Old National Bancorp at Barclays Conference: Strategic Growth and Integration

On Monday, 08 September 2025, Old National Bancorp (NASDAQ:ONB) participated in the Barclays 23rd Annual Global Financial Services Conference. The company presented a strategic overview that highlighted the successful integration of Bremer Bank, positive financial performance, and a cautious approach to future mergers and acquisitions. Despite economic uncertainties, Old National expressed confidence in its growth strategies and operational efficiencies.

Key Takeaways

• Old National Bancorp is optimistic about the Bremer Bank integration, which is progressing ahead of schedule.
• The company anticipates organic loan growth of 5% to 7%, supported by strong loan production.
• Financial outlook is positive with increased expectations for net interest income and fee income.
• The firm maintains a strong capital position and considers share repurchases due to stock undervaluation.
• Old National is not actively pursuing M&A deals, focusing instead on organic growth and efficiency.

Financial Results

• Net Interest Income and Fee Income: Old National expects an increase in net interest income and fee income, driven by a larger balance sheet following the Bremer acquisition.
• Net Interest Margin: The company aims to maintain a neutral position on the short end of the curve. With $7 billion in fixed-rate assets set to reprice, there is an opportunity to grow the net interest margin.
• Expense Management: The efficiency ratio is approximately 50%. Cost savings from the Bremer partnership will be reinvested, with a focus on talent acquisition to maintain positive operating leverage.

Operational Updates

• Bremer Bank Integration: The integration of Bremer Bank, closed on May 1st, is proceeding better than expected. Full cost savings and efficiencies are anticipated by the first quarter of the following year. The acquisition expands Old National’s presence in Minnesota, North Dakota, and western Wisconsin.
• Loan Growth: Strong loan production was noted in the first half of the year, with expectations of reduced paydowns and stronger growth moving forward. The company targets organic loan growth between 5% and 7%.

Future Outlook

• Capital Management: Old National’s capital levels exceed initial expectations post-Bremer deal. The company is generating capital rapidly due to high earnings and moderate payout ratios. Share repurchases are under consideration due to perceived undervaluation.
• M&A Strategy: Currently, Old National is not actively seeking new M&A deals, preferring to focus on organic growth and efficiency improvements. The company remains open to future partnerships but sees no urgent need to pursue new deals.

Q&A Highlights

• Competitive Landscape: Old National acknowledges increased competition from larger banks but remains committed to relationship-based banking. New deal spreads are around 110 basis points on the fixed-rate side.
• M&A Activity by Super Regionals: There is a noted trend of super regionals acquiring smaller targets, possibly due to limited availability of larger deals.

For more detailed insights, readers are encouraged to refer to the full transcript.

Full transcript - Barclays 23rd Annual Global Financial Services Conference:

: Great. Thanks, everybody, for joining us this afternoon. We’re happy to keep the mid-cap bank track going with Old National. We’re joined by Jim Ryan, Chairman and CEO. Old National is $70 billion based in Evansville, Indiana. Thanks very much for joining us.

Jim Ryan, Chairman and CEO, Old National: Great. Thanks for the opportunity to be back again this year.

: Yeah, maybe just to kick it off with a little bit of an update on how things are going and maybe a little bit of an overview.

Jim Ryan, Chairman and CEO, Old National: Yeah, really, things are really consistent with what we’ve seen so far this year. We closed on our Bremer partnership on May 1st. We’re working feverishly towards the integration, which will happen here very soon in October. That seems to be going better than expected. I feel really good about that partnership and really our ability to build scale and density in a place like Minnesota, which we care deeply about, adding North Dakota and a few other markets in western Wisconsin. I feel really good about that. Overall, I think as we’ve seen some optimism come out in today’s, I think, sessions, we feel a lot of that same optimism today.

: Great. Just given all the news and the noise in the broader economy, how would you describe commercial customer sentiment here? What’s the outlook from the conversations with clients?

Jim Ryan, Chairman and CEO, Old National: Yeah, we just recently conducted our annual survey of commercial clients. I think despite all the noise around tariffs, there was just an awful lot of optimism out there. Our clients are really finding ways to deal with whether it’s through price increases or changing supply chains or just thinking about the business. They’re accustomed to dealing with and overcoming these obstacles. I feel like a vast majority of our clients are feeling more optimistic this year over last.

