Breaking Down Old National Bancorp (ONB) Financial Health: Key Insights for Investors

You're looking at regional bank stability, and honestly, Old National Bancorp (ONB) just put up a defintely strong quarter that demands attention. The headline takeaway is that their strategic integration of the Bremer partnership is paying off, pushing profitability metrics into the top tier of their peer group. For the third quarter of 2025, Old National Bancorp reported an adjusted net income of $231.3 million, showing real earnings power, and their total assets now stand at a solid $71.21 billion. That profitability is clear in the 20.1% adjusted Return on Average Tangible Common Equity (ROATCE), which is the true measure of how efficiently a bank uses its shareholder capital. Plus, a Net Interest Margin (NIM) of 3.64% and annualized core deposit growth of 5.8% suggest they're managing their funding costs and expanding their client base effectively in a tough rate environment. We need to dig into how sustainable that performance is, especially with credit quality risks still lurking.

Revenue Analysis

You need to know where Old National Bancorp (ONB)'s money is actually coming from to gauge the quality of its growth. The direct takeaway is that ONB's revenue engine is running hot in 2025, largely due to the successful integration of Bremer Bank, with a clear and strong reliance on traditional lending income.

For the trailing twelve months (TTM) ending September 30, 2025, Old National Bancorp reported a total revenue of approximately $2.11 billion, marking a robust year-over-year growth of about 20.7%. That is a serious jump in scale. This momentum carried into the third quarter of 2025, where the company posted total revenue of nearly $713.1 million, representing a massive 46.8% increase from the same period last year. Here's the quick math on where that $713.1 million came from.

The core of any bank's revenue is Net Interest Income (NII) (the difference between what it earns on loans and pays on deposits), and for ONB, this is defintely the primary driver. In Q3 2025, NII on a fully taxable equivalent (FTE) basis hit $582.6 million, reflecting an expanded Net Interest Margin (NIM) of 3.64%. This segment alone contributed over 80% of the quarter's total revenue.

The remaining portion comes from Noninterest Income, which totaled $130.5 million in Q3 2025. This is where you see the contribution from diverse business segments like wealth management and capital markets, which are crucial for revenue diversification and stability. The breakdown of this segment shows a healthy mix:

• Bank Fees: Approximately $41 million
• Wealth Fees: Approximately $40 million
• Capital Markets: Approximately $13 million (a record for the quarter)
• Mortgage Fees: Approximately $10 million

The single biggest change in the revenue picture for 2025 is the full quarter impact of the Bremer Bank partnership. The conversion activities were completed in Q3 2025, and the resulting larger balance sheet and expanded geographic footprint in the Midwest and Southeast are the engine behind the significant year-over-year growth. Analysts project the full 2025 fiscal year revenue to land around $2.56 billion, which maps directly to the successful integration of that new business. The risk, of course, is that future growth will rely on organic expansion and sustained high interest rates, not another large-scale merger boost.

For a deeper dive into the balance sheet and valuation, you can read the full post here: Breaking Down Old National Bancorp (ONB) Financial Health: Key Insights for Investors.

Profitability Metrics

You want to know if Old National Bancorp (ONB) is making money efficiently, and the answer is a clear yes, especially after integrating the Bremer Bank partnership. The key takeaway is that ONB's operational efficiency, measured by its adjusted efficiency ratio, is significantly better than the industry average, which is driving a strong adjusted Return on Average Tangible Common Equity (ROATCE) of over 20%.

Gross, Operating, and Net Profit Margins

For a bank, profitability starts with Net Interest Income (NII) and fee income-that's your top-line revenue. In the third quarter of 2025, Old National Bancorp reported NII (on a fully taxable equivalent basis) of $582.6 million. This is the engine of their business, and it's up due to a larger balance sheet and higher asset yields following the merger.

