QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Zip Code) | |||||||||||
(Address of principal executive offices) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||||||||||||||||||||
The | Stock Market LLC | ||||||||||||||||||||||
The | Stock Market LLC | ||||||||||||||||||||||
The | Stock Market LLC |
☑ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Page | |||||||||||
PART I. | |||||||||||
Item 1. | |||||||||||
Note 1. | |||||||||||
Note 2. | |||||||||||
Note 3. | |||||||||||
Note 4. | |||||||||||
Note 5. | |||||||||||
Note 6. | |||||||||||
Note 7. | |||||||||||
Note 8. | |||||||||||
Note 9. | |||||||||||
Note 10. | |||||||||||
Note 11. | |||||||||||
Note 12. | |||||||||||
Note 13. | |||||||||||
Note 14. | |||||||||||
Note 15. | |||||||||||
Note 16. | |||||||||||
Note 17. | |||||||||||
Note 18. | |||||||||||
Note 19. | |||||||||||
Note 20. | |||||||||||
Note 21. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
PART II. | |||||||||||
Item 1A. | |||||||||||
Item 2. | |||||||||||
Item 5. | |||||||||||
Item 6. | |||||||||||
(dollars and shares in thousands, except per share data) | June 30, 2022 | December 31, 2021 | |||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Cash and due from banks | $ | $ | |||||||||
Money market and other interest-earning investments | |||||||||||
Total cash and cash equivalents | |||||||||||
Equity securities, at fair value | |||||||||||
Investment securities - available-for-sale, at fair value: | |||||||||||
U.S. Treasury | |||||||||||
U.S. government-sponsored entities and agencies | |||||||||||
Mortgage-backed securities | |||||||||||
States and political subdivisions | |||||||||||
Other securities | |||||||||||
Total investment securities - available-for-sale | |||||||||||
Investment securities - held-to-maturity, at amortized cost (fair value $ | |||||||||||
Federal Home Loan Bank/Federal Reserve Bank stock, at cost | |||||||||||
Loans held for sale, at fair value | |||||||||||
Loans: | |||||||||||
Commercial | |||||||||||
Commercial real estate | |||||||||||
Residential real estate | |||||||||||
Consumer credit, net of unearned income | |||||||||||
Total loans | |||||||||||
Allowance for credit losses | ( | ( | |||||||||
Net loans | |||||||||||
Premises and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Accrued interest receivable | |||||||||||
Goodwill | |||||||||||
Other intangible assets | |||||||||||
Company-owned life insurance | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities | |||||||||||
Deposits: | |||||||||||
Noninterest-bearing demand | $ | $ | |||||||||
Interest-bearing: | |||||||||||
Checking and NOW | |||||||||||
Savings | |||||||||||
Money market | |||||||||||
Time deposits | |||||||||||
Total deposits | |||||||||||
Federal funds purchased and interbank borrowings | |||||||||||
Securities sold under agreements to repurchase | |||||||||||
Federal Home Loan Bank advances | |||||||||||
Other borrowings | |||||||||||
Operating lease liabilities | |||||||||||
Accrued expenses and other liabilities | |||||||||||
Total liabilities | |||||||||||
Shareholders' Equity | |||||||||||
Preferred stock, | |||||||||||
Common stock, $ | |||||||||||
Capital surplus | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income (loss), net of tax | ( | ( | |||||||||
Total shareholders' equity | |||||||||||
Total liabilities and shareholders' equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(dollars and shares in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Interest Income | |||||||||||||||||||||||
Loans including fees: | |||||||||||||||||||||||
Taxable | $ | $ | $ | $ | |||||||||||||||||||
Nontaxable | |||||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||
Taxable | |||||||||||||||||||||||
Nontaxable | |||||||||||||||||||||||
Money market and other interest-earning investments | |||||||||||||||||||||||
Total interest income | |||||||||||||||||||||||
Interest Expense | |||||||||||||||||||||||
Deposits | |||||||||||||||||||||||
Federal funds purchased and interbank borrowings | |||||||||||||||||||||||
Securities sold under agreements to repurchase | |||||||||||||||||||||||
Federal Home Loan Bank advances | |||||||||||||||||||||||
Other borrowings | |||||||||||||||||||||||
Total interest expense | |||||||||||||||||||||||
Net interest income | |||||||||||||||||||||||
Provision for credit losses | ( | ( | |||||||||||||||||||||
Net interest income after provision for credit losses | |||||||||||||||||||||||
Noninterest Income | |||||||||||||||||||||||
Wealth management fees | |||||||||||||||||||||||
Service charges on deposit accounts | |||||||||||||||||||||||
Debit card and ATM fees | |||||||||||||||||||||||
Mortgage banking revenue | |||||||||||||||||||||||
Investment product fees | |||||||||||||||||||||||
Capital markets income | |||||||||||||||||||||||
Company-owned life insurance | |||||||||||||||||||||||
Debt securities gains (losses), net | ( | ||||||||||||||||||||||
Other income | |||||||||||||||||||||||
Total noninterest income | |||||||||||||||||||||||
Noninterest Expense | |||||||||||||||||||||||
Salaries and employee benefits | |||||||||||||||||||||||
Occupancy | |||||||||||||||||||||||
Equipment | |||||||||||||||||||||||
Marketing | |||||||||||||||||||||||
Data processing | |||||||||||||||||||||||
Communication | |||||||||||||||||||||||
Professional fees | |||||||||||||||||||||||
FDIC assessment | |||||||||||||||||||||||
Amortization of intangibles | |||||||||||||||||||||||
Amortization of tax credit investments | |||||||||||||||||||||||
Other expense | |||||||||||||||||||||||
Total noninterest expense | |||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Preferred dividends | ( | ( | |||||||||||||||||||||
Net income applicable to common shareholders | $ | $ | $ | $ | |||||||||||||||||||
Net income per common share - basic | $ | $ | $ | $ | |||||||||||||||||||
Net income per common share - diluted | |||||||||||||||||||||||
Weighted average number of common shares outstanding - basic | |||||||||||||||||||||||
Weighted average number of common shares outstanding - diluted | |||||||||||||||||||||||
Dividends per common share | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||
Change in debt securities available-for-sale: | ||||||||||||||||||||
Unrealized holding gains (losses) for the period | ( | ( | ( | ( | ||||||||||||||||
Reclassification for securities transferred to held-to-maturity | ||||||||||||||||||||
Reclassification adjustment for securities (gains) losses realized in income | ( | ( | ( | |||||||||||||||||
Income tax effect | ||||||||||||||||||||
Unrealized gains (losses) on available-for-sale securities | ( | ( | ( | ( | ||||||||||||||||
Change in securities held-to-maturity: | ||||||||||||||||||||
Adjustment for securities transferred from available-for-sale | ( | ( | ||||||||||||||||||
Amortization of unrealized losses on securities transferred from available-for-sale | ||||||||||||||||||||
Income tax effect | ||||||||||||||||||||
Changes from securities held-to-maturity | ( | ( | ||||||||||||||||||
Change in cash flow hedges: | ||||||||||||||||||||
Net unrealized derivative gains (losses) on cash flow hedges | ( | ( | ( | |||||||||||||||||
Reclassification adjustment for (gains) losses realized in net income | ( | ( | ( | ( | ||||||||||||||||
Income tax effect | ( | |||||||||||||||||||
Changes from cash flow hedges | ( | ( | ( | |||||||||||||||||
Change in defined benefit pension plans: | ||||||||||||||||||||
Amortization of net (gains) losses recognized in income | ( | ( | ||||||||||||||||||
