Old National Bancorp /In/ (ONB) Stock Analysis and Metrics

Old National Bancorp

NASDAQ: ONB

$26.48 ▲ +0.36 (+1.40%)

At close: Jul 24, 2026 · 3:59 PM UTC

Financial Ratios

Market Cap10.26 Bn

P/E13.82

P/S6.27

Div. Yield0.02

Total Debt (Qtr)1.33 Bn

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About

Old National Bancorp is a financial holding company that owns Old National Bank its wholly owned banking subsidiary. The company is incorporated in Indiana and is the sixth largest Midwestern headquartered bank by asset size with consolidated assets of $72.2 billion at December 31 2025. It ranks among the top 25 banking companies headquartered in the United States. Its corporate headquarters are in Evansville Indiana while its commercial and consumer banking operations are headquartered in Chicago Illinois. Through Old National Bank and non bank affiliates the company provides a wide range of services primarily throughout the Midwest and Southeast regions of the United States including consumer and commercial banking wealth management and capital markets.

The company earns interest income on loans as well as fee income from the origination of loans and from providing other services to clients. Deposit accounts generate revenue through service fees on various accounts and interest paid on interest bearing deposits. Wealth management trust investment advisory brokerage and foreign currency services also contribute to fee based revenue. For businesses the company provides treasury management merchant and capital markets services as well as community development lending and equity investment solutions. These activities together form the core of Old National Bancorp’s revenue streams.

Old National Bancorp is the sixth largest Midwestern headquartered bank by asset size and ranks among the top 25 banking companies headquartered in the United States. The company competes with other commercial banks savings and loan associations credit unions mortgage banking firms FinTech companies consumer finance companies securities brokerage firms insurance companies money market mutual funds private equity and debt funds and other financial services providers. Many competitors are larger and have substantially greater resources than Old National Bancorp. The company’s competitive advantages stem from its community banking focus long term client relationships diversified product offerings and strong capital position. Its strategic acquisitions have expanded its footprint in the Midwest and Southeast while reinforcing its commitment to local markets.

Old National Bancorp serves individual consumers small businesses and commercial clients across its Midwest and Southeast footprint. The company provides depository services lending and wealth management solutions to retail customers and to corporate entities. Community development lending and equity investment solutions target local businesses and municipalities seeking to spur job creation and revitalization. Overall the customer base consists of a broad mix of retail households and commercial enterprises seeking traditional banking and related financial services.

Investment Thesis

▲ Bull case

Old National Bank is positioned to capitalize on a record commercial loan pipeline of $5.5 billion, which is up nearly 14% year-over-year and reflects successful execution of its go-to-market strategy focused on sales excellence and targeted client acquisition. Management highlighted that this pipeline is being driven by a more balanced mix between commercial and industrial (C&I) and commercial real estate (CRE) lending compared to the first quarter’s skew toward lower-spread, near investment-grade floating rate C&I loans. This shift is expected to improve loan yields and net interest margin over the remainder of 2026, as the bank moves into core middle-market lending where spreads are historically stronger. The bank’s granular, low-cost deposit franchise continues to provide a structural advantage in a competitive rate environment, with deposit costs down 8 basis points quarter-over-quarter and a spot rate of 170 basis points on total deposits—achieving the targeted down-rate beta in the current cycle. This combination of strong asset growth, improving mix, and disciplined funding supports the potential for net interest income to exceed guidance, particularly if the yield curve steepens as management noted with the 5-year Treasury returning to ~3.90%. Furthermore, the bank’s investment in AI and operational efficiency—evidenced by a record adjusted efficiency ratio of 45.7%—is unlocking capacity to reinvest in talent without sacrificing profitability, creating a virtuous cycle where top-tier hires drive future revenue growth. The bank’s tangible book value per share grew 6% annualized in Q1 and 11% year-over-year despite capital return and merger integration costs, underscoring internal capital generation strength. With $383 million remaining under its share repurchase authorization and a combined payout ratio of 64% of adjusted net income, Old National has significant flexibility to return capital while still funding organic growth. The proposed Basel III endgame capital rules, if finalized, could add up to 100 basis points to CET1 capital through favorable treatment of mortgages and long-term unfunded commitments, providing optionality for either accelerated buybacks or increased lending capacity without diluting returns. Finally, management’s confidence in trending toward the higher end of its 4%-6% full-year loan growth range—supported by record pipelines and successful execution in community and middle-market segments—suggests the market may be underestimating the durability of its growth momentum in a volatile rate environment.

