OLD NATIONAL BANCORP /IN/ [ONB] Filings

10-Q 1 onb-20240630.htm 10-Q onb-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number 001-15817

Old National Bancorp

(Exact name of registrant as specified in its charter)


Indiana		35-1539838
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

One Main Street		47708
Evansville,	Indiana	(Zip Code)
(Address of principal executive offices)

(800) 731-2265

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common stock, no par value

ONB

NASDAQ

Global Select Market

Depositary Shares, each representing a 1/40th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series A

ONBPP

NASDAQ

Global Select Market

Depositary Shares, each representing a 1/40th interest in a share of Non-Cumulative Perpetual Preferred Stock, Series C

ONBPO

NASDAQ

Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The registrant has one class of common stock (no par value) with 318,970,000 shares outstanding at July 31, 2024.

OLD NATIONAL BANCORP

FORM 10-Q

TABLE OF CONTENTS


			Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets (unaudited)		4
	Consolidated Statements of Income (unaudited)		5
	Consolidated Statements of Comprehensive Income (Loss) (unaudited)		6
	Consolidated Statements of Changes in Shareholders’ Equity (unaudited)		7
	Consolidated Statements of Cash Flows (unaudited)		8
	Notes to Consolidated Financial Statements (unaudited)		10
	Note 1.	Basis of Presentation	10
	Note 2.	Recent Accounting Pronouncements	10
	Note 3.	Acquisition and Divestiture Activity	11
	Note 4.	Net Income Per Common Share	13
	Note 5.	Investment Securities	14
	Note 6.	Loans and Allowance for Credit Losses	17
	Note 7.	Leases	28
	Note 8.	Goodwill and Other Intangible Assets	30
	Note 9.	Qualified Affordable Housing Projects and Other Tax Credit Investments	31
	Note 10.	Securities Sold Under Agreements to Repurchase	33
	Note 11.	Federal Home Loan Bank Advances	33
	Note 12.	Other Borrowings	34
	Note 13.	Accumulated Other Comprehensive Income (Loss)	36
	Note 14.	Income Taxes	38
	Note 15.	Derivative Financial Instruments	39
	Note 16.	Commitments, Contingencies, and Financial Guarantees	43
	Note 17.	Fair Value	44
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		50
	Forward-Looking Statements		50
	Financial Highlights		51
	Non-GAAP Financial Measures		53
	Executive Summary		56
	Results of Operations		57
	Financial Condition		63
	Risk Management		67
	Critical Accounting Estimates		73
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		73
Item 4.	Controls and Procedures		74
PART II.	OTHER INFORMATION		75
Item 1A.	Risk Factors		75
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		75
Item 5.	Other Information		75
Item 6.	Exhibits		76
SIGNATURE			77

GLOSSARY OF ABBREVIATIONS AND ACRONYMS

As used in this report, references to “Old National,” “the Company,” “we,” “our,” “us,” and similar terms refer to the consolidated entity consisting of Old National Bancorp and its wholly-owned subsidiaries. Old National Bancorp refers solely to the parent holding company, and Old National Bank refers to Old National Bancorp’s wholly-owned bank subsidiary.

The acronyms and abbreviations identified below are used throughout this report, including the Notes to Consolidated Financial Statements (Unaudited). You may find it helpful to refer to this page as you read this report.

AOCI: accumulated other comprehensive income (loss)

AQR: asset quality rating

ASC: Accounting Standards Codification

ASU: Accounting Standards Update

ATM: automated teller machine

BBCC: business banking credit center (small business)

CapStar: CapStar Financial Holdings, Inc.

