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	23.47
Change Percentage	-0.34%
Open	22.91
Previous Close	23.55
Market Cap ( Millions)	9171
Volume	2908982
Year High	26.17
Year Low	16.83
M A 50	23.88
M A 200	22.18

FCF Yield	7.19%
Dividend Yield	2.39%
ROE	8.51%
Debt / Equity	87.72%
Net Debt / EBIDTA	701.42%
Price To Book	1.07
Price Earnings Ratio	13.6
Price To FCF	13.9
Price To sales	2.47
EV / EBITDA	16.39

2. Old National Bancorp's Strong 2025 Earnings and Promising 2026 Outlook

Old National Bancorp reported a robust fourth-quarter earnings, capping off an exceptional year with new organizational records for adjusted earnings per share, net income, and efficiency ratio. The company's GAAP fourth-quarter earnings per share stood at $0.556, slightly below estimates of $0.59. However, adjusted earnings per share came in at $0.62, marking a 5% increase over the prior quarter and a 27% increase year-over-year. The adjusted return on average tangible common equity was nearly 20%, and the adjusted efficiency ratio was 46%. The company's profitability profile remains top decile against peers.

Publication Date: Jan -22

                                    📋 Highlights
                                    Record Performance Metrics::
                                                Adjusted ROATCE reached nearly 20%, and adjusted efficiency ratio hit 46%, reflecting strong profitability and operational efficiency.
Tangible Book Value Growth::
                                                Tangible book value per share surged 15% YoY, despite share repurchases of 2.2 million shares and Bremer integration costs.
Capital Position Strength::
                                                CET1 ratio exceeded 11%, with tangible book value growing over 17% annualized, underscoring robust capital resilience.
Loan Growth and NII Outlook::
                                                2026 loan growth projected at 4–6%, driven by middle-market C&I and CRE, with net interest income benefiting from fixed asset repricing.
Deposit Stability and Pricing::
                                                Deposit costs expected to remain stable, with a 40% total down rate deposit beta and disciplined pricing in high-growth markets.

                                

Financial Performance Highlights

The company's 2025 results were driven by core deposit growth, positive operating leverage, disciplined credit management, and healthy liquidity and capital ratios. Tangible book value per share grew by 15% despite the impact of closing the Bremer partnership and repurchasing 2.2 million shares. The capital position has rebuilt quickly, with CET one over 11%, and tangible book value per share grew over 17% annualized. As Jared Shaw from Barclays noted, the company is comfortable with its current CET1 position and doesn't see the need to target a specific percentage.

2026 Outlook and Growth Drivers

For 2026, the company expects loan growth of 4-6%, driven by middle market C&I, CRE demand drivers, and talent acquisition. Net interest income is expected to increase with the benefit of fixed asset repricing and continued growth. The company assumes two additional rate cuts of 25 basis points each in 2026 and anticipates a total down rate deposit beta of approximately 40%. Ben Gerlinger from Citi inquired about growth drivers, and the company highlighted broad-based growth in middle markets and enhancements from CRE demand drivers.

Valuation and Dividend Yield

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.1, the stock appears reasonably valued. The Dividend Yield stands at 2.33%, providing a relatively stable source of return for investors. Considering the company's strong profitability profile and growth prospects, the current valuation multiples seem to be in line with expectations.

Management's Strategic Focus

The company is focused on organic growth, investing in talent, and maintaining a disciplined approach to pricing. On M&A, the company prioritizes organic growth and investing in itself. The wealth strategy and outlook are driven by a talent play, with plans to increase hiring and penetrate markets. As the company guides for 4-6% loan growth, driven by middle market C&I and CRE demand drivers, its strategic portfolio management is expected to continue yielding positive results.

3. NewsRoom

Market Today: Oil shock, NVDA's $4B bet, BRK.B slides, gold jumps, AAPL unveils low-cost iPhone

Mar -02

Source: gurufocus.com

Old National Bancorp $ONB Shares Sold by Channing Capital Management LLC

Feb -22

Source: defenseworld.net

Cibc World Market Inc. Buys New Shares in Old National Bancorp $ONB

Feb -19

Source: defenseworld.net

Old National Bancorp (NASDAQ:ONB) Short Interest Update

Feb -19

Source: defenseworld.net

Old National Bank, Axletree Solutions Partnership Finalizes Critical Swift Architecture, Achieves ISO 20022 Compliance for 2026

Feb -10

Source: globenewswire.com

Old National Names Joe Chasteen Chief Revenue Enablement Officer

Feb -06

Source: globenewswire.com

Old National Bancorp (NASDAQ:ONB) Receives Average Recommendation of “Moderate Buy” from Brokerages

Jan -29

Source: defenseworld.net

Old National Receives 2026 Trust in Banking Award

Jan -22

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

3.61%

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's Strong 2025 Earnings and Promising 2026 Outlook

Financial Performance Highlights

2026 Outlook and Growth Drivers

Valuation and Dividend Yield

Management's Strategic Focus

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

23.47$

Current Price

23.47$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA