8-K: Old National Bancorp Reports Strong Q3 2025 Results

Old National Bancorp announced robust third quarter 2025 financial results, driven by the Bremer Bank partnership and strong core deposit and commercial loan growth.

Summary

• Net income applicable to common shares was $178.5 million, or $0.46 diluted EPS.
• Adjusted net income applicable to common shares reached $231.3 million, or $0.59 adjusted diluted EPS.
• Net interest income on a fully taxable equivalent basis increased to $582.6 million, up from $521.9 million in Q2 2025.
• Net interest margin (FTE) improved by 11 basis points to 3.64%.
• Adjusted pre-provision net revenue (PPNR) increased 16% to $336.6 million.
• Period-end total deposits grew to $55.0 billion, a 4.8% annualized increase, with core deposits up 5.8% annualized.
• Period-end total loans reached $48.0 billion, a 0.6% annualized increase, or 3.1% annualized excluding Bremer acquired loans.
• Provision for credit losses was $26.7 million, significantly down from $106.8 million in the prior quarter.
• Adjusted efficiency ratio improved to 48.1% from 50.2% in the prior quarter.
• The company repurchased 1.1 million shares of common stock during the quarter.

Sentiment

Score: 8

Explanation: The filing reports strong financial results across key metrics, including significant increases in adjusted EPS, net interest income, and PPNR, alongside improved credit quality and capital ratios. The completion of merger integration activities and share repurchases further contribute to a highly positive outlook, despite some merger-related expenses.

Positives

• Adjusted diluted EPS of $0.59, reflecting strong operational performance.
• Net interest margin (FTE) increased by 11 basis points to 3.64%.
• Adjusted pre-provision net revenue (PPNR) increased 16% to $336.6 million.
• Total deposits grew 4.8% annualized to $55.0 billion, with core deposits up 5.8% annualized.
• Total loans increased 0.6% annualized to $48.0 billion, with commercial loan production up 20% from Q2 2025.
• Provision for credit losses significantly decreased to $26.7 million from $106.8 million in the prior quarter.
• Credit quality remains resilient with 30+ day delinquencies decreasing to 0.18% and nonaccrual loans stable at 1.23%.
• Adjusted efficiency ratio improved to 48.1%, indicating disciplined expense management.
• Return on average tangible common equity (ROATCE) was strong at 15.9% (GAAP) and 20.1% (adjusted).
• Preliminary regulatory Tier 1 common equity to risk-weighted assets increased by 28 bps to 11.02%.
• Completion of conversion activities related to the Bremer partnership positions the company well for the future.
• Record capital markets revenue contributed to noninterest income growth.
• Repurchased 1.1 million shares of common stock.

Negatives

• Noninterest expense was $445.7 million, including $69.3 million of pre-tax merger-related charges.
• Total deposit costs increased by 4 basis points to 197 bps.
• Net charge-offs were $30.0 million, or 25 bps of average loans, slightly up from 24 bps in the prior quarter.

Risks

• Competition in the financial services industry.
• Government legislation, regulations, and policies, including trade and tariff policies.
• Ability to execute the business plan effectively.
• Unanticipated changes in liquidity position, including access to sources of liquidity and capital.
• Changes in economic conditions and economic/business uncertainty impacting credit quality, 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 financial benefits from the merger with Bremer not being realized within expected timeframes, or integration costs/difficulties being greater than expected.
• Potential adverse reactions or changes to business or employee relationships resulting from the merger.
• Impact of purchase accounting with respect to the merger, or any change in the assumptions used regarding the assets acquired and liabilities assumed to determine their fair value and credit marks.
• Potential impact of future business combinations on performance and financial condition, including the ability to successfully integrate businesses, the success of revenue-generating and cost reduction initiatives, and the diversion of management's attention from ongoing business operations and opportunities.
• Failure or circumvention of internal controls.
• Operational risks or risk management failures by the company or critical third parties, including with respect to 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.
• The effects of climate change on Old National and its customers, borrowers, or service providers.
• The impacts of pandemics, epidemics, and other infectious disease outbreaks.

Future Outlook

Old National Bancorp anticipates continued strong performance for the remainder of 2025 and beyond, benefiting from the completed conversion activities related to its Bremer partnership and a sustained focus on fundamental banking operations.

Management Comments

• Old National's outstanding quarterly results reflect our continued focus on the fundamentals and the benefits from our recent partnership with Bremer Bank.
• Furthermore, with conversion activities related to our Bremer partnership now complete, Old National is exceptionally well positioned for the remainder of 2025 and beyond.

Industry Context

Old National Bancorp's strong Q3 2025 results, particularly in net interest income and margin expansion, suggest effective navigation of the current interest rate environment. The growth in core deposits and commercial loans, coupled with improved credit quality metrics, indicates a robust regional banking performance, potentially outperforming peers struggling with deposit retention and loan demand. The successful integration of Bremer Bank positions Old National for enhanced scale and efficiency in the competitive Midwest and Southeast markets.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to global benchmarks. Therefore, a direct assessment against industry standards with specific comparisons cannot be made based solely on the provided content.

Stakeholder Impact

• Shareholders: Positive impact due to strong earnings, improved profitability metrics (EPS, ROATCE), share repurchases, and a strong capital position, potentially leading to increased shareholder value.
• Employees: Positive impact from the successful integration of Bremer Bank, potentially leading to a more stable and expanded operational footprint.
• Customers: Continued focus on core banking fundamentals and an expanded presence (post-Bremer) could lead to enhanced service offerings and broader access.
• Creditors: Strong capital ratios and resilient credit quality indicate a lower risk profile, which is favorable for creditors.

Next Steps

• Host a conference call and live webcast on October 22, 2025, to review third quarter financial results.
• Make a slide presentation available on the Investor Relations section of the company's website.

Key Dates

Recommendation

The filing demonstrates exceptional financial performance for Q3 2025, with adjusted EPS of $0.59, a significant increase in net interest income and margin, and a 16% rise in adjusted PPNR. Credit quality metrics improved, and the adjusted efficiency ratio indicates strong cost management. The successful integration of Bremer Bank and the repurchase of 1.1 million shares further underscore robust strategic execution and shareholder value creation. These results, combined with a strong capital position and positive management outlook, suggest a compelling investment opportunity.

Keywords

Old National Bancorp, ONB, Q3 2025 Earnings, Financial Results, Banking, Net Interest Income, Net Interest Margin, Deposits, Loans, Credit Quality, EPS, Bremer Bank, Merger Integration, Capital Markets, Share Repurchase, Regional Bank