Old National Bancorp (NASDAQ: ONB) has captured investor attention following a significant increase in its stake by Comerica Bank. According to a 13F filing released on Friday, Comerica boosted its holdings by 27.8% during the fourth quarter, now owning 263,057 shares valued at approximately $5.87 million. This move comes as the bank continues to emphasize share buybacks and capital returns.
The timing of the filing is notable, as Old National released its first-quarter 10-Q on April 29, providing updated earnings, credit, and capital-return data just ahead of the disclosure. The bank reported net income to common shareholders of $229.6 million, or 59 cents per diluted share, with adjusted earnings landing at 61 cents per share. Net interest income, on a fully taxable equivalent basis, reached $580.4 million, while total loans climbed to $49.8 billion.
Chairman and CEO Jim Ryan highlighted the bank's performance as a "strong start to the year," citing "disciplined execution." The bank ended the quarter with $55.7 billion in deposits and repurchased 3.9 million common shares, underscoring its commitment to shareholder returns.
Chief Financial Officer John Moran emphasized the importance of buybacks, stating, "The best investment we can make today is ourselves." Old National returned $151 million to shareholders during the quarter, combining dividends and repurchases. The bank also declared a quarterly dividend of 14.5 cents per share, payable on May 16 to shareholders of record as of May 5.
Despite the positive earnings beat—adjusted earnings exceeded forecasts by one cent per share—revenue fell short of Wall Street targets. This has created a mixed sentiment among investors, balancing solid profit conversion against concerns about sluggish top-line growth. Net interest margin slipped 10 basis points to 3.55%, while net charge-offs totaled $32 million, highlighting ongoing credit challenges.
Analyst consensus remains cautiously optimistic. According to MarketBeat, eight analysts rate the stock a Buy, while three hold at Hold, resulting in an average "Moderate Buy" rating. The mean price target stands at $27.91, suggesting potential upside from the current share price of $23.97, which values the bank at approximately $9.3 billion in market capitalization.
Old National faces familiar regional banking headwinds, including managing loan growth amid tight deposit costs and avoiding credit quality deterioration. Peers such as Huntington Bancshares and Regions Financial, both with larger market caps, face similar scrutiny over funding stability and loan appetite. Commercial real estate exposure remains a risk factor, though higher net interest income and active buybacks provide some support for the investment case.
The key question now is whether Comerica's increased stake signals a broader institutional buying trend or remains an isolated filing. With margins under pressure and credit expenses persisting, Old National's ability to sustain its capital return strategy will be closely watched by investors.
