Executive Summary

Adjusted EPS of $0.53 beat S&P consensus by ~$0.01 (2.3%), while GAAP EPS was $0.34 given Day 1 CECL, merger charges, and a pension gain; S&P “revenue” missed by ~14% due to the CECL provision flowing through vendor methodology . Q2 “Primary EPS” actual 0.53 vs 0.518 consensus; “Revenue” actual $534.7M vs $624.3M consensus (S&P Global)*.
Operating momentum was strong: NIM (FTE) expanded 26 bps to 3.53%, total revenue (FTE) rose to $654.4M, fee income strengthened, and deposits/loans expanded with Bremer; efficiency improved on an adjusted basis .
Guidance: management raised 2025 NII and fee income guidance; expects 4–6% full‑year organic loan growth ex‑Bremer (lower end), and reiterated a neutral rate stance with two 25 bp cuts in the base case .
Catalysts: (1) sustained NIM expansion and deposit cost discipline, (2) Bremer integration/on-time October system conversion, (3) potential capital return discussion post-conversion (buybacks “on the horizon”), and (4) credit normalization staying benign vs peers .

What Went Well and What Went Wrong

What Went Well
- Margin/earning asset growth: NIM (FTE) rose to 3.53% (+26 bps q/q) on Bremer, organic loan growth, and securities repositioning; NII (FTE) reached $521.9M . “We expect NII and NIM will continue to grow in the second half of 2025” (CFO) .
- Fee momentum: Noninterest income was $132.5M ($111.6M ex pension gain), with strength in wealth, mortgage, and capital markets; adjusted PPNR improved to $289.9M .
- Deposit franchise: Deposits rose to $54.4B (core +$11.6B including Bremer); total deposit costs held at 1.93% (+2 bps); loan/deposit ratio improved to 88% .
- Quote: “Old National’s impressive second quarter results were achieved through… Growing our balance sheet, expanding our fee-based businesses, and controlling expenses.” – CEO Jim Ryan .
What Went Wrong
- Reported “revenue” miss vs S&P: Vendor “revenue” fell short (CECL Day 1 $75.6M reduces S&P’s revenue construct), yielding a headline miss despite strong FTE revenue and PPNR growth (S&P values)*.
- Elevated provision and integration costs: Provision rose to $106.8M (incl. $75.6M CECL Day 1); merger-related charges were $41.2M, partially offset by a $21.0M pension gain .
- Competitive loan market: Management’s organic loan growth bias to the lower end of 4–6% reflects heightened CRE competition and disciplined pricing/structure .

Financial Results

Headline trend vs prior quarters

Metric	Q4 2024	Q1 2025	Q2 2025
EPS (GAAP, $)	0.47	0.44	0.34
Adjusted EPS ($)	0.49	0.45	0.53
Net Interest Income (GAAP, $mm)	394.18	387.64	514.79
Noninterest Income ($mm)	95.77	93.79	132.52
Provision for Credit Losses ($mm)	27.02	31.40	106.84
NIM (FTE, %)	3.30	3.27	3.53
Efficiency Ratio (%)	54.4	53.7	55.8

Estimate comparison (S&P Global)

Metric (Q2 2025)	S&P Consensus	Actual	Surprise
Primary EPS (Adjusted)	$0.518*	$0.53*	+$0.012 (+2.3%)*
Revenue	$624.28M*	$534.66M*	-$89.62M (-14.4%)*

Values retrieved from S&P Global.
Note: ONB’s reported total revenue (FTE) was $654.37M (NII FTE $521.85M + noninterest income $132.52M); S&P’s “revenue” methodology for banks aligns more closely with “net interest income after provision + noninterest income,” which was ~$540.47M in Q2, explaining the apparent miss given the $75.6M Day 1 CECL impact .

Year-over-year snapshot

Metric	Q2 2024	Q2 2025
EPS (GAAP, $)	0.37	0.34
Adjusted EPS ($)	0.46	0.53
NIM (FTE, %)	3.33	3.53
EOP Deposits ($B)	40.00	54.36
EOP Loans ($B)	36.15	47.90
NCOs / Avg Loans (%)	0.16	0.24
ACL / EOP Loans (%)	1.08	1.24
CET1 (%)	10.73	10.74

KPIs and balance sheet quality

KPI	Q4 2024	Q1 2025	Q2 2025
EOP Loans ($B)	36.29	36.41	47.90
EOP Deposits ($B)	40.82	41.03	54.36
Loan/Deposit Ratio (%)	89	89	88
NCOs / Avg Loans (%)	0.21	0.24	0.24
ACL / EOP Loans (%)	1.14	1.16	1.24
CET1 (%)	11.38	11.62	10.74
TCE / TA (%)	7.41	7.76	7.26

Notes:

