Old National Bancorp's Q3 Net Income Jumps 27% on Strong Loan Growth

TL;DR

**ONBPP is growing fast, but watch those rising expenses and credit loss provisions – it's a mixed bag for traders.**

AI Summary

OLD NATIONAL BANCORP /IN/ reported a significant increase in net income for the three months ended September 30, 2025, reaching $182.57 million, up 27% from $143.80 million in the same period of 2024. Net interest income also saw a substantial rise to $574.61 million from $391.72 million year-over-year, driven by increased interest income from loans and investment securities. Total assets grew to $71.21 billion as of September 30, 2025, from $53.55 billion at December 31, 2024, primarily due to a $11.68 billion increase in total loans and a $14.18 billion increase in total deposits. The company's allowance for credit losses on loans increased to $572.18 million from $392.52 million, reflecting a higher provision for credit losses of $26.74 million for the quarter. Noninterest income improved to $130.46 million from $94.14 million, with wealth and investment services fees up by $10.57 million. Noninterest expenses surged to $445.73 million from $272.28 million, largely due to higher salaries and employee benefits and amortization of intangibles, partly attributable to the acquisition of Bremer Financial Corporation. Diluted net income per common share increased slightly to $0.46 from $0.44.

Why It Matters

This strong performance by Old National Bancorp, particularly the significant growth in net income and assets, signals robust operational health and successful integration of recent acquisitions like Bremer Financial Corporation. For investors, the increased net income per common share and dividend stability (at $0.14 per share) suggest a healthy return on investment, though the surge in noninterest expenses warrants close monitoring. Employees may see positive implications from the growth, potentially leading to more opportunities. Customers benefit from a larger, more stable bank, but competitive pressures in the banking sector mean Old National must continue innovating to retain and attract clients. The broader market will watch how Old National manages its increased allowance for credit losses, a key indicator of future asset quality in a dynamic economic environment.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant increase in the allowance for credit losses on loans, rising from $392.52 million at December 31, 2024, to $572.18 million at September 30, 2025, and a provision for credit losses of $26.74 million for the quarter. Additionally, total noninterest expenses surged by $173.45 million year-over-year, indicating potential cost pressures despite revenue growth.

Analyst Insight

Investors should closely monitor Old National Bancorp's future filings for trends in credit quality and expense management, especially the impact of integrating Bremer Financial Corporation. While the growth in net interest income and assets is positive, the substantial increase in the allowance for credit losses and noninterest expenses suggests potential headwinds. Consider holding existing positions but exercise caution before increasing exposure, awaiting clearer signs of expense control and stable asset quality.

Financial Highlights

revenue

$705.07M

total Assets

$71.21B

net Income

$182.57M

eps

$0.46

revenue Growth

+45.5%

Revenue Breakdown

Key Numbers

• $182.57M — Net income for Q3 2025 (Increased 27% from $143.80 million in Q3 2024)
• $574.61M — Net interest income for Q3 2025 (Increased from $391.72 million in Q3 2024)
• $71.21B — Total assets as of Sep 30, 2025 (Increased from $53.55 billion at Dec 31, 2024)
• $55.01B — Total deposits as of Sep 30, 2025 (Increased from $40.82 billion at Dec 31, 2024)
• $47.97B — Total loans as of Sep 30, 2025 (Increased from $36.29 billion at Dec 31, 2024)
• $572.18M — Allowance for credit losses on loans as of Sep 30, 2025 (Increased from $392.52 million at Dec 31, 2024)
• $445.73M — Total noninterest expense for Q3 2025 (Increased from $272.28 million in Q3 2024)
• $0.46 — Diluted net income per common share for Q3 2025 (Increased from $0.44 in Q3 2024)
• $1.03B — Common stock issued for Bremer Financial Corporation acquisition (Noncash investing and financing activity in Q2 2025)
• $443.24M — Common stock issued for forward sale agreements (Cash flow from financing activities in Q2 2025)

Key Players & Entities

• OLD NATIONAL BANCORP /IN/ (company) — Registrant
• Bremer Financial Corporation (company) — Acquired entity
• CapStar Financial Holdings, Inc. (company) — Acquired entity in 2024
• NASDAQ Global Select Market (regulator) — Exchange where securities are registered
• U.S. Securities and Exchange Commission (regulator) — Regulatory body for filings
• Financial Accounting Standards Board (regulator) — Sets accounting principles
• Office of the Comptroller of the Currency (regulator) — Banking regulator
• Federal Deposit Insurance Corporation (regulator) — Insures deposits
• Federal Home Loan Bank (company) — Source of advances
• Old National Bank (company) — Bank subsidiary

