Old National Bancorp(US:ONB)2025-10-22 15:00Financial Data and Key Metrics Changes - Old National Bancorp reported GAAP earnings per share of $0.46 for Q3 2025, with adjusted earnings per share of $0.59, reflecting an 11% increase over the prior quarter and a 28% increase year over year [8][12] - The company achieved a 20% return on average tangible common equity and a 1.3% return on assets, with an efficiency ratio below 50% [3][8] - The CET1 ratio increased by 28 basis points to over 11%, and tangible book value per share grew by 4% from Q2 and 10% year over year [5][17] Business Line Data and Key Metrics Changes - Total loans grew 3.1% annualized from the previous quarter, with production up 20% from the prior quarter [9][10] - Adjusted non-interest income was $130 million for the quarter, exceeding guidance, driven by strong performance in capital markets [13][83] - Adjusted non-interest expenses were $376 million, reflecting a full quarter impact of Bremer operations, with a low efficiency ratio of 48% [15][88] Market Data and Key Metrics Changes - Total deposits increased by 4.8% annualized, with core deposits (excluding brokered) increasing by 5.8% annualized [11][12] - Non-interest bearing deposits remained at 24% of core deposits, and brokered deposits decreased modestly [11][12] - The cost of total deposits increased by four basis points, resulting in a spot rate of 1.86% on total deposits as of September 30 [12][18] Company Strategy and Development Direction - The company is focused on organic growth and returning capital to shareholders, emphasizing that the best acquisition is itself [5][25] - Old National Bancorp is leveraging its market position and investing in talent to enhance efficiency and effectiveness [4][5] - The company aims to maintain a strong capital position while pursuing growth opportunities, particularly in the wake of the Bremer Bank partnership [6][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the credit outlook, noting a decline in criticized and classified loans and stable credit metrics [17][91] - The company anticipates continued success in deposit strategy and expects to meet or exceed industry growth in 2025 [19][20] - Management highlighted that the current economic environment presents opportunities for growth, particularly through talent acquisition [25][40] Other Important Information - The systems conversion and branding for the Bremer Bank partnership were successfully completed, with positive client sentiment reported [6][30] - The company repurchased 1.1 million shares late in the quarter, reflecting confidence in capital levels and future growth [5][96] - Management expects to realize cost savings from the Bremer integration in Q1 2026, with a full run-rate of approximately $115 million in annualized savings [88][89] Q&A Session Summary Question: Expectations for fourth quarter NII - Management noted a slight reduction in NII expectations for the fourth quarter, attributing it to stable dynamics and minor adjustments in the balance sheet [22][23] Question: Capital return strategy - Management emphasized that organic growth is the priority, but they remain opportunistic regarding share buybacks, with plans to assess capital return strategies post-Q4 [24][25] Question: Bremer loan dynamics - Management clarified that the loan sales and strategic portfolio management are normal, with no significant swings expected [28][29] Question: Systems conversion feedback - Management reported that the systems conversion was the best they have experienced, with high client engagement and satisfaction [30][31] Question: Loan growth guidance - Management confirmed that consolidated loan growth should align with overall growth expectations, with Bremer contributing positively [60][63] Question: Fee income trends - Management indicated that while fee income was strong this quarter, it is expected to normalize in the upcoming quarters [83][84]