CECL: current expected credit loss

Common Stock: Old National Bancorp common stock, no par value

DTI: debt-to-income

FASB: Financial Accounting Standards Board

FDIC: Federal Deposit Insurance Corporation

FHLB: Federal Home Loan Bank

FHTC: Federal Historic Tax Credit

FICO: Fair Isaac Corporation

GAAP: U.S. generally accepted accounting principles

LGD: loss given default

LIBOR: London Interbank Offered Rate

LIHTC: Low Income Housing Tax Credit

LTV: loan-to-value

N/A: not applicable

N/M: not meaningful

NASDAQ: NASDAQ Global Select Market

NMTC: New Markets Tax Credit

NOW: negotiable order of withdrawal

OCC: Office of the Comptroller of the Currency

PCD: purchased credit deteriorated

PD: probability of default

Renewable Energy: investment tax credits for solar projects

SEC: U.S. Securities and Exchange Commission

SOFR: Secured Overnight Financing Rate

OLD NATIONAL BANCORP

CONSOLIDATED BALANCE SHEETS


(dollars and shares in thousands, except per share data)	June 30, 2024		December 31, 2023
	(unaudited)
Assets
Cash and due from banks	$	428,665	$	430,866
Money market and other interest-earning investments	804,381		744,192
Total cash and cash equivalents	1,233,046		1,175,058
Equity securities, at fair value	85,521		80,372






Investment securities - available-for-sale, at fair value (amortized cost $8,168,508 and $7,684,889, respectively)	7,105,478		6,713,055
Investment securities - held-to-maturity, at amortized cost (fair value $2,512,502 and $2,601,188, respectively)	2,986,449		3,013,493
Federal Home Loan Bank/Federal Reserve Bank stock, at cost	374,147		365,588
Loans held-for-sale, at fair value	66,126		32,006
Loans:
Commercial	10,332,631		9,512,230
Commercial real estate	16,016,958		14,140,629
Residential real estate	6,894,957		6,699,443
Consumer	2,905,967		2,639,625
Total loans, net of unearned income	36,150,513		32,991,927
Allowance for credit losses on loans	(366,335)		(307,610)
Net loans	35,784,178		32,684,317
Premises and equipment, net	601,945		565,396


Goodwill	2,170,709		1,998,716
Other intangible assets	135,495		102,250
Company-owned life insurance	862,032		767,902
Accrued interest receivable and other assets	1,714,519		1,591,683
Total assets	$	53,119,645	$	49,089,836
Liabilities
Deposits:
Noninterest-bearing demand	$	9,336,042	$	9,664,247
Interest-bearing:
Checking and NOW	8,081,218		7,331,487
Savings	4,983,811		5,099,186
Money market	10,549,944		9,561,116
Time deposits	7,048,213		5,579,144
Total deposits	39,999,228		37,235,180
Federal funds purchased and interbank borrowings	250,154		390
Securities sold under agreements to repurchase	240,713		285,206
Federal Home Loan Bank advances	4,744,560		4,280,681
Other borrowings	849,777		764,870

Accrued expenses and other liabilities	960,141		960,609
Total liabilities	47,044,573		43,526,936
Shareholders’ Equity
Preferred stock, 2,000 shares authorized, 231 shares issued and outstanding	230,500		230,500
Common stock, no par value, $1.00 per share stated value, 600,000 shares authorized, 318,969 and 292,655 shares issued and outstanding, respectively	318,969		292,655
Capital surplus	4,550,965		4,159,924
Retained earnings	1,766,046		1,618,630
Accumulated other comprehensive income (loss), net of tax	(791,408)		(738,809)
Total shareholders’ equity	6,075,072		5,562,900
Total liabilities and shareholders’ equity	$	53,119,645	$	49,089,836

The accompanying notes to consolidated financial statements are an integral part of these statements.

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars and shares in thousands, except per share data)	2024		2023		2024		2023
Interest Income
Loans including fees:
Taxable	$	545,622	$	449,896	$	1,032,983	$	860,271
Nontaxable	13,243		10,925		26,345		21,137
Investment securities:
Taxable	82,755		64,072		157,782		124,873
Nontaxable	10,732		11,043		21,238		22,206
Money market and other interest-earning investments	11,311		8,966		21,296		12,064
Total interest income	663,663		544,902		1,259,644		1,040,551
Interest Expense
Deposits	215,806		100,974		401,245		163,567
Federal funds purchased and interbank borrowings	1,986		5,655		2,947		10,494
Securities sold under agreements to repurchase	639		900		1,556		1,679
Federal Home Loan Bank advances	44,643		45,088		85,810		83,084
Other borrowings	12,168		10,114		23,207		18,068
Total interest expense	275,242		162,731		514,765		276,892
Net interest income	388,421		382,171		744,879		763,659
Provision for credit losses	36,214		14,787		55,105		28,224
Net interest income after provision for credit losses	352,207		367,384		689,774		735,435
Noninterest Income
Wealth and investment services fees	29,358		26,521		57,662		53,441
Service charges on deposit accounts	19,350		17,751		37,248		34,754
Debit card and ATM fees	10,993		10,653		21,047		20,635
Mortgage banking revenue	7,064		4,165		11,542		7,565

