Old National Bancorp (ONB): SWOT Analysis [Nov-2025 Updated]

You're looking for a clear, actionable breakdown of Old National Bancorp's current position, and the Q3 2025 data gives us a sharp picture. The successful integration of the Bremer partnership has fundamentally reshaped the balance sheet, moving them to $71.21 billion in assets and a top-25 US bank ranking. This growth is backed by an industry-leading 48.1% efficiency ratio and a high adjusted Return on Tangible Common Equity of 20.1%, but that massive growth defintely comes with near-term costs-like the $69.3 million in pre-tax merger-related charges-plus the specific risk of a premium stock valuation (13.2x P/E) we need to watch. Let's map these strengths against the real weaknesses and market threats.

Old National Bancorp (ONB) - SWOT Analysis: Strengths

Adjusted Return on Tangible Common Equity is high at 20.1% (Q3 2025)

You want to see a bank generating real profit from its core business, and Old National Bancorp is defintely delivering. The adjusted Return on Average Tangible Common Equity (ROATCE)-a key measure of how efficiently a bank uses shareholder capital-hit a very strong 20.1% for the third quarter of 2025.

This is a top-decile performance among peers, telling you the management team is executing well on its strategy, especially after absorbing the Bremer Bank operations. The GAAP ROATCE was 15.9%, so the adjusted number strips out significant one-time merger-related charges of $69.3 million pre-tax, giving you a clearer view of the underlying profitability.

Strong capital position with Tier 1 common equity ratio at 11.02%

A strong capital base is your primary buffer against unexpected economic shocks, and Old National Bancorp is well-fortified. Their preliminary regulatory Tier 1 Common Equity (CET1) to risk-weighted assets ratio stood at 11.02% at the end of Q3 2025.

This ratio is a critical measure of a bank's ability to absorb losses without failing, and the 11.02% figure is well above the regulatory minimums and represents a 28 basis points increase from the prior quarter. Here's the quick math: strong retained earnings from high profitability are driving this capital build, giving them flexibility for future growth or capital returns.

Efficiency Ratio is industry-leading at 48.1% (adjusted Q3 2025)

When you look at a bank's operations, the Efficiency Ratio is what matters-it shows how much it costs to generate a dollar of revenue. Old National Bancorp's adjusted Efficiency Ratio for Q3 2025 was an outstanding 48.1%.

This is a sub-50% ratio, which is generally considered best-in-class for the banking industry, reflecting disciplined expense management even while integrating a major acquisition. The reported (GAAP) efficiency ratio was 58.8%, but the adjusted figure removes the one-time integration costs, showing the true operational leverage. What this estimate hides is that the full cost savings from the Bremer partnership will materialize later, so this ratio is expected to improve further into 2026.

Granular, low-cost deposit franchise with $55.0 billion in total deposits

A bank's deposit franchise is its lifeblood, and Old National Bancorp has a high-quality, low-cost funding base. Total deposits reached $55.0 billion at the end of Q3 2025.

This growth was not just from the acquisition; total deposits grew 4.8% on an annualized basis, with core deposits (excluding brokered deposits) growing even faster at an annualized rate of 5.8%. Their cost of total deposits remains competitive at 197 basis points (bps).

The strength of this franchise is clear in the composition and growth:

• Period-End Total Deposits: $55.0 billion
• Annualized Core Deposit Growth: 5.8%
• Total Deposit Costs: 197 bps
• Noninterest-Bearing Deposits: Remained 24% of core deposits

Successful, completed integration of the Bremer Bank partnership

The successful integration of a major acquisition is a huge strength, as it removes execution risk and unlocks the full financial benefits. The merger with Bremer Financial Corporation closed on May 1, 2025, and the critical core systems conversion was successfully completed in mid-October 2025.

This means the bank is past the most disruptive phase of integration, allowing management to focus entirely on organic growth. The Q3 2025 results already reflect the full quarter impact of the Bremer operations, contributing to the strong adjusted ROATCE and efficiency ratio. The combined entity is now positioned among the top 25 banking companies headquartered in the U.S.

The partnership also brought an increased commitment to the communities served by Bremer Bank, with Old National Bancorp raising its five-year Community Growth Plan from $9.5 billion to $11.1 billion, adding $1.6 billion in commitments across Minnesota, North Dakota, and Wisconsin.

Old National Bancorp (ONB) - SWOT Analysis: Weaknesses

Significant pre-tax merger-related charges of $69.3 million in Q3 2025

You're seeing the immediate, tangible cost of aggressive expansion, and it's a real drag on reported earnings. Old National Bancorp's (ONB) third quarter 2025 (Q3 2025) results included substantial pre-tax charges of $69.3 million for merger-related expenses. This figure is a direct result of the integration activities following the Bremer Bank partnership and other recent acquisitions. To put that in perspective, these charges reduced the reported GAAP earnings per diluted common share to $0.46, while the adjusted earnings per share (excluding these and other notable items) was a much stronger $0.59. This gap of $0.13 per share highlights the short-term earnings volatility inherent in large-scale bank mergers.

