Financial Data and Key Metrics Changes - Old National Bancorp reported GAAP earnings per share of $0.46 for Q3 2025, with adjusted earnings per share of $0.59, reflecting an 11% increase over the prior quarter and a 28% increase year over year [8][12] - The company achieved a 20% return on average tangible common equity and a 1.3% return on assets, with an efficiency ratio below 50% [3][8] - The CET1 ratio increased by 28 basis points to over 11%, and tangible book value per share grew by 4% from Q2 and 10% year over year [5][17] Business Line Data and Key Metrics Changes - Total loans grew 3.1% annualized from the previous quarter, with production up 20% from the prior quarter [9][10] - Adjusted non-interest income was $130 million for the quarter, exceeding guidance, driven by strong performance in capital markets [13][83] - Adjusted non-interest expenses were $376 million, reflecting a full quarter impact of Bremer operations, with a low efficiency ratio of 48% [15][88] Market Data and Key Metrics Changes - Total deposits increased by 4.8% annualized, with core deposits (excluding brokered) increasing by 5.8% annualized [11][12] - Non-interest bearing deposits remained at 24% of core deposits, and brokered deposits decreased modestly [11][12] - The cost of total deposits increased by four basis points, resulting in a spot rate of 1.86% on total deposits as of September 30 [12][18] Company Strategy and Development Direction - The company is focused on organic growth and returning capital to shareholders, emphasizing that the best acquisition is itself [5][25] - Old National Bancorp is leveraging its market position and investing in talent to enhance efficiency and effectiveness [4][5] - The company aims to maintain a strong capital position while pursuing growth opportunities, particularly in the wake of the Bremer Bank partnership [6][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the credit outlook, noting a decline in criticized and classified loans and stable credit metrics [17][91] - The company anticipates continued success in deposit strategy and expects to meet or exceed industry growth in 2025 [19][20] - Management highlighted that the current economic environment presents opportunities for growth, particularly through talent acquisition [25][40] Other Important Information - The systems conversion and branding for the Bremer Bank partnership were successfully completed, with positive client sentiment reported [6][30] - The company repurchased 1.1 million shares late in the quarter, reflecting confidence in capital levels and future growth [5][96] - Management expects to realize cost savings from the Bremer integration in Q1 2026, with a full run-rate of approximately $115 million in annualized savings [88][89] Q&A Session Summary Question: Expectations for fourth quarter NII - Management noted a slight reduction in NII expectations for the fourth quarter, attributing it to stable dynamics and minor adjustments in the balance sheet [22][23] Question: Capital return strategy - Management emphasized that organic growth is the priority, but they remain opportunistic regarding share buybacks, with plans to assess capital return strategies post-Q4 [24][25] Question: Bremer loan dynamics - Management clarified that the loan sales and strategic portfolio management are normal, with no significant swings expected [28][29] Question: Systems conversion feedback - Management reported that the systems conversion was the best they have experienced, with high client engagement and satisfaction [30][31] Question: Loan growth guidance - Management confirmed that consolidated loan growth should align with overall growth expectations, with Bremer contributing positively [60][63] Question: Fee income trends - Management indicated that while fee income was strong this quarter, it is expected to normalize in the upcoming quarters [83][84]

Financial Performance - The company reported a Return on Average Tangible Common Equity (ROATCE) of 15.9%, which adjusted to 20.1%[11] - The company reported a Return on Average Assets (ROAA) of 1.03%, which adjusted to 1.32%[11] - The company's efficiency ratio was 58.8%, adjusted to 48.1%[11] - Net income applicable to common shares was $179 million, which adjusted to $231 million[12] - Earnings per share (EPS) was $0.46, adjusted to $0.59[12] Balance Sheet and Capital - Total loans reached $48.048 billion[15] - Total assets amounted to $71.210 billion[15] - Total deposits were $55.006 billion[15] - The CET1 capital to Risk Weighted Assets (RWA) ratio was 11.02%[15] - Tangible common book value per share grew by 17.5% annualized[12] Credit Quality - Criticized and classified loans decreased by 6%, a reduction of $223 million[11, 14] - Net charge-offs (NCOs) were 0.25%, or 25 bps, with 0.17%, or 17 bps, excluding Purchased Credit Deteriorated (PCD) loans[14]

Core Insights - Old National Bancorp (ONB) reported quarterly earnings of $0.59 per share, exceeding the Zacks Consensus Estimate of $0.56 per share, and showing an increase from $0.46 per share a year ago, resulting in an earnings surprise of +5.36% [1] - The company achieved revenues of $713.05 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.35% and significantly up from $492.01 million year-over-year [2] - Old National Bancorp has consistently surpassed consensus EPS estimates over the last four quarters [2] Earnings Outlook - The future performance of Old National Bancorp's stock will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.60, with expected revenues of $711.38 million, and for the current fiscal year, the EPS estimate is $2.16 on revenues of $2.54 billion [7] Industry Context - The Banks - Midwest industry, to which Old National Bancorp belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Old National Bancorp's stock performance [5]

