Group 1 - The stock of Old National Bancorp (ONB) is experiencing significant attention due to high implied volatility in the options market, particularly for the Oct. 17, 2025 $45 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in the stock's price, potentially due to an upcoming event [2] - Old National Bancorp currently holds a Zacks Rank 3 (Hold) in the Banks – Midwest industry, which is in the top 23% of the Zacks Industry Rank, indicating a relatively stable outlook [3] Group 2 - Over the past 60 days, there has been a mixed sentiment among analysts regarding Old National Bancorp's earnings estimates, with two analysts raising their estimates while three have lowered them, resulting in a slight decrease in the Zacks Consensus Estimate from 56 cents to 55 cents per share [3] - The high implied volatility may present a trading opportunity, as seasoned options traders often seek to sell premium on options with high implied volatility, hoping that the underlying stock does not move as much as expected by expiration [4]

[Glossary of Abbreviations and Acronyms](index=4&type=section&id=GLOSSARY_OF_ABBREVIATIONS_AND_ACRONYMS) This section provides a comprehensive list of abbreviations and acronyms used throughout the report for clarity and reference [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART_I_FINANCIAL_INFORMATION) This part presents unaudited financial statements and management's discussion of financial condition and operations [Item 1. Financial Statements](index=4&type=section&id=Item_1_Financial_Statements) This section presents the unaudited consolidated financial statements and related notes [Consolidated Balance Sheets (unaudited)](index=5&type=section&id=Consolidated_Balance_Sheets_unaudited) This section provides a snapshot of the company's assets, liabilities, and shareholders' equity at specific points in time - Total Assets increased by **32.5%** from **$53.55 billion** at December 31, 2024, to **$70.98 billion** at June 30, 2025[11](index=11&type=chunk) - Total Liabilities increased by **33.1%** from **$47.21 billion** at December 31, 2024, to **$62.85 billion** at June 30, 2025[11](index=11&type=chunk) - Total Shareholders' Equity increased by **28.2%** from **$6.34 billion** at December 31, 2024, to **$8.13 billion** at June 30, 2025[11](index=11&type=chunk) Key Balance Sheet Changes (June 30, 2025 vs. Dec 31, 2024) | Metric | Dec 31, 2024 (in thousands) | June 30, 2025 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | :------- | | Cash and cash equivalents | $1,227,968 | $1,808,571 | $580,603 | 47.3% | | Investment securities (AFS) | $7,458,459 | $11,005,196 | $3,546,737 | 47.6% | | Total loans, net | $35,893,365 | $47,337,710 | $11,444,345 | 31.9% | | Total deposits | $40,823,560 | $54,357,683 | $13,534,123 | 33.2% | | Federal Home Loan Bank advances | $4,452,559 | $5,835,918 | $1,383,359 | 31.1% | | Goodwill | $2,175,251 | $2,409,886 | $234,635 | 10.8% | | Other intangible assets | $120,847 | $534,486 | $413,639 | 342.3% | | Accumulated other comprehensive income (loss) | $(746,043) | $(599,608) | $146,435 | -19.6% | [Consolidated Statements of Income (unaudited)](index=6&type=section&id=Consolidated_Statements_of_Income_unaudited) This section details the company's revenues, expenses, and net income over specific reporting periods - Net Income for the three months ended June 30, 2025, increased by **3.5%** to **$125.4 million** compared to **$121.2 million** in the same period of 2024[12](index=12&type=chunk) - Net Income for the six months ended June 30, 2025, increased by **11.8%** to **$270.1 million** compared to **$241.5 million** in the same period of 2024[12](index=12&type=chunk) Key Income Statement Changes (YoY, in thousands) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | % Change | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :------- | :--------------------------- | :--------------------------- | :------- | | Total interest income | $824,961 | $663,663 | 24.3% | $1,455,360 | $1,259,644 | 15.5% | | Total interest expense | $310,171 | $275,242 | 12.7% | $552,927 | $514,765 | 7.4% | | Net interest income | $514,790 | $388,421 | 32.5% | $902,433 | $744,879 | 21.2% | | Provision for credit losses | $106,835 | $36,214 | 195.0% | $138,238 | $55,105 | 150.9% | | Total noninterest income | $132,517 | $87,271 | 51.8% | $226,311 | $164,793 | 37.3% | | Total noninterest expense | $384,766 | $282,999 | 36.0% | $653,237 | $545,316 | 19.8% | | Net income applicable to common shareholders | $121,375 | $117,196 | 3.6% | $262,000 | $233,446 | 12.2% | | Diluted EPS | $0.34 | $0.37 | -8.1% | $0.77 | $0.77 | 0.0% | [Consolidated Statements of Comprehensive Income (Loss) (unaudited)](index=7&type=section&id=Consolidated_Statements_of_Comprehensive_Income_Loss_unaudited) This section presents total comprehensive income, including net income and other non-owner changes in equity - Comprehensive Income (Loss) for the three months ended June 30, 2025, increased significantly to **$174.3 million** from **$109.4 million** in the prior year period[15](index=15&type=chunk) - Comprehensive Income (Loss) for the six months ended June 30, 2025, increased significantly to **$416.5 million** from **$188.9 million** in the prior year period[15](index=15&type=chunk) Other Comprehensive Income (Loss), net of tax (YoY, in thousands) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | % Change | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :------- | :--------------------------- | :--------------------------- | :------- | | Unrealized gains (losses) on available-for-sale securities | $40,621 | $(13,349) | N/M | $125,905 | $(46,800) | N/M | | Changes from securities held-to-maturity | $3,037 | $3,265 | -7.0% | $5,958 | $6,486 | -8.2% | | Changes from hedges | $5,243 | $(1,696) | N/M | $14,572 | $(12,285) | N/M | | Total other comprehensive income (loss), net of tax | $48,901 | $(11,780) | N/M | $146,435 | $(52,599) | N/M | [Consolidated Statements of Changes in Shareholders' Equity (unaudited)](index=8&type=section&id=Consolidated_Statements_of_Changes_in_Shareholders_Equity_unaudited) This section details changes in shareholders' equity, reflecting net income, dividends, and other equity transactions - Total Shareholders' Equity increased from **$6.34 billion** at December 31, 2024, to **$8.13 billion** at June 30, 2025[16](index=16&type=chunk) - The acquisition of Bremer Financial Corporation contributed **$1.03 billion** to shareholders' equity through the issuance of **50.2 million** shares of common stock[16](index=16&type=chunk) - Common stock issued for forward sale agreements added **$443.2 million** to shareholders' equity[16](index=16&type=chunk) [Consolidated Statements of Cash Flows (unaudited)](index=9&type=section&id=Consolidated_Statements_of_Cash_Flows_unaudited) This section reports the cash generated and used by the company from operating, investing, and financing activities - Net increase in cash and cash equivalents for the six months ended June 30, 2025, was **$580.6 million**, a significant increase from **$58.0 million** in the same period of 2024[17](index=17&type=chunk) - Cash and cash equivalents at the end of the period reached **$1.81 billion** at June 30, 2025, up from **$1.23 billion** at June 30, 2024[17](index=17&type=chunk) Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------------- | :----------- | :----------- | | Net cash flows provided by (used in) operating activities | $181,093 | $265,213 | | Net cash flows provided by (used in) investing activities | $(684,942) | $(956,643) | | Net cash flows provided by (used in) financing activities | $1,084,452 | $749,418 | | Net increase (decrease) in cash and cash equivalents | $580,603 | $57,988 | - Noncash investing activities included **$1.03 billion** in common stock issued for merger, net, and **$52.1 million** in operating lease right-of-use assets obtained in exchange for lease obligations for the six months ended June 30, 2025[18](index=18&type=chunk) [Notes to Consolidated Financial Statements (unaudited)](index=11&type=section&id=Notes_to_Consolidated_Financial_Statements_unaudited) This section provides detailed explanations and additional information supporting the consolidated financial statements [Note 1. Basis of Presentation](index=11&type=section&id=Note_1_Basis_of_Presentation) This note outlines the accounting principles and conventions used in preparing the unaudited consolidated financial statements - The unaudited consolidated financial statements are prepared in conformity with GAAP, and interim results do not necessarily represent annual results[20](index=20&type=chunk) - These statements should be read in conjunction with Old National's Annual Report on Form 10-K for the year ended December 31, 2024[20](index=20&type=chunk) [Note 2. Recent Accounting Pronouncements](index=11&type=section&id=Note_2_Recent_Accounting_Pronouncements) This note discusses recently issued accounting standards and their potential impact on the company's financial statements - ASU 2023-09 (Income Taxes) is effective for annual periods beginning after December 15, 2024, requiring additional income tax disclosures, but is not expected to have a material impact[22](index=22&type=chunk) - ASU 2024-03 (Expense Disaggregation) is effective for annual periods beginning after December 15, 2026, requiring disclosure of specific cost and expense amounts; the impact is currently being evaluated[23](index=23&type=chunk) - ASU 2024-04 (Convertible Debt) and ASU 2025-03 (Business Combinations/Consolidation) are effective for annual periods beginning after December 15, 2025, and December 15, 2026, respectively, with their impacts currently under evaluation[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) [Note 3. Acquisition and Divestiture Activity](index=12&type=section&id=Note_3_Acquisition_and_Divestiture_Activity) This note details the company's merger and acquisition activities, including the financial impact of recent transactions - Old National completed the acquisition of Bremer Financial Corporation on May 1, 2025, for **$1.35 billion**, consisting of **50.2 million** shares of common stock and **$314.6 million** in cash[28](index=28&type=chunk)[30](index=30&type=chunk) Bremer Acquisition: Preliminary Valuation of Assets Acquired and Liabilities Assumed (May 1, 2025, in thousands) | Category | Amount (in thousands) | | :-------------------------------- | :----------- | | Total assets acquired | $16,303,579 | | Total liabilities assumed | $14,955,684 | | Goodwill | $234,635 | | Other intangible assets | $440,099 | | Common stock issued | $1,033,262 | | Cash consideration | $314,633 | | Total consideration | $1,347,895 | - Merger-related costs for the Bremer acquisition totaled **$40.2 million** for the three months and **$40.9 million** for the six months ended June 30, 2025[33](index=33&type=chunk) - The CapStar Financial Holdings, Inc. acquisition was finalized on April 1, 2024, for **$417.6 million** in an all-stock transaction, adding **$3.11 billion** in assets and **$2.69 billion** in liabilities[39](index=39&type=chunk)[40](index=40&type=chunk) [Note 4. Net Income Per Common Share](index=15&type=section&id=Note_4_Net_Income_Per_Common_Share) This note details the calculation of basic and diluted net income per common share and factors affecting share count - Diluted net income per common share decreased to **$0.34** for the three months ended June 30, 2025, from **$0.37** in the prior year period[45](index=45&type=chunk) - Diluted net income per common share remained flat at **$0.77** for the six months ended June 30, 2025, compared to the prior year period[45](index=45&type=chunk) - Weighted average diluted common shares outstanding increased to **361.4 million** for the three months and **340.3 million** for the six months ended June 30, 2025, primarily due to acquisitions[45](index=45&type=chunk) [Note 5. Investment Securities](index=16&type=section&id=Note_5_Investment_Securities) This note breaks down the company's investment securities portfolio, including available-for-sale and held-to-maturity categories - Available-for-sale (AFS) securities had a fair value of **$11.01 billion** at June 30, 2025, up from **$7.46 billion** at December 31, 2024, with net unrealized losses improving to **$(722.4) million** from **$(890.5) million**[11](index=11&type=chunk)[47](index=47&type=chunk)[240](index=240&type=chunk) - Held-to-maturity (HTM) securities had a fair value of **$2.47 billion** at June 30, 2025, with unrecognized losses improving to **$(456.0) million** from **$(484.1) million** at December 31, 2024[11](index=11&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[240](index=240&type=chunk) - At June 30, 2025, **2,477** out of **3,215** securities were in an unrealized loss position due to interest rate fluctuations, but Old National has no intent to sell them prior to anticipated recovery[56](index=56&type=chunk) - Alternative investments, primarily in affordable housing and economic development, totaled **$920.5 million** at June 30, 2025, up from **$609.2 million** at December 31, 2024[11](index=11&type=chunk)[59](index=59&type=chunk) [Note 6. Loans and Allowance for Credit Losses](index=19&type=section&id=Note_6_Loans_and_Allowance_for_Credit_Losses) This note details the company's loan portfolio, credit quality, and allowance for credit losses - Total loans, net of unearned income, increased by **32.0%** to **$47.90 billion** at June 30, 2025, from **$36.29 billion** at December 31, 2024, primarily due to the Bremer acquisition[11](index=11&type=chunk)[70](index=70&type=chunk) - The allowance for credit losses on loans increased to **$565.1 million** at June 30, 2025, from **$392.5 million** at December 31, 2024, including **$90.4 million** for acquired PCD loans and **$69.1 million** for non-PCD Bremer loans[11](index=11&type=chunk)[75](index=75&type=chunk) - Nonaccrual loans increased to **$594.7 million** at June 30, 2025, from **$448.0 million** at December 31, 2024, with **$126.8 million** attributed to the Bremer acquisition[86](index=86&type=chunk)[269](index=269&type=chunk) - Net charge-offs on loans totaled **$26.5 million** (**0.24%** annualized) for the three months and **$48.1 million** (**0.24%** annualized) for the six months ended June 30, 2025[74](index=74&type=chunk)[271](index=271&type=chunk) - The allowance for credit losses on unfunded loan commitments increased to **$29.6 million** at June 30, 2025, from **$21.7 million** at December 31, 2024, including **$6.5 million** from the Bremer acquisition[76](index=76&type=chunk)[277](index=277&type=chunk) [Note 7. Leases](index=31&type=section&id=Note_7_Leases) This note outlines the company's lease arrangements, including operating and finance lease liabilities and right-of-use assets - Operating lease liabilities were **$237.6 million** at June 30, 2025, compared to **$200.1 million** at December 31, 2024[97](index=97&type=chunk) - Finance lease liabilities were **$21.2 million** at June 30, 2025, compared to **$24.8 million** at December 31, 2024[97](index=97&type=chunk) - The weighted-average remaining lease term for operating leases was **9.0 years** and for finance leases was **8.8 years** at June 30, 2025[97](index=97&type=chunk) [Note 8. Goodwill and Other Intangible