These are one-time costs, yes, but they consume capital and management focus right now. The good news is that the conversion activities for the Bremer partnership are now complete, which should mean these charges will taper off significantly, but the sheer size of the Q3 2025 expense is a clear weakness in the near-term financial picture.

Slower growth trends in the Commercial Real Estate (CRE) lending segment

The bank is being proactive in managing its portfolio, but that necessary de-risking action translates to slower net growth in a key lending segment. In the first quarter of 2025 (Q1 2025), Old National Bancorp executed a sale of $71 million of commercial real estate loans. This move, while prudent for capital and risk management, actively reduces the size of the CRE portfolio and acts as a headwind against overall loan expansion.

Here's the quick math: period-end total loans were up just 0.6% annualized in Q3 2025, which is a very modest pace for a growth-focused regional bank. While commercial loan production was up a strong 20% from the prior quarter, the net portfolio growth is clearly being offset by payoffs and, crucially, these proactive portfolio actions like the CRE loan sale. You have to ask if the market is ready to forgive this slower overall growth for the sake of improved credit quality.

Nonaccrual loans are 1.23% of total loans, indicating some credit risk

Credit quality remains a focus, and while management is actively managing the portfolio, the nonaccrual loan ratio signals a persistent level of credit risk. As of Q3 2025, nonaccrual loans stood at 1.23% of total loans. This figure, while managed, is a clear weakness because it represents loans that are not generating interest income and carry a higher probability of becoming net charge-offs (NCOs).

It's important to note that roughly 60% of these nonaccruals are from acquired books, which means the risk is largely inherited from prior mergers, not necessarily from new, organic underwriting. Still, it requires active portfolio management-a distraction-and the allowance for credit losses (ACL) to total loans, including the reserve for unfunded commitments, was 126 basis points in Q3 2025. The bank must dedicate significant resources to resolving these legacy issues to free up capital and management time.

Execution risks tied to shifting focus toward organic growth initiatives

The strategic pivot from being an M&A-driven growth story to a purely organic one introduces significant execution risk. Following the completion of the Bremer integration, Old National Bancorp has signaled a clear shift, targeting full-year loan growth (excluding the impact of Bremer) of 4% to 5%. This is a solid target, but achieving it means relying on internal capabilities rather than simply acquiring a new loan book.

The risk lies in several areas:

• Sustaining the 4% to 5% organic loan growth target in a competitive market.
• Successfully executing the deposit strategy to meet or exceed industry growth for 2025.
• Integrating new client relationship managers and key support leaders effectively.

If the bank fails to execute on these organic initiatives, the overall growth narrative stalls. You're moving from a known M&A playbook to a more challenging, day-to-day sales and service grind, and that requires defintely flawless execution across every market.

Old National Bancorp (ONB) - SWOT Analysis: Opportunities

You're looking for where Old National Bancorp (ONB) can truly accelerate its growth in the near term, and the answer is clear: the recently expanded Midwest footprint and the high-margin Wealth Management business are the two biggest levers. The successful integration of Bremer Bank is already translating into strong organic loan growth and a much-improved market position.

Capitalize on new Midwest footprint, including becoming the third largest bank in the Twin Cities by deposits.

The partnership with Bremer Bank, which closed around May 1, 2025, is a game-changer for your Midwest scale. Honestly, this move instantly gave Old National Bancorp the critical mass it needed in the Upper Midwest, especially in a key metropolitan market. The combined entity is now the third largest bank in the Twin Cities (Minneapolis and St. Paul), measured by deposits.

The acquisition brought in $13.2 billion in deposits and $11.8 billion in total loans as of December 31, 2024. This new scale means you can now compete for larger commercial and agricultural clients across a much wider area, plus the successful core systems conversion completed in Q3 2025 means the heavy lifting is done.

Here's the quick math on the Bremer impact:

• Total Assets (post-acquisition): Approximately $71 billion
• Bremer Deposits Added: $13.2 billion
• New Branch Count Added: 70 locations

Expand Wealth Management business for high-net-worth clients and institutions.

The Wealth Management division, branded as 1834, offers a higher-margin, less capital-intensive revenue stream that you should aggressively expand. The strategic move in November 2025 to open new operations in southwestern Florida (Naples) is a smart way to capture affluent, high-net-worth (HNW) clients outside the traditional Midwest footprint.

The division already manages about $38 billion of assets under management, and its recent expansion into Florida is specifically designed to meet the complex needs of ultra-high-net-worth individuals and institutions. This is a direct play to diversify non-interest income and stabilize earnings against interest rate volatility. The team includes over 70 wealth advisors and a total of about 125 team members across the footprint. You need to defintely fund this growth.

Strategic investment in digital banking infrastructure to scale services efficiently.