Notable items in Q2: $75.6M Day 1 CECL (non‑PCD), $41.2M merger charges, $21.0M pension gain .
Adjusted PPNR improved to $289.9M; adjusted efficiency to 50.2% .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Income (NII)	FY 2025	Prior framework (not quantified publicly)	Increased; NII expected to grow in H2 2025	Raised
Fee Income	FY 2025	Prior framework	Increased; mortgage, wealth, capital markets tracking well	Raised
Organic Loan Growth (ex‑Bremer)	FY 2025	4–6%	4–6%, likely lower end given competition and active portfolio management	Range maintained; lower-end bias
Non‑interest‑bearing Mix	FY 2025	Stable	Expected to remain relatively stable	Maintained
Rate Assumptions	H2 2025	N/A	Two 25 bp cuts; 5‑yr UST stabilizes at 4%; down‑rate deposit beta ~40%	Provided
Rate Sensitivity	H2 2025	N/A	Guidance unchanged for one or no cuts; balance sheet neutrally positioned	Maintained
Bremer Conversion	2025	N/A	On track for mid‑October systems conversion	Reaffirmed
Dividend	Q3 2025	$0.14/sh	$0.14/sh declared (payable Sep 15)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 2025)	Trend
AI/Technology	Limited explicit commentary in prior PRs	New CIO (Matt Keen) in place; focus on data, treasury mgmt, ecosystem; “looking at AI very intensely”	Increasing focus/investment
Supply chain / Tariffs / Macro	Not a major factor in prior PRs	Clients “cautiously optimistic”; tariffs/trade effects less than feared; inventory normalization	Improving sentiment
Regulatory	Not highlighted previously	“Very constructive” deregulatory tone; awaiting clarity on thresholds	Improving backdrop
Product performance (Fees)	Q1 seasonally softer fees	Wealth, mortgage, capital markets stronger; fee guide raised	Improving
Credit	Stable/benign in Q4/Q1	NCOs 24 bps; criticized/classified down 9% ex‑Bremer; ACL up 8 bps to 1.24%	Stable/slightly better mix
Capital deployment	Build capital in Q1	Buybacks “on the horizon,” post-conversion; CET1 ~50 bps better than modeled	Optionality rising

Management Commentary

CEO: “Old National’s impressive second quarter results were achieved through… Growing our balance sheet, expanding our fee-based businesses, and controlling expenses… with the successful closing of our partnership with Bremer on May 1, 2025.”
CFO: “Adjusted EPS were $0.53… Results were driven by additional two months of Bremer, organic growth in loans and deposits, margin expansion, growth in fee income, and well-controlled expenses.”
CFO on NIM/NII trajectory: “Repricing dynamics… combined with loan growth and the Bremer partnership, support our expectation that NII and NIM will continue to grow in the second half of 2025.”
CEO on capital return: “We are interested in building a little bit of capital… buyback is on the horizon… focusing on conversion and a strong start for next year.”

Q&A Highlights

Loan growth outlook: Heightened CRE competition; disciplined pricing/structure leads to lower‑end 4–6% organic growth bias; strong C&I pipeline .
Deposit costs and mix: Spot total deposit cost 1.93%; noninterest-bearing ~25% of core (up ~2 pts q/q); brokered ~6% of deposits—below peers .
Time deposit/brokered repricing: ~$5.5B TDs roll in Q3, ~$3B in Q4; ~$2.4B brokered next 90 days at mid‑4s offers downward repricing opportunity .
Capital and buybacks: CET1 ~50 bps better than expected post‑Bremer; evaluating buybacks post‑conversion .
Deal model EPS: 2026 EPS tracking at “$2.60+” with retained $2.4B CRE offsetting lower rate/credit marks .

Estimates Context

Q2 2025 vs S&P consensus: Adjusted/Primary EPS $0.53 vs $0.518 (+$0.012); “Revenue” $534.7M vs $624.3M (‑$89.6M). The revenue miss is driven by S&P’s bank revenue methodology that effectively includes provision (Day 1 CECL $75.6M), while ONB’s reported FTE total revenue was $654.4M . Values retrieved from S&P Global.*
Forward consensus: S&P Primary EPS means trend up ($0.59 in Q3 2025E; $0.645 by Q2 2026E); revenue means ~$706–723M by Q4 2025–Q2 2026E as the larger balance sheet rolls forward (S&P Global).*
Values retrieved from S&P Global.

Key Takeaways for Investors

Core earnings power is improving: NIM expansion, higher FTE revenue, and growing fee lines underpin H2 tailwinds despite CECL/merger noise .
Deposit franchise remains an asset: low cost, stable NIB mix, and room to reprice brokered TDs lower should support margin resilience .
Guidance skew is positive on NII/fees; loan growth prudently biased to the lower end amid CRE competition—expect C&I-led production with active portfolio management .
Credit is normalizing but contained vs peers; criticized/classified reductions and adequate reserves (ACL 1.24% of loans) reduce downside risk .
Bremer integration ahead of schedule with October conversion on track; securities repositioning already lifted portfolio yield and reduced duration/RWA density .
Capital optionality improving; buybacks under consideration post-conversion could add to TSR if credit/margin trends hold .
Near-term trading setup: Adjusted EPS beat and raised NII/fee guide are supportive, but headline “revenue” miss (vendor methodology) and elevated one-time CECL could create noise; focus on H2 NIM trajectory, deposit costs, and any color on buyback timing .

Footnotes:

Values retrieved from S&P Global.

OLD NATIONAL BANCORP /IN/ (ONB)·Q2 2025 Earnings Summary