Old National Bancorp Continues To Grind Out Gains

Old National Bancorp delivered a strong Q2, with record net income of $249.4M and adjusted EPS beating consensus by $0.02. ONB posted robust 8.3% annualized loan growth, a stable net interest margin at 3.54%, and a record commercial lending pipeline of $5.6B. Credit quality remains excellent, with net charge-offs flat at 0.26% and nonaccrual loans improving to 0.91%; the efficiency ratio hit a record 45.2%. Despite strong fundamentals and raised guidance, ONB stock's valuation near $26 per share appears rich versus book, supporting a continued neutral stance. We are making significant progress in our ongoing Q2 regional bank earnings updates and understanding how the tough macro situation is impacting performance and the outlook for the group as a whole.