Income tax effect | ( | ( | ||||||||||||||||||
Changes from defined benefit pension plans | ( | ( | ||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | ( | ( | ||||||||||||||||
Comprehensive income (loss) | $ | ( | $ | $ | ( | $ |
(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, 2020 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Dividends - common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Common stock issued | — | — | — | ||||||||||||||||||||||||||||||||
Common stock repurchased | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Stock activity under incentive compensation plans | — | ( | ( | — | |||||||||||||||||||||||||||||||
Balance, March 31, 2021 | |||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Dividends - common stock ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Common stock issued | — | — | — | ||||||||||||||||||||||||||||||||
Common stock repurchased | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Stock activity under incentive compensation plans | — | ( | — | ||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Net income (loss) | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
First Midwest Bancorp, Inc. merger: | |||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of preferred stock, net of issuance costs | — | — | — | ||||||||||||||||||||||||||||||||
Cash dividends: | |||||||||||||||||||||||||||||||||||
Common ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Preferred dividends | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Common stock issued | — | — | — | ||||||||||||||||||||||||||||||||
Common stock repurchased | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Stock activity under incentive compensation plans | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||
Balance, March 31, 2022 | ( | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Cash dividends: | |||||||||||||||||||||||||||||||||||
Common ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Preferred dividends | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Common stock issued | — | — | — | ||||||||||||||||||||||||||||||||
Common stock repurchased | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Stock activity under incentive compensation plans | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Six Months Ended June 30, | |||||||||||
(dollars in thousands) | 2022 | 2021 | |||||||||
Cash Flows From Operating Activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization of other intangible assets | |||||||||||
Amortization of tax credit investments | |||||||||||
Net premium amortization on investment securities | |||||||||||
Accretion income related to acquired loans | ( | ( | |||||||||
Share-based compensation expense | |||||||||||
Provision for credit losses | ( | ||||||||||
Debt securities (gains) losses, net | ( | ( | |||||||||
Net (gains) losses on sales of loans and other assets | ( | ( | |||||||||
Increase in cash surrender value of company-owned life insurance | ( | ( | |||||||||
Residential real estate loans originated for sale | ( | ( | |||||||||
Proceeds from sales of residential real estate loans | |||||||||||
(Increase) decrease in interest receivable | ( | ( | |||||||||
(Increase) decrease in other assets | |||||||||||
Increase (decrease) in accrued expenses and other liabilities | ( | ||||||||||
Net cash flows provided by (used in) operating activities | |||||||||||
Cash Flows From Investing Activities | |||||||||||
Cash received (paid) from merger, net | |||||||||||
Purchases of investment securities available-for-sale | ( | ( | |||||||||
Purchases of investment securities held-to-maturity | ( | ||||||||||
Purchases of Federal Home Loan Bank/Federal Reserve Bank stock | ( | ||||||||||
Purchases of equity securities | ( | ||||||||||
Proceeds from maturities, prepayments, and calls of investment securities available-for-sale | |||||||||||
Proceeds from sales of investment securities available-for-sale | |||||||||||
Proceeds from maturities, prepayments, and calls of investment securities held-to-maturity | |||||||||||
Proceeds from sales of Federal Home Loan Bank/Federal Reserve Bank stock | |||||||||||
Proceeds from sales of equity securities | |||||||||||
Loan originations and payments, net | ( | ||||||||||
Proceeds from company-owned life insurance death benefits | |||||||||||
Proceeds from sales of premises and equipment and other assets | |||||||||||
Purchases of premises and equipment and other assets | ( | ( | |||||||||
Net cash flows provided by (used in) investing activities | ( | ( | |||||||||
Cash Flows From Financing Activities | |||||||||||
Net increase (decrease) in: | |||||||||||
Deposits | ( | ||||||||||
Federal funds purchased and interbank borrowings | |||||||||||
Securities sold under agreements to repurchase | ( | ( | |||||||||
Other borrowings | |||||||||||
Payments for maturities of Federal Home Loan Bank advances | ( | ( | |||||||||
Payments for modification of Federal Home Loan Bank advances | ( | ||||||||||
Proceeds from Federal Home Loan Bank advances | |||||||||||
Cash dividends paid | ( | ( | |||||||||
Common stock repurchased | ( | ( | |||||||||
Common stock issued | |||||||||||
Net cash flows provided by (used in) financing activities | ( | ||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ |
Six Months Ended June 30, | |||||||||||
(dollars in thousands) | 2022 | 2021 | |||||||||
Supplemental cash flow information: | |||||||||||
Total interest paid | $ | $ | |||||||||
Total income taxes paid (net of refunds) | ( | ||||||||||
Common stock issued for merger, net | |||||||||||
Preferred stock issued for merger, net | |||||||||||
Investment securities purchased but not settled | |||||||||||
Securities transferred from available-for-sale to held-to-maturity | |||||||||||
Operating lease right-of-use assets obtained in exchange for lease obligations | |||||||||||
Finance lease right-of-use assets obtained in exchange for lease obligations | $ |
(dollars and shares in thousands) | February 15, 2022 | ||||
Assets | |||||
Cash and cash equivalents | $ | ||||
Investment securities | |||||
FHLB/Federal Reserve Bank stock | |||||
Loans held for sale | |||||
Loans, net of allowance for credit losses | |||||
Premises and equipment | |||||
Operating lease right-of-use assets | |||||
Accrued interest receivable | |||||
Goodwill | |||||
Other intangible assets | |||||
Company-owned life insurance | |||||
Other assets | |||||
Total assets | $ | ||||
Liabilities | |||||
Deposits | $ | ||||
Securities sold under agreements to repurchase | |||||
Federal Home Loan Bank advances | |||||
Other borrowings | |||||
Accrued expenses and other liabilities | |||||
Total liabilities | $ | ||||
Fair value of consideration | |||||
Preferred stock | $ | ||||
Common stock ( | |||||
Total consideration | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Total revenues (1) | $ | $ | $ | $ | |||||||||||||||||||
Income before income taxes |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(dollars and shares in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Preferred dividends | ( | ( | |||||||||||||||||||||
Net income applicable to common shares | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Weighted average common shares outstanding (basic) | |||||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Restricted stock | |||||||||||||||||||||||
Stock appreciation rights | |||||||||||||||||||||||
Weighted average diluted shares outstanding | |||||||||||||||||||||||
Basic Net Income Per Common Share | $ | $ | $ | $ | |||||||||||||||||||