Financial Performance - Net income applicable to common shares for Q3 2025 was $178.5 million, with adjusted net income of $231.3 million, resulting in diluted EPS of $0.46 and adjusted EPS of $0.59[2][3] - Net income available to common shareholders for Q3 2025 was $178.5 million, up from $121.4 million in Q2 2025, a 47% increase[28] - Earnings per share (EPS) for Q3 2025 was $0.46, compared to $0.34 in Q2 2025, reflecting a 35.3% increase[28] - Adjusted EPS for the latest quarter was $0.59, up from $0.53 in the previous quarter, reflecting a 11.3% increase[44] - The company reported an ROAE of 9.0% for Q3 2025, compared to 6.7% in Q2 2025, indicating improved profitability[47] Revenue and Income - Net interest income on a fully taxable equivalent basis was $582.6 million, reflecting an increase driven by higher asset yields and the full quarter impact of Bremer[2][8] - Noninterest income for Q3 2025 was $130.5 million, slightly down from $132.5 million in Q2 2025[28] - Total revenue (FTE) for the quarter was $713,045 thousand, an increase from $654,370 thousand in the previous quarter, representing a 9.0% rise[45] - The company reported a total adjusted revenue of $713,038 thousand, compared to $633,410 thousand in the previous quarter, indicating a 12.6% increase[45] Loans and Deposits - Total loans at the end of the period were $48.0 billion, up 0.6% annualized, with a 3.1% increase when excluding loans acquired from Bremer[2][8] - Total loans reached $47.97 billion at the end of Q3 2025, compared to $47.90 billion at the end of Q2 2025[28] - Total deposits reached $55.0 billion, up 4.8% annualized, while core deposits increased by 5.8% annualized[2][8] - Total deposits rose to $55,006,184 thousand, compared to $54,357,683 thousand in the prior quarter, indicating an increase of 1.2%[31] Credit Quality - Provision for credit losses was $26.7 million, with net charge-offs of $30.0 million, representing 25 basis points of average loans[2][8] - Provision for credit losses decreased to $26.7 million in Q3 2025 from $106.8 million in Q2 2025, indicating improved credit quality[28] - The allowance for credit losses on loans increased to $572,178 thousand, up from $565,109 thousand in the previous quarter, reflecting a rise of 1.9%[31] - Nonaccrual loans stood at $590,820 thousand as of September 30, 2025, slightly down from $594,709 thousand in the previous quarter[40] Efficiency and Ratios - The efficiency ratio was 58.8%, while the adjusted efficiency ratio improved to 48.1%[2][15] - The efficiency ratio improved to 58.8% in Q3 2025 from 55.8% in Q2 2025, indicating better cost management[28] - Return on average tangible common equity (ROATCE) was 15.9%, with adjusted ROATCE at 20.1%[2][15] - The net interest margin improved to 3.64%, up 11 basis points from the previous quarter[2][8] Assets and Equity - Total assets increased to $71.21 billion in Q3 2025 from $70.98 billion in Q2 2025[28] - Total shareholders' equity increased to $8,309,271 thousand, compared to $8,126,387 thousand in the previous quarter, marking a growth of 2.2%[31] - The Tier 1 common equity ratio stood at 11.02% at the end of Q3 2025, up from 10.74% at the end of Q2 2025[29] - Average shareholders' common equity increased to $7,924,856,000 in Q3 2025 from $7,208,397,000 in Q2 2025, reflecting a 10% growth[47]

Core Insights - Old National Bancorp reported a net income applicable to common shares of $178.5 million for Q3 2025, with a diluted EPS of $0.46. Adjusted figures show a net income of $231.3 million and an adjusted EPS of $0.59 [1][4]. Financial Performance - Net interest income on a fully taxable equivalent basis reached $582.6 million, with a net interest margin (NIM) of 3.64%, reflecting an increase of 11 basis points [2][11]. - Pre-provision net revenue (PPNR) was reported at $267.3 million, with an adjusted PPNR of $336.6 million, marking a 16% increase [2]. - Noninterest income totaled $130.5 million, with organic growth and record capital markets revenue contributing to this figure [2][11]. Expenses and Efficiency - Noninterest expenses were $445.7 million, including $69.3 million in merger-related charges. Adjusted noninterest expenses were $376.5 million [2][11]. - The efficiency ratio stood at 58.8%, while the adjusted efficiency ratio was 48.1%, indicating improved operational efficiency [2][11]. Deposits and Loans - Total deposits at the end of the period were $55.0 billion, reflecting a 4.8% annualized growth, with core deposits increasing by 5.8% [2][11]. - Total loans amounted to $48.0 billion, with a 0.6% annualized increase. Excluding loans acquired from Bremer, total loans grew by 3.1% [2][11]. Credit Quality - The provision for credit losses was $26.7 million, with net charge-offs of $30.0 million, representing 25 basis points of average loans [2][11]. - 30+ day delinquencies were at 0.18%, and nonaccrual loans accounted for 1.23% of total loans, indicating resilient credit quality [2][11]. Capital Position - Return on average tangible common equity (ROATCE) was reported at 15.9%, with an adjusted ROATCE of 20.1% [2]. - Preliminary regulatory Tier 1 common equity to risk-weighted assets was 11.02%, up 28 basis points [2][11].

