Q2 2026 Old National Bancorp Earnings Call Transcript
Key Points
- Old National Bancorp (ONB) reported record second-quarter results for 2026, achieving record adjusted EPS, net income, and efficiency ratio.
- The company experienced strong loan growth, with end-of-period loans increasing by $1 billion or 8% annualized, driven by robust high-quality commercial production.
- Fee income showed broad-based strength across all fee businesses, contributing to a more balanced earnings engine less reliant on net interest income.
- Credit quality remained strong, with nonaccruals decreasing by $50 million or 10% from the prior quarter, and net charge-offs consistent with expectations.
- The capital position is robust, with a CET1 ratio of 11.09% and a 14% year-over-year increase in tangible book value per share, alongside significant capital returns to shareholders through dividends and buybacks.
- The competitive deposit environment remains challenging, although ONB has managed to maintain stable funding costs.
- The company's net interest margin (NIM) was impacted by the full quarter effect of sub debt issuance and lower SOFR rates, which could affect future margin expansion.
- Despite strong fee income, some components like other income are expected to normalize back to lower levels in the coming quarters.
- The loan-to-deposit ratio increased modestly to 91%, which may indicate a need for careful management of liquidity and funding costs.
- The company faces ongoing challenges in maintaining its credit quality amidst global economic uncertainties, as reflected in its qualitative reserves.
Welcome to the Old National Bancorp second-quarter earnings conference call. This call is being recorded and has been made accessible to the public in accordance with the SEC's Regulation FD. The audio webcast and corresponding presentation slides can be found on the Investor Relations page at oldnational.com and will be archived there for 12 months.
Management would like to remind everyone that certain statements on today's call may be forward-looking in nature and are subject to certain risks, uncertainties, and other factors that could cause actual results or outcomes to differ from those discussed. The company refers you to its forward-looking statement legend in the earnings release and presentation slides. The company's risk factors are fully disclosed and discussed within its SEC filings.
In addition, certain slides contain non-GAAP measures, which management believes provide more appropriate comparisons. These non-GAAP measures are intended to assist investors' understanding of performance trends. Reconciliations for these numbers are contained within the appendix of the
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