Assets](index=33&type=section&id=Note_8_Goodwill_and_Other_Intangible_Assets) This note details goodwill and other intangible assets, including changes from acquisitions and amortization - Goodwill increased to **$2.41 billion** at June 30, 2025, from **$2.18 billion** at December 31, 2024, with **$234.6 million** added from the Bremer acquisition[11](index=11&type=chunk)[99](index=99&type=chunk) - Net other intangible assets increased to **$534.5 million** at June 30, 2025, from **$120.8 million** at December 31, 2024, including **$397.1 million** in core deposit intangibles and **$43.0 million** in customer relationship intangibles from Bremer[11](index=11&type=chunk)[101](index=101&type=chunk) - Total amortization expense for intangibles was **$26.5 million** for the six months ended June 30, 2025, up from **$12.9 million** in the prior year period[102](index=102&type=chunk) - No impairment charges were recorded for goodwill or other intangible assets during the six months ended June 30, 2025 or 2024[100](index=100&type=chunk)[102](index=102&type=chunk) [Note 9. Qualified Affordable Housing Projects and Other Tax Credit Investments](index=34&type=section&id=Note_9_Qualified_Affordable_Housing_Projects_and_Other_Tax_Credit_Investments) This note details investments in qualified affordable housing and other tax credit projects and their financial impacts - Total investments in qualified affordable housing and other tax credit projects were **$377.0 million** at June 30, 2025, up from **$290.7 million** at December 31, 2024[105](index=105&type=chunk) - Unfunded commitments for these investments totaled **$152.1 million** at June 30, 2025[105](index=105&type=chunk) Amortization Expense and Tax Benefit (Six Months Ended June 30, in thousands) | Investment Type | Amortization Expense (in thousands) | Tax Expense (Benefit) Recognized (in thousands) | | :-------------------------------- | :------------------- | :------------------------------- | | LIHTC | $6,409 | $(8,815) | | FHTC | $1,169 | $(1,418) | | NMTC | $9,239 | $(11,309) | | Total | $16,817 | $(21,542) | [Note 10. Securities Sold Under Agreements to Repurchase](index=34&type=section&id=Note_10_Securities_Sold_Under_Agreements_to_Repurchase) This note provides information on repurchase agreements, including outstanding balances and weighted-average interest rates - Securities sold under agreements to repurchase outstanding at period end were **$297.6 million** at June 30, 2025, compared to **$269.0 million** at December 31, 2024[11](index=11&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - The weighted-average interest rate at period end was **0.91%** at June 30, 2025, up from **0.86%** at December 31, 2024[109](index=109&type=chunk)[110](index=110&type=chunk) [Note 11. Federal Home Loan Bank Advances](index=35&type=section&id=Note_11_Federal_Home_Loan_Bank_Advances) This note details the company's borrowings from the Federal Home Loan Bank, including outstanding balances, rates, and maturities - Total Federal Home Loan Bank (FHLB) advances were **$5.84 billion** at June 30, 2025, up from **$4.45 billion** at December 31, 2024[11](index=11&type=chunk)[112](index=112&type=chunk) - The weighted-average rate for FHLB advances was **3.82%** at June 30, 2025, compared to **3.54%** at December 31, 2024[112](index=112&type=chunk) - Contractual maturities for FHLB advances include **$1.63 billion** due in 2025 and **$2.18 billion** due thereafter[113](index=113&type=chunk) [Note 12. Other Borrowings](index=36&type=section&id=Note_12_Other_Borrowings) This note breaks down other debt instruments, including junior subordinated debentures and leveraged loans for tax credit investments - Total other borrowings increased to **$872.3 million** at June 30, 2025, from **$689.6 million** at December 31, 2024[11](index=11&type=chunk)[114](index=114&type=chunk) - Other borrowings include **$198.5 million** in junior subordinated debentures with rates ranging from **5.98%** to **8.12%** at June 30, 2025[114](index=114&type=chunk)[119](index=119&type=chunk) - Leveraged loans for New Markets Tax Credit (NMTC) totaled **$398.5 million** at June 30, 2025, up from **$210.3 million** at December 31, 2024[114](index=114&type=chunk)[120](index=120&type=chunk) [Note 13. Accumulated Other Comprehensive Income (Loss)](index=38&type=section&id=Note_13_Accumulated_Other_Comprehensive_Income_Loss) This note details components of accumulated other comprehensive income (loss), including unrealized gains/losses on securities and hedges - Accumulated Other Comprehensive Income (Loss) improved to **$(599.6) million** at June 30, 2025, from **$(746.0) million** at December 31, 2024[11](index=11&type=chunk)[122](index=122&type=chunk) - Unrealized gains and losses on available-for-sale debt securities improved to **$(542.2) million** at June 30, 2025, from **$(668.1) million** at December 31, 2024[122](index=122&type=chunk) - Gains and losses on hedges increased to **$18.9 million** at June 30, 2025, from **$4.3 million** at December 31, 2024[122](index=122&type=chunk) [Note 14. Income Taxes](index=41&type=section&id=Note_14_Income_Taxes) This note provides information on income tax expense, effective tax rate, deferred tax assets, and net operating loss carryforwards - Income tax expense for the six months ended June 30, 2025, was **$67.2 million**, a slight decrease from **$67.7 million** in the prior year period[125](index=125&type=chunk) - The effective tax rate decreased to **19.9%** for the six months ended June 30, 2025, from **21.9%** in the prior year period, reflecting an increase in tax credits[125](index=125&type=chunk)[235](index=235&type=chunk) - Net deferred tax assets totaled **$527.9 million** at June 30, 2025, up from **$456.4 million** at December 31, 2024, with no valuation allowance required[126](index=126&type=chunk) - Federal net operating loss carryforwards increased to **$183.1 million** at June 30, 2025, from **$60.2 million** at December 31, 2024, primarily due to acquisitions[128](index=128&type=chunk) [Note 15. Derivative Financial Instruments](index=41&type=section&id=Note_15_Derivative_Financial_Instruments) This note describes the company's use of derivative instruments for hedging, including their fair values and notional amounts - Derivatives designated as hedging instruments were in a net asset position with a fair value gain of **$15.9 million** at June 30, 2025, compared to a net liability position with a fair value loss of **$7.0 million** at December 31, 2024[288](index=288&type=chunk) - Cash flow hedges (interest rate swaps, collars, and floors on loan pools and borrowings) had a notional amount of **$1.95 billion** at June 30, 2025[136](index=136&type=chunk)[140](index=140&type=chunk) - Fair value hedges (interest rate swaps on investment securities and borrowings) had a notional amount of **$2.03 billion** at June 30, 2025[139](index=139&type=chunk)[140](index=140&type=chunk) - Derivatives not designated as hedges, including customer and counterparty interest rate swaps, had a total notional amount of **$9.02 billion** at June 30, 2025, up from **$6.26 billion** at December 31, 2024[145](index=145&type=chunk) [Note 16. Commitments, Contingencies, and Financial Guarantees](index=45&type=section&id=Note_16_Commitments_Contingencies_and_Financial_Guarantees) This note discloses the company's off-balance sheet commitments, potential liabilities, and financial guarantees - Unfunded loan commitments totaled **$11.41 billion** at June 30, 2025, an increase from **$8.53 billion** at December 31, 2024[155](index=155&type=chunk) - Standby letters of credit had a notional amount of **$267.7 million** at June 30, 2025, up from **$194.3 