Old National Bancorp(US:ONB)2025-04-22 15:02Financial Data and Key Metrics Changes - The company reported GAAP earnings per diluted common share of $0.44 for Q1, with adjusted earnings per share at $0.45 after excluding merger-related charges [8][14] - Tangible book value per share increased by 5% compared to the previous quarter and by 13% year-over-year [9][18] - The CET1 ratio was 11.62%, up 86 basis points from a year ago, indicating a strong capital position [9][18] Business Line Data and Key Metrics Changes - Total loans increased by 1.5% annualized from the last quarter, or 2.3% excluding approximately $70 million of commercial real estate (CRE) loan sales [9][10] - Non-interest income was $94 million for the quarter, benefiting from a gain on the sale of previously acquired loans and stable fee income [14][15] - Adjusted non-interest expenses were $263 million, which was better than guidance due to lower other expenses [15] Market Data and Key Metrics Changes - Total deposits were up 2.1% annualized, with core deposits (excluding brokered) up nearly 1.7% annualized [11][12] - Non-interest bearing deposits remained stable at 23% of core deposits [11] - The loan-to-deposit ratio was consistent at 89% [12] Company Strategy and Development Direction - The company is preparing for the integration of its partnership with Bremer Bank, which is expected to enhance its footprint and provide balance sheet flexibility [5][7] - The company aims to control deposit costs while responding proactively to future Fed rate actions [12][20] - The guidance for 2025 includes expectations for loan growth of 4% to 6%, excluding the impact of Bremer [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strength despite macroeconomic uncertainties, supported by a robust balance sheet and diverse revenue streams [5][24] - The company anticipates that net interest income and margin will grow in 2025, bolstered by the Bremer partnership [11][19] - Management acknowledged the potential for a wider range of outcomes due to global trade uncertainties but remains optimistic about growth [22][24] Other Important Information - The company received all necessary regulatory approvals for the Bremer partnership, with a legal close date anticipated on May 1 [5][25] - The company is focused on maintaining strong credit quality, with net charge-offs in the expected range [4][16] Q&A Session Summary Question: Impact of Bremer on NII outlook - Management indicated that the NII outlook remains based on original M&A assumptions, with potential for higher capital levels post-Bremer [29][30] Question: Guidance on deposit beta - The deposit beta of 40% does not include Bremer and is expected to be reached by Q2 [31][32] Question: Fee income run rate - A good run rate for other fee income, excluding discrete items, is suggested to be around $5 million to $8 million [34] Question: Customer sentiment and economic outlook - Customers are generally doing well, with a pause in activity but no significant changes in plans [50][52] Question: Loan growth guidance - The pipeline for loans is up 30% year-over-year, indicating strong potential for loan growth despite macro uncertainties [58][60] Question: Capital management post-Bremer - Management is considering the optimal use of capital, including potential buybacks, but prioritizes balance sheet strength [61][62]