Diluted Net Income Per Common Share | $ | $ | $ | $ |
(dollars in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Basis Adjustments (1) | Fair Value | ||||||||||||||||||||||||
June 30, 2022 | |||||||||||||||||||||||||||||
Available-for-Sale | |||||||||||||||||||||||||||||
U.S. Treasury | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
U.S. government-sponsored entities and agencies | ( | ( | |||||||||||||||||||||||||||
Mortgage-backed securities - Agency | ( | ||||||||||||||||||||||||||||
States and political subdivisions | ( | ||||||||||||||||||||||||||||
Pooled trust preferred securities | ( | ||||||||||||||||||||||||||||
Other securities | ( | ||||||||||||||||||||||||||||
Total available-for-sale securities | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Held-to-Maturity | |||||||||||||||||||||||||||||
U.S. government-sponsored entities and agencies | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Mortgage-backed securities - Agency | ( | ||||||||||||||||||||||||||||
States and political subdivisions | ( | ||||||||||||||||||||||||||||
Allowance for securities held-to-maturity | ( | — | — | — | ( | ||||||||||||||||||||||||
Total held-to-maturity securities | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||||||||
Available-for-Sale | |||||||||||||||||||||||||||||
U.S. Treasury | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
U.S. government-sponsored entities and agencies | ( | ( | |||||||||||||||||||||||||||
Mortgage-backed securities - Agency | ( | ||||||||||||||||||||||||||||
States and political subdivisions | ( | ||||||||||||||||||||||||||||
Pooled trust preferred securities | ( | ||||||||||||||||||||||||||||
Other securities | ( | ||||||||||||||||||||||||||||
Total available-for-sale securities | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Proceeds from sales of available-for-sale securities | $ | $ | $ | $ | |||||||||||||||||||
Proceeds from calls of available-for-sale securities | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Realized gains on sales of available-for-sale securities | $ | $ | $ | $ | |||||||||||||||||||
Realized gains on calls of available-for-sale securities | |||||||||||||||||||||||
Realized losses on sales of available-for-sale securities | ( | ( | ( | ( | |||||||||||||||||||
Realized losses on calls of available-for-sale securities | ( | ( | ( | ( | |||||||||||||||||||
Debt securities gains (losses), net | $ | ( | $ | $ | $ |
June 30, 2022 | |||||||||||||||||
(dollars in thousands) | Amortized Cost | Fair Value | Weighted Average Yield | ||||||||||||||
Maturity | |||||||||||||||||
Available-for-Sale | |||||||||||||||||
Within one year | $ | $ | % | ||||||||||||||
One to five years | |||||||||||||||||
Five to ten years | |||||||||||||||||
Beyond ten years | |||||||||||||||||
Total | $ | $ | % | ||||||||||||||
Held-to-Maturity | |||||||||||||||||
Within one year | $ | $ | % | ||||||||||||||
One to five years | |||||||||||||||||
Five to ten years | |||||||||||||||||
Beyond ten years | |||||||||||||||||
Total | $ | $ | % |
Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||||||||||||||
(dollars in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||
June 30, 2022 | |||||||||||||||||||||||||||||||||||
Available-for-Sale | |||||||||||||||||||||||||||||||||||
U.S. Treasury | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
U.S. government-sponsored entities and agencies | ( | ( | ( | ||||||||||||||||||||||||||||||||
Mortgage-backed securities - Agency | ( | ( | ( | ||||||||||||||||||||||||||||||||
States and political subdivisions | ( | ( | |||||||||||||||||||||||||||||||||
Pooled trust preferred securities | ( | ( | |||||||||||||||||||||||||||||||||
Other securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total available-for-sale | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||||||||||||||
Available-for-Sale | |||||||||||||||||||||||||||||||||||
U.S. Treasury | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
U.S. government-sponsored entities and agencies | ( | ( | ( | ||||||||||||||||||||||||||||||||
Mortgage-backed securities - Agency | ( | ( | ( | ||||||||||||||||||||||||||||||||
States and political subdivisions | ( | ( | ( | ||||||||||||||||||||||||||||||||
Pooled trust preferred securities | ( | ( | |||||||||||||||||||||||||||||||||
Other securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total available-for-sale | $ | $ | ( | $ | $ | ( | $ | $ | ( |
Less than 12 months | 12 months or longer | Total | |||||||||||||||||||||||||||||||||
(dollars in thousands) | Fair Value | Unrecognized Losses | Fair Value | Unrecognized Losses | Fair Value | Unrecognized Losses | |||||||||||||||||||||||||||||
June 30, 2022 | |||||||||||||||||||||||||||||||||||
Held-to-Maturity | |||||||||||||||||||||||||||||||||||
U.S. government-sponsored entities and agencies | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Mortgage-backed securities - Agency | ( | ( | ( | ||||||||||||||||||||||||||||||||
States and political subdivisions | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total held-to-maturity | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Segment | |||||||||||||||||
Statement | Portfolio | After | |||||||||||||||
(dollars in thousands) | Balance | Reclassifications | Reclassifications | ||||||||||||||
June 30, 2022 | |||||||||||||||||
Loans: | |||||||||||||||||
Commercial | $ | $ | ( | $ | |||||||||||||
Commercial real estate | ( | ||||||||||||||||
BBCC | N/A | ||||||||||||||||
Residential real estate | |||||||||||||||||
Consumer | ( | N/A | |||||||||||||||
Indirect | N/A | ||||||||||||||||
Direct | N/A | ||||||||||||||||
Home equity | N/A | ||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
December 31, 2021 | |||||||||||||||||
Loans: | |||||||||||||||||
Commercial | $ | $ | ( | $ | |||||||||||||
Commercial real estate | ( | ||||||||||||||||
BBCC | N/A | ||||||||||||||||
Residential real estate | |||||||||||||||||
Consumer | ( | N/A | |||||||||||||||
Indirect | N/A | ||||||||||||||||
Direct | N/A | ||||||||||||||||
Home equity | N/A | ||||||||||||||||
Total | $ | $ | $ |
(dollars in thousands) | June 30, 2022 | December 31, 2021 | |||||||||
Commercial (1) (2) | $ | $ | |||||||||
Commercial real estate | |||||||||||
BBCC | |||||||||||
Residential real estate | |||||||||||
Indirect | |||||||||||
Direct | |||||||||||
Home equity | |||||||||||
Total loans | |||||||||||
Allowance for credit losses | ( | ( | |||||||||
Net loans | $ | $ |
(dollars in thousands) | Balance at Beginning of Period | Allowance Established for Acquired PCD Loans | Charge-offs | Recoveries | Provision for Credit Losses | Balance at End of Period | |||||||||||||||||||||||||||||
Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Commercial real estate | ( | ||||||||||||||||||||||||||||||||||
BBCC | ( | ( | |||||||||||||||||||||||||||||||||
Residential real estate | ( | ||||||||||||||||||||||||||||||||||
Indirect | ( | ||||||||||||||||||||||||||||||||||
Direct | ( | ||||||||||||||||||||||||||||||||||
Home equity | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Commercial real estate | ( | ( | |||||||||||||||||||||||||||||||||
BBCC | ( | ||||||||||||||||||||||||||||||||||
Residential real estate | ( | ||||||||||||||||||||||||||||||||||
Indirect | ( | ( | |||||||||||||||||||||||||||||||||
Direct | ( | ||||||||||||||||||||||||||||||||||
Home equity | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Commercial real estate | ( | ||||||||||||||||||||||||||||||||||