: Do you think that’s going to translate into better utilization as we move forward?

Jim Ryan, Chairman and CEO, Old National: I think so. We saw a little uptick in the second quarter. There are some questions around, you know, was that inventory build and will that be repeatable in the back half of the year? Generally, I think our clients are still feeling really good, and things are staying relatively strong.

: You referenced you recently closed on the acquisition of Bremer. Congratulations on the early approval. What’s the early read on that now that it’s in-house, and any areas that are especially exciting you compared to when you were first looking at it?

Jim Ryan, Chairman and CEO, Old National: Yeah, you know, we always knew we were going to find really quality people in a quality organization. I was just in Minnesota last week, had the opportunity to travel with several of our leaders and relationship managers and call in clients and visit with some team members. Every time I’m back in Minnesota or North Dakota, I just continue to get reaffirmed about the quality of the organization in terms of the people. I mean, we just have outstanding people. What’s really gratifying is they have deep, deep relationships in their communities with their clients. That’s still a place where those relationships, the community involvement matters. When you have a quality organization that was involved in its communities and supported it both from volunteerism and philanthropy, that’s our business model. Community banking 101.

We do that exceptionally well. Bremer Bank was great at it, and we’re just going to continue to build on that great success and drive deeper relationships. I’m just, it’s just more affirming every single time I’m there about the quality of the people and those relationships, you know, they’re bringing to the table for us.

: You’ve been referencing loan production and pipelines have been strong recently. That hasn’t really translated into bottom line balance sheet growth or loan growth. What’s been driving that, and what could change to lead to faster loan growth as we move forward?

Jim Ryan, Chairman and CEO, Old National: Yeah, I mean, we have always had strong pipelines, as you noted. Production was really good in the first half of the year. Where we saw maybe a little bit more pressure was on the paydowns. Some of those intentional, just portfolio management, some of it was unexpected. I think we’re seeing, you know, going forward a little bit stronger. The production continues to be strong for us and maybe less paydowns. A little bit more optimistic as we finish the second quarter and heading into this quarter just in terms of the overall growth profile. You know, again, I think that’s the sentiment we’re seeing repeated over and over by participants here today.

: We have a few questions for the audience. Maybe we can run through those now and that can be some of the conversation topics as well. The first one, what’s your current position in Old National shares today? One, overweight or long. Two, market weight. Three, underweight or short. Four, not involved is probably the better way to say that.

Jim Ryan, Chairman and CEO, Old National: Are we going to get them to tell the truth, or are they trying to psych everybody out?

: They’ll tell us the truth. There you go. Sorry.

Jim Ryan, Chairman and CEO, Old National: Thank you for this, by the way, everybody.

: Current holders. Number two, which would have the largest impact on improving relative valuation of the shares of Old National? One, better margin performance. Two, above peer loan growth. Three, better expense control. Four, credit quality outperformance. Five, more active share repurchases. Six, an accrued bank acquisition. Loan growth coming out of the deal, almost half. I think that that’s the best path. What will organic loan growth be at Old National in 2026? One, 3% to 5%. Two, 5% to 7%. Three, 7% to 9%. Four, 9% plus. Five to 7%, 90%. That seems to be where many of the mid-caps are today. In which market does it make the most sense for Old National to pursue higher market share through inorganic or organic investment? Indiana, Illinois, Minnesota, Tennessee, or other. Tennessee, I guess there’s maybe some opportunity there with some news in the market. Indiana, Minnesota as well.

Are you looking at that? Any markets that you feel have a competitive advantage from your standpoint?

Jim Ryan, Chairman and CEO, Old National: I’d say all the above. By the way, I agreed with all the answers, all the questions, and the answers that came back from the audience. I do think Tennessee presents some unique opportunities for us right now. There’s obviously the certain noise that’s out there right now, and there could be more noise in the future. Tim Burke, our new President and CEO, just joined us in the last 60 days. I’ve asked him to prioritize finding new talent across our footprint, but especially there in Tennessee, where we just feel like there’s great opportunity. The natural growth dynamics make sense to invest more in talent. You add on top of that any disruption that might happen, and it just feels like the right place to invest at the right time. I think we’re well positioned to do that. We’ve got a great team that’s on the field already.

