Old National Bancorp NASDAQ: ONB said first-quarter 2026 earnings came in above both internal expectations and analyst estimates, as stronger loan growth and fee income helped offset typical seasonal pressure on net interest income and the impact of a late-January subordinated debt issuance.
“We carried strong momentum into the year, and our performance in the first quarter reinforces our confidence in the full year plan,” Chairman and CEO Jim Ryan said on the company’s earnings call. He added that Old National is focused on “disciplined execution,” organic growth, and returning capital to shareholders, while noting the company does not need acquisitions to meet its objectives.
Quarterly results and profitability
CFO John Moran said Old National reported GAAP earnings per share of $0.59. Excluding $0.02 of merger-related expenses and a non-cash expense tied to the final distribution of a legacy First Midwest pension plan, adjusted EPS was $0.61. Moran said results were driven by better-than-expected loan growth and fee income, alongside “well-controlled expenses.”
Moran also highlighted profitability and capital metrics, saying return on assets and return on tangible common equity remained “top decile versus our peers.” Old National ended the quarter with a common equity tier 1 (CET1) ratio “comfortably north of 11%,” and tangible book value per share grew 6% annualized from the prior quarter and 11% year-over-year despite one-time charges linked to the Otto Bremer transaction, balance sheet growth, and capital returns.
Loan growth, pipelines, and deposit trends
Old National posted 8% annualized loan growth from the previous quarter, led by 16.9% annualized growth in commercial and industrial (C&I) loans. Moran said production was diversified across the commercial portfolio and pointed to record-high loan pipelines of $5.5 billion, up nearly 14% from year-end.
During the Q&A, President and COO Timothy Burke Jr. attributed the momentum to sharpened go-to-market execution and targeting, as well as leveraging the bank’s product platform. “We’re really focusing on sales excellence and just being tighter in who we’re targeting, how we’re targeting,” Burke said, adding that the company expects pipelines to convert as it adds bankers and talent.
Deposits increased 4.2% annualized, driven by commercial and retail growth and partly offset by seasonally lower public funds balances, Moran said. Non-interest-bearing deposits dipped to 23% of total deposits from 24% in the prior quarter, which management partly tied to seasonal factors. Moran said Old National decreased total deposit costs by eight basis points linked-quarter and reduced interest-bearing deposit costs by 14 basis points, citing pricing discipline and down-rate actions following fourth-quarter Fed cuts. The company’s spot rate on total deposits was 170 basis points at March 31.
Asked about deposit costs if rate cuts pause, Moran said Old National still sees “some opportunity in the back book” and from brokered deposits rolling off, but added that “the material decreases in spot rate are probably behind us if the Fed’s done for the year,” while describing competition as “intense but rational.”
Net interest income, margin outlook, and fee performance
Moran said net interest income and net interest margin in the quarter were influenced by two fewer days, the subordinated debt issuance, and a loan production mix tilted toward “near investment grade floating rate C&I.” Despite that, he said strong loan growth, continued repricing across loans and securities, and deposit pricing discipline support “stable to improving net interest income and net interest margin over the course of 2026.”
In response to a question about maintaining the company’s net interest income guidance, Moran pointed to a “more cooperative yield curve” versus the first-quarter average and the larger loan pipeline, with expectations for a more balanced mix between commercial real estate and C&I going forward. He reiterated a “stable to improving” framework for margin.
Non-interest income also exceeded guidance, with adjusted non-interest income of $122 million. Moran said fee businesses generally performed as expected, but mortgage and capital markets results were better than anticipated due to a mid-quarter dip in rates. Management said it expects fee businesses to remain strong, supported by the loan pipeline, capital markets activity, and momentum in wealth management and brokerage.
Expenses, efficiency, credit, and capital return
Adjusted non-interest expense was $354 million, and Moran said the company generated positive operating leverage both quarter-over-quarter and year-over-year. Old National reported a record-low 46% adjusted efficiency ratio and said it has realized 100% of the $111 million of annual run-rate cost saves anticipated from the Bremer transaction.
Management emphasized that expense guidance for 2026 is unchanged, even after a better-than-expected first quarter, because of ongoing investments—particularly hiring. Moran said the unchanged expense outlook “is really a nod to the talent pipeline.” Ryan added that the company does not want efficiency targets to inhibit investing in growth: “I don’t want that number of 45% to be a number that stops us from investing in our future.”
On technology, Moran said Old National has established an “AI center of excellence” within its technology and data teams and described progress so far as “a lot of singles and doubles.” He gave an example of using AI to modernize legacy Power BI code in about a week, work that “would’ve taken some of our best programmers months.” Moran said an early deeper use case may be in risk management, where AI could help automate work that traditionally requires significant staffing.
Credit trends remained stable, with total net charge-offs of 26 basis points, or 19 basis points excluding purchased credit deteriorated (PCD) loans. Criticized and classified loans increased $113 million as Bremer loans transitioned into Old National’s asset quality framework, which Moran said was consistent with due diligence expectations. Non-accrual loans as a percentage of total loans improved for the fourth consecutive quarter, according to management.
Capital returns were another focus. Old National returned $151 million to shareholders in the quarter and repurchased 3.9 million shares, bringing repurchases to 6.1 million shares over the last year. Moran said $383 million remains under the current buyback authorization, which runs through the end of February, and management expects to use the remaining capacity. Ryan also addressed a $50 million repurchase that reduced the Otto Bremer trust position, saying he does not anticipate near-term changes in the trust’s ownership beyond that reduction, and noted Old National has a right of first refusal if shares are sold.
Looking ahead, management maintained its full-year 2026 guidance, with Moran saying the pipeline supports 4% to 6% loan growth and that results may trend toward “the higher end” of that range. Moran added that the company’s base case assumes the Fed is finished cutting rates for the rest of the year and that the five-year rate stabilizes around current levels.
About Old National Bancorp NASDAQ: ONB
Old National Bancorp NASDAQ: ONB is the bank holding company for Old National Bank, a regional financial services firm headquartered in Evansville, Indiana. Through its network of community banking offices, the company provides a full range of commercial and consumer banking services. Its offerings include checking and savings accounts, personal and business loans, and deposit products designed to meet the needs of individuals, small businesses, and larger corporate customers.
In addition to traditional banking, Old National Bancorp delivers specialty financial services such as treasury management, wealth management, mortgage loan production, and insurance solutions.
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