ONB - Old National Showing Some Loan Growth But Execution Of Its Upcoming Merger Is The Major Driver

• Old National had an okay, but not particularly inspiring, second quarter as pre-provisions were a little light and the earnings beat came from lower provision expense.
• Loan growth (excluding PPP loans) was welcome, but continuing that momentum into the second half is important, as spreads are not going to drive growth in the near term.
• The merger of equals with First Midwest surprised a lot of analysts and investors who expected both banks to follow their own consolidation strategies in the Midwest.
• Deal execution is critical, as making the FMBI MOE deal work is the best opportunity for growth and outperformance that Old National has right now.
• Old National looks undervalued on multiple metrics, but historical growth and returns haven't been exceptional and MOEs carry above-average integration risks.

For further details see: