Old National Bancorp's Q1 2025: Key Contradictions in Capital Strategy and Deposit Beta Management

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Financial Performance and Loan Growth:
- Old National Bancorp reported adjusted earnings per share of $0.45 for Q1, with net interest income and margin meeting expectations.
- The growth was driven by strong deposit franchise, solid loan growth, and disciplined expense management.

Deposit Strategy and Cost Management:
- Total deposits were up 2.1% annualized, with core deposits (excluding brokered) up nearly 1.7% annualized.
- The 17 basis point decrease in total deposit costs was in line with expectations, and the cumulative total deposit beta remained at 37%.

Bremer Partnership and Capital Flexibility:
- The Bremer Bank partnership is expected to close on May 1, earlier than initially anticipated, enhancing Old National's footprint and balance sheet.
- Higher day-one capital levels are expected, providing flexibility around the size of a potential commercial real estate loan sale post-close.

Credit Quality and Reserves:
- Total net charge-offs were 24 basis points, with a stable delinquency ratio, and the allowance for credit losses increased to 116 basis points.
- The increase in reserves reflects uncertainty in global trade and economic conditions, maintaining a proactive approach to credit monitoring.