BBCC | ( | ( | |||||||||||||||||||||||||||||||||
Residential real estate | ( | ||||||||||||||||||||||||||||||||||
Indirect | ( | ||||||||||||||||||||||||||||||||||
Direct | ( | ||||||||||||||||||||||||||||||||||
Home equity | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||
Commercial real estate | ( | ( | |||||||||||||||||||||||||||||||||
BBCC | ( | ( | |||||||||||||||||||||||||||||||||
Residential real estate | ( | ( | |||||||||||||||||||||||||||||||||
Indirect | ( | ( | |||||||||||||||||||||||||||||||||
Direct | ( | ( | |||||||||||||||||||||||||||||||||
Home equity | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | ( | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Allowance for credit losses on unfunded loan commitments: | |||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Provision for credit losses on unfunded commitments for loans acquired during the period | |||||||||||||||||||||||
Expense (reversal of expense) for credit losses | ( | ( | |||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ |
Origination Year | Revolving to Term | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving | Total | |||||||||||||||||||||||||||||||||||||||||||||
June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Criticized | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Classified: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonaccrual | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Criticized | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Classified: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonaccrual | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
BBCC: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Criticized | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Classified: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonaccrual | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Origination Year | Revolving to Term | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | 2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving | Total | |||||||||||||||||||||||||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Criticized | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Classified: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonaccrual | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Criticized | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Classified: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonaccrual | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
BBCC: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Criticized | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Classified: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonaccrual | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Origination Year | Revolving to Term | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving | Total | |||||||||||||||||||||||||||||||||||||||||||||
June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Indirect: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Direct: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Home equity: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Origination Year | Revolving to Term | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | Prior | Revolving | Total | ||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Indirect: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Direct: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Home equity: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Rating: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Nonperforming | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ |
(dollars in thousands) | 30-59 Days Past Due | 60-89 Days Past Due | Past Due 90 Days or More | Total Past Due | Current | Total Loans | |||||||||||||||||||||||||||||
June 30, 2022 | |||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||
BBCC | |||||||||||||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||||||||||||
Indirect | |||||||||||||||||||||||||||||||||||
Direct | |||||||||||||||||||||||||||||||||||
Home equity | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||
BBCC | |||||||||||||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||||||||||||
Indirect | |||||||||||||||||||||||||||||||||||
Direct | |||||||||||||||||||||||||||||||||||
Home equity | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
June 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
(dollars in thousands) | Nonaccrual Amortized Cost | Nonaccrual With No Related Allowance | Past Due 90 Days or More and Accruing | Nonaccrual Amortized Cost | Nonaccrual With No Related Allowance | Past Due 90 Days or More and Accruing | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||
BBCC | |||||||||||||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||||||||||||
Indirect | |||||||||||||||||||||||||||||||||||
Direct | |||||||||||||||||||||||||||||||||||
Home equity | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Type of Collateral | |||||||||||||||||||||||||||||
(dollars in thousands) | Real Estate | Blanket Lien | Investment Securities/Cash | Auto | Other | ||||||||||||||||||||||||
June 30, 2022 | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
BBCC | |||||||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||||||
Indirect | |||||||||||||||||||||||||||||
Direct | |||||||||||||||||||||||||||||
Home equity | |||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
BBCC | |||||||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||||||
Indirect | |||||||||||||||||||||||||||||
Direct | |||||||||||||||||||||||||||||
Home equity | |||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ |
(dollars in thousands) | Beginning Balance | (Charge-offs)/ Recoveries | (Payments)/ Disbursements | (Removals)/ Additions | Ending Balance | ||||||||||||||||||||||||
Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Commercial real estate | ( | ||||||||||||||||||||||||||||
BBCC | |||||||||||||||||||||||||||||
Residential | ( | ||||||||||||||||||||||||||||
Indirect | |||||||||||||||||||||||||||||
Direct | ( | ||||||||||||||||||||||||||||
Home equity | ( | ||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Commercial real estate | ( | ||||||||||||||||||||||||||||
BBCC | ( | ||||||||||||||||||||||||||||
Residential | ( | ( | |||||||||||||||||||||||||||
Indirect | ( | ||||||||||||||||||||||||||||
Direct | ( | ||||||||||||||||||||||||||||
Home equity | ( | ||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Commercial real estate | ( | ||||||||||||||||||||||||||||
BBCC | ( | ||||||||||||||||||||||||||||
Residential | ( | ||||||||||||||||||||||||||||
Indirect | ( | ||||||||||||||||||||||||||||
Direct | ( | ||||||||||||||||||||||||||||
Home equity | ( | ||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Commercial real estate | ( | ||||||||||||||||||||||||||||
BBCC | ( | ||||||||||||||||||||||||||||
Residential | ( | ( | |||||||||||||||||||||||||||
Indirect | ( | ||||||||||||||||||||||||||||
Direct | ( | ||||||||||||||||||||||||||||
Home equity | ( | ||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ( | $ |
(dollars in thousands) | First Midwest (1) | ||||
Purchase price of loans at acquisition | $ | ||||
Allowance for credit losses at acquisition | |||||
Non-credit discount/(premium) at acquisition | |||||
Par value of acquired loans at acquisition | $ |
(dollars in thousands) | June 30, 2022 | December 31, 2021 | |||||||||
Land | $ | $ | |||||||||
Buildings | |||||||||||
Furniture, fixtures, and equipment | |||||||||||