To get a clearer picture of core profitability, we look at adjusted figures, which strip out one-time merger charges. Here's the quick math on the most recent quarter, which gives us a strong proxy for their current run-rate performance:

• Net Interest Margin (NIM): This is the banking equivalent of a gross profit margin. ONB's NIM for Q3 2025 was 3.64%, an 11 basis point increase from the prior quarter.
• Adjusted Operating Profit Margin: The best measure here is the Pre-Provision Net Revenue (PPNR) margin, which is revenue less non-interest expense, before accounting for loan losses (provision) and taxes. ONB's adjusted PPNR for Q3 2025 was $336.6 million. This represents a robust operating margin of roughly 43.0% on adjusted total revenue.
• Adjusted Net Profit Margin: Based on the Trailing Twelve Months (TTM) ending September 30, 2025, ONB's GAAP Net Income was $590.372 million on revenue of $3.487 billion, resulting in a TTM net profit margin of approximately 16.9%. The adjusted net income for Q3 2025 was $231.3 million, showing strong earnings power.

Comparison with Industry Averages and Trends

Old National Bancorp is defintely outperforming its peers on key efficiency metrics, which is a testament to their disciplined expense management and the benefits of the Bremer partnership. The trend is toward improved operating leverage (growth in revenue outpacing growth in expenses).

The core of this outperformance is the Efficiency Ratio (noninterest expense as a percentage of net operating revenue). Lower is better, and ONB is targeting a top-quartile performance:

The adjusted efficiency ratio of 48.1% for Q3 2025 is a massive win, beating the industry average of 56.2% by over 8 percentage points. This shows that for every dollar of revenue, ONB spends less than 49 cents on overhead, which is a sign of superior cost management and operational efficiency. The goal is to be a top quartile performing bank, and they are hitting that mark. You can read more about their strategic focus on Mission Statement, Vision, & Core Values of Old National Bancorp (ONB).

Analysis of Operational Efficiency

The jump in efficiency is directly tied to the successful integration of the Bremer Bank partnership. Management noted that the full run-rate cost savings from this deal will be even more evident in the first quarter of 2026. This means the 48.1% adjusted efficiency ratio is likely to improve further, pushing them deeper into top-tier performance.

The operational focus is clear: grow the balance sheet, expand fee-based businesses, and control expenses. They are generating positive operating leverage, meaning revenue is growing faster than expenses, even with the full quarter impact of the Bremer operations reflected in the Q3 noninterest expense of $445.7 million (GAAP). This is how you build long-term shareholder value. The immediate action for you is to monitor the Q4 2025 and Q1 2026 reports closely for the final realization of those merger cost savings.

Debt vs. Equity Structure

You want to know how Old National Bancorp (ONB) is funding its expansion, and the answer is clear: its financial structure is leaning heavily on equity, which is defintely a good sign for stability. The company's recent acquisition-driven growth in 2025 was primarily financed through stock issuance, keeping its debt-to-equity ratio well-controlled and below industry benchmarks.

As of the third quarter of 2025, Old National Bancorp reported total debt of approximately $6.71 billion against total equity (Equity Capital and Reserves) of about $8.31 billion. This structure shows a conservative approach to leverage, which is critical in the current, uncertain rate environment.

Here's the quick math on their leverage:

• Total Debt: $6.71 billion (Q3 2025)
• Total Equity: $8.31 billion (Q3 2025)
• Debt-to-Equity Ratio: 0.81 (TTM Q3 2025)

Debt-to-Equity Ratio and Industry Comparison

Old National Bancorp's debt-to-equity (D/E) ratio sits at about 0.81, which is a strong figure. For capital-intensive sectors like banking, a D/E ratio between 2.0 and 2.5 is often considered acceptable, but ONB is operating far below that. This low ratio suggests that for every dollar of shareholder equity, the company has only about 81 cents of debt, signaling lower financial risk compared to peers with higher leverage.

The low D/E ratio is a direct reflection of their funding choices, which prioritize a strong capital base. This focus on equity over debt is a key factor in how the market views their risk profile, especially after the recent sector volatility. You can dig deeper into the ownership landscape by Exploring Old National Bancorp (ONB) Investor Profile: Who's Buying and Why?

Balancing Growth: Equity Funding Takes the Lead

The most significant financing activity in 2025 wasn't a major debt issuance; it was a substantial equity raise tied to the acquisition of Bremer Bank. This move dramatically bolstered the equity side of the balance sheet.

• Issued 50.2 million shares of Common Stock, adding $1.0 billion to shareholders' equity.
• Issued an additional 21.9 million shares from forward sale agreements, adding $443.2 million to shareholders' equity.

