Old National Bancorp(US:ONB)2025-10-29 20:19Financial Performance - Net interest income for Q3 2025 was $574,609,000, an increase of 11.6% compared to $514,790,000 in Q2 2025[188] - Net income available to common shareholders rose to $178,533,000 in Q3 2025, up 47% from $121,375,000 in Q2 2025[188] - Noninterest income increased by 38% to $356,772 compared to $258,931 in 2024[190] - Net income available to common shareholders reached $440,533, reflecting a 18% increase from $373,214 in 2024[190] - Net interest income rose by $59.8 million to $574.6 million compared to the second quarter of 2025, driven by the full quarter impact of Bremer and higher asset yields[206] - Noninterest income for the third quarter of 2025 was $130.5 million, reflecting an increase of 38.6% compared to $94.1 million in the same quarter of 2024[213] - Net interest income increased to $184.7 million for the three months ended September 30, 2025, up by $60.5 million year-over-year, and $342.1 million for the nine months, an increase of $126.9 million[226] Loan and Deposit Growth - Total loans increased to $47,967,915,000 in Q3 2025, compared to $47,902,819,000 in Q2 2025, reflecting growth in lending activities[188] - Total loans grew to $47,967,915, a significant increase of 32% from $36,400,643 in 2024[190] - Total deposits reached $55,006,184,000 in Q3 2025, up from $54,357,683,000 in Q2 2025, showing strong customer retention and acquisition[188] - Total deposits rose to $55,006,184, marking a 35% increase from $40,845,746 in 2024[190] - Total deposits increased by $648.5 million, or 5% annualized, to $55.0 billion at September 30, 2025 compared to June 30, 2025[205] - Total deposits reached $55.0 billion, an increase of $14.2 billion or 34.7% from December 31, 2024, attributed to Bremer deposits and organic growth[265] Credit Quality and Loss Provisions - Provision for credit losses decreased to $26,738,000 in Q3 2025 from $106,835,000 in Q2 2025, indicating improved credit quality[188] - Provision for credit losses rose to $164,976, up 97% from $83,602 in the previous year[190] - Provision for credit losses was $26.7 million in the third quarter of 2025, with a significant increase in the year-to-date provision to $165.0 million compared to $83.6 million in 2024[213] - The allowance for credit losses on loans was $566,102 thousand as of September 30, 2025, up from $366,667 thousand in the previous year[220] - The allowance for credit losses on loans was $572.2 million at September 30, 2025, up from $392.5 million at December 31, 2024, reflecting $103.5 million of allowance for credit losses on acquired PCD loans[283] Efficiency and Operational Metrics - Return on average assets improved to 1.03% in Q3 2025, compared to 0.77% in Q2 2025, indicating enhanced operational efficiency[188] - The efficiency ratio for Q3 2025 was 58.84%, a slight increase from 55.80% in Q2 2025, suggesting a need for cost management[188] - The efficiency ratio was reported at 56.43%, slightly up from 56.37% in the previous year[190] - Noninterest expense for the three months ended September 30, 2025, was $445.7 million, a 63.7% increase from $272.3 million in the same period of 2024[240] - Total noninterest expense for the nine months ended September 30, 2025, reached $1.1 billion, up 34.4% from $817.6 million in 2024[241] Capital and Equity - The Tier 1 common equity ratio was 11.02% in Q3 2025, up from 10.74% in Q2 2025, reflecting a stronger capital position[188] - Shareholders' equity increased to $8,168,575 thousand in September 2025, compared to $6,190,071 thousand in September 2024, indicating a growth of 32%[220] - Shareholders' equity increased to $8.3 billion at September 30, 2025, up from $6.3 billion at December 31, 2024, due to the issuance of 50.2 million shares related to the Bremer acquisition[267] Acquisition Impact - The acquisition of Bremer Financial Corporation was completed on May 1, 2025, with a total consideration of $1.3 billion, including 50.2 million shares of Old National common stock and $314.6 million in cash[212] - Average loans increased by $11.9 billion for the three months and $7.7 billion for the nine months ended September 30, 2025, primarily due to the acquisition of Bremer loans totaling $11.2 billion[232] - Other income increased by $6.1 million for the three months and $38.1 million for the nine months ended September 30, 2025, driven by the acquisition of Bremer and a $21.0 million gain from the Bremer pension plan[239] Risk Management and Liquidity - The company performs stress testing periodically to ensure sufficient capital to continue operations during economic stress, evaluating decisions related to pricing, loan concentrations, and mergers[271] - The company has adopted a Risk Appetite Statement to assess and mitigate various risks, including credit, market, and liquidity risks[272] - Liquidity management strategies include maintaining strategic and contingency liquidity plans to ensure sufficient funding for balance sheet growth[296] - The company maintains significant liquidity, with access to $4,555,409,000 from the Federal Reserve discount window and $8,120,873,000 from the Federal Home Loan Bank[301] Projections and Future Outlook - Projected net interest income for September 30, 2025, is $4,716,381,000, reflecting a change of 0.20% from the base scenario[291] - Total interest income is expected to reach $9,079,196,000 by September 30, 2025, with a year-over-year increase driven by loan growth and asset repricing[293] - Projected interest expense for September 30, 2025, is $4,362,815,000, indicating a significant increase from previous periods[291]