Old National Bancorp Q4 FY2025 earnings call

• Jim Ryan congratulated the Indiana Hoosiers on their National College Football Championship and highlighted 2025 results with records in adjusted earnings per share, net income, and efficiency ratio. - The company successfully completed the systems conversion and integration related to the Bremer Bank partnership, which was a major and well-executed effort. - Focus on fundamentals included core deposit growth to support loan expansion, positive operating leverage, disciplined credit management, and healthy liquidity and capital ratios. - In 2026, the company will maintain balance between building capital organically and returning capital through share repurchases, and will invest in talent, technology, and client-facing capabilities.

In the fourth quarter of 2025, Old National Bancorp reported GAAP earnings per share of $0.55. Excluding certain items, adjusted earnings per share were $0.62, a 5% increase from the prior quarter and 27% year over year. Credit improved with an 8% reduction in total criticized and classified loans. Profitability metrics such as adjusted return on average tangible common equity of nearly 20%, adjusted ROA of 1.37%, and adjusted efficiency ratio of 46% were peer-leading. The capital position rebuilt quickly with CET1 over 11%, and tangible book value per share grew over 17% annualized. Total loans grew 6.4% annualized, deposit growth kept pace with asset growth, and the loan to deposit ratio was 89%. Revenue contribution was driven by stable margin, better-than-expected fee income growth, and well-controlled expenses.

• 2026 loan growth expected to be 4-6% full year, with first quarter growth 3-5%. - Fee income expected to remain strong due to supportive rate backdrop for mortgage and capital markets. - Expense guidance incorporates full Bremer cost savings and seasonal factors. - NII expected to increase with fixed asset repricing and growth; assumptions include 2 additional 25 basis point rate cuts in 2026, 5-year treasury rate at 375 basis points, total down rate deposit beta of approximately 40%, and stable noninterest bearing deposits.

Q: Scott Siefers asked about the margin trajectory and pace of share repurchase.

A: John Moran responded that the bigger factor in margin trajectory was day count, and the company plans to be more active in share repurchases in 2026 compared to 2025.

Q: Brendan Nosal inquired about margin striping out day count factors and credit reserve coverage.

A: John Moran stated margin striping out day count factors is stable, and credit reserve coverage is influenced by improvement in criticized and classified book.

Q: Jared Shaw asked about core target CET1 and deposit seasonality.

A: John Moran said comfortable with current CET1, and deposit seasonality is stable as a percentage.

Q: Ben Gerlinger asked about growth sources and pricing.

A: Jim Ryan mentioned broad-based growth from C and I middle markets, CRE demand drivers, and disciplined pricing.

Q: Terry McEvoy asked about fee seasonality and loan securities repricing.

A: John Moran said there's seasonality in mortgage, and on loan side, ~$5 billion of loans over next twelve months with 70 basis points spread, and $2.9 billion cash flow in investment portfolio with new money yields 94 basis points above back book yield.

Q: Jeanette Lee asked about securities portfolio yields and deposit growth.

A: Jim Ryan said securities as percentage of earning assets will be stable, and deposit cost has room to pull down.

Q: Chris McGratty asked about deposit repricing and tech expenses.

A: Jim Ryan said deposit repricing is rational in most markets, and technology spend is self-funded with focus on innovation and hiring for front line.

Q: David Schiavirini asked about loan growth drivers and M&A appetite.

A: Tim responded on borrower sentiment and factors driving loan growth, and Jim Ryan said focus is on investing in themselves and not actively pursuing M&A.

Q: Jon Arfstrom asked about strategic portfolio management and wealth strategy.

A: John Moran said strategic portfolio management is ongoing, and Jim Ryan discussed wealth strategy as a talent play with opportunities for growth through hiring and partnership with commercial bank