Old National Extends Record Profit Streak on Expense Discipline

The Tip Desk · October 26, 2026 · 3 min read

Net income applicable to common shares reached $250.0 million, or $0.66 a share, as the efficiency ratio hit a record 46.1%.

Old National Bancorp (ONB), the sixth-largest commercial bank headquartered in the Midwest, reported record third-quarter 2026 net income applicable to common shares of $250.0 million, or $0.66 a share, extending a second-quarter record of $249.4 million. Adjusted net income was $249.7 million, also $0.66 a share.

The result combined a second consecutive rise in fully taxable-equivalent net interest income with a step-down in expenses that produced a record efficiency ratio. Chairman and CEO Jim Ryan said the quarter was highlighted by record net income, a record efficiency ratio, and growth in both deposits and loans.

Net interest income on a fully taxable-equivalent basis rose to $592.0 million from $586.5 million. The company said earning-asset growth and favorable rate/volume mix more than offset higher deposit costs. Net interest margin on a fully taxable-equivalent basis compressed 2 bps to 3.52%.

Period-end total loans were $51.2 billion, up $362.3 million, or 2.9% annualized, after an $1.0 billion, or 8.3% annualized, increase in the second quarter. Commercial and industrial loans rose $148.0 million and commercial real estate $157.3 million. Average total loans were $51.1 billion, up 7.8% annualized. The period-end commercial pipeline totaled $4.4 billion, down 20% from record second-quarter levels and up 6% from a year earlier.

Deposit growth re-accelerated. Period-end total deposits were $57.6 billion, up 10.6% annualized, after 3.4% annualized growth in the prior quarter. Average deposits were $56.9 billion, up $1.3 billion. Total deposit costs rose 8 bps to 179 bps and interest-bearing deposit costs rose 8 bps to 231 bps, reversing a 1 bp decline in both costs in the second quarter. The loan-to-deposit ratio was 89%.

Noninterest income was $128.4 million, down from $153.6 million. Excluding pre-tax gains from the settlement of the Bremer pension plan of $0.9 million in the third quarter and $13.2 million in the second quarter, as well as realized debt-securities gains, noninterest income was down 9.1%. The company attributed the decline to about $10 million of elevated other income in the second quarter from market-value adjustments, higher company-owned life insurance income, and an asset recovery. Bank and wealth fees remained resilient, the company said.

Noninterest expense fell to $355.4 million from $372.2 million. Adjusted noninterest expense, which excludes $0.7 million of merger-related charges, declined to $354.7 million from $360.1 million. The efficiency ratio was a record 46.1% and the adjusted efficiency ratio a record 44.9%, versus 47.0% and 45.2%.

Credit quality remained stable. The provision for credit losses was $33.6 million, compared with $36.2 million. Net charge-offs were $34.1 million, or 27 bps of average loans, versus 26 bps; excluding purchased credit deteriorated loans with an allowance at acquisition, net charge-offs were 24 bps versus 22 bps. Thirty-plus day delinquencies were 0.25% of loans and nonaccrual loans 0.92%. The allowance for credit losses, including unfunded commitments, stood at $611.5 million, or 1.20% of total loans.

Preliminary regulatory Tier 1 common equity to risk-weighted assets rose 2 bps to 11.11%. The company repurchased $100 million, or 3.9 million shares, of common stock and paid $55 million of quarterly cash dividends, a combined payout ratio of 62%. Return on average tangible common equity was 19.6%.

Income tax expense was $69.8 million, for an effective tax rate of 21.6%. Old National said it remains well positioned to build on the quarter’s momentum.