Capital markets income	4,729		6,173		7,629		13,112
Company-owned life insurance	5,739		4,698		9,173		7,884
Debt securities gains (losses), net	2		17		(14)		(5,199)
Other income	10,036		11,651		20,506		20,118
Total noninterest income	87,271		81,629		164,793		152,310
Noninterest Expense
Salaries and employee benefits	159,193		135,810		308,996		273,174
Occupancy	26,547		26,085		53,566		54,367
Equipment	8,704		7,721		17,375		15,110
Marketing	11,284		9,833		21,918		19,250
Technology	24,002		20,056		44,025		39,258
Communication	4,480		4,232		8,480		8,693
Professional fees	10,552		6,397		16,958		13,129
FDIC assessment	9,676		9,624		20,989		20,028
Amortization of intangibles	7,425		6,060		12,880		12,246
Amortization of tax credit investments	2,747		2,762		5,496		5,523

Other expense	18,389		18,004		34,633		36,517
Total noninterest expense	282,999		246,584		545,316		497,295
Income before income taxes	156,479		202,429		309,251		390,450
Income tax expense	35,250		47,393		67,738		88,814
Net income	121,229		155,036		241,513		301,636
Preferred dividends	(4,033)		(4,033)		(8,067)		(8,067)
Net income applicable to common shareholders	$	117,196	$	151,003	$	233,446	$	293,569
Net income per common share - basic	$	0.37	$	0.52	$	0.77	$	1.01
Net income per common share - diluted	0.37		0.52		0.77		1.01
Weighted average number of common shares outstanding - basic	315,585		290,559		303,283		290,822
Weighted average number of common shares outstanding - diluted	316,461		291,266		304,207		291,870
Dividends per common share	$	0.14	$	0.14	$	0.28	$	0.28

The accompanying notes to consolidated financial statements are an integral part of these statements.

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2024		2023		2024		2023
Net income	$	121,229	$	155,036	$	241,513	$	301,636

Other comprehensive income (loss):

Change in debt securities available-for-sale:
Unrealized holding gains (losses) for the period	(17,788)		(120,159)		(62,497)		(95,435)

Reclassification adjustment for securities (gains) losses realized in income	(2)		(17)		14		5,199
Income tax effect	4,441		30,043		15,683		31,189
Unrealized gains (losses) on available-for-sale securities	(13,349)		(90,133)		(46,800)		(59,047)

Change in securities held-to-maturity:

Amortization of unrealized losses on securities transferred from available-for-sale	4,376		5,122		8,694		10,951
Income tax effect	(1,111)		(1,300)		(2,208)		(1,431)
Changes from securities held-to-maturity	3,265		3,822		6,486		9,520

Change in hedges:
Net unrealized derivative gains (losses) on hedges	(7,035)		13,272		(26,194)		61,121
Reclassification adjustment for (gains) losses realized in net income	4,747		(32,112)		9,624		(24,820)
Income tax effect	592		4,872		4,285		(8,848)
Changes from hedges	(1,696)		(13,968)		(12,285)		27,453

Change in defined benefit pension plans:
Amortization of net (gains) losses recognized in income	—		6		—		(182)
Income tax effect	—		(2)		—		45
Changes from defined benefit pension plans	—		4		—		(137)
Other comprehensive income (loss), net of tax	(11,780)		(100,275)		(52,599)		(22,211)
Comprehensive income (loss)	$	109,449	$	54,761	$	188,914	$	279,425

The accompanying notes to consolidated financial statements are an integral part of these statements.

