Stephens has revised its price projection for Old National Bancorp (NASDAQ: ONB) upward to $28.00 from the prior $27.00, keeping its Overweight stance on the stock. This adjustment follows the bank's release of fourth-quarter 2025 financial results which outperformed consensus forecasts in key areas.
The earnings report highlighted Old National's advantages stemming from its cost-efficient deposit structure, a strong presence in the Midwest market, and integration benefits tied to the recent acquisition of Bremer Bank in the Minneapolis-Saint Paul metropolitan area. These factors collectively contributed to the bank’s enhanced profitability metrics.
Further affirming its financial strength, Old National repurchased 1.1 million shares in the final quarter of 2025, complementing an aggregate buyback of 2.2 million shares for the full year. Management characterized stock repurchases as the preferred allocation of surplus capital aside from client lending activities. Notably, discussions indicated that further mergers and acquisitions are presently unlikely.
Looking ahead, the bank’s leadership anticipates loan growth between 4% and 6% in 2026, accompanied by incremental quarterly growth in net interest income. Stephens’ financial model projects a return on assets (ROA) of approximately 1.36% and a return on tangible common equity (ROTCE) near 18% for the year.
On the earnings front, Old National posted an adjusted earnings per share (EPS) of $0.62 for the quarter, exceeding analyst predictions of $0.59. However, total revenue was reported at $690.59 million, falling short of forecasts set at $706.14 million. This divergence suggests a mixed outcome, with profits surpassing expectations despite weaker top-line performance.
Investors and analysts are weighing these developments carefully, noting that while the EPS beat is encouraging, the revenue shortfall might raise considerations regarding the bank's future growth potential. Adjustments in analyst evaluations and shifts in investor sentiment could result from these earnings dynamics.
Overall, Old National Bancorp's strong capital position and strategic focus on share repurchases, combined with positive earnings surprises, offer a cautiously optimistic outlook. Nonetheless, the revenue miss injects some uncertainty into the bank’s longer-term growth trajectory.