8-K: Old National Bancorp Reports Strong Q2 2026 Results

Old National Bancorp announced record second quarter results with strong profitability, robust capital levels, and a stable, low-cost deposit franchise.

Summary

• Old National Bancorp reported record second quarter 2026 results, with adjusted EPS of $0.65 and a record adjusted efficiency ratio of 45.2%.
• The company achieved peer-leading profitability with an adjusted ROATCE of 19.9% and adjusted ROAA of 1.39%.
• Total loan growth was 8.3% annualized, driven by Commercial & Industrial (C&I) and Commercial Real Estate (CRE) segments.
• The deposit franchise remains strong, with total deposits up 3.4% annualized and total deposit costs at 171 bps.
• Credit quality remains a hallmark, with nonaccrual loans down 10% quarter-over-quarter and net charge-offs at 22 bps (excluding PCD loans).
• Capital remains strong, with CET1 at 11.09% and tangible common book value per share up 14% year-over-year.
• The company returned $163 million to common shareholders in Q2 2026 through dividends and share repurchases.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a positive report, highlighting strong financial performance, robust capital, and a stable deposit franchise, indicating solid operational execution and a healthy outlook.

Positives

• Record adjusted EPS of $0.65 and record adjusted efficiency ratio of 45.2%.
• Peer-leading profitability with adjusted ROATCE of 19.9% and adjusted ROAA of 1.39%.
• Strong loan growth of 8.3% annualized, with C&I up 12.7% and CRE up 6.2% annualized.
• Stable and low-cost deposit franchise with total deposits up 3.4% annualized and total deposit costs at 171 bps.
• Excellent credit quality with nonaccrual loans down 10% QoQ and net charge-offs at 22 bps (excluding PCD loans).
• Strong capital position with CET1 at 11.09% and tangible common book value per share up 14% YoY.
• Significant capital return to shareholders totaling $163 million in Q2 2026, including $107 million in share repurchases.
• Positive operating leverage and outlook for continued EPS growth.

Negatives

• Net interest margin (NIM) decreased slightly by 1 bp to 3.54% compared to the previous quarter.
• HTM securities had pre-tax unrealized losses of $376 million, though expected to recover.

Risks

• Competition in the banking industry.
• Government legislation, regulations, and policies.
• Changes in economic conditions impacting credit quality and deposit gathering.
• Inflation and governmental responses, including increasing interest rates.
• Market, economic, operational, liquidity, credit, and interest rate risks.
• Potential impact of future business combinations.
• Cybersecurity threats and operational risk failures.
• Disruptive technologies in payment systems and other banking services.

Future Outlook

The full-year 2026 outlook projects EOP loans (including HFS) up 8% annualized, with a YoY growth of 6%-8%. Net interest income (FTE basis) is projected around $2,400 million +/2%, and noninterest income is expected between $515 $525 million. Noninterest expense is projected to be around $1,435 $1,455 million. The net charge-off ratio is expected to be around 0.25% 0.30%. The company assumes no Fed interest rate actions in 2026 and sees opportunities for positive operating leverage and over 15% EPS growth YoY.

Management Comments

• Old National's primary strategic objective is to be a top quartile performing basic bank that is a primary, trusted partner to our clients in the communities we serve, and a highly respected, highly valued employer that continually empowers our team members to grow, develop and succeed.
• The company is prioritizing organic growth and capital growth over M&A.
• The company's strong capital position is validated by internal stress testing.
• Net interest income drivers show more opportunities than headwinds in today's environment.

Industry Context

StockSavvy.ai notes that Old National Bancorp's performance in Q2 2026, particularly its strong profitability and efficiency ratios, positions it favorably within the regional banking sector, which is navigating a dynamic interest rate environment and ongoing competitive pressures.

Comparison to Industry Standards

• Old National Bancorp's adjusted ROAA of 1.39% and adjusted ROATCE of 19.9% for Q2 2026 are reported as top quartile compared to peers.
• The adjusted efficiency ratio of 45.2% is also presented as a record and competitive within the industry.
• The company's loan-to-deposit ratio of 91% is within a healthy range for the industry.
• Net charge-offs of 22 bps (excluding PCD) are low compared to industry averages, indicating strong credit risk management.
• The CET1 capital ratio of 11.09% exceeds typical regulatory minimums and is competitive among peers.
• Core deposit tenure exceeding 5 years for 75% of deposits highlights a stable funding base, often a differentiator in the banking sector.
• The company's tangible common book value per share growth of 14% YoY outpaces the 8.7% and 9.9% 2-year and 3-year CAGRs of comparable KRX companies.

Corporate Governance

Stakeholder Impact

• Shareholders: Benefit from strong profitability, capital returns through dividends and share repurchases, and potential for continued value appreciation.
• Employees: Supported by a commitment to being a highly valued employer with opportunities for growth and development.
• Customers: Served by a trusted partner focused on client needs and community investment.
• Creditors: Benefit from the company's strong capital position and stable financial performance.

Next Steps

• Continue to prioritize organic growth and capital growth.
• Monitor and manage interest rate risk and economic conditions.
• Execute on strategic initiatives to maintain top-quartile performance.
• Return capital to shareholders through dividends and share repurchases.

Key Dates

Recommendation

The filing presents strong Q2 2026 results with record profitability and efficiency, alongside robust capital and credit quality. However, the slight decrease in NIM and the unrealized losses on HTM securities warrant a cautious approach. While performance is solid and in line with expectations, the current environment and potential headwinds suggest a 'hold' rating until further clarity on interest rate movements and economic stability emerges.

Keywords

Old National Bancorp, Q2 2026 Earnings, Financial Performance, Loan Growth, Deposit Franchise, Capital Management, Credit Quality, Efficiency Ratio