million** at December 31, 2024[155](index=155&type=chunk) - Risk participation transactions of interest rate swaps had total notional amounts of **$1.0 billion** at June 30, 2025[157](index=157&type=chunk) [Note 17. Fair Value](index=46&type=section&id=Note_17_Fair_Value) This note discloses fair value measurements of financial instruments, categorized by valuation inputs (Level 1, 2, or 3) - Financial instruments measured at fair value on a recurring basis include equity securities (**$121.0 million**, Level 1), investment securities available-for-sale (**$11.01 billion**, primarily Level 2), loans held-for-sale (**$77.6 million**, Level 2), and derivative assets/liabilities (primarily Level 2)[161](index=161&type=chunk) - Assets measured at fair value on a non-recurring basis at June 30, 2025, included collateral dependent loans (**$160.5 million**, Level 3) and foreclosed assets (**$2.8 million**, Level 3)[162](index=162&type=chunk)[163](index=163&type=chunk) - The fair value option was elected for loans held-for-sale, which totaled **$77.6 million** at June 30, 2025, up from **$34.5 million** at December 31, 2024[169](index=169&type=chunk)[171](index=171&type=chunk) [Note 18. Segment Information](index=52&type=section&id=Note_18_Segment_Information) This note explains the company's operating segments and how performance is evaluated and resources are allocated - Old National operates as a single reportable segment, as the Chief Operating Decision Maker (CODM) evaluates performance and allocates resources on a consolidated basis[175](index=175&type=chunk)[178](index=178&type=chunk) - The company provides a wide range of commercial and consumer banking services, wealth management, and capital markets services primarily throughout the Midwest and Southeast regions of the United States[176](index=176&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item_2_Managements_Discussion_and_Analysis_of_Financial_Condition_and_Results_of_Operations) This section provides management's discussion and analysis of financial condition and results of operations [Forward-Looking Statements](index=54&type=section&id=Forward-Looking_Statements) This section cautions readers about forward-looking statements subject to various risks and uncertainties - Forward-looking statements are subject to various risks and uncertainties, including competition, government regulations, economic conditions, and integration costs of mergers, which could cause actual results to differ materially[180](index=180&type=chunk) - The company does not undertake an obligation to update these statements, and investors are advised to consult further disclosures in SEC filings[181](index=181&type=chunk) [Financial Highlights](index=56&type=section&id=Financial_Highlights) This section summarizes key financial performance indicators and significant changes in the company's financial position - Net income applicable to common shareholders increased by **3.6%** to **$121.4 million** for Q2 2025 and by **12.2%** to **$262.0 million** for YTD Q2 2025 compared to the prior year periods[183](index=183&type=chunk)[185](index=185&type=chunk) - Diluted EPS was **$0.34** for Q2 2025 (down **8.1%** YoY) and **$0.77** for YTD Q2 2025 (flat YoY)[183](index=183&type=chunk)[185](index=185&type=chunk) - Total assets grew to **$71.0 billion** at June 30, 2025 (up **33.6%** YoY), total loans to **$47.9 billion** (up **32.5%** YoY), and total deposits to **$54.4 billion** (up **36.0%** YoY)[183](index=183&type=chunk)[185](index=185&type=chunk) Key Performance Ratios (YTD Q2 2025 vs. YTD Q2 2024) | Metric | YTD Q2 2025 | YTD Q2 2024 | Change | | :-------------------------------- | :---------- | :---------- | :----- | | Return on average assets | 0.91% | 0.95% | -0.04% | | Return on average common equity | 7.83% | 8.45% | -0.62% | | Net interest margin (taxable equivalent) | 3.41% | 3.31% | +0.10% | | Efficiency ratio | 54.92% | 57.73% | -2.81% | | Net charge-offs to average loans | 0.24% | 0.15% | +0.09% | | Non-performing loans to ending loans | 1.24% | 0.94% | +0.30% | [Non-GAAP Financial Measures](index=58&type=section&id=Non-GAAP_Financial_Measures) This section explains the company's use of non-GAAP financial measures and provides reconciliations to GAAP measures - The company uses non-GAAP measures like adjusted net income, tangible common equity, and taxable equivalent net interest income/margin to provide additional insights into operating performance and facilitate peer comparisons[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - Adjusted diluted EPS for YTD Q2 2025 increased to **$0.99** from **$0.90** in YTD Q2 2024[195](index=195&type=chunk) - Tangible common book value was **$12.60** at June 30, 2025, up from **$11.05** at June 30, 2024[195](index=195&type=chunk) [Executive Summary](index=62&type=section&id=Executive_Summary) This section provides a high-level overview of the company's strategic position, financial performance, and key operational achievements - Old National is the fifth largest commercial bank headquartered in the Midwest, with consolidated assets of **$71.0 billion** at June 30, 2025[197](index=197&type=chunk) - Q2 2025 net income applicable to common shares was **$121.4 million** (**$0.34** diluted EPS), impacted by **$41.2 million** in merger-related expenses, **$75.6 million** in CECL Day 1 non-PCD provision, and a **$21.0 million** pension plan gain from the Bremer acquisition[198](index=198&type=chunk)[199](index=199&type=chunk) - Adjusted net income applicable to common shares for Q2 2025 was **$190.9 million** (**$0.53** diluted EPS)[199](index=199&type=chunk) - Deposits: Period-end total deposits increased **$13.3 billion** to **$54.4 billion** (**1%** annualized organic growth excluding Bremer)[200](index=200&type=chunk) - Loans: Period-end total loans increased **$11.5 billion** to **$47.9 billion** (**4%** annualized organic growth excluding Bremer)[201](index=201&type=chunk) - Net Interest Income: Increased **$127.1 million** to **$514.8 million** QoQ, driven by Bremer, organic loan growth, and higher asset yields[202](index=202&type=chunk) - Provision for Credit Losses: **$106.8 million**, adjusted to **$31.2 million** excluding Bremer CECL Day 1 non-PCD provision[203](index=203&type=chunk) - Noninterest Income: Increased **$38.7 million** to **$132.5 million** QoQ, reflecting Bremer and organic growth[204](index=204&type=chunk) - Noninterest Expense: Increased **$116.3 million** QoQ, including **$41.2 million** merger-related expenses. Adjusted, it increased by **$80.9 million** due to Bremer operating costs and intangibles amortization[204](index=204&type=chunk) - The Bremer acquisition, completed May 1, 2025, added approximately **$16.3 billion** of total assets, **$11.1 billion** of total loans, and **$12.9 billion** of deposits[206](index=206&type=chunk) [Results of Operations](index=63&type=section&id=Results_of_Operations) This section analyzes the company's financial performance over the reporting periods, focusing on key revenue and expense drivers - Net interest income for the six months ended June 30, 2025, increased by **21.2%** to **$902.4 million**, driven by the Bremer acquisition, strong loan growth, and lower costs of average interest-bearing liabilities[207](index=207&type=chunk)[221](index=221&type=chunk) - Net interest margin on a fully taxable equivalent basis increased to **3.41%** for the six months ended June 30, 2025, from **3.31%** in the prior year period[207](index=207&type=chunk)[222](index=222&type=chunk) - Provision for credit losses for the six months ended June 30, 2025, increased by **150.9%** to **$138.2 million**, primarily due to **$75.6 million** for non-PCD Bremer loans and unfunded commitments[207](index=207&type=chunk)[226](index=226&type=chunk) - Noninterest income for the six months ended June 30, 2025, increased by **37.3%** to **$226.3 million**, driven by the Bremer and CapStar acquisitions, organic growth in fee-based businesses, and a **$21.0 million** gain from the Bremer pension plan[207](index=207&type=chunk)[229](index=229&type=chunk) - Noninterest expense for the six months ended June 30, 2025, increased by **19.8%** to **$653.2 million**, including **$47.1 million** in merger-related expenses. Adjusted for these and other non-recurring items, it increased to **$606.2 million** from **$506.7 million**[207](index=207&type=chunk)[233](index=233&type=chunk) - The effective tax rate decreased to **19.9%** for the six months ended June 30, 2025, from **21.9%** in the prior year period, reflecting an increase in tax credits[207](index=207&type=chunk)[235](index=235&type=chunk) [Financial Condition](index=69&type=section&id=Financial_Condition) This section analyzes the company's balance sheet, including assets, liabilities, and equity, and discusses changes in financial position - Total assets were **$71.0 billion** at June 30, 2025, a **$17.4 billion** increase from December 31, 2024, primarily due to the Bremer acquisition[236](index=236&type=chunk) - Earning assets increased by **$15.6 billion** to **$63.7 billion** at June 30, 2025[237](index=237&type=chunk) - The investment securities portfolio grew to **$14.5 billion** at June 30, 2025, from **$10.9 billion** at December 31, 2024, mainly due to Bremer, with an effective duration of **4.76**[239](index=239&type=chunk)[241](index=241&type=chunk) - The total loan portfolio increased by **$11.6 billion** to **$47.9 billion** at June 30, 2025, driven by the Bremer acquisition and commercial loan production[242](index=242&type=chunk)[243](index=243&type=chunk) - Total funding (deposits and wholesale borrowings) increased by **$15.5 billion** to **$61.7 billion** at June 30, 2025, with total deposits up **$13.5 billion** (**33.2%**) due to Bremer and organic growth[255](index=255&type=chunk) - Shareholders' equity reached **$8.1 billion** at June 30, 2025, benefiting from the Bremer acquisition (**+$1.0 billion**) and forward sale agreements (**+$443.2 million**)[257](index=257&type=chunk) - Old National and its bank subsidiary exceeded regulatory minimums and were 'well-capitalized' at June 30, 2025, with a Tier 1 leverage ratio of **9.26%** and Common equity Tier 1 capital ratio of **10.74%**[258](index=258&type=chunk)[259](index=259&type=chunk) [Risk Management](index=74&type=section&id=Risk_Management) This section describes the company's approach to identifying, assessing, and mitigating various financial and operational risks - The company's Risk Appetite Statement addresses strategic, market, liquidity, credit, operational, information security and technology, talent management, and compliance/regulatory/legal risks[263](index=263&type=chunk) - Under-performing assets increased to **$619.6 million** at June 30, 2025, from **$456.3 million** at December 31, 2024, primarily due to the Bremer acquisition, with nonaccrual loans at **$594.7 million**[266](index=266&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk) - Total criticized and classified assets were **$3.6 billion** at June 30, 2025, an increase of **$1.1 billion** from December 31, 2024, mainly due to Bremer[266](index=266&type=chunk)[270](index=270&type=chunk) - The allowance for credit losses on loans to nonaccrual loans was **95.02%** at June 30, 2025, up from **87.62%** at December 31, 2024[266](index=266&type=chunk)[269](index=269&type=chunk) - Market risk management uses derivative instruments (swaps, collars, floors) to mitigate interest rate risk. Projected net interest income sensitivity to a **300 basis point** immediate rate decrease was **-10.19%** and to a **300 basis point** increase was **-1.64%** at June 30, 2025[282](index=282&type=chunk)[284](index=284&type=chunk)[288](index=288&type=chunk) - Liquidity risk is managed through strategic and contingency plans, with **$485.1 million** in available liquid funds at the parent company and **$19.46 billion** at subsidiaries at June 30, 2025[289](index=289&type=chunk)[294](index=294&type=chunk) [Critical Accounting Estimates](index=78&type=section&id=Critical_Accounting_Estimates) This section highlights critical accounting estimates requiring significant judgment and assumptions that could materially affect financial reporting - No material changes in the company's critical accounting estimates have occurred since December 31, 2024[297](index=297&type=chunk) - These estimates require significant judgment and assumptions, which can materially impact the carrying value of certain assets and liabilities[296](index=296&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=78&type=section&id=Item_3_Quantitative_and_Qualitative_Disclosures_About_Market_Risk) This section refers to the market and liquidity risk discussions within Management's Discussion and Analysis - For quantitative and qualitative disclosures about market risk, refer to the 'Market Risk' and 'Liquidity Risk' sections within Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations[298](index=298&type=chunk) [Item 4. Controls and Procedures](index=78&type=section&id=Item_4_Controls_and_Procedures) This section confirms effective disclosure controls and procedures with no material changes in internal control over financial reporting - Old National's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[299](index=299&type=chunk) - Management acknowledges the inherent limitations of control systems, including potential for error, fraud, or management override[300](index=300&type=chunk)[301](index=301&type=chunk) - There were no material changes in Old National's internal control over financial reporting during the period covered by this report[302](index=302&type=chunk) [PART II. OTHER INFORMATION](index=79&type=section&id=PART_II_OTHER_INFORMATION) This part includes disclosures on risk factors, equity security sales, other corporate information, and a list of exhibits [Item 1A. Risk Factors](index=79&type=section&id=Item_1A_Risk_Factors) This section reports no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K - No material changes from the risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[303](index=303&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=Item_2_Unregistered_Sales_of_Equity_Securities_and_Use_of_Proceeds) This section details equity security repurchases for tax withholding and a new stock repurchase program - During Q2 2025, Old National purchased **378,569** shares of common stock at an average price of **$21.02** per share[304](index=304&type=chunk) - These shares were acquired to satisfy tax withholding obligations associated with the vesting of restricted stock or performance shares earned under the company's share-based incentive programs[304](index=304&type=chunk) - A new **$200 million** stock repurchase program was approved on February 19, 2025, authorized through February 28, 2026, replacing the prior program[305](index=305&type=chunk) [Item 5. Other Information](index=79&type=section&id=Item_5_Other_Information) This section confirms no material changes in board nominee procedures or Rule 10b5-1 trading arrangements by directors or officers - There have been no material changes in the procedure by which security holders recommend nominees to the Company's board of directors[306](index=306&type=chunk) - No director or Section 16 officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[306](index=306&type=chunk) [Item 6. Exhibits](index=80&type=section&id=Item_6_Exhibits) This section lists all exhibits filed with the Form 10-Q, including merger agreements and financial statements - The exhibits include the Agreement and Plan of Merger for Bremer Financial Corporation, various amendments to the Articles of Incorporation and By-Laws, and certifications required by the Sarbanes-Oxley Act[307](index=307&type=chunk) - Financial statements (Consolidated Balance Sheets, Statements of Income, Comprehensive Income (Loss), Changes in Shareholders' Equity, Cash Flows, and Notes) are provided in inline XBRL format[307](index=307&type=chunk) [SIGNATURE](index=81&type=section&id=SIGNATURE) This section contains the required signatures for the filing, affirming the accuracy and completeness of the report

