ONB Q4 In-Depth Analysis: Improving Margins, Bremer Merger, and Targeted Loan Expansion

Old National Bancorp Surpasses Q4 2025 Revenue Forecasts

Old National Bancorp (NASDAQ: ONB), a prominent regional bank in the Midwest, exceeded analysts’ revenue projections for the fourth quarter of fiscal year 2025. The company reported sales of $714.4 million, marking a 44.1% increase compared to the same period last year. Adjusted earnings per share reached $0.62, outperforming consensus estimates by 4.8%.

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Q4 2025 Performance Overview

• Total Revenue: $714.4 million, surpassing the $708.1 million analyst estimate (44.1% annual growth, 0.9% above forecast)
• Adjusted EPS: $0.62, beating the $0.59 consensus (4.8% above expectations)
• Adjusted Operating Income: $316.9 million, below the $335.1 million estimate (44.4% margin, 5.4% shortfall)
• Market Value: $9.39 billion

StockStory’s Perspective

Investors responded positively to Old National Bank’s quarterly results, which management attributed to robust core deposit growth, careful cost management, and improvements in credit quality. CEO Jim Ryan emphasized the successful integration of Bremer Bank and noted that the company increased tangible book value per share, even after accounting for merger expenses and share buybacks. Leadership also pointed to healthy trends in fee-based income, especially from mortgage and capital markets activities, supported by a more favorable interest rate environment.

Looking ahead, management expects net interest income and margins to remain steady or improve, driven by continued loan expansion, stable deposits, and anticipated interest rate reductions. CFO John Moran highlighted the importance of operational efficiency and further cost savings from the Bremer merger, while CEO Jim Ryan underscored ongoing investments in talent and technology. The company remains committed to organic growth and returning capital to shareholders, with plans for increased share repurchases in 2026 while maintaining strong capital reserves.

Key Takeaways from Management

Leadership credited the quarter’s strong results to a blend of steady loan and deposit growth, effective integration efforts, and enhanced credit quality, alongside ongoing investments in people and technology.

• Bremer Integration Finalized: The full transition from the Bremer Bank merger was completed smoothly, strengthening Old National’s presence in Minnesota and expanding funding in North Dakota.
• Loan Portfolio Expansion: Total loans grew at an annualized rate of 6.4%, driven by strong commercial lending. The loan pipeline also rose nearly 15% from the previous quarter, signaling future growth potential.
• Deposit and Liquidity Management: Core deposits increased in line with assets, maintaining a loan-to-deposit ratio of 89%. The cost of deposits fell by 17 basis points, thanks to proactive strategies and favorable rate moves.
• Cost Control and Efficiency: Adjusted noninterest expenses were tightly managed, resulting in a record-low efficiency ratio of 46%. Management expects to fully realize cost savings from the Bremer merger in the next quarter, further boosting operational leverage.
• Improved Credit Quality: Criticized and classified loans declined by 8%, with upgrades and repayments in commercial real estate outpacing downgrades two-to-one. Charge-offs remained low, and management expressed confidence in the bank’s credit outlook.

Looking Ahead: Factors Shaping Future Results

Old National Bank’s 2026 outlook is underpinned by expectations for ongoing loan and deposit growth, stable margins, and disciplined capital allocation.

• Margin Stability: Management anticipates that continued loan growth, asset repricing, and careful deposit cost management will help sustain or slightly improve net interest margins, even as rates fluctuate.
• Efficiency Gains: Finalizing cost synergies from the Bremer merger should further enhance the efficiency ratio, supporting growth in adjusted earnings and enabling more aggressive share buybacks.
• Investments in People and Technology: The bank plans to expand hiring, especially in client-facing and wealth management roles. Technology upgrades, funded through cost discipline, aim to improve payment systems and client services, fueling organic growth.

What to Watch in Upcoming Quarters

StockStory analysts will be tracking several key factors in the coming quarters:

• The pace of loan and deposit growth compared to industry peers
• The full realization of cost savings from the Bremer integration and its impact on operational efficiency
• The effectiveness of investments in talent and technology in attracting new clients and expanding the wealth management segment
• Updates on net interest margin resilience amid potential changes in interest rates

Old National Bank’s share price currently stands at $24.03, up from $22.90 before the earnings release. Wondering if there’s value in ONB shares?

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