Old National Bancorp Grows Q2 Earnings

Re suggests that It's worth noting that Old National Bancorp (ONB -1. 48%) reported second quarter 2025 earnings on July 22, dering adjusted EPS of $0

Conversely, Additionally, it closed the Bremer Bank partnership ahead of schedule (which is quite significant) (noteworthy indeed)

Moreover, This leads to the conclusion that analysis below explores balance sheet expansion, disciplined capital management, and d merger outcomes directly impacting ONB’s long-term file

The CET1 ratio, a key regulatory capital measure, was 10. 74% -- 50 basis points above the merger model, due to strong retained earnings at Bremer and securities portfolio restructuring that generated new money yields apximately 110 basis points above back book yields on securities. "Given our capital levels are higher than we modeled at the time we announced Bremer last November, we have significant flexibility around our balance sheet, leaving us in a position to retain all CRE loans that we had originally contemplated selling. "— John Moran, CFOUnexpectedly strong capital generation enabled ONB to forgo previously planned commercial real estate (CRE) loan sales post-merger, preserving forward earnings power and demonstrating enhanced risk absorption capacity versus prior assumptions

ONB maintains disciplined credit risk oversightSecond quarter net charge-offs totaled 24 basis points (or 21 basis points excluding purchased credit deteriorated loans), and the allowance for credit losses imved by 8 basis points, to 1

Additionally, Non-accrual loans as a percentage of total loans decreased five basis points quarter-over-quarter, while a 9% reduction in legacy criticized and classified assets indicates risk mitigation despite integrating Bremer’s loan book. "Our active apach to credit monitoring has led to above-peer levels of non-accruals, but below-peer averages in delinquency and charge-off ratios over time

Roughly 60% of our non-accruals are from acquired books with appriate reserves and/or marks (an important development). "— John Moran, CFOStrategic focus on credit discipline allows ONB to manage higher headline non-accruals from acquired portfolios without netting elevated loss content, supporting best-in-class charge-off ratios

Nevertheless, "Overall, we closed two months earlier than expected, adding to our 2025 earnings momentum, with financial metrics tracking to exceed the expectations we set at announcement

Additionally, Higher capital and lower purchase accounting marks shortened the TBV earnback by apximately half a year. "— John Moran, CFOEarlier-than-modeled Bremer closing and favorable mark-to-market dynamics accelerated tangible book value (TBV) recovery

Management increased net interest income and fee income guidance for the full year, and expects accumulated other comprehensive income (AOCI) imvement by year-end, considering recent developments

On the other hand, No formal repurchase has been announced, though excess capital could make buybacks a consideration once the Bremer systems conversion finalizes in mid-October

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