Does Old National Bancorp's (ONB) Dividend Hike Hint at Shifting Capital Management Priorities?

• On August 13, 2025, Old National Bancorp's Board of Directors declared a quarterly cash dividend of US$0.14 per share for common stockholders and a US$17.50 quarterly dividend per share for holders of its 7.0% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A and Series C.
• This announcement came shortly after dovish comments from Federal Reserve Chair Jerome Powell eased concerns about prolonged high interest rates, prompting increased optimism toward regional banks like Old National Bancorp.
• We'll explore how the Fed's more accommodative tone could impact Old National Bancorp's earnings outlook, capital management, and risk profile.

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Old National Bancorp Investment Narrative Recap

To be a shareholder of Old National Bancorp, you largely need confidence in its ability to leverage its Midwest market position and acquisition of Bremer Bank to fuel sustainable loan and fee income growth, while maintaining disciplined risk management in a challenging regional banking sector. The recent dovish shift from the Federal Reserve may help ease a major short-term constraint, namely, margin compression from high interest rates, but does little to mitigate the bank’s ongoing exposure to commercial real estate (CRE) credit risk, which remains the single most significant vulnerability for earnings stability.

Among Old National Bancorp’s recent actions, the August 2025 dividend declarations are particularly relevant, signaling board confidence in the bank’s current capital position and earnings consistency, even as investors continue to monitor margin dynamics and credit quality. These payouts, combined with the optimism sparked by Fed policy tone, could temporarily support sentiment but do not materially alter the underlying credit exposures tied to the bank’s large CRE loan book.

In contrast, recent improvements in credit quality figures may not fully offset the risks investors should be aware of if CRE market volatility returns...

Read the full narrative on Old National Bancorp (it's free!)

Old National Bancorp's outlook anticipates $3.6 billion in revenue and $1.5 billion in earnings by 2028. This assumes annual revenue growth of 24.2% and an increase in earnings of $948.4 million from the current $551.6 million.

Uncover how Old National Bancorp's forecasts yield a $26.27 fair value, a 16% upside to its current price.

Exploring Other Perspectives

Fair value estimates from the Simply Wall St Community range from US$17.70 to US$40.62 across three private investor viewpoints. These differences highlight how expectations around interest rates and exposure to CRE loans can shape the outlook for Old National Bancorp’s performance, check the data to see where your own perspective fits.

Explore 3 other fair value estimates on Old National Bancorp - why the stock might be worth 22% less than the current price!

Build Your Own Old National Bancorp Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Old National Bancorp research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Old National Bancorp research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Old National Bancorp's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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