Old National Bancorp(ONB)2025-04-22 19:08Financial Data and Key Metrics Changes - The company reported GAAP earnings per diluted common share of 0.45 after excluding merger-related charges [13] - Tangible book value per share increased by 5% compared to the previous quarter and by 13% year-over-year [15] - The CET1 ratio improved to 11.62%, up 86 basis points from a year ago [16] Business Line Data and Key Metrics Changes - Total loans increased by 1.5% annualized from the last quarter, or 2.3% excluding approximately 94 million for the quarter, above guidance, with strong performance in primary fee businesses [25] Market Data and Key Metrics Changes - Total deposits were up 2.1% annualized, with core deposits (excluding brokered) up nearly 1.7% annualized [20] - Noninterest-bearing deposits remained stable at 23% of core deposits [20] - The loan-to-deposit ratio was consistent at 89% [21] Company Strategy and Development Direction - The company is preparing for the integration of its partnership with Bremer Bank, expecting to close on May 1, which will enhance its footprint and provide balance sheet flexibility [10][12] - The company aims to maintain strong credit quality and execute its deposit strategy effectively, anticipating continued success in deposit growth [36] - The guidance for 2025 includes the original M&A marks and 2.4 billion of loan sales, with expectations for net interest income to increase with the addition of Bremer [32][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the uncertain macroeconomic environment, supported by a robust balance sheet and diverse revenue streams [9] - The company noted that while there is uncertainty surrounding global trade and macroeconomic outlook, the Bremer partnership creates interesting alternatives for growth [37] - Management highlighted that businesses are currently in a "wait and see" mode but have not changed their plans, indicating a strong pipeline for future growth [66] Other Important Information - The company has received all necessary regulatory approvals for the Bremer Bank partnership [10] - The allowance for credit losses to total loans stands at 116 basis points, reflecting a proactive approach to credit monitoring [27] Q&A Session Summary Question: Impact of Bremer on NII outlook - Management indicated that the original M&A assumptions remain, but day 1 capital levels are likely to be higher, which may reduce the need for the full 2.4 billion loan sale [44] Question: Deposit beta and Bremer inclusion - The 40% deposit beta does not include Bremer, and management expects to match uprate beta on the downside by the end of Q2 [46][47] Question: Fee income run rate - Management suggested a good run rate for other fee income would be around 8 million, excluding discrete items from previous quarters [49] Question: Customer sentiment and economic outlook - Management noted that businesses are generally doing well, with a strong pipeline, despite a pause in activity due to uncertainty [65] Question: Loan growth guidance - The pipeline is up 30% from a year ago, indicating strong loan growth potential, although some caution is warranted due to market competitiveness [72] Question: Capital management post-Bremer - Management is focused on optimizing capital and may consider buybacks in the future, but priority is on maintaining a larger balance sheet [76] Question: Loss provision guidance amidst economic uncertainty - Management feels confident about their loss provision guidance, which accounts for growth and current economic conditions [80] Question: Expansion plans in Nashville - The company remains committed to growing its presence in Nashville, viewing it as a long-term investment opportunity [83]