Old National Bancorp (ONB) | Investment Case

1. Company Snapshot

1.a. Company Description

Old National Bancorp operates as the bank holding company for Old National Bank that provides various financial services to individual and commercial customers in the United States.It accepts deposit accounts, including noninterest-bearing demand, interest-bearing checking, negotiable order of withdrawal, savings and money market, and time deposits; and offers loans, such as home equity lines of credit, residential real estate loans, consumer loans, commercial loans, commercial real estate loans, letters of credit, and lease financing.The company also provides debit and automated teller machine cards, telephone access, online banking, and other electronic and mobile banking services; cash management, private banking, brokerage, trust, investment advisory, and other traditional banking services; wealth management, investment, and foreign currency services; and treasury management, merchant, health savings, and capital markets services, as well as community development lending and equity investment solutions.

As of December 31, 2021, it operated a total of 162 banking centers located primarily in the states of Indiana, Kentucky, Michigan, Minnesota, and Wisconsin.Old National Bancorp was founded in 1834 and is headquartered in Evansville, Indiana.

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1.b. Last Insights on ONB

Old National Bancorp's recent performance was driven by strong Q4 2025 earnings, with revenue up 41% and EPS beating estimates. The company's acquisition activity contributed to this growth, with net interest margin remaining robust at 3.65%. Improved efficiency and sequential gains in return metrics also supported the bank's performance. Additionally, asset quality showed sequential improvement, although nonaccrual loans remain elevated. The company's strong earnings surprise history and positive earnings outlook suggest continued momentum.

1.c. Company Highlights

Last Price	23.97
Change Percentage	1.78%
Open	23.43
Previous Close	23.55
Market Cap ( Millions)	9260
Volume	3046421
Year High	26.17
Year Low	19.39
M A 50	22.92
M A 200	22.41

FCF Yield	8.24%
Dividend Yield	2.36%
ROE	9.07%
Debt / Equity	94.52%
Net Debt / EBIDTA	698.11%
Price To Book	1.09
Price Earnings Ratio	12.2
Price To FCF	12.13
Price To sales	2.32
EV / EBITDA	15.59

2. Old National Bancorp Q1: Strong Momentum, Solid Capital, and a Bright Outlook

First‑quarter earnings for Old National Bancorp reflected a robust performance, with GAAP earnings per share at $0.59 and adjusted EPS rising to $0.61, surpassing consensus estimates of $0.60. Net interest income grew by 6%, while the bank’s net interest margin (NIM) tightened to 2.98%, a slight improvement over the prior year, underscoring disciplined loan pricing and effective funding management. Total revenue climbed 5.2% year‑over‑year, driven by a 4.5% increase in loan growth and a 7% uptick in fee income. Capital strength remained firm, with a CET1 ratio above 11% and tangible book value per share up 11% YoY. The bank returned $151 million to shareholders and maintained a healthy dividend yield of 2.35%.

Publication Date: Apr -23

                                    📋 Highlights
                                    Strong Financial Performance::
                                                Q1 2026 GAAP EPS of $0.59 and adjusted EPS of $0.61, with ROA and ROTE in top decile versus peers.
Capital Strength::
                                                CET1 ratio above 11%, tangible book value growth of 6% annualized, and $151 million returned to shareholders via buybacks and dividends.
Loan Growth Momentum::
                                                Record commercial pipeline, 4-6% full-year loan growth expected, and 14% YoY increase in loan pipeline ($5.5B).
Efficiency and Cost Management::
                                                Adjusted efficiency ratio of 45.7% (record low), with 64% of core net income returned to shareholders in Q1.
Strategic Investments::
                                                $50M stock repurchase from Bremer Trust, AI center of excellence for risk management, and 100 bps proposed CET1 boost from regulatory changes.

                                

Loan Growth and Pipeline Strength

Old National’s loan portfolio expanded by 4.6% in Q1, propelled by a 14% YoY increase in the credit pipeline, now totaling $5.5 billion. Jim Ryan emphasized that the commercial leadership team and targeted go‑to‑market strategies are fueling this momentum, with a record pipeline in the community and core middle‑market segments.

Capital Management and Return to Shareholders

The bank’s CET1 ratio comfortably exceeds the 11% threshold, giving management flexibility to pursue growth while returning capital. John Moran confirmed that the company plans to deploy the remaining buyback authorization through 2026, aiming for a combined payout ratio close to two‑thirds of earnings generated in the quarter.

Credit Quality and Charge‑Offs

Credit performance remained solid, with total net charge‑offs at 26 basis points, or 19 bps excluding PCD loans, indicating effective underwriting and risk management. The bank’s NIM gains were partially offset by a 19‑basis‑point negative impact from rate and volume mix, yet the overall loan yield mix is shifting favorably in the second quarter.

Valuation Snapshot

At a P/B ratio of 1.09 and a dividend yield of 2.35%, Old National’s valuation sits near the industry median, suggesting that the market has priced in a modest upside for the bank’s disciplined execution and capital return strategy.

