Old National Bancorp (ONB) Q4 2023 earnings summary

Executive summary

• FY23 record adjusted EPS was $2.05, adjusted ROATCE 21.3%, and adjusted efficiency ratio 50.4%; reported EPS was $1.94.

• Q4 adjusted EPS was $0.46 and adjusted ROATCE 19.0%; stable deposits and credit quality supported results despite higher funding costs and lower NIM.

Financial highlights

• FY23 net income applicable to common shares was $565.9M, or $1.94 diluted EPS; adjusted net income was $599.2M, or $2.05 EPS.

• Q4 net income applicable to common shares was $128.4M, or $0.44 diluted EPS; adjusted net income was $134.6M, or $0.46 EPS.

• Q4 FTE net interest income was $370.5M and FTE NIM was 3.39%, down 10 bps QoQ and 46 bps YoY.

• Q4 FTE total revenue was $470.6M; PPNR was $186.4M, or $194.6M adjusted.

• Q4 noninterest expense was $284.2M and adjusted expense was $255.2M; adjusted noninterest income was $79M, up 7% YoY.

Outlook and guidance

• FY24 outlook assumes CapStar closes June 30, 2024; EOP loans up 12%–13% (4%–6% excluding CapStar), with total revenue down ~4% (flat to down 1% excluding CapStar).

• FY24 FTE NII outlook is ~$1.53B, down ~3% versus FY23; excluding CapStar, flat to down 1%.

• FY24 noninterest income is expected up 6%–7% (2% excluding CapStar); noninterest expense is projected at $1.01B (~$980M excluding CapStar).

• FY24 net charge-off ratio outlook is 0.15%–0.20%; provision is $80M–$85M, excluding CapStar Day 1 non-PCD double count; tax rate outlook is 22%–25%.

• Guidance assumes three 25-bp Fed cuts in 2H24; deposit beta peaks at 39% before declining to the low 20% range by Q4.