11%, with tangible book value per share up 4% from Q2 and 10% YoY.

Loan to Deposit Ratio: 87%.

Total Deposits: Increased 4.8% annualized; core deposits (excluding brokered) increased 5.8%.

2Strategic Updates and Business Highlights

Successful systems conversion and branding of former Bremer Bank locations to Old National.

Focus on organic growth rather than pursuing new partnerships or acquisitions.

Continued investment in talent acquisition to enhance operational capabilities.

Strong performance in fee income, particularly in capital markets, although some normalization is expected in Q4.

Management emphasized a commitment to maintaining a robust capital return strategy while balancing organic growth.

3Forward Guidance and Outlook

Loan Growth: Guidance for full-year loan growth (excluding Bremer) is 4% to 5%.

Net Interest Income (NII): Expected to remain stable to improving, with a forecast for continued growth into 2026.

Fee Income: Guidance increased to reflect strong Q3 performance, with expectations for normalization in Q4.

Efficiency Improvements: Anticipated cost savings from Bremer integration will be more evident in Q1 2026.

4Bad News, Challenges, or Points of Concern

Credit Environment: While management remains optimistic about credit quality, they acknowledged industry-wide discussions about potential credit cracks, although they view current issues as manageable.

Loan Payoffs: Late-quarter payoffs impacted loan balances, particularly from Bremer, which could affect future growth.

Market Competition: Management highlighted the need to remain vigilant against competitive pressures in deposit gathering and loan origination.

5Notable Q&A Insights

Loan Growth Dynamics: Management clarified that loan growth guidance includes contributions from Bremer, with expectations for reduced runoff from Bremer loans in future quarters.

Capital Management: There is a healthy tension between returning capital to shareholders and maintaining adequate capital levels, with management open to increasing buybacks if conditions allow.

Credit Quality Outlook: Management described the credit environment as stable to improving, with ongoing monitoring to mitigate risks.

Hiring Plans: There is a commitment to hiring talent to capitalize on market opportunities, with discussions ongoing about the pace and scale of recruitment. Overall, Old National Bancorp reported strong financial results for Q3 2025, with a focus on organic growth and strategic investments while navigating a competitive and potentially challenging credit environment.