Old National Bancorp Shines in Q1 2025: Strong Deposit Franchise, Solid Loan Growth, and a Bright Future Ahead
Old National Bancorp, a leading financial institution, has reported impressive first-quarter earnings for 2025. The company's Chairman and CEO, Jim Ryan, attributed the strong results to its ability to navigate a challenging economic environment, setting it up favorably as it moves into the second quarter and prepares for the close integration of its partnership with Bremer Bank.
According to Ryan, the company's robust deposit franchise and solid loan growth drove results for the past quarter. The net interest income and margin performance met expectations, while noninterest income benefited from the gain on sale of previously acquired loans and higher fees from mortgages and service charges. Notably, the company's disciplined expense management is reflected in its efficiency ratio, demonstrating its ability to maintain profitability.
Ryan also highlighted the company's commitment to controlling what it can do to serve and support clients, communities, and shareholders despite the uncertain macroeconomic environment. He emphasized that with over 190 years of experience navigating through uncertainty, Old National remains confident in its strength, supported by a robust balance sheet, diverse revenue streams, and resilient Midwest markets bolstered by its partner, Bremer Bank.
The company has received all necessary regulatory approvals for the Bremer Bank partnership and anticipates a legal close date of May 1. Conversion of banking centers and systems is expected to occur in mid-October, marking a significant step towards integrating the two institutions. Ryan expressed his enthusiasm for the partnership, stating that it will be one of the company's best, providing greater scale and density in the Upper Midwest.
In terms of financial metrics, Old National reported GAAP 1Q earnings per diluted common share of $0.44. Excluding merger-related charges, adjusted earnings per share were $0.45. Credit was benign with normalized levels of charge-offs, and the company's return profile as measured on assets and on tangible common equity remained high.
The quarterly balance sheet trends highlight stability in liquidity with continued improvement in capital position. Total deposit growth over the last year has allowed the company to organically fund loan growth, while minimizing borrowings and brokered deposits. The tangible book value per share grew by 5% compared to the previous quarter and 13% over the last year. Old National ended the quarter with a strong CET1 ratio of 11.
Overall, Old National Bancorp's first-quarter earnings demonstrate its ability to adapt to challenging economic conditions while maintaining profitability and growth prospects. The company's commitment to serving clients, communities, and shareholders is evident in its disciplined expense management and robust balance sheet. As it prepares for the integration of Bremer Bank, investors can expect increased scale, density, and value creation in the Upper Midwest.