Core Points - Old National Bancorp's Chairman and CEO, James "Jim" C. Ryan III, has been appointed Vice Chair of the American Bankers Association (ABA) [1][4] - Jim Ryan has been with Old National Bancorp since 2005 and has held various leadership roles, including CFO and Director of Corporate Development [2] - Old National Bancorp is the sixth largest commercial bank in the Midwest, with approximately $71 billion in assets and $38 billion in assets under management [6] Company Overview - Old National Bancorp serves clients primarily in the Midwest and Southeast, focusing on long-term partnerships and community support [6] - The company offers a range of services, including consumer and commercial banking, wealth management, and capital markets services [6] - In 2025, Old National was recognized as one of "The Civic 50," highlighting its commitment to community engagement [6] Leadership and Industry Impact - Jim Ryan expressed his honor in serving as Vice Chair of the ABA, emphasizing the importance of banking in helping communities and driving economic growth [4] - The ABA's leadership team for 2025-26 includes experienced individuals who aim to enhance the banking industry's resources and policy environment [5][8]

Group 1 - Old National Bancorp's earnings are expected to significantly increase due to the acquisition of Bremer Financial this year [1] - Following the merger, the loan balance and net interest margin are likely to stabilize, indicating that the merger is the primary catalyst for earnings growth [1]

Core Viewpoint - Old National Bancorp (ONB) is anticipated to report a year-over-year increase in earnings and revenues for the quarter ended September 2025, with earnings expected to be $0.56 per share, reflecting a +21.7% change, and revenues projected at $696.7 million, up 41.6% from the previous year [1][3]. Earnings Expectations - The upcoming earnings report is scheduled for October 22, and the stock may rise if the reported numbers exceed expectations, while a miss could lead to a decline [2]. - The consensus EPS estimate has been revised 0.08% higher in the last 30 days, indicating a slight bullish sentiment among analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model shows a positive Earnings ESP of +1.79% for Old National Bancorp, suggesting analysts have become more optimistic about the company's earnings prospects [12]. - Despite the positive Earnings ESP, the company holds a Zacks Rank of 4 (Sell), complicating the prediction of an earnings beat [12]. Historical Performance - In the last reported quarter, Old National Bancorp had an earnings surprise of +3.92%, reporting $0.53 per share against an expectation of $0.51 [13]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [14]. Industry Context - In the Zacks Banks - Midwest industry, Wintrust Financial (WTFC) is also expected to report earnings of $2.63 per share, reflecting a +6.5% year-over-year change, with revenues projected at $681.43 million, up 10.7% [18]. - Wintrust has an Earnings ESP of +4.12%, but also carries a Zacks Rank of 4 (Sell), making predictions of an earnings beat challenging [19][20].

Core Points - Old National Bancorp is scheduled to release its third-quarter 2025 earnings on October 22, 2025, at approximately 7:00 A.M. ET, followed by a conference call at 10:00 A.M. ET [1] - The company provides various dial-in numbers for the conference call, including U.S. and international options, along with an access code [1] - A webcast of the conference call will be available on Old National's Investor Relations website and can be replayed until midnight ET on November 5, 2025 [1] Company Overview - Old National Bancorp is the holding company of Old National Bank, ranking as the sixth largest commercial bank in the Midwest with approximately $71 billion in assets and $38 billion in assets under management [2] - The company serves clients primarily in the Midwest and Southeast and is among the top 25 banking companies headquartered in the United States [2] - Old National has a long history dating back to 1834 and focuses on building long-term partnerships with clients while supporting the communities it serves [2] - In 2025, Old National was recognized as one of "The Civic 50," highlighting its commitment to community engagement [2]

Core Insights - First Merchants Corp. has agreed to acquire First Savings Financial Group for $241 million in stock, expanding its presence into the Louisville, Kentucky banking market [1][10] - The acquisition is strategically significant as it enhances First Merchants' southern Indiana growth potential and adds exposure to specialty lending verticals [2][5] Company Overview - First Merchants is the second-largest Indiana-based bank with assets of $18.6 billion, while First Savings has assets of $2.4 billion [3][4] - The deal will create a combined institution with $21 billion in assets, 127 branches, $15.3 billion in loans, and $16.6 billion in deposits [10] Strategic Rationale - The acquisition allows First Merchants to enter the competitive Louisville market, where it previously had no presence, and capitalize on commercial lending opportunities [5][9] - First Savings holds a 3% share of Louisville's $45 billion deposit market, with a significant number of branches located in the metropolitan area [5] Financial Implications - The deal is expected to result in 11% earnings accretion for First Merchants in the last nine months of 2026, along with cost savings equal to 27.5% of First Savings' operating expense base [10][11] - First Savings has shown a recovery in its SBA lending, with $111 million in 7(a) loans closed in the current fiscal year, compared to just under $8 million for First Merchants [6][7] Market Reaction - Investor reaction to the acquisition news was mixed, with First Merchants' shares trading down approximately 1.3% following the announcement [11]