Summary of Old National Bancorp (ONBPP) Q4 2025 Earnings Call

1Key Financial Results and Metrics

Earnings: Q4 GAAP EPS was $0.55; adjusted EPS was $0.62, reflecting a 5% quarter-over-quarter increase and a 27% year-over-year increase.

Profitability: Adjusted return on average tangible common equity (ROATCE) was nearly 20%, and adjusted return on assets (ROA) was 1.37%. Adjusted efficiency ratio improved to 46%.

Capital: Common Equity Tier 1 (CET1) ratio exceeded 11%, and tangible book value per share grew by 4% quarter-over-quarter and 15% year-over-year.

Credit Quality: Total criticized and classified loans decreased by 8%, with low levels of non-PCD charge-offs (27 basis points).

2Strategic Updates and Business Highlights

Successful integration of Bremer Bank partnership, enhancing market presence in Minnesota and North Dakota.

Focus on organic growth, with a commitment to investing in talent, technology, and client-facing capabilities.

Continued emphasis on disciplined credit management and maintaining high liquidity and capital ratios.

Positive growth in total loans (6.4% annualized) and noninterest income, particularly in mortgage and capital markets.

3Forward Guidance and Outlook

For 2026, loan growth is expected to be between 4% to 6%, with a strong pipeline supporting 1Q growth of 3% to 5%.

Anticipated continued strength in fee income, particularly in mortgage and capital markets.

Expense management will benefit from full realization of Bremer cost savings, with expectations for a record low efficiency ratio.

Net interest income (NII) is expected to increase, supported by stable to improving net interest margin (NIM) and fixed asset repricing.

4Bad News, Challenges, or Points of Concern

Core deposits decreased by approximately 3% annualized, primarily due to seasonally lower public funds balances.

The use of brokered deposits increased, although still below peer levels (6.7% of total deposits).

Some concerns regarding competitive pressures in deposit pricing, although management noted that pricing remains rational in most markets.

5Notable Q&A Insights

Management indicated that the margin trajectory in 2026 will be influenced by factors such as loan growth, the steepness of the yield curve, and effective deposit beta management.

There is a cautious optimism regarding mortgage performance, with expectations for a constructive rate backdrop.

The company plans to be more active in share repurchases in 2026 compared to the previous year, balancing capital growth with shareholder returns.

Management expressed confidence in the improvement of credit metrics, suggesting that the peak of criticized and classified loans may have passed.

The focus remains on organic growth rather than pursuing additional M&A opportunities, emphasizing internal development as a priority. Overall, Old National Bancorp reported strong financial performance in Q4 2025, driven by strategic initiatives and effective management, while also addressing challenges related to deposit growth and competitive pressures.