Old National Bancorp tops Q3 estimates on strong revenue growth

Old National Bancorp (ONB) reported strong third-quarter results, surpassing analyst expectations with adjusted earnings of $0.59 per share and revenue of $705.07 million. The bank's performance was driven by higher net interest income, an 11 basis point expansion in net interest margin to 3.64%, and robust 5.8% annualized core deposit growth, benefiting from the completed Bremer Bank partnership conversion. ONB also demonstrated solid credit quality, a significantly reduced provision for credit losses, and improved capital ratios, positioning it favorably for 2025 and beyond.

Analysis

Old National Bancorp (ONB) reported robust third-quarter results, surpassing analyst expectations with adjusted earnings of $0.59 per share against a $0.56 consensus and revenue of $705.07 million, exceeding the $696.71 million estimate. This strong performance was primarily driven by a significant increase in net interest income, which rose to $582.6 million, and an 11 basis point expansion in net interest margin to 3.64%.

The bank demonstrated solid operational execution, evidenced by a 5.8% annualized growth in core deposits, contributing to total deposits reaching $55.0 billion. The completed conversion activities from the Bremer Bank partnership were cited by CEO Jim Ryan as a key factor positioning ONB "exceptionally well for the remainder of 2025 and beyond." Loan growth, excluding Bremer acquisitions, also showed a healthy 3.1% annualized rate.

Credit quality remained strong with net charge-offs at a low 0.25% of average loans, and the provision for credit losses significantly decreased to $26.7 million from $106.8 million in the prior quarter. ONB further strengthened its financial position, improving its adjusted efficiency ratio to 48.1% and boosting its preliminary regulatory Tier 1 common equity to risk-weighted assets ratio by 28 basis points to 11.02%.

This comprehensive performance, including an impressive adjusted return on average tangible common equity of 20.1%, underscores the bank's fundamental strength and successful integration efforts, suggesting a positive trajectory for future financial periods.

Key Decisions for Investors

• Investors should consider ONB's strong earnings beat and positive outlook, particularly given the successful integration of the Bremer Bank partnership and expanding net interest margin.
• Monitor the sustainability of core deposit growth and continued improvement in efficiency ratios as key indicators of ongoing operational strength.
• Evaluate the bank's consistent credit quality and capital accretion as factors supporting long-term stability and potential for shareholder returns.