Leasehold improvements | |||||||||||
Total | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Premises and equipment, net | $ | $ |
Affected Line Item in the Statement of Income | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||
Operating lease cost | Occupancy/Equipment expense | $ | $ | $ | $ | ||||||||||||||||||||||||
Finance lease cost: | |||||||||||||||||||||||||||||
Amortization of right-of-use assets | Occupancy expense | ||||||||||||||||||||||||||||
Interest on lease liabilities | Interest expense | ||||||||||||||||||||||||||||
Sub-lease income | Occupancy expense | ( | ( | ( | ( | ||||||||||||||||||||||||
Total | $ | $ | $ | $ |
(dollars in thousands) | June 30, 2022 | December 31, 2021 | |||||||||
Operating Leases | |||||||||||
Operating lease right-of-use assets | $ | $ | |||||||||
Operating lease liabilities | |||||||||||
Finance Leases | |||||||||||
Weighted-Average Remaining Lease Term (in Years) | |||||||||||
Operating leases | |||||||||||
Finance leases | |||||||||||
Weighted-Average Discount Rate | |||||||||||
Operating leases | % | % | |||||||||
Finance leases | % | % |
Six Months Ended June 30, | |||||||||||
(dollars in thousands) | 2022 | 2021 | |||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
Operating cash flows from finance leases | |||||||||||
Financing cash flows from finance leases |
(dollars in thousands) | Operating Leases | Finance Leases | |||||||||
2022 | $ | $ | |||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
Thereafter | |||||||||||
Total undiscounted lease payments | |||||||||||
Amounts representing interest | ( | ( | |||||||||
Lease liability | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Acquisitions and adjustments | ( | ||||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ |
(dollars in thousands) | Gross Carrying Amount | Accumulated Amortization and Impairment | Net Carrying Amount | ||||||||||||||
June 30, 2022 | |||||||||||||||||
Core deposit | $ | $ | ( | $ | |||||||||||||
Customer trust relationships | ( | ||||||||||||||||
Total intangible assets | $ | $ | ( | $ | |||||||||||||
December 31, 2021 | |||||||||||||||||
Core deposit | $ | $ | ( | $ | |||||||||||||
Customer trust relationships | ( | ||||||||||||||||
Total intangible assets | $ | $ | ( | $ |
(dollars in thousands) | |||||
2022 remaining | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Additions (1) | |||||||||||||||||||||||
Amortization | ( | ( | ( | ( | |||||||||||||||||||
Balance before valuation allowance at end of period | |||||||||||||||||||||||
Valuation allowance: | |||||||||||||||||||||||
Balance at beginning of period | ( | ( | ( | ( | |||||||||||||||||||
(Additions)/recoveries | |||||||||||||||||||||||
Balance at end of period | ( | ( | |||||||||||||||||||||
Loan servicing rights, net | $ | $ | $ | $ |
(dollars in thousands) | June 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||
Investment | Accounting Method | Investment | Unfunded Commitment (1) | Investment | Unfunded Commitment | |||||||||||||||||||||
LIHTC | Proportional amortization | $ | $ | $ | $ | |||||||||||||||||||||
FHTC | Equity | |||||||||||||||||||||||||
NMTC | Consolidation | |||||||||||||||||||||||||
Renewable Energy | Equity | |||||||||||||||||||||||||
Total | $ | $ | $ | $ |
(dollars in thousands) | Amortization Expense (1) | Tax Expense (Benefit) Recognized (2) | |||||||||
Three Months Ended June 30, 2022 | |||||||||||
LIHTC | $ | $ | ( | ||||||||
FHTC | ( | ||||||||||
NMTC | ( | ||||||||||
Renewable Energy | |||||||||||
Total | $ | $ | ( | ||||||||
Three Months Ended June 30, 2021 | |||||||||||
LIHTC | $ | $ | ( | ||||||||
FHTC | ( | ||||||||||
NMTC | ( | ||||||||||
Renewable Energy | |||||||||||
Total | $ | $ | ( | ||||||||
Six Months Ended June 30, 2022 | |||||||||||
LIHTC | $ | $ | ( | ||||||||
FHTC | ( | ||||||||||
NMTC | ( | ||||||||||
Renewable Energy | |||||||||||
Total | $ | $ | ( | ||||||||
Six Months Ended June 30, 2021 | |||||||||||
LIHTC | $ | $ | ( | ||||||||
FHTC | ( | ||||||||||
NMTC | ( | ||||||||||
Renewable Energy | ( | ||||||||||
Total | $ | $ | ( |
At or for the Six Months Ended June 30, 2022 | At December 31, 2021 | At or for the Six Months Ended June 30, 2021 | |||||||||||||||
(dollars in thousands) | |||||||||||||||||
Outstanding at period end | $ | $ | $ | ||||||||||||||
Average amount outstanding during the period | N/A | ||||||||||||||||
Maximum amount outstanding at any month-end during the period | N/A | ||||||||||||||||
Weighted-average interest rate: | |||||||||||||||||
During the period | % | N/A | % | ||||||||||||||
At period end | % | % | % |
At June 30, 2022 | |||||||||||||||||||||||||||||
Remaining Contractual Maturity of the Agreements | |||||||||||||||||||||||||||||
(dollars in thousands) | Overnight and Continuous | Up to 30 Days | 30-90 Days | Greater Than 90 days | Total | ||||||||||||||||||||||||
Repurchase Agreements: | |||||||||||||||||||||||||||||
U.S. Treasury and agency securities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
(dollars in thousands) | June 30, 2022 | December 31, 2021 | |||||||||
FHLB advances (fixed rates and variable rates July 2022 to January 2041 | $ | $ | |||||||||
Fair value hedge basis adjustments and unamortized prepayment fees | ( | ( | |||||||||
Total | $ | $ |
(dollars in thousands) | |||||
Due in 2022 | $ | ||||
Due in 2023 | |||||
Due in 2024 | |||||
Due in 2025 | |||||
Due in 2026 | |||||
Thereafter | |||||
Fair value hedge basis adjustments and unamortized prepayment fees | ( | ||||
Total | $ |
(dollars in thousands) | June 30, 2022 | December 31, 2021 | |||||||||
Old National Bancorp: | |||||||||||
Senior unsecured notes (fixed rate | $ | $ | |||||||||
Unamortized debt issuance costs related to senior unsecured notes | ( | ( | |||||||||
Subordinated debentures (fixed rate | |||||||||||
Junior subordinated debentures (variable rates of | |||||||||||
Other basis adjustments | ( | ||||||||||
Old National Bank: | |||||||||||
Finance lease liabilities | |||||||||||
Subordinated debentures (variable rate | |||||||||||
Leveraged loans for NMTC (fixed rates of maturing December 2046 to December 2052 | |||||||||||
Other | |||||||||||
Total other borrowings | $ | $ |
(dollars in thousands) | |||||
Due in 2022 | $ | ||||
Due in 2023 | |||||
Due in 2024 | |||||
Due in 2025 | |||||
Due in 2026 | |||||
Thereafter | |||||
Unamortized debt issuance costs and other basis adjustments | |||||
Total | $ |
(dollars in thousands) | Rate at June 30, 2022 | |||||||||||||||||||||||||
Name of Trust | Issuance Date | Issuance Amount | Rate | Maturity Date | ||||||||||||||||||||||
St. Joseph Capital Trust II | March 2005 | $ | 3-month LIBOR plus | March 17, 2035 | ||||||||||||||||||||||
Anchor Capital Trust III | August 2005 | 3-month LIBOR plus | September 30, 2035 | |||||||||||||||||||||||
Home Federal Statutory Trust I | September 2006 | 3-month LIBOR plus | September 15, 2036 | |||||||||||||||||||||||
Monroe Bancorp Capital Trust I | July 2006 | 3-month LIBOR plus | October 7, 2036 | |||||||||||||||||||||||
Tower Capital Trust 3 | December 2006 | 3-month LIBOR plus | March 1, 2037 | |||||||||||||||||||||||
Monroe Bancorp Statutory Trust II | March 2007 | 3-month LIBOR plus | June 15, 2037 | |||||||||||||||||||||||
First Midwest Capital Trust I | November 2003 | December 1, 2033 | ||||||||||||||||||||||||
Great Lakes Statutory Trust II | December 2005 | 3-month LIBOR plus | December 15, 2035 | |||||||||||||||||||||||
Great Lakes Statutory Trust III | June 2007 | 3-month LIBOR plus | September 15, 2037 | |||||||||||||||||||||||