Core Insights - Old National Bancorp (NASDAQ: ONB) is a bank established in 1834 and headquartered in Evansville, Indiana, with a focus on growing its loan portfolio while facing significant challenges [1] Group 1: Company Overview - Old National Bancorp has a long history dating back to 1834, indicating its established presence in the banking sector [1] Group 2: Investment Perspective - The bank's ability to grow its loan portfolio over time is highlighted, suggesting potential for future growth despite existing challenges [1]

Core Insights - Old National Bancorp (ONB) reported second quarter 2025 earnings with adjusted EPS of $0.53, reflecting an 18% increase over the prior quarter and a 15% year-over-year growth [1] - The company successfully closed the Bremer Bank partnership ahead of schedule, contributing positively to its financial metrics [1][8] Financial Performance - Tangible book value per share increased by 14% year-over-year, and the Common Equity Tier 1 (CET1) ratio finished at 10.74%, which is 50 basis points above expectations [1][3] - Period-end loans rose by $11.5 billion, with a 3.7% annualized organic loan growth excluding Bremer, while core deposits (excluding brokered) increased just under 1% annualized [3] Capital Management - The unexpected strong capital generation allowed ONB to retain all commercial real estate (CRE) loans initially planned for sale, enhancing its risk absorption capacity [4] - The company maintains a disciplined credit risk oversight, with second quarter net charge-offs totaling 24 basis points, and the allowance for credit losses improved by 8 basis points to 1.24% [5] Credit Risk Oversight - Non-accrual loans as a percentage of total loans decreased by five basis points quarter-over-quarter, indicating effective risk mitigation despite the integration of Bremer's loan book [5] - Approximately 60% of non-accruals are from acquired books with appropriate reserves, supporting best-in-class charge-off ratios [6] Future Guidance - ONB expects full-year 2025 loan growth (excluding Bremer) to be toward the lower end of the 4%-6% range, influenced by intensified CRE competition [7] - The company has increased its net interest income and fee income guidance for the full year, anticipating improvements in accumulated other comprehensive income (AOCI) by year-end [9] Strategic Outlook - The earlier-than-expected closing of the Bremer partnership has added to ONB's 2025 earnings momentum, with financial metrics tracking to exceed initial expectations [8] - No formal share repurchase has been announced, but excess capital could lead to buybacks once the Bremer systems conversion is finalized in mid-October [10]

Financial Data and Key Metrics Changes - The company reported GAAP 2Q earnings per share of $0.34, with adjusted earnings per share of $0.53, reflecting an 18% increase over the prior quarter and a 15% increase year over year [9] - The CET1 ratio was better than expected at 10.74%, and tangible book value increased by 14% year over year [6][20] - Net charge-offs were within expected ranges, with total net charge-offs at 24 basis points [18] Business Line Data and Key Metrics Changes - Period-end loans increased by $11.5 billion, with total loans growing 3.7% annualized from last quarter [12] - The investment portfolio increased by $3.4 billion from the prior quarter, primarily due to the Bremer acquisition [12] - Adjusted noninterest income was $112 million for the quarter, with growth in wealth, mortgage, and capital markets [17] Market Data and Key Metrics Changes - Total deposits increased by $13.3 billion, with core deposits (excluding brokered) up $11.6 billion [14] - Noninterest-bearing deposits represented 25% of core deposits, up 2% from first quarter levels [14] - The loan-to-deposit ratio was 88%, down 1% from last quarter [15] Company Strategy and Development Direction - The company is focused on organic growth and maintaining a strong capital position, with a commitment to controlling expenses and improving fee-based businesses [5][8] - The partnership with Bremer Bank is expected to enhance the company's market position and financial metrics [7][21] - The company is exploring technology investments and enhancing its IT capabilities to better serve clients [100][102] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding client sentiment, noting increased competition in the commercial real estate sector [33][36] - The company anticipates continued growth in net interest income and net interest margin in the second half of 2025 [24][27] - There is a recognition of global economic uncertainties that could impact growth and rates, but the larger balance sheet from the Bremer partnership is seen as a positive offset [27][28] Other Important Information - The company appointed Tim Burke as the new president and COO, effective immediately [3][4] - The systems conversion for Bremer is scheduled for mid-October [5] - The company is actively managing its portfolio, with a focus on reducing classified and criticized loans [19] Q&A Session Summary Question: Client sentiment and loan growth outlook - Management noted that while there is economic optimism, competition is increasing, particularly in commercial real estate, leading to a cautious loan growth outlook [33][34][36] Question: Increase in non-performing assets (NPAs) - The increase in NPAs was attributed to the merger with Bremer, but overall NPAs as a percentage of total loans are down [42] Question: Spot rates on loans and bonds - Current spot rates are approximately seven basis points higher for securities and five basis points higher for loans compared to previous averages [48] Question: Capital deployment and buyback expectations - Management indicated a preference for building capital at this time, with potential for buybacks being considered in the future [51] Question: Deregulatory environment impact - The management expressed a positive outlook on the deregulatory environment, which could facilitate growth opportunities [58][60] Question: Active portfolio management - Active portfolio management involves reducing classified and criticized loans through payoffs and refinancing, with a focus on maintaining loan quality [71] Question: Fee income outlook - Fee income is expected to remain strong, driven by growth in mortgage and wealth management services [89]