This strategy of using equity to fund a major acquisition shows a commitment to maintaining a robust balance sheet and strong regulatory capital ratios. Speaking of risk, the company's credit rating from Moody's is currently Baa1 NEG (Negative outlook) as of May 27, 2025, which is investment grade but the negative outlook suggests analysts are watching how the company manages the integration and the broader economic pressures. The management is clearly using new equity to offset the balance sheet expansion, keeping the leverage in check.

What this estimate hides is the composition of the total debt, which includes both short-term and long-term obligations, but the overall picture is one of disciplined capital management.

Liquidity and Solvency

You need to know if Old National Bancorp (ONB) can cover its short-term obligations, and the answer is yes, but you have to look beyond the standard ratios. For a bank, the traditional Current and Quick Ratios are almost meaningless. The real story is in their deposit base and their Loan-to-Deposit (LTD) ratio, which shows a strong, improving liquidity position heading into the end of 2025.

The standard liquidity metrics look low, but that's normal for a financial institution. For the trailing twelve months (TTM) ending Q3 2025, the Current Ratio and Quick Ratio both stood at approximately 0.03. Don't panic. This low number just reflects how a bank's balance sheet is structured-deposits are current liabilities, and most loans are not considered current assets. What truly matters is the stability of your funding and the ratio of loans to those deposits.

The key liquidity indicator for Old National Bancorp (ONB) is the Loan-to-Deposit (LTD) ratio, which has been trending favorably. This ratio shows how much of the bank's funding (deposits) is tied up in loans. A lower number means more liquidity. Here's the quick math on the improvement:

• Q1 2025 LTD Ratio: 89%
• Q2 2025 LTD Ratio: 88%
• Q3 2025 LTD Ratio: 87%

This steady decline to 87% in Q3 2025, combined with existing funding sources, is what management cites as providing strong liquidity. The bank is funding its loan growth primarily through its own expanding, low-cost deposit franchise, not relying on more expensive, volatile sources.

Working capital for a bank is essentially the management of its deposit base (the primary liability) and its short-term assets (cash, securities). Old National Bancorp (ONB) has demonstrated strong working capital trends in 2025, largely due to its successful merger with Bremer Bank and organic growth. Total deposits hit approximately $55.0 billion by the end of Q3 2025, with core deposits growing at an annualized rate of 5.8%. That's a defintely solid funding engine. The bank also maintains a highly granular, long-tenured deposit base, with over 70% of total deposits being insured.

Looking at the cash flow statement overview for the 2025 fiscal year, we see a healthy generation of cash from core operations. The reported Operating Cash Flow for the 2025 fiscal year was approximately $341.19 million, with Free Cash Flow for the third quarter of 2025 at $355.80 million. Investing cash flow is dominated by loan growth-total loans were $48.0 billion at the end of Q3 2025, a necessary deployment of capital. Financing cash flow reflects the management of debt and equity, including a strategic repurchase of 1.1 million shares of common stock in Q3 2025, funded by strong capital generation. Management is confident in the near-term cash generation, expecting approximately $2.8 billion in cash flow over the next 12 months from the end of Q3 2025.

The primary strength is the quality and stability of the funding, which is the lifeblood of any bank. The post-merger integration is complete, and the larger balance sheet is generating significant capital, which is a great sign for future stability. For a deeper dive into the strategic direction that underpins this financial strength, you can review their Mission Statement, Vision, & Core Values of Old National Bancorp (ONB).

Next step: Check the Q4 2025 earnings release in January for confirmation that the LTD ratio continues its downward trend and that the anticipated cash flow is on track.

Valuation Analysis

You want to know if Old National Bancorp (ONB) is a good buy right now, and the consensus is a solid 'Moderate Buy.' The stock is trading near $20.76 as of mid-November 2025, but analysts see a clear path to higher ground. The average 12-month price target is a compelling $26.27, suggesting an upside of over 26% from the current price. This is a bank that looks reasonably valued, not cheap, but certainly not overvalued given its earnings power.

The core of the 'Moderate Buy' rating comes from a healthy mix of valuation metrics and a strong dividend profile. Twelve Wall Street analysts have weighed in, with seven giving a 'Buy' rating and one a 'Strong Buy,' compared to only four 'Hold' ratings. This tells me the smart money sees more opportunity than risk in the near term. Still, the stock has been volatile, declining 2.21% over the last 12 months, which is a key risk to consider.