Northern States Statutory Trust I | September 2005 | 3-month LIBOR plus | September 15, 2035 | |||||||||||||||||||||||
Bridgeview Statutory Trust I | July 2001 | 3-month LIBOR plus | July 31, 2031 | |||||||||||||||||||||||
Bridgeview Capital Trust II | December 2002 | 3-month LIBOR plus | January 7, 2033 | |||||||||||||||||||||||
Total | $ |
(dollars in thousands) | Unrealized Gains and Losses on Available- for-Sale Debt Securities | Unrealized Gains and Losses on Held-to- Maturity Securities | Gains and Losses on Cash Flow Hedges | Defined Benefit Pension Plans | Total | ||||||||||||||||||||||||
Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
Balance at beginning of period | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ( | ( | |||||||||||||||||||||||||
Amounts reclassified from AOCI to income (1) | ( | ( | |||||||||||||||||||||||||||
Balance at end of period | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ( | ||||||||||||||||||||||||||
Amounts reclassified from AOCI to income (1) | ( | ( | ( | ||||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
Balance at beginning of period | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ( | ( | |||||||||||||||||||||||||
Amounts reclassified from AOCI to income (1) | ( | ( | ( | ||||||||||||||||||||||||||
Balance at end of period | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||||||||
Amounts reclassified from AOCI to income (1) | ( | ( | ( | ||||||||||||||||||||||||||
Balance at end of period | $ | $ | $ | $ | ( | $ |
Three Months Ended June 30, | |||||||||||||||||
(dollars in thousands) | 2022 | 2021 | |||||||||||||||
Details about AOCI Components | Amount Reclassified from AOCI | Affected Line Item in the Statement of Income | |||||||||||||||
Unrealized gains and losses on available-for-sale securities | $ | ( | $ | Debt securities gains (losses), net | |||||||||||||
( | Income tax (expense) benefit | ||||||||||||||||
$ | ( | $ | Net income | ||||||||||||||
Unrealized gains and losses on held-to-maturity securities | $ | ( | $ | Interest income (expense) | |||||||||||||
Income tax (expense) benefit | |||||||||||||||||
$ | ( | $ | Net income | ||||||||||||||
Gains and losses on cash flow hedges Interest rate contracts | $ | $ | Interest income (expense) | ||||||||||||||
( | ( | Income tax (expense) benefit | |||||||||||||||
$ | $ | Net income | |||||||||||||||
Amortization of defined benefit pension items | |||||||||||||||||
Actuarial gains (losses) | $ | $ | ( | Salaries and employee benefits | |||||||||||||
( | Income tax (expense) benefit | ||||||||||||||||
$ | $ | ( | Net income | ||||||||||||||
Total reclassifications for the period | $ | ( | $ | Net income |
Six Months Ended June 30, | |||||||||||||||||
(dollars in thousands) | 2022 | 2021 | |||||||||||||||
Details about AOCI Components | Amount Reclassified from AOCI | Affected Line Item in the Statement of Income | |||||||||||||||
Unrealized gains and losses on available-for-sale securities | $ | $ | Debt securities gains (losses), net | ||||||||||||||
( | ( | Income tax (expense) benefit | |||||||||||||||
$ | $ | Net income | |||||||||||||||
Unrealized gains and losses on held-to-maturity securities | $ | ( | $ | Interest income (expense) | |||||||||||||
Income tax (expense) benefit | |||||||||||||||||
$ | ( | $ | Net income | ||||||||||||||
Gains and losses on cash flow hedges Interest rate contracts | $ | $ | Interest income (expense) | ||||||||||||||
( | ( | Income tax (expense) benefit | |||||||||||||||
$ | $ | Net income | |||||||||||||||
Amortization of defined benefit pension items | |||||||||||||||||
Actuarial gains (losses) | $ | $ | ( | Salaries and employee benefits | |||||||||||||
( | Income tax (expense) benefit | ||||||||||||||||
$ | $ | ( | Net income | ||||||||||||||
Total reclassifications for the period | $ | ( | $ | Net income |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Provision at statutory rate of 21% | $ | $ | $ | $ | |||||||||||||||||||
Tax-exempt income: | |||||||||||||||||||||||
Tax-exempt interest | ( | ( | ( | ( | |||||||||||||||||||
Section 291/265 interest disallowance | |||||||||||||||||||||||
Company-owned life insurance income | ( | ( | ( | ( | |||||||||||||||||||
Tax-exempt income | ( | ( | ( | ( | |||||||||||||||||||
State income taxes | |||||||||||||||||||||||
Interim period effective rate adjustment | ( | ( | ( | ||||||||||||||||||||
Tax credit investments - federal | ( | ( | ( | ( | |||||||||||||||||||
Other, net | ( | ||||||||||||||||||||||
Income tax expense (benefit) | $ | $ | $ | $ | |||||||||||||||||||
Effective tax rate | % | % | % | % |
June 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||
(dollars in thousands) | Notional | Assets (1) | Liabilities (2) | Notional | Assets (1) | Liabilities (2) | |||||||||||||||||||||||||||||
Cash flow hedges | |||||||||||||||||||||||||||||||||||
Interest rate collars and floors on loan pools | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Interest rate swaps on borrowings (3) | |||||||||||||||||||||||||||||||||||
Fair value hedges | |||||||||||||||||||||||||||||||||||
Interest rate swaps on investment securities (3) | |||||||||||||||||||||||||||||||||||
Interest rate swaps on borrowings (3) | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
(dollars in thousands) | Gain (Loss) Recognized in Income on Related Hedged Items | |||||||||||||||||||
Derivatives in Fair Value Hedging Relationships | Location of Gain or (Loss) Recognized in Income on Derivative | Gain (Loss) Recognized in Income on Derivative | Hedged Items in Fair Value Hedging Relationships | Location of Gain or (Loss) Recognized in in Income on Related Hedged Item | ||||||||||||||||
Three Months Ended June 30, 2022 | ||||||||||||||||||||
Interest rate contracts | Interest income/(expense) | $ | ( | Fixed-rate debt | Interest income/(expense) | $ | ||||||||||||||
Interest rate contracts | Interest income/(expense) | Fixed-rate investment securities | Interest income/(expense) | ( | ||||||||||||||||
Total | $ | $ | ( | |||||||||||||||||
Three Months Ended June 30, 2021 | ||||||||||||||||||||
Interest rate contracts | Interest income/(expense) | $ | ( | Fixed-rate debt | Interest income/(expense) | $ | ||||||||||||||
Interest rate contracts | Interest income/(expense) | ( | Fixed-rate investment securities | Interest income/(expense) | ||||||||||||||||
Total | $ | ( | $ | |||||||||||||||||
Six Months Ended June 30, 2022 | ||||||||||||||||||||
Interest rate contracts | Interest income/(expense) | $ | ( | Fixed-rate debt | Interest income/(expense) | $ | ||||||||||||||
Interest rate contracts | Interest income/(expense) | Fixed-rate investment securities | Interest income/(expense) | ( | ||||||||||||||||
Total | $ | $ | ( | |||||||||||||||||
Six Months Ended June 30, 2021 | ||||||||||||||||||||
Interest rate contracts | Interest income/(expense) | $ | ( | Fixed-rate debt | Interest income/(expense) | $ | ||||||||||||||
Interest rate contracts | Interest income/(expense) | Fixed-rate investment securities | Interest income/(expense) | ( | ||||||||||||||||
Total | $ | ( | $ | |||||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | Location of Gain or (Loss) Reclassified from AOCI into Income | Gain (Loss) Recognized in Other Comprehensive Income on Derivative | Gain (Loss) Reclassified from AOCI into Income | ||||||||||||||||||||
Interest rate contracts | Interest income/(expense) | $ | ( | $ | ( | $ | $ | ||||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | Location of Gain or (Loss) Reclassified from AOCI into Income | Gain (Loss) Recognized in Other Comprehensive Income on Derivative | Gain (Loss) Reclassified from AOCI into Income | ||||||||||||||||||||
