Old National Bank SOAR Analysis
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Strengths
Deep Market Density Across the Midwestern Footprint
Old National Bank holds top-five share in key legacy cities across Indiana and Illinois, and its 7-state Midwest footprint gives it scale that stays local. Its focus on middle-market clients in mid-sized urban hubs supports high-touch service and faster credit decisions, a fit national banks and digital-only models often miss. The bank is also expanding in Minnesota and Wisconsin, reinforcing a regional moat built on density, relationships, and community presence.
Highly Granular and Cost-Efficient Core Deposit Base
Old National Bank"s core deposit base is highly granular: about 30% of total balances are non-interest-bearing demand accounts, which supports low funding costs. That mix, built on retail loyalty and small-business ties, helped keep total deposit costs below peers in early 2026 and gives the bank room to price loans more aggressively. In a volatile rate cycle, this funding profile is a clear edge.
Robust Capital Buffers and Conservative Credit Culture
Old National Bank's Common Equity Tier 1 ratio was about 10.7% in 2025, giving it a strong cushion against stress and rule changes. Its credit culture stays conservative, with net charge-offs typically 10 to 15 basis points below the industry median, which helps protect capital in weak CRE or softer consumer spending. That discipline keeps the balance sheet resilient and gives the bank room to absorb shocks without chasing risky growth.
Diversified Non-Interest Income Through Wealth Management
Old National Bank's wealth management and private banking units now drive nearly 20% of total revenue, giving the bank a stronger fee base than spread income alone. Its 1824 Wealth Advisors platform oversees more than $30 billion in assets under management and administration, and that scale helps capture high-net-worth inflows from larger metro rivals. This fee income cushions earnings when net interest margins tighten or loan demand slows.
Successfully Integrated Post-Merger Operational Scale
Old National Bank has turned the 2022 First Midwest merger into a cleaner, larger operating base, with back-office and core-system consolidation lifting the franchise's scale. The payoff shows in a lower cost base and a 2025 efficiency ratio moving toward the 50% mark by early 2026, which is strong for a regional bank of this size. That leaner setup frees capital for digital upgrades and hiring without pushing non-interest expense much higher.
Old National Bank's Midwest Scale, Low-Cost Deposits, and Strong Credit Stand Out
Old National Bank's strengths are its Midwest scale, with top-five share in key legacy markets and a 7-state footprint that supports local pricing power and relationship banking. Its funding base is a clear edge, with about 30% of deposits non-interest-bearing and total deposit costs below peers in early 2026.
Capital and credit quality are also strong: CET1 was about 10.7% in 2025, and net charge-offs have run 10 to 15 basis points below the industry median. Fee income adds more cushion, with wealth and private banking driving nearly 20% of revenue.
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Opportunities
Expansion into High-Growth Tennessee and Missouri Markets
Nashville and St. Louis give Old National Bank a faster-growth C&I target than its legacy Midwest core. The Nashville metro has more than 2.1 million people, and the St. Louis metro is about 2.8 million, so both offer deeper business and loan pipelines. By moving its relationship-based model into these markets, Old National Bank can take share from entrenched rivals and grow commercial balances.
Digital Transformation and Neo-Banking for Small Businesses
Old National Bank can win by offering a digital-first stack for small businesses that need more than basic banking. U.S. small businesses are 99.9% of firms and employ 45.9% of workers, so tools for payroll, merchant services, and real-time cash flow can create sticky fee income. Even a 5% share of tech-forward clients in current markets could add meaningful deposits and cross-sell revenue.
Strategic Consolidation of Smaller Community Rivals
In 2025, sub-$5 billion community banks still face heavier compliance and tech costs, which keeps exit deals in play. Old National Bank, with a 2025 balance sheet above $50 billion, can act as a natural aggregator by buying nearby banks and lifting deposit share in contiguous counties. These bolt-on deals add low-cost funding, and they let Old National Bank remove duplicate branches and back-office costs fast.
Expansion of Sustainable and Transition Financing
Old National Bank can win share in Midwest green retrofits and sustainable infrastructure, where manufacturers are upgrading plants to cut energy use and cost. A dedicated ESG-linked lending team would help structure loans around federal and state incentives and meet investor reporting rules. This niche is expected to grow at a double-digit pace through 2027.
Enhanced Data Analytics for Precision Cross-Selling
Old National Bank can use machine learning on transactional data from its 1.2 million customers to spot likely wealth and specialty insurance needs, then route the right offers at the right time. That matters because much of the retail base is still under-penetrated in fee products, so even a small lift in products per household can raise cross-sell revenue without adding many new clients.
Shifting from reactive service to proactive advice also improves retention and deepens wallet share, especially in higher-balance households.
Old National Bank's 2025 Growth Play: Nashville, St. Louis, and Small Business
Old National Bank's best opportunities in 2025 are Nashville and St. Louis expansion, small-business fee products, and bolt-on M&A. The firm reported 1.2 million customers and a balance sheet above $50 billion, giving it scale to add deposits and cross-sell in faster-growth markets.
| Opportunity | 2025 fact |
|---|---|
| Nashville | 2.1M+ metro people |
| St. Louis | 2.8M+ metro people |
| Small business | 99.9% of U.S. firms |
| Scale | $50B+ balance sheet |
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Aspirations
Attainment of Top-Quartile Return on Tangible Common Equity
Old National Bank still frames top-quartile Return on Tangible Common Equity as an >18% goal for the mid-2020s, which would put it near the best regional banks on capital efficiency. Hitting that level depends on keeping a strong mix of higher-yield loans, tight funding costs, and disciplined expense control. If achieved, it should support a richer valuation because investors usually pay up for banks that can sustain elite ROTCE through the cycle.
