Old National's Third-Quarter Profit Hits $250.0 Million, With Efficiency Ratio At 46.1%
The bank's margin slipped 2 basis points to 3.52%, but lower costs and faster deposit growth carried the quarter.
Old National Bancorp reported record third-quarter net income applicable to common shares of $250.0 million, or $0.66 per diluted share, in an 8-K filed Wednesday. The gain came from lower costs and deposit growth, while its lending margin edged down.
What the results show
Adjusted net income was $249.7 million, also $0.66 per share. Diluted EPS was $0.65 in the second quarter and $0.46 a year earlier, the release's tables show.
The efficiency ratio, which measures expenses as a share of revenue, was a record 46.1%, against 47.0% in the second quarter. The adjusted ratio was a record 44.9%, versus 45.2%.
Noninterest expense was $355.4 million. Adjusted noninterest expense fell to $354.7 million from $360.1 million.
Return on average tangible common equity, a measure of profit against the shareholder capital the bank uses, was 19.6%.
Deposits up, margin down
Period-end deposits reached $57.6 billion, up 10.6% annualized. Total loans were $51.2 billion, up $362.3 million, or 2.9% annualized. The company said the growth included $148.0 million in commercial and industrial loans and $157.3 million in commercial real estate.
Net interest margin on a tax-equivalent basis fell 2 basis points (0.02 percentage points) to 3.52%. Deposit costs rose 8 basis points to 179 basis points. Net interest income on that basis rose to $592.0 million from $586.5 million.
Total noninterest income was $128.4 million, down from $153.6 million. The company attributed about $10 million of the second-quarter level to elevated other income.
The commercial loan pipeline was $4.4 billion, down 20% from the record at the end of the second quarter and up 6% from a year ago.
Credit and capital
The provision for credit losses was $33.6 million, versus $36.2 million. Net charge-offs were $34.1 million, or 27 basis points of average loans, versus 26. Loans 30 or more days delinquent were 0.25% of loans, versus 0.29%.
Old National repurchased $100 million, or 3.9 million shares, of stock and paid $55 million in dividends. Preliminary Tier 1 common equity was 11.11%, up 2 basis points. Tangible common equity to tangible assets fell to 7.28% from 7.68%, which the company tied to a $391 million rates impact on other comprehensive income.
Chairman and CEO Jim Ryan said the bank remains "very well positioned to build on this momentum."
What to watch
The company scheduled its earnings call for 9:00 a.m. Central Time Wednesday. Slides covering its financial outlook were to be posted on its investor relations site.
The next test is margin: deposit costs rose 8 basis points in the quarter, and the margin has slipped from 3.64% a year earlier.
Sources
- 8-K Filing — OLD NATIONAL BANCORP /IN/ (ONB) — SEC EDGAR
- Exhibit onb_exhibit991er3q26.htm — OLD NATIONAL BANCORP /IN/ 8-K exhibit — SEC EDGAR
- Old National Bancorp Reports Record Third Quarter 2026 — globenewswire.com
