With The First Midwest Merger Done, Old National Bancorp Needs Execute On The Opportunity

Banks undergoing significant mergers are typically put in the penalty box now due to concerns about regulatory delays and real post-deal synergies, but the close of Old National Bancorp’s (NASDAQ:ONB) merger of equals with First Midwest hasn’t really helped much. These shares have continued to lag peers since my last update, with the shares up about 4% against closer to a 10% positive move in the peer group and a similar 4% move in the S&P 500.

I have decidedly mixed feelings on Old National shares at this point. On one hand, the valuation doesn’t seem ambitious or aggressive to me, even in the context of long-term term earnings growth in the neighborhood of 4%. On the other hand, neither of these two banks stand out on customer service or long-term core growth, and the Chicago-era lending market is getting increasingly competitive.

 

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With The First Midwest Merger Done, Old National Bancorp Needs Execute On The Opportunity