Becoming the Preeminent Midwest Employer of Choice
Old National Bank is aiming to be the Midwest employer of choice by winning the top 5% of regional banking talent. It is pairing community impact with career flexibility, which matters in a relationship business where people shape client trust.
The bank is also investing in leadership development and inclusive hiring to build stronger teams in 2025 and beyond. That should lower turnover costs and raise the quality of every customer interaction.
Complete Seamlessness Between Physical and Digital Channels
Old National Bank's goal is a frictionless, truly omnichannel journey: a customer should be able to start a mortgage on mobile and finish it in a branch with no data loss. That means every product must work through every touchpoint, so the old split between digital and branch teams disappears. For a bank serving 1 million+ customers across the Midwest and Southeast, seamless handoffs can raise convenience and loyalty.
Transformation into a National Leader in Community Reinvestment
Old National Bank's goal is to set a CRA bar that rivals the best in banking, using 2025 capital to back affordable housing and small-business grants in Midwest urban cores. That matters because community lending is not just compliance; it can shape where depositors, borrowers, and local partners choose to bank. If Old National Bank becomes a visible pillar in underserved neighborhoods, it can turn social impact into durable brand trust and deeper customer loyalty.
Reducing the Long-Term Efficiency Ratio Below 50 Percent
Old National Bank's goal to keep the efficiency ratio in the upper 40s by 2026 is key, because every 1-point drop frees up 1 cent of expense for each revenue dollar. Automation of back-office work and moving legacy clients to digital self-service should cut costs without needing faster loan growth. That matters if loan demand stalls or rates fall, since a 49% ratio gives more positive operating leverage than a 55% ratio.
Old National's 2025 Push: Higher Returns, Lower Costs, Bigger Reach
Old National Bank's aspirations center on elite 2025 execution: >18% ROTCE, upper-40s efficiency by 2026, and top-5% regional talent. It also wants a true omnichannel model for 1M+ customers and stronger CRA-led community reach. If it delivers, the mix should lift loyalty, lower cost, and support valuation.
| Metric | Target |
|---|---|
| ROTCE | >18% |
| Efficiency ratio | Upper 40s by 2026 |
| Customers | 1M+ |
| Talent | Top 5% |
Results
Record Net Income and ROA Performance for Fiscal Year 2025
Old National Bank posted its most profitable year in company history in fiscal 2025, helped by the full run-rate from merger synergies. Return on assets reached 1.22%, up sharply versus its prior 3-year average. That level of ROA shows the larger scale is now producing better earnings power and more room to fund future growth.
Successful Milestone of Fifty Billion Dollars in Total Assets
In 2025, Old National Bank crossed the $50 billion total asset mark, reaching a new scale that lifts its standing in the Midwest and beyond. That size improves pricing power with technology vendors and supports larger commercial credit facilities. Growth was still balanced, with loan gains in Minneapolis and Chicago helping offset branch pruning in slower-growth rural markets.
Consistency in Core Net Interest Margin Expansion
Old National Bank kept core net interest margin near 3.42% in early 2026, even as many peers faced deposit-cost pressure. That strength came from a high mix of non-interest-bearing deposits and disciplined rate hedging, which helped protect spread income. With margin stability in place, Old National Bank could keep funding its digital platform and still support earnings per share through FY2025.
Year Over Year Growth in Wealth Management Fees
Old National Bank's wealth management fees rose 14% year over year by early 2026, showing clear momentum in fee income. That run-rate adds a steadier earnings stream and helps diversify revenue beyond spread income. It also points to effective cross-selling into the commercial client base, while fiduciary services make relationships stickier and lift wallet share per client.
Industry-Leading Asset Quality and Low Delinquency Rates
Old National Bank ended the 2025 cycle with non-performing loans at just 0.45% of total loans, among the lowest levels in the mid-cap regional bank group.
That shows the bank kept credit standards tight while still growing, instead of chasing volume at the expense of risk.
For investors, this supports dividend safety and suggests the growth plan can hold up through a weaker credit backdrop.
Old National Bank Posts Record Profit as Margin and Credit Hold Strong
Old National Bank delivered record fiscal 2025 profit, with ROA at 1.22% and assets above $50 billion. Core margin held near 3.42% into early 2026, while wealth fees rose 14% and non-performing loans stayed low at 0.45% of total loans.
| FY2025 metric | Value |
|---|---|
| Return on assets | 1.22% |
| Total assets | >$50B |
| Wealth fees growth | 14% |
| Non-performing loans | 0.45% |
Frequently Asked Questions
Old National Bank leverages its dominant Midwest market density, a granular $38 billion core deposit base, and a conservative credit culture to ensure stability. These internal assets are supported by an 18.2% Return on Tangible Common Equity target and a 10.7% CET1 ratio. This capital strength allows the bank to maintain a low-cost funding advantage and survive economic volatility while pursuing aggressive market share gains.
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