Old National Bancorp "Discounted Top Performer - Assuming at Buy" (Buy) Braziler

Research evidence excerpt

Old National Bancorp "Discounted Top Performer - Assuming at Buy" (Buy) Braziler

Old National Bancorp UBS Research

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Pivotal Questions Q: Can ONB continue growing earnings as acquisition accretion runs off?

Yes. We believe investors remain overly focused on scheduled accretion runoff (rate marks 88% of

total) and underappreciate the number of earnings levers still at ONB's disposal. Nearly 40% of

deposits remain exception priced (~90% down-rate beta), and ~$8B of fixed-rate loans and securities

are expected to reprice over the next year. The higher level of exception priced deposits limits the pool

of deposits at-risk for costs moving higher in the current rate back-drop. At the same time, dollars

from acquired loan run-off continue to be redeployed at higher market rates. We believe the

combination of fixed asset repricing and strong deposit base should support continued NIM

expansion, which when coupled with buybacks supports double-digit EPS growth.

Q: Buybacks versus M&A, what's the right use of capital today?

Management views ONB stock as the highest-return investment available. ONB returned $151MM to

shareholders in 1Q26 while maintaining a CET1 ratio above 11%, and management continues to

describe repurchases as generating roughly an 11% return at current valuation levels. Importantly,

ONB no longer needs acquisitions to support growth, liquidity, or market positioning. The company

has already transformed the franchise through First Midwest, CapStar, and Bremer. We believe the

next phase is characterized by capital return and organic growth. While management's M&A track

record should win them the right to do more deals in the future, the near-term focus on organic