OLD NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)


(dollars in thousands, except per share data)	Preferred Stock		Common Stock		Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
Balance, December 31, 2022	$	230,500	$	292,903	$	4,174,265	$	1,217,349	$	(786,422)	$	5,128,595


Net income	—		—		—		146,600		—		146,600
Other comprehensive income (loss)	—		—		—		—		78,064		78,064



Cash dividends:
Common ($0.14 per share)	—		—		—		(41,088)		—		(41,088)
Preferred ($17.50 per share)	—		—		—		(4,034)		—		(4,034)
Common stock issued	—		15		247		—		—		262
Common stock repurchased	—		(2,598)		(41,112)		—		—		(43,710)
Share-based compensation expense	—		—		12,742		—		—		12,742
Stock activity under incentive compensation plans	—		1,602		(1,412)		(195)		—		(5)
Balance, March 31, 2023	230,500		291,922		4,144,730		1,318,632		(708,358)		5,277,426
Net income	—		—		—		155,036		—		155,036
Other comprehensive income (loss)	—		—		—		—		(100,275)		(100,275)
Cash dividends:
Common ($0.14 per share)	—		—		—		(40,932)		—		(40,932)
Preferred ($17.50 per share)	—		—		—		(4,033)		—		(4,033)
Common stock issued	—		20		252		—		—		272
Common stock repurchased	—		(8)		(97)		—		—		(105)
Share-based compensation expense	—		—		5,247		—		—		5,247
Stock activity under incentive compensation plans	—		663		(1,043)		(161)		—		(541)
Balance, June 30, 2023	$	230,500	$	292,597	$	4,149,089	$	1,428,542	$	(808,633)	$	5,292,095
















December 31, 2023	$	230,500	$	292,655	$	4,159,924	$	1,618,630	$	(738,809)	$	5,562,900


Net income	—		—		—		120,284		—		120,284
Other comprehensive income (loss)	—		—		—		—		(40,819)		(40,819)
Cash dividends:
Common ($0.14 per share)	—		—		—		(41,060)		—		(41,060)
Preferred ($17.50 per share)	—		—		—		(4,034)		—		(4,034)
Common stock issued	—		17		248		—		—		265
Common stock repurchased	—		(434)		(6,748)		—		—		(7,182)
Share-based compensation expense	—		—		5,491		—		—		5,491
Stock activity under incentive compensation plans	—		1,092		(1,373)		(156)		—		(437)
Balance, March 31, 2024	230,500		293,330		4,157,542		1,693,664		(779,628)		5,595,408
Net income	—		—		—		121,229		—		121,229
Other comprehensive income (loss)	—		—		—		—		(11,780)		(11,780)
Acquisition of CapStar Financial Holdings, Inc.	—		24,014		393,584		—		—		417,598
Cash dividends:
Common ($0.14 per share)	—		—		—		(44,656)		—		(44,656)
Preferred ($

OLD NATIONAL BANCORP /IN/ [ONB] Filings
OLD NATIONAL BANCORP /IN/ [ONBPO] Filings
OLD NATIONAL BANCORP /IN/ [ONBPP] Filings
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10-Q	[2024-05-01]
10-K	[2024-02-22]
10-Q	[2023-11-01]
10-Q	[2023-08-02]
10-Q	[2023-05-03]
10-K	[2023-02-22]
10-Q	[2022-11-02]
10-Q	[2022-08-03]
10-Q	[2022-05-04]
10-K	[2022-02-10]
10-Q	[2021-10-27]
10-Q	[2021-08-04]
10-Q	[2021-04-28]
10-K	[2021-02-10]
10-Q	[2020-10-28]
10-Q	[2020-07-29]
10-Q	[2020-04-29]
10-K	[2020-02-12]
10-Q	[2019-10-30]
10-Q	[2019-07-31]
10-Q	[2019-05-02]
10-K	[2019-02-12]
10-Q	[2018-10-31]
10-Q	[2018-08-01]
10-Q	[2018-05-02]
10-K	[2018-02-15]
10-Q	[2017-11-01]
10-Q	[2017-08-01]
10-Q	[2017-05-05]
10-K	[2017-02-16]
10-Q	[2016-11-04]
10-Q	[2016-08-05]
10-Q	[2016-05-06]
10-K	[2016-02-26]
10-Q	[2015-10-30]
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10-Q	[2012-11-02]
10-Q	[2012-08-03]
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OLD NATIONAL BANCORP /IN/ [ONB] Filings

OLD NATIONAL BANCORP /IN/ [ONBPO] Filings

OLD NATIONAL BANCORP /IN/ [ONBPP] Filings