Interest rate contracts | Interest income/(expense) | $ | ( | $ | $ | $ |
June 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||
(dollars in thousands) | Notional | Assets (1) | Liabilities (2) | Notional | Assets (1) | Liabilities (2) | |||||||||||||||||||||||||||||
Interest rate lock commitments | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Forward mortgage loan contracts | |||||||||||||||||||||||||||||||||||
Customer interest rate swaps | |||||||||||||||||||||||||||||||||||
Counterparty interest rate swaps (3) | |||||||||||||||||||||||||||||||||||
Customer foreign currency forward contracts | |||||||||||||||||||||||||||||||||||
Counterparty foreign currency forward contracts | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended June 30, | ||||||||||||||
(dollars in thousands) | 2022 | 2021 | ||||||||||||
Derivatives Not Designated as Hedging Instruments | Location of Gain or (Loss) Recognized in Income on Derivative | Gain (Loss) Recognized in Income on Derivative | ||||||||||||
Interest rate contracts (1) | Other income/(expense) | $ | $ | ( | ||||||||||
Mortgage contracts | Mortgage banking revenue | ( | ( | |||||||||||
Foreign currency contracts | Other income/(expense) | ( | ||||||||||||
Total | $ | ( | $ | ( | ||||||||||
Six Months Ended June 30, | ||||||||||||||
2022 | 2021 | |||||||||||||
Derivatives Not Designated as Hedging Instruments | Location of Gain or (Loss) Recognized in Income on Derivative | Gain (Loss) Recognized in Income on Derivative | ||||||||||||
Interest rate contracts (1) | Other income/(expense) | $ | $ | |||||||||||
Mortgage contracts | Mortgage banking revenue | ( | ( | |||||||||||
Foreign currency contracts | Other income/(expense) | ( | ||||||||||||
Total | $ | ( | $ | ( |
Fair Value Measurements at June 30, 2022 Using | |||||||||||||||||||||||
(dollars in thousands) | Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
Financial Assets | |||||||||||||||||||||||
Equity securities | $ | $ | $ | $ | |||||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||||||||
U.S. Treasury | |||||||||||||||||||||||
U.S. government-sponsored entities and agencies | |||||||||||||||||||||||
Mortgage-backed securities - Agency | |||||||||||||||||||||||
States and political subdivisions | |||||||||||||||||||||||
Pooled trust preferred securities | |||||||||||||||||||||||
Other securities | |||||||||||||||||||||||
Residential loans held for sale | |||||||||||||||||||||||
Derivative assets | |||||||||||||||||||||||
Financial Liabilities | |||||||||||||||||||||||
Derivative liabilities |
Fair Value Measurements at December 31, 2021 Using | |||||||||||||||||||||||
(dollars in thousands) | Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
Financial Assets | |||||||||||||||||||||||
Equity securities | $ | $ | $ | $ | |||||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||||||||
U.S. Treasury | |||||||||||||||||||||||
U.S. government-sponsored entities and agencies | |||||||||||||||||||||||
Mortgage-backed securities - Agency | |||||||||||||||||||||||
States and political subdivisions | |||||||||||||||||||||||
Pooled trust preferred securities | |||||||||||||||||||||||
Other securities | |||||||||||||||||||||||
Residential loans held for sale | |||||||||||||||||||||||
Derivative assets | |||||||||||||||||||||||
Financial Liabilities | |||||||||||||||||||||||
Derivative liabilities |
(dollars in thousands) | Pooled Trust Preferred Securities | ||||
Three Months Ended June 30, 2022 | |||||
Balance at beginning of period | $ | ||||
Accretion of discount | |||||
Increase in fair value of securities | |||||
Transfers out of Level 3 | ( | ||||
Balance at end of period | $ | ||||
Three Months Ended June 30, 2021 | |||||
Balance at beginning of period | $ | ||||
Accretion of discount | |||||
Sales/payments received | ( | ||||
Increase in fair value of securities | |||||
Balance at end of period | $ | ||||
Six Months Ended June 30, 2022 | |||||
Balance at beginning of period | $ | ||||
Accretion of discount | |||||
Increase in fair value of securities | |||||
Transfers out of Level 3 | ( | ||||
Balance at end of period | $ | ||||
Six Months Ended June 30, 2021 | |||||
Balance at beginning of period | $ | ||||
Accretion of discount | |||||
Sales/payments received | ( | ||||
Increase in fair value of securities | |||||
Balance at end of period | $ |
(dollars in thousands) | Fair Value | Valuation Techniques | Unobservable Input | Range (Weighted Average) (4) | ||||||||||
December 31, 2021 | ||||||||||||||
Pooled trust preferred securities | $ | Discounted cash flow | Constant prepayment rate (1) | |||||||||||
Additional asset defaults (2) | ||||||||||||||
Expected asset recoveries (3) |
Fair Value Measurements at June 30, 2022 Using | |||||||||||||||||||||||
(dollars in thousands) | Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
Collateral Dependent Loans: | |||||||||||||||||||||||
Commercial loans | $ | $ | $ | $ | |||||||||||||||||||
Commercial real estate loans | |||||||||||||||||||||||
Foreclosed Assets: | |||||||||||||||||||||||
Commercial | |||||||||||||||||||||||
Fair Value Measurements at December 31, 2021 Using | |||||||||||||||||||||||
(dollars in thousands) | Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
Collateral Dependent Loans: | |||||||||||||||||||||||
Commercial loans | $ | $ | $ | $ | |||||||||||||||||||
Commercial real estate loans | |||||||||||||||||||||||
Loan servicing rights |
(dollars in thousands) | Fair Value | Valuation Techniques | Unobservable Input | Range (Weighted Average) (1) | |||||||||||||||||||
June 30, 2022 | |||||||||||||||||||||||
Collateral Dependent Loans | |||||||||||||||||||||||
Commercial loans | $ | Discounted | Discount for type of property, | ||||||||||||||||||||
cash flow | age of appraisal, and current status | ||||||||||||||||||||||
Commercial real estate loans | Discounted | Discount for type of property, | |||||||||||||||||||||
cash flow | age of appraisal, and current status | ||||||||||||||||||||||
Foreclosed Assets | |||||||||||||||||||||||
Commercial real estate (1) | Fair value of | Discount for type of property, | |||||||||||||||||||||
collateral | age of appraisal, and current status | ||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||
Collateral Dependent Loans | |||||||||||||||||||||||
Commercial loans | $ | Discounted | Discount for type of property, | ||||||||||||||||||||
cash flow | age of appraisal, and current status | ||||||||||||||||||||||
Commercial real estate loans | Discounted | Discount for type of property, | |||||||||||||||||||||
cash flow | age of appraisal, and current status | ||||||||||||||||||||||
(dollars in thousands) | Aggregate Fair Value | Difference | Contractual Principal | ||||||||||||||
June 30, 2022 | |||||||||||||||||
Residential loans held for sale | $ | $ | $ | ||||||||||||||
December 31, 2021 | |||||||||||||||||
Residential loans held for sale | $ | $ | $ |
(dollars in thousands) | Other Gains and (Losses) | Interest Income | Interest (Expense) | Total Changes in Fair Values Included in Current Period Earnings | |||||||||||||||||||
Three Months Ended June 30, 2022 | |||||||||||||||||||||||
Residential loans held for sale | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended June 30, 2021 | |||||||||||||||||||||||
Residential loans held for sale | $ | $ | $ | ( | $ | ||||||||||||||||||