The focus on technology isn't just about keeping up; it's about scaling efficiently, which is reflected in your improved efficiency ratio. Old National Bancorp has made targeted investments in new technology, including a new small business digital banking platform introduced in 2024. This infrastructure is crucial for integrating the new Bremer customers and offering a seamless experience.

What this estimate hides is the long-term operating leverage (positive operating leverage) you gain from these investments. The Q3 2025 adjusted efficiency ratio-which measures expenses as a percentage of revenue-improved to a peer-leading 48.1%. This low ratio shows that the digital investments and expense control are working, allowing revenue to grow faster than non-interest expenses, which included $41 million in technology and communication costs in Q3 2025. That's a strong foundation for future growth without ballooning costs.

Strong organic loan growth potential, excluding Bremer, at 3.1% annualized in Q3 2025.

The core business is showing solid momentum, even when you filter out the acquisition boost. In the third quarter of 2025, total loan growth, excluding the loans acquired from Bremer Bank, was 3.1% annualized. This is a healthy organic expansion rate in a challenging rate environment.

Management is confident this trend will continue, forecasting full-year 2025 loan growth, excluding the Bremer impact, to be between 4% to 5%. This growth is driven by strong commercial and industrial (C&I) lending and commercial real estate (CRE) activity across the expanded Midwest and Southeast markets. The focus isn't on chasing new partnerships right now, but on organically growing the balance sheet and capital.

Here is a breakdown of the recent loan and deposit growth metrics:

Next step: Commercial Banking leadership should draft a 2026 tactical plan focusing on C&I client acquisition in the Twin Cities market by January 15, 2026.

Old National Bancorp (ONB) - SWOT Analysis: Threats

You've seen Old National Bancorp (ONB) deliver solid performance, especially with the strategic acquisitions, but you cannot ignore the clear and present dangers in the banking sector. The biggest threats are not internal; they are macroeconomic and market-driven, specifically the combination of a premium stock valuation and a shaky Commercial Real Estate (CRE) market.

Continued competitive pressure within the regional banking sector.

Regional banking remains a knife fight for deposits and quality loan growth. Old National Bancorp faces intense competition, especially in its expanded Midwest markets, which forces a cautious approach to lending. This caution is smart for credit quality but acts as a brake on margin expansion. For instance, heightened competition is one reason management signaled that full-year 2025 loan growth, excluding the Bremer Bank partnership, will likely land toward the lower end of the 4% to 6% guidance range.

When interest rates rise, the competition for deposits forces Old National Bancorp to pay more to retain client funds, directly squeezing the net interest margin (NIM). This is a perpetual headwind for regional banks, and Old National Bancorp is not defintely immune, despite its strong deposit base.

Ongoing economic uncertainties and potential regulatory changes in 2025.

The economic outlook for 2025 is a mix of policy uncertainty and potential slowdown. Global growth is projected to slow to 3.2% in 2025, and advanced economies are looking at growth around 1.5%. This kind of near-zero growth environment in the US, driven by trade tensions and policy volatility, makes it tough for businesses to plan and invest confidently.

The core risk here is that a significant economic slowdown would increase credit losses and dampen demand for loans, directly impacting Old National Bancorp's primary revenue streams. Plus, the specter of further regulatory changes, often a reaction to broader financial instability, remains a key risk that could increase compliance costs and capital requirements, which would hit the bottom line.

Elevated interest rates creating headwinds for the CRE market.

This is arguably the most significant near-term threat for Old National Bancorp and most regional banks. The combination of elevated interest rates and a post-pandemic shift in office space demand has put significant stress on Commercial Real Estate (CRE) valuations. Old National Bancorp has a substantial exposure here: CRE loans accounted for 45% of the total loan portfolio as of the second quarter of 2025.

The real crunch is coming from loan maturities. A significant volume of CRE debt is set to mature in late 2024 and early 2025, forcing borrowers to refinance at much higher rates. Old National Bancorp specifically held $459.6 million in non-owner-occupied CRE loans as of December 31, 2024, that are set to mature within 18 months at an interest rate below 4%. Refinancing these loans at current market rates will be a major challenge for borrowers, raising the risk of defaults and increased non-performing assets for the bank.

Stock valuation is trading at a premium (13.2x P/E) to the US Banks industry average (10.9x), raising risk if expectations are missed.

Here's the quick math: Old National Bancorp's stock is trading at a premium, which is a double-edged sword. As of November 2025, the company's Price-to-Earnings (P/E) ratio is approximately 13.2x. This is notably higher than the US Banks industry average P/E of around 10.9x.

A valuation premium suggests the market has priced in a strong growth narrative and operational excellence. The risk is that if Old National Bancorp misses its future earnings forecasts-say, due to unexpected CRE losses or a deeper-than-expected economic slowdown-the stock could face a sharp correction as the multiple contracts back toward the industry average. Investors are essentially paying a higher price for future growth, so any disappointment will be punished more severely than for a peer trading at a lower multiple.

Action: Finance should stress-test the loan loss reserves against a 10% CRE default scenario by month-end.