Is Old National Bancorp (ONB) Overvalued or Undervalued?

When looking at a bank like Old National Bancorp (ONB), we focus less on Enterprise Value-to-EBITDA (EV/EBITDA)-which is often not applicable (n/a) for financial institutions because interest and taxes are central to their business model-and more on price-to-earnings (P/E) and price-to-tangible book value (P/TBV). The current trailing P/E ratio sits at about 12.14. This is a reasonable multiple, but the forward P/E, based on 2025 earnings per share (EPS) estimates of $2.08 to $2.18, drops to a more attractive 8.22. That's the quick math showing a potential undervaluation if the bank hits its earnings targets.

Here's a snapshot of the key valuation metrics as of late 2025:

Dividend Health and Stock Trend

For income-focused investors, the dividend health is excellent. Old National Bancorp (ONB) pays an annual dividend of $0.56 per share, which translates to a current yield of around 2.70%. The crucial part is the payout ratio-the percentage of earnings paid out as dividends. The trailing payout ratio is a very sustainable 32.75%, and based on 2025 estimates, it drops to an even healthier 26.92%. This low ratio gives the bank a lot of cushion to maintain or even increase the dividend, even if earnings dip slightly. That's defintely a sign of a well-managed balance sheet.

The stock's 52-week trading range of $16.83 to $24.49 shows it has seen better days, but the analyst target of $26.27 suggests the stock is currently trading closer to its 52-week low than its true potential. This is an opportunity for patient investors. You can also explore the Mission Statement, Vision, & Core Values of Old National Bancorp (ONB). to understand the company's long-term strategic direction.

• Stock is a 'Moderate Buy' with a $26.27 target.
• Forward P/E of 8.22x suggests it's undervalued on future earnings.
• Dividend yield of 2.70% is safe with a 26.92% estimated payout ratio.

Next step: Dig into the bank's loan portfolio quality-that's what will make or break the $26.27 price target.

Risk Factors

You're looking at Old National Bancorp (ONB) and seeing strong Q3 2025 numbers-an adjusted return on average tangible common equity (ROATCE) of 20.1% is defintely impressive. But even top-quartile regional banks have real risks you need to map, particularly in this volatile environment.

The biggest near-term risks for Old National Bancorp fall into three buckets: managing the integration, maintaining credit quality, and navigating the interest rate environment.

Operational and Strategic Integration Risk

The primary strategic risk for Old National Bancorp in 2025 stemmed from the Bremer Bank acquisition, which closed in Q2 2025. While the partnership is a long-term positive, mergers always carry execution risk. The good news is that the core systems conversion for Bremer Bank was completed in Q3 2025, which significantly de-risks the operational side of the integration.

Still, merger-related expenses continue to hit the bottom line. In the third quarter of 2025 alone, Old National Bancorp reported pre-tax charges of $69.3 million related to the merger. That's a cost you have to back out to see the true operating performance, which is why the adjusted net income of $231.3 million is the cleaner number to focus on. The mitigation here is simple: these costs should taper off as the integration moves from conversion to optimization.

Credit Quality and Portfolio Concentration

The core of a bank's risk profile is its loan book. Old National Bancorp has maintained a strong credit culture, but you need to watch net charge-offs (NCOs) and nonaccrual loans (NPLs). In Q3 2025, NCOs were $30.0 million, or 25 basis points (bps) of average loans. Here's the quick math: excluding purchased credit deteriorated (PCD) loans-those acquired with the Bremer deal that already had an allowance-the NCO rate drops to just 17 bps.

The bank is actively managing its exposure. Total criticized and classified loans saw a 6% reduction in Q3 2025, and nonaccrual loans stood at 1.23% of total loans. What this estimate hides is that roughly 60% of their nonaccrual loans are from acquired books, which were appropriately reserved at the time of acquisition. A good sign: Old National Bancorp's loan-to-deposit ratio is a conservative 87%, providing strong liquidity.

• Net Charge-Offs (Q3 2025): $30.0 million (25 bps of average loans).
• Nonaccrual Loans (Q3 2025): 1.23% of total loans.
• Loan-to-Deposit Ratio (Q3 2025): 87%.

