8-K: Old National Bancorp Posts Record 2025 Earnings

Old National Bancorp reported strong fourth quarter and record full-year 2025 financial results, driven by core deposit growth, loan expansion, and improved efficiency.

Summary

• Fourth quarter 2025 net income applicable to common shares was $212.6 million, or $0.55 diluted EPS; adjusted figures were $241.0 million and $0.62, respectively.
• Full-year 2025 net income applicable to common shares was $653.1 million, or $1.79 diluted EPS; adjusted figures were $808.6 million and $2.21, respectively.
• Net interest income on a fully taxable equivalent basis increased to $588.8 million, and net interest margin (NIM) increased 1 basis point to 3.65%.
• Adjusted pre-provision net revenue (PPNR) increased 4% to $349.6 million, and the adjusted efficiency ratio improved to a record 46.0%.
• Period-end total deposits were $55.1 billion, up 0.6% annualized, though core deposits were down 3.2% annualized.
• Total deposit costs decreased by 17 basis points to 180 bps.
• Period-end total loans grew by $768.8 million, or 6.4% annualized, driven by a 25% increase in commercial loan production.
• Provision for credit losses was $32.7 million, and net charge-offs were $32.1 million, or 27 bps of average loans.
• Credit quality metrics showed 30+ day delinquencies at 0.22% and nonaccrual loans at 1.07% of total loans.
• Return on average tangible common equity (ROATCE) was 17.8%; adjusted ROATCE was 19.9%.
• Preliminary regulatory Tier 1 common equity to risk-weighted assets increased 6 basis points to 11.08%.
• Notable items included $24.5 million of pre-tax merger-related charges, a $15.9 million pre-tax pension plan loss, and a $3.0 million pre-tax reduction to the FDIC special assessment.

Sentiment

Score: 8

Explanation: The company reported record adjusted full-year results across key metrics like EPS, net income, and efficiency ratio. Strong loan growth, improved net interest margin, and disciplined cost management are significant positives, despite some challenges in core deposit growth and an increase in provision for credit losses. The share repurchase program also indicates confidence.

Positives

• Achieved new organizational records for adjusted earnings per share, net income, and efficiency ratio for the full year 2025.
• Net interest margin on a fully taxable equivalent basis increased 1 basis point to 3.65% in Q4 2025.
• Adjusted pre-provision net revenue (PPNR) increased 4% linked-quarter to $349.6 million.
• Adjusted efficiency ratio improved to a record 46.0% in Q4 2025, down from 48.1% in Q3 2025.
• Total loans grew by $768.8 million, or 6.4% annualized, in Q4 2025, driven by strong commercial loan production (up 25%).
• Total deposit costs decreased by 17 basis points to 180 bps, indicating effective funding cost management.
• Nonaccrual loans as a percentage of total loans decreased to 1.07% in Q4 2025 from 1.23% in Q3 2025, reflecting improved credit quality.
• Return on average tangible common equity (ROATCE) was strong at 17.8% (GAAP) and 19.9% (adjusted).
• Preliminary regulatory Tier 1 common equity to risk-weighted assets increased 6 basis points to 11.08%, demonstrating strong capital generation.
• The company repurchased 1.1 million shares of common stock during the quarter, signaling confidence in valuation.
• Record capital markets income and higher mortgage banking revenue contributed positively to noninterest income.

Negatives

• Core deposits decreased 3.2% on an annualized basis in Q4 2025.
• Provision for credit losses increased to $32.7 million in Q4 2025 from $26.7 million in Q3 2025.
• Net charge-offs increased to $32.1 million, or 27 bps of average loans, in Q4 2025 compared to 24 bps in Q3 2025.
• 30+ day delinquencies as a percentage of loans increased to 0.22% in Q4 2025 from 0.18% in Q3 2025.
• Pre-tax merger-related charges of $24.5 million impacted GAAP results.
• A pre-tax pension plan loss of $15.9 million was recognized in Q4 2025.
• Excluding the pension plan loss and debt securities gains, noninterest income was down 3.7% linked-quarter, driven by lower other income.

