Old National Bancorp (ONB -2.36%), a regional banking company, reported quarterly results on July 22, 2025, covering the second quarter of fiscal 2025. The headline news was the successful closing of the Bremer acquisition, which contributed to substantial growth in loans, deposits, and fee income. Non-GAAP earnings per share reached $0.53, beating the consensus non-GAAP EPS estimate of $0.52. Overall, the quarter reflected solid execution on strategic initiatives, driven by both organic expansion and merger activity, alongside stable credit and capital trends.
Understanding the Business and Recent Focus Areas
Old National Bancorp is a regional banking company providing commercial and consumer banking, wealth management, and capital markets services across the Midwest. It has grown its presence through mergers and acquisitions, which expand its asset base and geographic reach. The scale-up means a broader footprint and the ability to serve more clients with a diverse array of financial services.
Recently, the company has focused on growth via mergers, such as its acquisitions of CapStar and most notably, Bremer. Key success factors include maintaining strong regulatory compliance and managing financial health. Human capital management and a competitive service offering are also central to its strategy, with attention to both organic growth and synergy realization from recent deals.
Quarter in Detail: Major Moves and Key Metrics
The highlight of Q2 2025 was the successful closing, on May 1, of the Bremer partnership. This deal added $11.2 billion in loans and $11.5 billion in core deposits to Old National’s balance sheet. As a result, total loans rose by over 30 %, and deposits increased 35.9% year-over-year. Even after accounting for Bremer, the company reported a 3.7% annualized increase in core loans and 4.6% annualized growth in commercial loans, pointing to underlying strength outside the merger effect.
Noninterest income—fees from sources outside traditional lending—grew 18.8% year-over-year, boosted by Bremer’s contribution and gains in wealth management, mortgage banking, and capital markets. Old National’s adjusted efficiency ratio, a non-GAAP measure of how much it spends to generate $1 of revenue, improved to 50.2%. Lower efficiency ratios mean the bank is operating more cost-effectively. These operating trends highlight both the impact of the acquisition and ongoing discipline on expenses.
On credit quality, certain risk metrics ticked up due to the new loans added from Bremer. Loans that were past due by more than 30 days represented 0.30% of all loans (up from 0.22% in the previous quarter). Nonaccrual loans—those not currently earning interest—were 1.24% of the loan portfolio, slightly lower than last quarter. The allowance for credit losses increased by $170.7 million, largely due to “Day 1” adjustments after the Bremer deal, a typical step to account for new risks in acquired portfolios. Net charge-offs, which are losses on loans removed from the books as uncollectable, held steady at 0.24% of average loans.
Regulatory capital ratios dipped as expected following the acquisition but stayed above important thresholds. The Tier 1 Common Equity ratio reached 10.74%, while the ratio of tangible common equity (a non-GAAP measure defined as actual shareholder equity minus intangible assets) to tangible assets stood at 7.26%, marking a step down from the previous quarter. Management stressed a focus on keeping capital levels robust, even as it expanded the balance sheet. The quarterly dividend was unchanged at $0.14 per share.
Looking Ahead: Management’s Outlook and Critical Watch Points
Management pointed to ongoing cost controls, strong fee income, and a positive operating leverage outlook. The company projects organic loan growth (excluding Bremer) in the 4–6% range for the full year 2025. With a larger, more flexible balance sheet post-acquisition, management expects to build on fee growth, maintain controlled expenses, and keep credit quality in check.
Management did not communicate any material change to the dividend or a pending resumption of share buybacks, citing preference for a strong capital position in the near term. Ongoing integration success and careful balance sheet management will remain essential areas for investors and stakeholders to watch.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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