Will ONB's Q1 2025 forecast meet expectations?

**Old National Bancorp's (ONB) Q1 2025 forecast faces a challenging environment**, with potential risks stemming from anticipated rate cuts and leadership transitions. However, the bank's strong deposit and loan growth, recent acquisitions, and robust financial metrics provide a solid foundation that could support meeting market expectations. Here's a detailed analysis:

1. **Potential Impact of Rate Cuts**: The management has expressed concerns about the potential future income impacts due to anticipated rate cuts. This cautious outlook on interest rate movements could affect the bank's net interest income (NII) and overall earnings if rate cuts lead to reduced net interest margins (NIMs).
2. **Leadership Transition**: The planned retirement of President and COO, Mark Sander, scheduled for June 30, 2025, presents a significant leadership transition. This change could lead to uncertainty in the bank's strategic direction and may impact short-term operational efficiency.
3. **Strong Deposit and Loan Growth**: Old National Bancorp has seen remarkable growth in low-cost core deposits, with a 10% increase in 2024. This growth has funded a corresponding 10% increase in loans. The bank's total deposits and loans have enjoyed a compounded annual growth rate of 8% since 2022, indicating a strong business expansion.
4. **Successful Acquisitions**: The bank's successful acquisition and integration of CapStar Bank and Old National Bank, along with a new partnership with Bremer Bank, are expected to enhance its market position and drive growth.
5. **Robust Financial Metrics**: Old National Bancorp reported impressive financial metrics, including an adjusted earnings per share (EPS) of $1.86, an adjusted return on average tangible common equity (ROATCE) of 16.9%, and an adjusted efficiency ratio of 52%. These figures suggest strong financial health and operational efficiency.
6. **Analyst Expectations**: Analysts project Q1 2025 earnings per share (EPS) of $0.42 and revenue of $479.43 million. This aligns with the bank's historical performance and market conditions. However, there is a slight variance in estimates, with some analysts expecting a slightly higher EPS of $0.46 per share and revenue of $486.03 million for the quarter.

In conclusion, while there are potential challenges, Old National Bancorp's strong growth in deposits and loans, successful acquisitions, and robust financial metrics position the bank well to meet market expectations in Q1 2025. The bank's ability to navigate potential rate cuts and leadership transitions will be crucial in sustaining this performance.