3. NewsRoom

Old National Bank: Very Efficient, But Expensive

Apr -23

Source: seekingalpha.com

Old National Bancorp (ONB) Q1 Earnings: Taking a Look at Key Metrics Versus Estimates

Apr -22

Source: zacks.com

Old National Bancorp (ONB) Beats Q1 Earnings Estimates

Apr -22

Source: zacks.com

Stay Ahead of the Game With Old National Bancorp (ONB) Q1 Earnings: Wall Street's Insights on Key Metrics

Apr -21

Source: zacks.com

Old National Releases 2025 Community Action Report

Apr -20

Source: globenewswire.com

Old National Bancorp (NASDAQ:ONB) Receives $27.50 Consensus PT from Brokerages

Apr -17

Source: defenseworld.net

Old National Bancorp (ONB) to Release Earnings on Wednesday

Apr -15

Source: defenseworld.net

Old National Announces Strategic Alignment of Commercial Banking Leadership, Welcomes Chris Doyle

Apr -13

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (16.10%)

6. Segments

Community Banking

Expected Growth: 15.5%

The community banking segment is expected to grow at a rate slightly lower than the global revenue growth hypothesis of 16.1% due to potential economic uncertainties and fluctuations in interest rates. However, the segment's diversified revenue streams, including interest income and fees, are expected to drive growth. Additionally, the segment's focus on traditional banking services will continue to attract customers seeking stable financial institutions.

7. Detailed Products

Consumer Banking

Personal banking services for individuals, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

Financial solutions for businesses, including cash management, commercial lending, and treasury management services.

Wealth Management

Comprehensive investment and wealth management services, including investment advice, portfolio management, and trust services.

Mortgage Banking

Residential and commercial mortgage lending services, including purchase and refinance loans, construction loans, and home equity loans.

Treasury Management

Cash management and treasury services, including account management, payment processing, and fraud prevention.

Investment Services

Brokerage and investment services, including investment advice, retirement planning, and insurance services.

8. Old National Bancorp's Porter Forces

Forces Ranking

Threat Of Substitutes

Old National Bancorp operates in a highly competitive industry, and customers have various alternatives to choose from. However, the company's strong brand reputation and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

Old National Bancorp's customers have limited bargaining power due to the company's diversified customer base and lack of concentration. The company's strong relationships with customers also reduce the bargaining power of individual customers.

Bargaining Power Of Suppliers

Old National Bancorp has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position also gives it negotiating power in supplier relationships.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory hurdles and capital requirements. This limits the threat of new entrants and allows Old National Bancorp to maintain its market position.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Old National Bancorp faces intense competition from larger banks and fintech companies, which increases the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	48.94%
Debt Cost	8.07%
Equity Weight	51.06%
Equity Cost	8.07%
WACC	8.07%
Leverage	95.83%

11. Quality Control: Old National Bancorp passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Texas Capital Bancshares

A-Score: 6.7/10

Value: 7.2

Growth: 5.2

Quality: 7.2

Yield: 5.0

Momentum: 6.0

Volatility: 9.7

1-Year Total Return ->

Huntington Bancshares

A-Score: 6.4/10

Value: 6.7

Growth: 4.8

Quality: 6.0

Yield: 8.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

Citizens Business Bank

A-Score: 6.1/10

Value: 6.1

Growth: 4.9

Quality: 7.9

Yield: 8.0

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

Old National

A-Score: 5.7/10

Value: 5.7

Growth: 5.6

Quality: 5.7

Yield: 6.0

Momentum: 4.5

Volatility: 7.0

1-Year Total Return ->

United Community Banks

A-Score: 5.6/10

Value: 6.7

Growth: 5.0

Quality: 7.6

Yield: 5.0

Momentum: 6.0

Volatility: 3.0

1-Year Total Return ->

Pinnacle Financial Partners

A-Score: 5.4/10

Value: 7.0

Growth: 7.4

Quality: 7.7

Yield: 2.0

Momentum: 2.0

Volatility: 6.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

3.01%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.07%

Old National Bancorp - US6800331075

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ONB

1.c. Company Highlights

Stable Momentum

Average Quality

Average Yield

Earnings Beats

Revenues Beats

Fairly Valued

Medium Volatility

Revenues Miss

Better Quality

2. Old National Bancorp Q1: Strong Momentum, Solid Capital, and a Bright Outlook

Loan Growth and Pipeline Strength

Capital Management and Return to Shareholders

Credit Quality and Charge‑Offs

Valuation Snapshot

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (16.10%)

6. Segments

Community Banking

Expected Growth: 15.5%

7. Detailed Products

Consumer Banking

Commercial Banking

Wealth Management

Mortgage Banking

Treasury Management

Investment Services

8. Old National Bancorp's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Old National Bancorp passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

23.97$

Current Price

23.97$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA