Old National Bancorp(US:ONB)2026-01-21 16:00Financial Data and Key Metrics Changes - Old National Bancorp reported GAAP Q4 earnings per share of $0.55, with adjusted earnings per share of $0.62, reflecting a 5% increase over the prior quarter and a 27% increase year over year [7][8] - The adjusted return on average tangible common equity was nearly 20%, and the adjusted efficiency ratio was 46% [4][8] - Tangible book value per share grew by 15% year over year, despite the impact of the Bremer partnership closing and associated one-time charges [5][9] Business Line Data and Key Metrics Changes - Total loans grew 6.4% annualized from the previous quarter, with production up 25% across the commercial book [9][10] - Adjusted non-interest income was $126 million for the quarter, exceeding guidance, driven by strong performance in mortgage and capital markets [12] - Adjusted non-interest expenses were $365 million for the quarter, with a record low adjusted efficiency ratio of 46% [13] Market Data and Key Metrics Changes - Total deposits increased 0.6% annualized, with core deposits excluding brokered deposits decreasing about 3% annualized [10][11] - Non-interest-bearing deposits grew to 26% of core deposits from 24% in the prior quarter [11] - The loan-to-deposit ratio is now 89%, indicating strong liquidity and capital [8][9] Company Strategy and Development Direction - The company aims to maintain a balance between organic capital growth and returning capital through share repurchases, focusing on maximizing shareholder value [6][19] - Investment in talent, technology, and client-facing capabilities is prioritized to ensure long-term success [6][20] - The company is focused on organic growth and enhancing its core fundamentals while being opportunistic in talent acquisition [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the execution of their deposit strategy and anticipates meeting or exceeding industry growth in 2026 [18][19] - The outlook for loan growth is projected at 4%-6% for the full year 2026, supported by positive borrower sentiment and strategic talent acquisition [18][34] - Management remains cautious yet optimistic about the mortgage line of business, expecting a constructive rate backdrop [26] Other Important Information - The company successfully completed the systems conversion and integration related to the Bremer Bank partnership, which is expected to yield cost savings [5][19] - The capital position has been strengthened, with CET1 over 11% and tangible book value per share increasing [8][16] Q&A Session Summary Question: Margin projection for the year - Management indicated that the margin trajectory will be influenced by growth, the steepness of the yield curve, fixed asset repricing, and deposit beta management [21][22] Question: Share repurchase pace - The company plans to be more active in share repurchases in 2026 compared to the previous year, balancing capital for growth and returning capital to shareholders [22] Question: Loan growth and credit outlook - Management noted significant improvement in criticized and classified loans, allowing for a slight reduction in reserve coverage ratio [24][34] Question: Deposit growth expectations - The company expects stable deposit levels as a percentage, with some seasonality in public funds [30] Question: Wealth strategy and outlook - Management sees opportunities for growth in the wealth management sector, emphasizing the importance of talent acquisition [37]