Market and Regulatory Headwinds

External risks are always in play, especially for regional banks. Regulatory and legislative change is a perennial concern, ranking as the fourth biggest global risk in 2025. For Old National Bancorp, this means navigating evolving rules from the Consumer Financial Protection Bureau (CFPB) on things like small business lending data collection and fair lending practices (Regulation B). Plus, the Federal Reserve's focus on Artificial Intelligence (AI) risks-like bias and model explainability-is a new compliance front for all financial institutions.

The interest rate outlook is another market risk. Management's guidance for the rest of 2025 assumes two additional 25 basis point rate cuts, which aligns with the forward curve. This means they are positioned for a potential decline in rates, expecting their net interest income (NII) and net interest margin (NIM), which was 3.64% in Q3 2025, to remain stable to improving due to fixed asset repricing and continued growth. They are not just waiting for the Fed; they are actively managing their rate risk. For more on the bank's long-term vision, you can check out their Mission Statement, Vision, & Core Values of Old National Bancorp (ONB).

The next step is for you to model how a delayed rate cut, or a higher-than-expected NCO rate in Q4, would impact that $0.59 adjusted EPS for Q3.

Growth Opportunities

You're looking past the recent noise and asking the right question: Where does Old National Bancorp (ONB) go from here? The direct takeaway is that ONB has successfully digested its largest acquisition, Bremer Bank, and is now laser-focused on extracting organic growth and capital efficiency, which should drive a significant earnings rebound in 2026. This is a shift from M&A to execution.

The core growth story for Old National Bancorp right now isn't about chasing new deals; it's about making the Bremer Bank partnership-which closed ahead of schedule on May 1, 2025-work for shareholders. The systems conversion was completed in mid-October 2025, so the focus is now squarely on realizing the synergies (cost savings and revenue gains) from the expanded footprint, which now includes a strong position in the Twin Cities market, where ONB is the third-largest bank by deposits.

Here's the quick math on the near-term outlook: Full-year 2025 consensus estimates project revenue around $2.53 billion and earnings per share (EPS) of about $1.82. To be fair, some analysts see EPS closer to $2.18, but even the lower figure is a solid base. The company's Q3 2025 results already showed strong momentum, delivering an adjusted EPS of $0.59 and an adjusted Return on Average Tangible Common Equity (ROATCE) of 20.1%.

• Acquisition Integration: Completed the Bremer Bank systems conversion, now driving synergy capture.
• Fee-Based Revenue: Strong growth in noninterest income, specifically from wealth management and mortgage banking, stabilizing earnings.
• Organic Loan Growth: Targeting full-year 2025 organic loan growth (excluding Bremer) in the 4% to 6% range.
• Capital Deployment: Repurchased 1.1 million shares in Q3 2025, signaling a prioritizaton of returning capital to shareholders.

Competitive Edge and Strategic Focus

Old National Bancorp's competitive advantages (the things that let them win business) are rooted in their disciplined approach to banking. They've built a genuinely low-cost deposit base, which is crucial in a higher-rate environment. Core deposits (excluding brokered) grew at a strong 5.8% annualized rate in Q3 2025. That's a defintely strong signal of client loyalty and a stable funding source. This is a key reason why their net interest margin (NIM) improved to 3.64% in Q3 2025.

The management team is also focused on operational efficiency, which is paying off. They've achieved a sub-50% efficiency ratio, which means they're spending less than 50 cents to generate a dollar of revenue. Plus, their Common Equity Tier 1 (CET1) capital ratio sits at a robust 11.02% as of Q3 2025, giving them plenty of cushion and flexibility for future growth or capital return. They even retained $2.4 billion in Commercial Real Estate (CRE) loans they had planned to sell post-merger, thanks to this unexpected capital strength, preserving forward earnings power.

The strategic plan is clear: focus on organic growth, invest in technology, and recruit top talent, leveraging market disruptions to their advantage. You can dive deeper into who's betting on this strategy by reading Exploring Old National Bancorp (ONB) Investor Profile: Who's Buying and Why?

Finance: Track the Q4 2025 Net Interest Income and Noninterest Income against the company's projections of approximately $585 million and $120 million, respectively, to gauge synergy realization.