Midwestern regional bank Old National Bancorp (NASDAQ: ONB) missed Wall Street’s revenue expectations in Q3 2026, with sales flat year on year at $719.5 million. Its non-GAAP profit of $0.66 per share was in line with analysts’ consensus estimates.

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StockStory’s take

Old National Bank’s third quarter results were met with a negative market reaction, reflecting flat revenue performance against a backdrop of heightened competition for deposits and loans. Management attributed the quarter’s results to robust deposit growth, stable credit quality, and careful expense management. CEO James C. Ryan pointed to “disciplined execution of our strategy,” highlighting strong deposit inflows and expansion in commercial lending, while noting that increased competition and selective loan origination moderated overall loan growth.

Looking ahead, management’s guidance is shaped by expectations for continued organic loan and deposit growth, with a specific focus on commercial and industrial lending. CFO John Vincent Moran noted that “our overall expectations remain unchanged,” emphasizing positive operating leverage and a goal of delivering over 15% EPS growth for the year. However, the team acknowledged potential headwinds from deposit pricing pressures and a competitive environment, while maintaining that investments in talent and technology should support future profitability.

Key insights from management’s remarks

Management identified strong organic deposit growth, modest loan expansion, and effective cost control as key factors shaping quarterly performance, while continuing to invest in talent and technology to support the bank’s long-term strategy.

• Deposit growth momentum: Organic deposit inflows were robust, with non-interest-bearing deposits up and period-end total deposits increasing 11% annualized. Seasonal strength in public funds also contributed, but management emphasized that brokered deposits actually declined, underscoring the organic nature of the growth.
• Competitive loan growth: The commercial portfolio saw healthy expansion, particularly in commercial and industrial (C&I) lending, which grew 12% year over year. Active portfolio management and selective origination helped moderate overall loan growth, with management focusing on opportunities that met credit and pricing standards.
• Discipline amid rising funding costs: The bank experienced an 8-basis-point increase in deposit costs, attributed partly to new, higher-cost deposit growth and seasonal factors. Management described the deposit environment as “very competitive,” requiring a proactive approach to client acquisition and pricing.
• Strategic hiring boosts capabilities: The addition of 26 relationship managers, including hires focused on key growth markets like Ohio and specialized banking areas, was highlighted as a driver for future relationship expansion and fee income growth. Management stressed that these hires are expected to pay for themselves quickly and enhance the bank’s competitive positioning.
• Expense control and reinvestment: Old National achieved a record-low efficiency ratio while reducing adjusted expenses, even as investments continued in technology, process improvements, and talent. The leadership team remains committed to balancing expense discipline with investments that support long-term growth and operational efficiency.

Drivers of future performance

Old National expects ongoing competition for deposits and loans, continued investment in talent, and stable credit quality to shape its performance in the next quarter and beyond.

• Deposit and loan pipeline strength: Management believes healthy loan and deposit pipelines, especially in commercial and industrial segments, will drive growth. They expect recent hires to expand client relationships and support mid-single-digit loan growth targets, but acknowledge that heightened competition could pressure margins and growth rates.
• Expense management versus investment: The bank anticipates expenses to remain near the lower end of guidance, despite a step-up from new hires and normal year-end factors. Leadership is focused on maintaining strong efficiency while investing in client-facing talent, technology, and specialized business lines such as fintech and wealth management.
• Interest rate and margin dynamics: Management expects a modest improvement in net interest margin, supported by repricing of loans and securities at higher yields. However, they caution that deposit costs could remain elevated due to competitive pressures and that the overall rate environment will impact NII (Net Interest Income) and profitability.

Catalysts in upcoming quarters

Over the next few quarters, the StockStory team will be watching (1) whether deposit growth remains robust despite a highly competitive environment, (2) how effectively new commercial hires ramp up and contribute to loan and fee income expansion, and (3) the bank’s ability to manage expense discipline while investing in technology and specialized business lines. The interplay between deposit pricing, credit quality, and net interest margin will also be closely monitored.

Old National Bank currently trades at $24.61, down from $25.34 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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