Financial Data and Key Metrics Changes - The company reported GAAP Q2 earnings per share of $0.34, with adjusted earnings per share of $0.53, reflecting an 18% increase over the prior quarter and a 15% increase year over year [11][12] - The CET1 ratio was better than expected at 10.74%, approximately 50 basis points higher than anticipated [7][12] - Tangible book value per share increased by 14% year over year [7][24] Business Line Data and Key Metrics Changes - Total loans increased by $11.5 billion, with a 3.7% annualized growth excluding Bremer [14] - The investment portfolio grew by $3.4 billion from the prior quarter, primarily due to Bremer and reinvestment of cash flows [14] - Adjusted noninterest income was $112 million for the quarter, showing increases across all line items due to Bremer and organic growth [19] Market Data and Key Metrics Changes - Total deposits increased by $13.3 billion, with core deposits (excluding brokered) up by $11.6 billion [16] - Noninterest-bearing deposits represented 25% of core deposits, up 2% from the first quarter [16] - The loan-to-deposit ratio was 88%, down 1% from the last quarter [17] Company Strategy and Development Direction - The company is focused on organic growth and maintaining a disciplined approach to credit management, particularly in a competitive commercial real estate market [36][66] - The recent partnership with Bremer is expected to enhance the company's position and provide significant flexibility around its balance sheet [9][30] - The company is committed to investing in technology and enhancing its infrastructure to better serve clients [100][102] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding client sentiment, noting increased competition in the commercial real estate sector [36][40] - The company anticipates continued growth in net interest income and net interest margin in the second half of 2025, supported by the Bremer partnership [15][29] - There is a recognition of uncertainty surrounding global economic conditions, which could impact growth and rates [29] Other Important Information - The company appointed Tim Burke as the new president and COO, effective immediately [4][5] - The merger with Bremer was completed two months ahead of schedule, contributing positively to earnings momentum [23][30] Q&A Session Summary Question: Client sentiment and loan growth outlook - Management noted that while there is economic optimism among clients, increased competition in commercial real estate has led to a more cautious loan growth outlook [36][40] Question: Increase in non-performing assets (NPAs) - The increase in NPAs was attributed to the merger with Bremer, but overall NPAs as a percentage of total loans have decreased [45] Question: Spot rates on loans and bonds - The current spot rate on loans is approximately five basis points higher than reported, with new money yields in the high sixes [51] Question: Capital deployment and buyback expectations - Management indicated a focus on building capital post-merger, with potential for buybacks being considered in the future [54] Question: Deregulatory environment impact - Management expressed a positive outlook on the deregulatory environment, which could facilitate growth opportunities [60][62] Question: Active portfolio management - Active portfolio management involves reducing classified and criticized loans through payoffs and refinancing, with a focus on maintaining credit quality [72] Question: Fee income outlook - Fee income is expected to remain strong, driven by growth in mortgage, wealth management, and capital markets [91]

Core Insights - Old National Bancorp (ONB) reported a revenue of $654.37 million for Q2 2025, marking a year-over-year increase of 35.8% and exceeding the Zacks Consensus Estimate by 5.02% [1] - The earnings per share (EPS) for the same quarter was $0.53, up from $0.46 a year ago, with an EPS surprise of 3.92% compared to the consensus estimate of $0.51 [1] Financial Performance Metrics - Efficiency Ratio stood at 55.8%, significantly better than the average estimate of 62.1% from four analysts [4] - Net interest margin (FTE) was reported at 3.5%, slightly below the average estimate of 3.6% [4] - Total earning assets averaged $59.06 billion, surpassing the estimated $58.55 billion [4] - Net Interest Income (FTE) reached $521.85 million, exceeding the average estimate of $518.38 million [4] - Total noninterest income was $132.52 million, significantly higher than the estimated $105.08 million [4] - Mortgage banking revenue was $10.03 million, above the average estimate of $8.36 million [4] - Wealth and investment services fees totaled $35.82 million, exceeding the estimated $33.22 million [4] - Service charges on deposit accounts were $23.88 million, slightly above the average estimate of $23.12 million [4] - Other income was reported at $36.17 million, far exceeding the average estimate of $14.5 million [4] - Capital markets income reached $7.11 million, above the average estimate of $6 million [4] - Debit card and ATM fees totaled $12.92 million, surpassing the estimated $11 million [4] Stock Performance - Old National Bancorp's shares returned +7.7% over the past month, outperforming the Zacks S&P 500 composite's +5.9% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Financial Performance Highlights - The company's reported EPS was $0.34, while the adjusted EPS reached $0.53[9] - Net income was reported at $121 million, with an adjusted net income of $191 million[9] - Return on average tangible common equity was 12%, and the adjusted return on average tangible common equity was 18.1%[9] Balance Sheet Strength - Total loans increased by 32% year-over-year to $47.98 billion[11] - Total deposits grew by 36% year-over-year to $54.358 billion[11] - Available-for-sale securities increased by 55% year-over-year to $11.005 billion[11] Bremer Acquisition Impact - The acquisition of Bremer was completed on May 1, 2025, strengthening the company's presence in the Midwest[10] - The Day 2 Provision (non-PCD loans & unfunded loan commitments) was $76 million[53] - Core deposit intangibles related to the Bremer acquisition amounted to $397 million[53] Net Interest Income and Margin - Net interest income (FTE) increased by 33% compared to the previous quarter, reaching $522 million[27] - Net interest margin (NIM) (FTE) increased by 26 bps from the previous quarter to 3.53%[27]

Core Insights - Old National Bancorp (ONB) reported quarterly earnings of $0.53 per share, exceeding the Zacks Consensus Estimate of $0.51 per share, and showing an increase from $0.46 per share a year ago, resulting in an earnings surprise of +3.92% [1] - The company achieved revenues of $654.37 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.02%, and up from $482.03 million year-over-year [2] - Old National Bancorp has outperformed consensus EPS estimates three times in the last four quarters and has topped revenue estimates four times in the same period [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 sustainability of the stock's price movement based on recent earnings and future expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.56, with expected revenues of $695.64 million, and for the current fiscal year, the EPS estimate is $2.14 on revenues of $2.52 billion [7] Industry Context - The Zacks Industry Rank places the Banks - Midwest sector in the top 31% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Executive Summary & CEO Commentary Old National Bancorp reported strong Q2 2025 results, with adjusted diluted EPS of **$0.53**, driven by balance sheet growth, expanded fee-based businesses, and expense control, further strengthened by the Bremer partnership and new leadership appointment - Adjusted diluted EPS for Q2 2025 was **$0.53**[1](index=1&type=chunk) - The Bremer partnership successfully closed on May 1, 2025, contributing to a larger balance sheet and stronger capital position[1](index=1&type=chunk) - Tim Burke was named Old National's President and Chief Operating Officer[1](index=1&type=chunk) [Second Quarter Highlights](index=1&type=section&id=SECOND%20QUARTER%20HIGHLIGHTS) Old National