FAQ

Risk Factors

• Credit Loss Provisions [medium — financial]: The allowance for credit losses on loans increased to $572.18 million from $392.52 million. This reflects a higher provision for credit losses of $26.74 million for the quarter, indicating management's anticipation of potential loan defaults.
• Integration of Acquisitions [medium — operational]: Noninterest expenses surged to $445.73 million, partly attributable to the acquisition of Bremer Financial Corporation. This includes higher salaries, employee benefits, and amortization of intangibles, suggesting integration costs and potential operational complexities.
• Interest Rate Sensitivity [medium — market]: While net interest income increased significantly, the bank's profitability is sensitive to changes in interest rates. Fluctuations in market interest rates could impact future net interest margin.
• Regulatory Compliance [high — regulatory]: As a financial institution, Old National Bancorp is subject to extensive regulation. Changes in regulatory requirements or failure to comply could result in fines, penalties, or operational restrictions.

Industry Context

The banking industry is characterized by intense competition, stringent regulatory oversight, and sensitivity to macroeconomic factors like interest rates and economic growth. Consolidation through mergers and acquisitions remains a trend as institutions seek scale and diversification. Banks are increasingly focusing on fee-based income streams and digital transformation to enhance customer experience and operational efficiency.

Regulatory Implications

Old National Bancorp operates within a highly regulated environment. Changes in capital requirements, lending standards, or consumer protection laws could impact its operations and profitability. The recent acquisition of Bremer Financial Corporation may also bring increased scrutiny from regulators regarding market concentration and integration.

What Investors Should Do

1. Monitor integration of Bremer Financial Corporation
2. Analyze credit quality trends
3. Evaluate noninterest income growth drivers
4. Assess impact of interest rate environment

Key Dates

• 2025-09-30: End of Q3 2025 — Reported net income of $182.57 million, a 27% increase year-over-year, and total assets grew to $71.21 billion.
• 2025-02-28: End of Q2 2025 — Common stock issued for Bremer Financial Corporation acquisition ($1.03B) and forward sale agreements ($443.24M) impacted cash flow and equity.
• 2024-12-31: End of Fiscal Year 2024 — Total assets were $53.55 billion, and allowance for credit losses was $392.52 million, providing a baseline for 2025 growth.

Glossary

Net Interest Income

The difference between the interest income generated by a bank and the interest paid out to its depositors and lenders. (A primary driver of profitability for banks, showing strong growth for Old National.)

Allowance for Credit Losses

An estimate of the amount of loans that may not be repaid by borrowers. (An increase here suggests potential concerns about loan portfolio quality or a more conservative provisioning strategy.)

Noninterest Income

Revenue generated from sources other than interest, such as fees, commissions, and trading income. (Diversifies revenue streams for the bank; showed significant growth driven by wealth management.)

Amortization of Intangibles

The systematic allocation of the cost of an intangible asset over its useful life. (An increase in this expense is often related to acquisitions, as seen with Bremer Financial Corporation.)

Diluted Net Income Per Common Share

Net income divided by the total number of outstanding shares, including those that could be converted from options or warrants. (A key metric for shareholder value, showing a slight increase.)

Year-Over-Year Comparison

Compared to the prior year's comparable period, Old National Bancorp has demonstrated robust growth. Net income surged by 27% to $182.57 million, and net interest income saw a substantial increase of approximately 46.7% to $574.61 million, driven by loan and securities growth. Total assets expanded significantly to $71.21 billion, reflecting strong deposit and loan origination. However, noninterest expenses also rose considerably by over 63%, largely due to acquisition-related costs, impacting the overall efficiency ratio. Diluted EPS saw a modest increase to $0.46.

Filing Documents

• onb-20250930.htm (10-Q) — 5256KB
• onb_exhibit3113q25.htm (EX-31.1) — 13KB
• onb_exhibit3123q25.htm (EX-31.2) — 13KB
• onb_exhibit3213q25.htm (EX-32.1) — 8KB
• onb_exhibit3223q25.htm (EX-32.2) — 8KB
• 0000707179-25-000064.txt ( ) — 24482KB
• onb-20250930.xsd (EX-101.SCH) — 96KB
• onb-20250930_cal.xml (EX-101.CAL) — 195KB
• onb-20250930_def.xml (EX-101.DEF) — 572KB
• onb-20250930_lab.xml (EX-101.LAB) — 1172KB
• onb-20250930_pre.xml (EX-101.PRE) — 912KB
• onb-20250930_htm.xml (XML) — 6194KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets (unaudited) 4 Consolidated Statements of Income (unaudited) 5 Consolidated Statements of Comprehensive Income (Loss) (unaudited) 6 Consolidated Statements of Changes in Shareholders' Equity (unaudited) 7 Consolidated Statements of Cash Flows (unaudited) 9