I do think one thing that limits us is we have a small set of distribution, particularly in the Nashville MSA. Our retail distribution is a little bit smaller than we’d like it to be and subscale. We probably need to continue to invest there, but continue to find great talent across Tennessee and potentially even broadly, outside of Tennessee as we just pursue opportunities that might come our way in terms of talent acquisition. I think that makes a ton of sense for us. Having said that, Minnesota, Chicago, and broadly across both Illinois and Minnesota, and all of our markets make a ton of sense. We’re finding great opportunities.

Tim and I spent an awful lot of time at lunch today discussing the opportunities that we’re seeing coming out of other regional banks, large national players who like our style of banking, who like how fast and nimble we can be with our client set. We need to continue to double down on that opportunity to grow talent and take advantage of this.

: Great. At second quarter earnings, you increased the outlook for net interest income and fee income. What’s driving that increased confidence? What could change to either support that or potentially put that higher guidance at risk?

Jim Ryan, Chairman and CEO, Old National: Yeah, obviously that bigger balance sheet is super helpful when it comes to our net interest margin guidance. We feel really good about where we’re positioned. It’s becoming increasingly clear that the Fed will do at least one or more cuts yet this year. As we have stated, we tried to get to the position where we were relatively neutral and short end of the curve and didn’t have to wait too much for that. Obviously, the steepness of the curve always will matter for banks, and we’re no exception to that. To the extent that it gets a little bit steeper, that could really benefit us. To the extent that rates fall a little bit faster, we could potentially, we have some repricing that we can continue to do, not only within our own book, but also in the broker CD book.

We have about $7 billion in fixed-rate between loans and investments that we’ll reprice here. To the extent that that curve remains steep, that is a real opportunity to grow NIM here.

: How are the deposit pricing dynamics in the market? Are you seeing the beta expectations holding up? What about customer preference for deposit makeshift?

Jim Ryan, Chairman and CEO, Old National: Yeah, I think things are very rational overall. We have been unapologetically aggressive when it comes to deposit growth. Tim and I have spent a lot of time in his first 60 days talking about how we’re going to continue to ramp up our deposit growth by just holding ourselves more accountable. We’re not shy to take the opportunity to grow the deposit book, and sometimes that does come at slightly higher rates. We have a pretty good allocation to the municipal deposit base, and those can be seasonally in or out depending on what’s going on. They’re very predictable, but that can also drive a little bit of our total deposit cost. I would characterize it as very rational. We’re obviously sensitive to what’s going on in terms of the competitive dynamics. We’ll have to see what happens with these first couple of rate cuts.

How aggressive does everybody be? I think it’s going to be rational and it’s expected.

: Yeah. You know, you talked about the $7 billion of fixed-rate asset repricing opportunity. What’s sort of been going on with the CRE paydowns and payoff activity? Are you seeing the competitive landscape changing for exits there?

Jim Ryan, Chairman and CEO, Old National: Yeah, I think we saw a kind of reopening of that market. You know, everybody was, there were many, many banks that got out of the real estate markets in the last couple of years. They all came back in, it feels like at the same time. I think we saw good flows in the capital markets, which we are suggesting is a good thing. It’s a good thing for us, a good thing for the industry to have that velocity happening in the system. I think that allows us to have really strong portfolio management. Those dynamics are as competitive as we’ve seen in the most recent handful of years. I would chalk that up to a good thing. It might hurt, you know, occasionally, you might have a few more paydowns than you might expect. I think overall, that’s a good thing for our industry.

It’s a good thing for Old National just to have a strong CRE kind of liquid market.

: Yeah. Does it change your appetite for adding new CRE here?

Jim Ryan, Chairman and CEO, Old National: No, I would say, look, we believe in that asset class. We have a really great team that works in that business and fundamentally believe that that’s where lots of opportunities still exist for us. Having said that, as we’ve said before, we’re incredibly focused in on the C&I market and our ability to be successful there and grow. Again, I think that’s where I think about a lot of the talent acquisition will come, in that C&I talent base. I think there’ll be some great opportunities for us to grow there since we have such a strong CRE team today. We’re not afraid of it. Having said that, I think I’d like to see C&I grow a little bit faster than we’ve been able to grow our CRE book.