Old National Bank is positioned to capitalize on a record commercial loan pipeline of $5.5 billion, which is up nearly 14% year-over-year and reflects successful execution of its go-to-market strategy focused on sales excellence and targeted client acquisition. Management highlighted that this pipeline is being driven by a more balanced mix between commercial and industrial (C&I) and commercial real estate (CRE) lending compared to the first quarter’s skew toward lower-spread, near investment-grade floating rate C&I loans. This shift is expected to improve loan yields and net interest margin over the remainder of 2026, as the bank moves into core middle-market lending where spreads are historically stronger. The bank’s granular, low-cost deposit franchise continues to provide a structural advantage in a competitive rate environment, with deposit costs down 8 basis points quarter-over-quarter and a spot rate of 170 basis points on total deposits—achieving the targeted down-rate beta in the current cycle. This combination of strong asset growth, improving mix, and disciplined funding supports the potential for net interest income to exceed guidance, particularly if the yield curve steepens as management noted with the 5-year Treasury returning to ~3.90%. Furthermore, the bank’s investment in AI and operational efficiency—evidenced by a record adjusted efficiency ratio of 45.7%—is unlocking capacity to reinvest in talent without sacrificing profitability, creating a virtuous cycle where top-tier hires drive future revenue growth. The bank’s tangible book value per share grew 6% annualized in Q1 and 11% year-over-year despite capital return and merger integration costs, underscoring internal capital generation strength. With $383 million remaining under its share repurchase authorization and a combined payout ratio of 64% of adjusted net income, Old National has significant flexibility to return capital while still funding organic growth. The proposed Basel III endgame capital rules, if finalized, could add up to 100 basis points to CET1 capital through favorable treatment of mortgages and long-term unfunded commitments, providing optionality for either accelerated buybacks or increased lending capacity without diluting returns. Finally, management’s confidence in trending toward the higher end of its 4%-6% full-year loan growth range—supported by record pipelines and successful execution in community and middle-market segments—suggests the market may be underestimating the durability of its growth momentum in a volatile rate environment.

▼ Bear case

Old National Bank’s first-quarter performance was bolstered by transient factors that may not be sustainable, including a favorable shift in loan production toward near investment-grade floating rate C&I loans that lowered yields and pressured net interest income, a benefit from two fewer days in the quarter that flattered daily metrics, and the impact of its late January sub-debt issuance which increased funding costs—yet management did not adequately address how these headwinds might reverse or persist into subsequent quarters. Despite record pipelines of $5.5 billion, the bank has not translated this into proportional loan growth, with Q1 annualized loan growth at only 8% (16.9% in C&I), raising questions about conversion efficiency and whether the pipeline reflects genuine demand or over-optimistic reporting. The bank’s reliance on exception-priced deposits to achieve a 93% beta on funding costs reveals a strategy that may be nearing its limits, as management acknowledged that material decreases in deposit costs are likely behind them if the Fed is done cutting rates, leaving the balance sheet vulnerable to margin compression should rates rise or competitive pressures intensify in key markets like Nashville, where superregional competitors are aggressively pricing deposits. Furthermore, while the bank celebrates a record low adjusted efficiency ratio of 45.7%, James Ryan explicitly warned that this level could become an inhibitor to future growth if it discourages necessary investments in talent—a candid admission that the current expense discipline may be masking underinvestment in long-term capabilities, especially as merit increases and seasonal costs return in Q2. The bank’s credit quality, while currently stable, shows warning signs: criticized and classified loans increased by $113 million quarter-over-quarter due to Bremer portfolio integration, and although legacy upgrades offset some of this, the transition remains a work in progress with potential for further deterioration as the acquired book is fully seasoned. Management’s emphasis on minimal exposure to nondepository financial institutions (MDFIs at ~1% of loans) does not eliminate concentration risk in commercial lending, particularly as CRE pipelines grow and the bank faces cyclical vulnerabilities in a sector sensitive to remote work trends and interest rate volatility. Finally, the anticipated capital benefit from proposed Basel rule changes—cited as up to 100 basis points on CET1—remains highly speculative and contingent on final regulatory approval, yet management presented it as a near-term optionality driver without discussing the timeline, uncertainty, or potential for delays, which could leave investors overestimating near-term capital flexibility.

Old National Bank’s first-quarter performance was bolstered by transient factors that may not be sustainable, including a favorable shift in loan production toward near investment-grade floating rate C&I loans that lowered yields and pressured net interest income, a benefit from two fewer days in the quarter that flattered daily metrics, and the impact of its late January sub-debt issuance which increased funding costs—yet management did not adequately address how these headwinds might reverse or persist into subsequent quarters. Despite record pipelines of $5.5 billion, the bank has not translated this into proportional loan growth, with Q1 annualized loan growth at only 8% (16.9% in C&I), raising questions about conversion efficiency and whether the pipeline reflects genuine demand or over-optimistic reporting. The bank’s reliance on exception-priced deposits to achieve a 93% beta on funding costs reveals a strategy that may be nearing its limits, as management acknowledged that material decreases in deposit costs are likely behind them if the Fed is done cutting rates, leaving the balance sheet vulnerable to margin compression should rates rise or competitive pressures intensify in key markets like Nashville, where superregional competitors are aggressively pricing deposits. Furthermore, while the bank celebrates a record low adjusted efficiency ratio of 45.7%, James Ryan explicitly warned that this level could become an inhibitor to future growth if it discourages necessary investments in talent—a candid admission that the current expense discipline may be masking underinvestment in long-term capabilities, especially as merit increases and seasonal costs return in Q2. The bank’s credit quality, while currently stable, shows warning signs: criticized and classified loans increased by $113 million quarter-over-quarter due to Bremer portfolio integration, and although legacy upgrades offset some of this, the transition remains a work in progress with potential for further deterioration as the acquired book is fully seasoned. Management’s emphasis on minimal exposure to nondepository financial institutions (MDFIs at ~1% of loans) does not eliminate concentration risk in commercial lending, particularly as CRE pipelines grow and the bank faces cyclical vulnerabilities in a sector sensitive to remote work trends and interest rate volatility. Finally, the anticipated capital benefit from proposed Basel rule changes—cited as up to 100 basis points on CET1—remains highly speculative and contingent on final regulatory approval, yet management presented it as a near-term optionality driver without discussing the timeline, uncertainty, or potential for delays, which could leave investors overestimating near-term capital flexibility.

Peer Comparison

Companies in the Banks - Regional

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	KB	KB Financial Group Inc.	42,090.38 Bn	0.00 Bn	0.01 Mn	56.66 Bn
2	SHG	Shinhan Financial Group Co Ltd	33,919.15 Bn	0.00 Bn	0.00 Mn	40.46 Bn
3	BCH	Bank Of Chile	4,123.52 Bn	368.17 Bn	1.57 Mn	0.00 Bn
4	LYG	Lloyds Banking Group plc	360.83 Bn	0.00 Bn	0.00 Mn	42.37 Bn
5	FCAP	First Capital Inc	204.17 Bn	0.00 Bn	0.03 Mn	-
6	LARK	Landmark Bancorp Inc	187.97 Bn	0.00 Bn	0.00 Mn	0.00 Bn
7	NWG	NatWest Group plc	144.82 Bn	0.00 Bn	0.00 Mn	94.66 Bn
8	PNC	Pnc Financial Services Group, Inc.	101.80 Bn	0.00 Bn	0.00 Mn	21.42 Bn

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Investment Thesis

Consolidated Entities Breakdown of Revenue (2018)

Peer Comparison

Research Tools

Developers

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Investment Thesis

Consolidated Entities Breakdown of Revenue (2018)

Peer Comparison

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