Old National Bancorp(US:ONB)2023-04-25 17:52Financial Data and Key Metrics Changes - The company reported adjusted EPS of $0.54 per common share, with adjusted ROA and ROATCE of 1.4% and 23.4% respectively [4] - GAAP net income applicable to common shares was $143 million or $0.49 per share, including $15 million in pretax merger-related charges [9] - Total asset growth was $1.1 billion, driven by disciplined loan growth and higher cash balances [10] Business Line Data and Key Metrics Changes - Total loans grew by 2%, with consumer loans remaining stable quarter-over-quarter [18] - Adjusted noninterest income was $76 million, with improvements in capital markets and wealth revenues [25] - Adjusted noninterest expense was $235 million, resulting in an adjusted efficiency ratio of 48.8% [26] Market Data and Key Metrics Changes - Total deposits were stable quarter-over-quarter despite public fund outflows, with average deposits reflecting a shift from noninterest-bearing accounts to money market and CDs [11] - Total deposit costs increased by 38 basis points quarter-over-quarter to 72 basis points, with interest-bearing deposit costs rising by 57 basis points to 1.09% [12] Company Strategy and Development Direction - The company aims for disciplined loan growth in 2023, focusing on maintaining a low deposit cost to drive funding advantage [7] - There is a continued emphasis on organic growth in the wealth management client base and disciplined expense management [7] - The company plans to maintain a strong liquidity position with a coverage ratio of approximately 150% for uninsured deposits [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the client selection and underwriting processes, despite potential economic uncertainties [7] - The outlook for 2023 includes expectations for net interest income growth in the range of 9% to 12%, although margins may face pressure from higher deposit costs [30] - Management remains watchful of credit conditions but does not foresee significant concerns compared to previous quarters [91] Other Important Information - The company has a strong capital position, with TCE ratio increasing to 6.37% [27] - The company repurchased 1.8 million shares of common stock earlier in the quarter but does not anticipate further repurchases in the near term [28] Q&A Session Summary Question: Thoughts on deposit mix and noninterest-bearing levels - Management indicated that average core deposit account balances are lower than peers, with a significant portion of customers having long-standing relationships with the bank [16] Question: Comments on loan growth and areas of focus - Management noted that C&I remains strong, with a positive outlook despite a more muted environment compared to previous quarters [39] Question: Expectations for net interest income and deposit beta - Management provided a range for deposit beta from 30% to 40% by the end of the year, with a bias towards the higher end [54] Question: Concerns about credit conditions - Management stated they are not significantly more concerned about credit than in previous quarters, emphasizing proactive management of the loan portfolio [91]