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 11 Note 1. Basis of Presentation 11 Note 2. Recent Accounting Pronouncements 11 Note 3. Acquisition and Divestiture Activity 12 Note 4. Net Income Per Common Share 16 Note 5. Investment Securities 16 Note 6. Loans and Allowance for Credit Losses 19 Note 7. Leases 32 Note 8. Goodwill and Other Intangible Assets 33 Note 9. Qualified Affordable Housing Projects and Other Tax Credit Investments 34 Note 10. Securities Sold Under Agreements to Repurchase 35 Note 11. Federal Home Loan Bank Advances 36 Note 12. Other Borrowings 37 Note 13. Accumulated Other Comprehensive Income (Loss) 39 Note 14. Income Taxes 41 Note 15. Derivative Financial Instruments 41 Note 16. Commitments, Contingencies, and Financial Guarantees 46 Note 17. Fair Value 47 Note 18. Segment Information 53

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 55

Forward-Looking Statements

Forward-Looking Statements 55 Financial Highlights 56 Non-GAAP Financial Measures 58 Executive Summary 61 Results of Operations 62 Financial Condition 68 Risk Management 73 Critical Accounting Estimates 80

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 80

Controls and Procedures

Item 4. Controls and Procedures 80

OTHER INFORMATION

PART II. OTHER INFORMATION 81

Risk Factors

Item 1A. Risk Factors 81

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 81

Other Information

Item 5. Other Information 81

Exhibits

Item 6. Exhibits 82 SIGNATURE 83 2 GLOSSARY OF ABBREVIATIONS AND ACRONYMS As used in this report, references to "Old National," "the Company," "we," "our," "us," and similar terms refer to the consolidated entity consisting of Old National Bancorp and its wholly owned subsidiaries. Old National Bancorp refers solely to the parent holding company, and Old National Bank refers to Old National Bancorp's bank subsidiary. The acronyms and abbreviations identified below are used throughout this report, including the Notes to Consolidated Financial Statements (Unaudited). You may find it helpful to refer to this page as you read this report. AOCI: accumulated other comprehensive income (loss) AQR: asset quality rating ASC: Accounting Standards Codification ASU: Accounting Standards Update ATM: automated teller machine BBCC: business banking credit center (small business) Bremer: Bremer Financial Corporation CapStar: CapStar Financial Holdings, Inc. CECL: current expected credit loss Common Stock: Old National Bancorp common stock, no par value DTI: debt-to-income FASB: Financial Accounting Standards Board FDIC: Federal Deposit Insurance Corporation FHLB: Federal Home Loan Bank FHTC: Federal Historic Tax Credit FICO: Fair Isaac Corporation GAAP: U.S. generally accepted accounting principles LGD: loss given default LIHTC: Low Income Housing Tax Credit Merger: merger between Old National and Bremer N/A: not applicable N/M: not meaningful NASDAQ: NASDAQ Global Select Market NMTC: New Markets Tax Credit NOW: negotiable order of withdrawal OCC: Office of the Comptroller of the Currency PCD: purchased credit deteriorated PD: probability of default Preferred Stock: Old National Bancorp preferred stock Renewable Energy: investment tax credits for solar projects SEC: U.S. Securities and Exchange Commission SOFR: Secured Overnight Financing Rate 3 OLD NATIONAL BANCORP CONSOLIDATED BALANCE SHEETS (dollars and shares in thousands, except

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 1 – BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include the accounts of Old National Bancorp and its wholly owned subsidiaries (hereinafter collectively referred to as "Old National") and have been prepared in conformity with accounting principles generally accepted in the United States of America and prevailing practices within the banking industry. Such principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosures of contingent assets and liabilities at the date of the financial statements and amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the consolidated financial statements contain all the normal and recurring adjustments necessary for a fair statement of the financial position of Old National as of September 30, 2025 and December 31, 2024, and the results of its operations for the three and nine months ended September 30, 2025 and 2024. Interim results do not necessarily represent annual results. Certain information and disclosures normally included in notes to consolidated annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted in this Quarterly Report on Form 10-Q pursuant to SEC rules and regulations. These financial statements should be read in conjunction with Old National's Annual Report on Form 10-K for the year ended December 31, 2024. All intercompany transactions and balances have been eliminated. Certain prior year amounts have been reclassified to conform to the current presentation. Such reclassifications had no effect on prior period net income or shareholders' equity and were insignificant amounts. NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS Accounting Guidance Pending Adoption Financial

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