Risks

• Competition within the banking industry.
• Impact of government legislation, regulations, and policies, including trade and tariff policies.
• Ability to successfully execute the business plan.
• Unanticipated changes in liquidity position, including access to sources of liquidity and capital.
• Changes in economic conditions and economic/business uncertainty, which could materially impact credit quality trends, loan generation, and deposit gathering.
• Inflation and governmental responses to inflation, including increasing interest rates.
• Market, economic, operational, liquidity, credit, and interest rate risks associated with the business.
• Ability to successfully manage credit risk and the sufficiency of the allowance for credit losses.
• Expected cost savings, synergies, and other financial benefits from the merger with Bremer not being realized within expected time frames, or integration costs/difficulties being greater than expected.
• Potential adverse reactions or changes to business or employee relationships resulting from the Bremer merger.
• Impact of purchase accounting with respect to the Bremer merger, or any change in assumptions used for fair value and credit marks.
• Potential impact of future business combinations on performance and financial condition, including integration challenges and diversion of management's attention.
• Failure or circumvention of internal controls.
• Operational risks or risk management failures by the company or critical third parties, including data processing, information systems, cybersecurity, technological changes, vendor issues, business interruption, and fraud risks.
• Significant changes in accounting, tax, or regulatory practices or requirements.
• New legal obligations or liabilities.
• Disruptive technologies in payment systems and other services traditionally provided by banks.
• Failure or disruption of information systems; computer hacking and other cybersecurity threats.
• Effects of climate change on Old National and its customers, borrowers, or service providers.
• Impacts of pandemics, epidemics, and other infectious disease outbreaks.

Future Outlook

The filing contains forward-looking statements regarding Old National's financial condition, results of operations, asset and credit quality trends, profitability, and business plans. It also discusses potential risks related to competition, economic conditions, inflation, interest rates, integration of the Bremer merger, operational risks, cybersecurity threats, and climate change. No specific numerical guidance for future periods is provided.

Management Comments

• "Old National's strong fourth quarter earnings punctuate an exceptional year that set new organizational records for adjusted earnings per share, net income, and efficiency ratio."
• "Our 2025 results were driven by a focus on fundamentals – core deposit growth to support loan expansion, positive operating leverage, disciplined credit management, and healthy liquidity and capital ratios."

Industry Context

Old National Bancorp's results reflect a mixed environment for regional banks. While the company achieved strong loan growth, particularly in commercial lending, and managed to reduce deposit costs, the annualized decline in core deposits indicates ongoing competition for funding. The increase in net interest margin by 1 basis point is a positive sign in a potentially stabilizing or declining interest rate environment, suggesting effective asset-liability management. The record efficiency ratio demonstrates strong cost control, which is a key differentiator in the banking sector.

Stakeholder Impact

• Shareholders: Positive impact due to record adjusted earnings, increased ROATCE, share repurchases, and strong capital ratios.
• Employees: Potential positive impact from a high-performing company, though merger-related charges could imply some integration-related adjustments.
• Customers: Strong loan growth and a granular low-cost deposit franchise suggest continued service and offerings.
• Creditors: Strong liquidity and capital ratios indicate a healthy financial position.

Next Steps

• Host a conference call and live webcast on January 21, 2026, at 9:00 a.m. Central Time to review results.
• Make presentation slides available on the Investor Relations website.
• Provide a telephone replay of the conference call until February 4, 2026.

Key Dates

Recommendation

The filing demonstrates exceptional financial performance for Old National Bancorp, achieving record adjusted earnings per share, net income, and efficiency ratio for the full year 2025. The company exhibits strong fundamentals with robust commercial loan growth, improving net interest margin, and effective cost management. While core deposit growth saw a slight annualized decline, overall deposit costs decreased, and liquidity remains strong. Credit quality metrics, though showing a slight uptick in provision and NCOs, remain well-managed with decreasing nonaccrual loans. The share repurchase program and strong capital ratios further underscore management's confidence and commitment to shareholder value. These results position ONB favorably within the regional banking sector, suggesting a strong investment opportunity.

Keywords

Old National Bancorp, ONB, Financial Results, Earnings, Banking, Regional Bank, Net Interest Income, Net Interest Margin, Deposits, Loans, Credit Quality, Efficiency Ratio, Capital Ratios, Share Repurchase, Commercial Banking, Wealth Management, Capital Markets, SEC Filing, 8-K, Q4 2025, Full Year 2025