Bancorp's Q2 2025 highlights reflect significant growth and operational performance, largely influenced by the Bremer partnership, with adjusted net income of **$190.9 million** and a net interest margin of **3.53%** | Metric | Value | | :--- | :--- | | Net income applicable to common shares | $121.4 million | | Adjusted net income applicable to common shares | $190.9 million | | EPS, diluted | $0.34 | | Adjusted EPS | $0.53 | | Metric | Value | Change | | :--- | :--- | :--- | | Net interest income (FTE) | $521.9 million | | | Net interest margin (FTE) | 3.53% | Up 26 bps | | Metric | Value | Change | | :--- | :--- | :--- | | Period-end total deposits | $54.4 billion | Up $13.3 billion | | Period-end core deposits | Up $11.6 billion | | | Total deposit costs | 193 bps | Up 2 bps | | Metric | Value | | :--- | :--- | | End-of-period total loans | $48.0 billion | | Provision for credit losses | $106.8 million | | Net charge-offs | $26.5 million (24 bps of average loans) | | 30+ day delinquencies | 0.30% | | Nonaccrual loans | 1.24% of total loans | | Metric | Value | Change | | :--- | :--- | :--- | | ROATCE | 12.0% | | | Adjusted ROATCE | 18.1% | | | Preliminary regulatory Tier 1 common equity to risk-weighted assets | 10.74% | Down 88 bps | - Key events impacting Q2 results include the closing of the Bremer partnership on May 1, 2025, a **$75.6 million** pre-tax CECL Day 1 non-PCD provision expense, **$41.2 million** pre-tax merger-related charges, and a **$21.0 million** pre-tax pension plan gain[3](index=3&type=chunk) [Leadership Update: Appointment of President and COO](index=2&type=section&id=TIM%20BURKE%20TO%20JOIN%20OLD%20NATIONAL%20AS%20PRESIDENT%20AND%20COO) Timothy M. Burke, Jr. was appointed President and Chief Operating Officer, bringing nearly 30 years of banking experience to oversee Commercial, Community, Wealth, Credit, and Marketing segments - Timothy M. Burke, Jr. joined Old National Bancorp as President and Chief Operating Officer on July 22, 2025[4](index=4&type=chunk) - Mr. Burke brings nearly **30 years** of extensive banking expertise, with prior leadership experience in commercial banking across **12 Midwestern markets**[4](index=4&type=chunk)[5](index=5&type=chunk) - As President and COO, Burke will be responsible for guiding the success of Old National's Commercial, Community, and Wealth segments, and Credit and Marketing teams[6](index=6&type=chunk) [Results of Operations](index=2&type=section&id=RESULTS%20OF%20OPERATIONS) Old National Bancorp reported Q2 2025 net income of **$121.4 million** ($0.34 diluted EPS), with adjusted net income of **$190.9 million** ($0.53 diluted EPS) after excluding significant one-time items | Metric | Q2 2025 Value | | :--- | :--- | | Net income applicable to common shares | $121.4 million | | Diluted common share EPS | $0.34 | | Adjusted net income | $190.9 million | | Adjusted diluted common share EPS | $0.53 | - Adjusted results exclude **$75.6 million** of pre-tax CECL Day 1 non-PCD provision expense, **$41.2 million** of pre-tax merger-related expenses, and a **$21.0 million** pre-tax gain from freezing Bremer pension plan benefits[8](index=8&type=chunk) [Deposits and Funding](index=2&type=section&id=DEPOSITS%20AND%20FUNDING) Total deposits increased significantly to **$54.4 billion**, primarily due to the Bremer transaction, which contributed **$11.5 billion** in core deposits | Metric | Value | | :--- | :--- | | Period-end total deposits | $54.4 billion (up $13.3 billion) | | Period-end core deposits | Up $11.6 billion (includes $11.5 billion from Bremer) | - Period-end core deposits, excluding Bremer, were up **0.8%** annualized[11](index=11&type=chunk) - Total deposit costs were **193 bps**, up **2 bps**[11](index=11&type=chunk) [Loans](index=2&type=section&id=LOANS) Total loans reached **$48.0 billion**, an increase of **$11.5 billion**, largely driven by the Bremer acquisition, with commercial loans showing strong annualized growth | Metric | Value | | :--- | :--- | | Period-end total loans | $48.0 billion (up $11.5 billion) | | Loans acquired in Bremer transaction | $11.2 billion | - Excluding loans acquired in the Bremer transaction, period-end total loans were up **3.7%** annualized[11](index=11&type=chunk) - Commercial loans, excluding Bremer, grew **4.6%** annualized, with a period-end commercial pipeline totaling **$4.8 billion**, up approximately **40%**[11](index=11&type=chunk)[17](index=17&type=chunk) [Credit Quality](index=4&type=section&id=CREDIT%20QUALITY) Credit quality remained resilient, with a provision for credit losses of **$106.8 million**, primarily due to the CECL Day 1 non-PCD provision from the Bremer transaction | Metric | Value | | :--- | :--- | | Provision for credit losses | $106.8 million | | Provision excluding CECL Day 1 non-PCD | $31.2 million | | Net charge-offs | $26.5 million (24 bps of average loans) | | 30+ day delinquencies | 0.30% (compared to 0.22%) | | Nonaccrual loans to total loans | 1.24% (compared to 1.29%) | - The allowance for credit losses (ACL) stood at **$594.7 million**, or **1.24%** of total loans, reflecting **$75.6 million** of CECL Day 1 non-PCD provision expense and **$90.4 million** of allowance related to acquired PCD loans[17](index=17&type=chunk) [Net Interest Income and Margin](index=4&type=section&id=NET%20INTEREST%20INCOME%20AND%20MARGIN) Net interest income (FTE) increased significantly to **$521.9 million**, and net interest margin (FTE) rose by **26 bps** to **3.53%**, driven by balance sheet growth and higher asset yields | Metric | Q2 2025 Value | Change | | :--- | :--- | :--- | | Net interest income (FTE) | $521.9 million | Increased from $393.0 million | | Net interest margin (FTE) | 3.53% | Increased 26 bps | | Cost of total deposits | 1.93% | Increased 2 bps | | Cost of total interest-bearing deposits | 2.52% | Increased 6 bps | - The increase in net interest income was driven by the Bremer transaction, loan growth, higher asset yields, and more days in the quarter, partly offset by higher funding costs[17](index=17&type=chunk) [Noninterest Income](index=4&type=section&id=NONINTEREST%20INCOME) Total noninterest income was **$132.5 million**, with an adjusted increase of **18.8%** (excluding a **$21.0 million** pension plan gain and debt securities losses), attributed to Bremer revenue and organic growth | Metric | Q2 2025 Value | | :--- | :--- | | Total noninterest income | $132.5 million | | Noninterest income excluding pension plan gain | $111.6 million | - Excluding the pension plan gain and realized debt securities losses, noninterest income was up **18.8%**, driven by Bremer revenue, higher wealth fees, mortgage fees, and capital markets revenue[17](index=17&type=chunk) [Noninterest Expense](index=4&type=section&id=NONINTEREST%20EXPENSE) Noninterest expense totaled **$384.8 million**, including **$41.2 million** in merger-related charges, resulting in an adjusted efficiency ratio of **50.2%** | Metric | Q2 2025 Value | | :--- | :--- | | Noninterest expense | $384.8 million | | Merger-related charges | $41.2 million | | Adjusted noninterest expense | $343.6 million | | Efficiency ratio | 55.8% | | Adjusted efficiency ratio | 50.2% | - Adjusted noninterest expense was driven primarily by elevated operating costs and additional intangibles amortization, both related to the Bremer transaction[17](index=17&type=chunk) [Income Taxes](index=4&type=section&id=INCOME%20TAXES) Income tax expense was **$30.3 million**, resulting in an effective tax rate of **19.5%**, impacted by the Bremer transaction and a tax credit benefit | Metric | Q2 2025 Value | | :--- | :--- | | Income tax expense | $30.3 million | | Effective tax rate