: Hello, anything from the audience? Any questions? Happy to expand the questioning. No, shy group. I guess maybe talk a little bit about the expected path for expenses, especially after we see some of the cost savings coming out of the deal. Where do you see the need for some investments as you continue to grow from here? How should we think about that in terms of overall expense growth?

Jim Ryan, Chairman and CEO, Old National: Yeah, I mean, the great news is, as we said, you know, post our Bremer partnership, we set aside a few of the cost savings dollars for future investment in ourselves. We have a lot of flexibility in how we use that. I think the good news is, I think initially we thought a lot of that investment dollars were going to be allocated towards just being a bigger bank, building out infrastructure that’s not necessarily accretive to revenue and, you know, maybe more back office oriented or support oriented. The good news is we’re having more flexibility in those conversations. It feels like, you know, the regulatory environment is more conducive to, you know, pushing any kind of dollar thresholds higher in terms of what a large financial institution means.

We haven’t seen any actual results out of that yet, but it just feels generally broadly more conducive to maybe spending a few less dollars on that and maybe a few more dollars on revenue and growth initiatives. Today we’re sitting around a 50% efficiency ratio. We think that’s pretty good for a bank our size. At the same time, I don’t feel like we’re underinvesting in the area. If we’re going to go off and spend money outside of what we’ve already kind of promised to Wall Street, I do think it’s going to be in the talent acquisition area. Again, almost my entire conversation with our new President over lunch today was about growing the workforce and finding ways to continue to add to that. I don’t anticipate any big changes coming out of that other than that will be a place we’ll continue to spend money.

I think we got the right plans and initiatives in place. A lot of that self-funding is just, you know, our technology investments roll over. We’ll continue to roll those dollars into new products. We met with our core service provider this morning, talked a little bit about their initiatives and their plans and how they can continue to support our growth and feel really good about that. John is really good. We’re getting ahead into budget season here. We always start with the mindset of positive operating leverage. Now that’s incumbent on Tim to drive the top line. John is going to watch the bottom line. We’re going to come together and drive positive operating leverage every single year.

Quite frankly, the tailwind that we come off our partnership helps this so much, you know, so tremendously that it makes our jobs a little bit easier in a year like this where we have just that significant tailwind. I don’t think we’re that unique in terms of our core business, but we are unique in having the benefit of this bigger balance sheet and the ability to take advantage of the mark to market on the Bremer assets.

: We spent a little bit of time on the credit side, how you know you’re looking out over the next 12 months just in terms of the trajectory of credit migration and your thoughts with the provisioning level or reserve level here, and you know, where that could go.

Jim Ryan, Chairman and CEO, Old National: Yeah, I think we have said we’re kind of in this new normal for Old National. Legacy Old National was arguably under-levered and probably didn’t take as much risk as we could have to drive higher returns. We kind of feel like we’re in this range now where it’s the new normal for Old National. I think what you saw in the first half of the year will continue to shine in the back half of the year and as we look out into 2026. For us, that’s a little bit higher than where we historically have been, but I think it’s the right level for us today. As we look out, we’ve been, I think, aggressive in identifying any demonstrated weakness and putting it into the right buckets.

The good news is when we put it in the right buckets, we’re not feeling like, boy, we have material loss content here. We feel like we’ve got it appropriately graded. We’re watching and monitoring closely. We’re actively working with those borrowers for plans to remediate any deficiency. A lot of this, they got caught up in the higher level of interest rates and how it hurt their cash flows. We feel really good about, if it’s a real estate property, where they own the property at. I think we got a lot of expertise still on our side, both on the credit and workout side. I think we’re in a really good spot. I would call it a more normal year for the back half of the year and the same for 2026.

: You know, capital is still strong after the close, especially with the lower than expected purchase count increase marks. What are your thoughts on optimal capital ratios today, and how should we think about the path of capital management going forward?

Jim Ryan, Chairman and CEO, Old National: Because of our very high earnings, if you look at our, you know, I think on the maybe median to slightly lower than median payout ratios and our very high capital generation, capital is going to come back to us quicker than we thought. We closed the deal and realized that we ended up with better capital ratios than we thought we were going to have. John and I are active discussions around, you know, what that capital return looks like. Obviously, it’s going to be organic growth first, always. We are looking at our capital projections. We’re weighing against, you know, what are the capital markets and ratings agencies’ needs relative to return to capital. I do think, as we indicated earlier, I think there’s an opportunity. We have a program in place today. I do feel like we’re cheap on an earnings basis.

