Yahoo Finance Old National Bancorp (ONB) Q1 2024 Earnings Call Transcript Highlights: Strong Performance and ...
GAAP Earnings Per Share: $0.40 per common share for Q1 2024
Adjusted Earnings Per Share: $0.45, exceeding consensus estimates by 5%
Adjusted Return on Average Tangible Common Equity (ROATCE): 16.7%
Adjusted Return on Assets (ROA): 1.1%
Adjusted Efficiency Ratio: 53.4%
Total Deposit Growth: 5% annualized, 8% year over year
Total Loan Growth: 7.5% annualized, 6% year over year
Total Cost of Deposits: 201 basis points for the quarter
Tangible Common Book Value Growth: 2% during Q1, 11% year over year
Common Equity Tier 1 (CET1) Ratio: 10.76%
Net Interest Income: Faced modest declines due to deposit repricing
Adjusted Non-Interest Income: $78 million for the quarter
Adjusted Non-Interest Expenses: Lower than expected due to various factors
Credit Trends: Stable, with total net charge-offs at 14 basis points
Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the deposit pricing metrics mentioned, particularly the late first quarter and spot rates, and the overall competitive dynamics? A: John Moran, Chief Strategy Officer, noted that the deposit environment remains competitive, but Old National is actively pursuing growth. He highlighted a decrease in deposit costs late in the quarter, with March's deposit costs at 205 basis points, slightly above the average but showing signs of stabilization.
Q: Could you provide insights into the loan growth observed this quarter compared to industry trends? A: Mark Sander, President and COO, explained that Old National's loan growth slightly exceeded expectations due to solid C&I client positions and ongoing demand. He mentioned the benefit of construction loans and expects continued above-industry growth.
Q: Regarding the potential for exceeding growth guides, especially if market conditions provide opportunities, what is Old National's stance? A: James Ryan, CEO, emphasized leveraging new talent and the recent CapStar partnership to potentially accelerate growth. He highlighted the strategic focus on robust markets like Tennessee and Asheville, aiming for significant growth in these areas.
Q: Can you comment on the credit quality, particularly in commercial real estate, and any geographic areas of concern? A: Mark Sander noted that while the CRE volume has decreased due to market dynamics and not a change in underwriting standards, Old National remains selective in adding new CRE clients. James Ryan added that maintaining full pricing and relationships is crucial for sustaining success.
Q: What trends are you observing in multifamily loans within your markets? A: Mark Sander described the multifamily sector as robust, with continued modest rent growth following years of strong performance, which has offset rising expenses. He expressed confidence in the stability and health of the multifamily portfolio.
Q: Could you expand on the non-performing loans that increased this quarter? What specific issues led to this rise? A: Mark Sander clarified that the increase was due to three specific credits, including one multifamily property and two C&I credits. He reassured that these are not indicative of broader concerns and are being actively managed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