I do think there’s an opportunity for us to think about, you know, when’s the appropriate time to turn back on the buyback. We’re getting closer to every single day that we click along on the capital side. We feel really good about that trajectory.

: What about additional deals from here? You were able to get a good deal with Bremer. You closed it quickly. You, as you just said, have a lot of capital. You have some regulatory tailwinds. Is that still an active part of the planning?

Jim Ryan, Chairman and CEO, Old National: It’s interesting. Obviously, there was an announcement today, and it was a little bit of an eye-popping multiple. They’re all paying attention to that. I think we’re going to look back and just know that those earliest deals were the best deals you could do. For us, I’m glad we did the deal when we did. We’re in a position where we don’t need to do anything, right? We could just focus on being the best bank we can be, the most profitable bank we can be, continue to work on the organic growth side, continue to hire great talent, continue to make the investments of just being a better bank, being an efficient bank. I think that’s job number one for sure. We’re going to look at this capital return and make sure we have the right payouts relative to our growth of capital.

I think thirdly, then we’ll think about what a next partnership might look like. Again, there’s no markets we’ve identified where we absolutely have to be bigger in. We feel really good about where the financial metrics are. We’re in the amenable position to, we can look a lot, but we don’t have to pull the trigger. Again, if deal values are going to head to where the deal print we saw today happens, this is a good time to be on the sidelines, kind of watch it all happen around us. I would be remiss if I didn’t just remind the audience, we talked a little bit about the cost savings and efficiency that we’ll really feel the full effect of the efficiencies and all the cost savings from our Bremer Bank partnership starting in the first quarter of next year. That’s when we’ll realize 100% of that.

The conversion happens pretty late into the fourth quarter, and plus, there’s always kind of a trailing 30 days that we run out some of the staffing needs and get all the rest of the cost savings out. Really, the first quarter is when you’ll see the full impact of the cost savings and the efficiencies we’ll drive out of this partnership.

: Great. Check again to see if there’s any questions in the audience. Yes, ma’am. All right, one second for the microphones.

: I think we’ve been hearing a lot about kind of large banks getting a lot more aggressive, especially on the loan side, and that’s been impacting spreads. I think you’ve made some comments about that on the earnings call. We’d love to hear just how that has evolved. Maybe that’s the first question. The second question, I’m curious on your thoughts about some of these super regionals coming quite downstream on the M&A side. I think the targets we’ve seen with HBand and PNC have been more targets I would have thought for a bank kind of more on your side. How that changes your thoughts on just, I guess, the competitive landscape for both loan deals and also kind of M&A deals.

Jim Ryan, Chairman and CEO, Old National: Sure. Let me start with the M&A since it’s kind of the hot topic of the day. I think we are surprised a little bit about, but I think, you know, you have to fish where the fish are. I think that’s what you’re seeing right now is a reflection of what’s available versus what they’d maybe like to do. I think it also helps them, you know, sharpen their skills up a little bit if they haven’t done a transaction in a while. I don’t think that’s surprising. In terms of impact, right, I think the deal today was around 5% of total assets. I mean, it seems relatively small. Again, I think it’s an important market for them. I’m sure they thought that was the right play. You know, it’s hard to tell in a competitive environment. It’s always competitive.

I mean, I just, you know, I don’t, there’s never a time where it’s not competitive. I guess we’ve seen, you know, when some of the regionals or super regionals went on risk-weighted asset diets, there was a little bit of a slowdown in some of the competitive environment. Some of the big banks just dropped some asset classes altogether, like real estate and other places like that. Everybody’s back in. It’s, you know, we’re used to dealing with that. You know, despite the number of, you know, banks we see, for example, in Chicago, at the end of the day, it only comes down to a handful that we’re really competing with. It comes down to having great relationships. Where we have great relationships, we can win. We’re still seeing nice positive spreads.

I think we’re around 110 basis points on new deals, you know, versus on the fixed rate side. When we reprice, you know, the book, it’s about 110 basis points. Interesting enough, on both, you know, the fixed income, you know, securities portfolio, but also on the loan book. That’s a nice little pickup in spread as we reprice that $7 million towards NIM. I don’t know, Pam, did I get all your question or you can drill me later?

: Anyone else?

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