Six Months Ended June 30, 2022 | |||||||||||||||||||||||
Residential loans held for sale | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Six Months Ended June 30, 2021 | |||||||||||||||||||||||
Residential loans held for sale | $ | ( | $ | $ | ( | $ | ( |
Fair Value Measurements at June 30, 2022 Using | |||||||||||||||||||||||
(dollars in thousands) | Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
Financial Assets | |||||||||||||||||||||||
Cash, due from banks, money market, and other interest-earning investments | $ | $ | $ | $ | |||||||||||||||||||
Investment securities held-to-maturity: | |||||||||||||||||||||||
U.S. government-sponsored entities and agencies | |||||||||||||||||||||||
Mortgage-backed securities - Agency | |||||||||||||||||||||||
State and political subdivisions | |||||||||||||||||||||||
Loans, net: | |||||||||||||||||||||||
Commercial | |||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||
Consumer credit | |||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||
Financial Liabilities | |||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||
Noninterest-bearing demand deposits | $ | $ | $ | $ | |||||||||||||||||||
Checking, NOW, savings, and money market interest-bearing deposits | |||||||||||||||||||||||
Time deposits | |||||||||||||||||||||||
Federal funds purchased and interbank borrowings | |||||||||||||||||||||||
Securities sold under agreements to repurchase | |||||||||||||||||||||||
FHLB advances | |||||||||||||||||||||||
Other borrowings | |||||||||||||||||||||||
Accrued interest payable | |||||||||||||||||||||||
Standby letters of credit | |||||||||||||||||||||||
Off-Balance Sheet Financial Instruments | |||||||||||||||||||||||
Commitments to extend credit | $ | $ | $ | $ |
Fair Value Measurements at December 31, 2021 Using | |||||||||||||||||||||||
(dollars in thousands) | Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
Financial Assets | |||||||||||||||||||||||
Cash, due from banks, money market, and other interest-earning investments | $ | $ | $ | $ | |||||||||||||||||||
Loans, net: | |||||||||||||||||||||||
Commercial | |||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||
Consumer credit | |||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||
Financial Liabilities | |||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||
Noninterest-bearing demand deposits | $ | $ | $ | $ | |||||||||||||||||||
Checking, NOW, savings, and money market interest-bearing deposits | |||||||||||||||||||||||
Time deposits | |||||||||||||||||||||||
Federal funds purchased and interbank borrowings | |||||||||||||||||||||||
Securities sold under agreements to repurchase | |||||||||||||||||||||||
FHLB advances | |||||||||||||||||||||||
Other borrowings | |||||||||||||||||||||||
Accrued interest payable | |||||||||||||||||||||||
Standby letters of credit | |||||||||||||||||||||||
Off-Balance Sheet Financial Instruments | |||||||||||||||||||||||
Commitments to extend credit | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(dollars and shares in thousands, | June 30, | March 31, | June 30, | June 30, | |||||||||||||||||||||||||
except per share data) | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||
Income Statement: | |||||||||||||||||||||||||||||
Net interest income | $ | 337,472 | $ | 222,785 | $ | 149,927 | $ | 560,257 | $ | 298,047 | |||||||||||||||||||
Taxable equivalent adjustment (1) | 4,314 | 3,772 | 3,470 | 8,086 | 6,970 | ||||||||||||||||||||||||
Net interest income - tax equivalent basis | 341,786 | 226,557 | 153,397 | 568,343 | 305,017 | ||||||||||||||||||||||||
Provision for credit losses | 9,245 | 97,569 | (4,929) | 106,814 | (22,285) | ||||||||||||||||||||||||
Noninterest income | 89,117 | 65,240 | 51,508 | 154,357 | 108,220 | ||||||||||||||||||||||||
Noninterest expense | 277,395 | 226,756 | 129,618 | 504,151 | 247,358 | ||||||||||||||||||||||||
Net income (loss) available to common shareholders | 110,952 | (29,603) | 62,786 | 81,349 | 149,604 | ||||||||||||||||||||||||
Per Common Share Data: | |||||||||||||||||||||||||||||
Weighted average diluted shares | 291,881 | 227,002 | 165,934 | 260,253 | 165,821 | ||||||||||||||||||||||||
Net income (loss) (diluted) | $ | 0.38 | $ | (0.13) | $ | 0.38 | $ | 0.31 | $ | 0.90 | |||||||||||||||||||
Cash dividends | 0.14 | 0.14 | 0.14 | 0.28 | 0.28 | ||||||||||||||||||||||||
Common dividend payout ratio (2) | 37 | % | (108) | % | 37 | % | 90 | % | 31 | % | |||||||||||||||||||
Book value | $ | 16.51 | $ | 17.03 | $ | 18.05 | $ | 16.51 | $ | 18.05 | |||||||||||||||||||
Stock price | 14.79 | 16.38 | 17.61 | 14.79 | 17.61 | ||||||||||||||||||||||||
Tangible common book value (3) | 9.23 | 9.71 | 11.55 | 9.23 | 11.55 | ||||||||||||||||||||||||
Performance Ratios: | |||||||||||||||||||||||||||||
Return on average assets | 1.01 | % | (0.31) | % | 1.06 | % | 0.43 | % | 1.27 | % | |||||||||||||||||||
Return on average common equity | 9.08 | (2.89) | 8.39 | 3.62 | 10.04 | ||||||||||||||||||||||||
Return on tangible common equity (3) | 17.21 | (3.61) | 13.58 | 6.71 | 16.10 | ||||||||||||||||||||||||
Return on average tangible common equity (3) | 16.93 | (4.03) | 13.58 | 6.84 | 16.21 | ||||||||||||||||||||||||
Net interest margin (3) | 3.33 | 2.88 | 2.91 | 3.13 | 2.93 | ||||||||||||||||||||||||
Efficiency ratio (3) | 62.70 | 76.15 | 62.05 | 68.13 | 58.79 | ||||||||||||||||||||||||
Net charge-offs (recoveries) to average loans | 0.02 | 0.05 | (0.01) | 0.04 | — | ||||||||||||||||||||||||
Allowance for credit losses to ending loans | 0.97 | 0.99 | 0.79 | 0.97 | 0.79 | ||||||||||||||||||||||||
Non-performing loans to ending loans | 0.78 | 0.88 | 1.03 | 0.78 | 1.03 | ||||||||||||||||||||||||
Balance Sheet: | |||||||||||||||||||||||||||||
Total loans | $ | 29,553,648 | $ | 28,336,244 | $ | 13,784,677 | $ | 29,553,648 | $ | 13,784,677 | |||||||||||||||||||
Total assets | 45,748,355 | 45,834,648 | 23,675,666 | 45,748,355 | 23,675,666 | ||||||||||||||||||||||||
Total deposits | 35,538,975 | 35,607,390 | 17,868,911 | 35,538,975 | 17,868,911 | ||||||||||||||||||||||||
Total borrowed funds | 4,384,411 | 4,347,560 | 2,559,113 | 4,384,411 | 2,559,113 | ||||||||||||||||||||||||
Total shareholders' equity | 5,078,783 | 5,232,114 | 2,991,118 | 5,078,783 | 2,991,118 | ||||||||||||||||||||||||
Capital Ratios: | |||||||||||||||||||||||||||||
Risk-based capital ratios: | |||||||||||||||||||||||||||||
Tier 1 common equity | 9.90 | % | 10.04 | % | 11.95 | % | 9.90 | % | 11.95 | % | |||||||||||||||||||
Tier 1 | 10.63 | 10.79 | 11.95 | 10.63 | 11.95 | ||||||||||||||||||||||||
Total | 12.03 | 12.19 | 12.73 | 12.03 | 12.73 | ||||||||||||||||||||||||
Leverage ratio (to average assets) | 8.19 | 10.58 | 8.38 | 8.19 | 8.38 | ||||||||||||||||||||||||
Total equity to assets (averages) | 11.22 | 12.03 | 12.61 | 11.57 | 12.69 | ||||||||||||||||||||||||
Tangible common equity to tangible assets (3) | 6.20 | 6.51 | 8.47 | 6.20 | 8.47 | ||||||||||||||||||||||||
Nonfinancial Data: | |||||||||||||||||||||||||||||
Full-time equivalent employees | 4,196 | 4,333 | 2,465 | 4,196 | 2,465 | ||||||||||||||||||||||||
Banking centers | 266 | 267 | 162 | 266 | 162 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(dollars and shares in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Tangible common book value: | |||||||||||||||||||||||
Shareholders' common equity (GAAP) | $ | 4,835,064 | $ | 2,991,118 | $ | 4,835,064 | $ | 2,991,118 | |||||||||||||||
Deduct: | Goodwill | 1,991,534 | 1,036,994 | 1,991,534 | 1,036,994 | ||||||||||||||||||
Intangible assets | 140,281 | 40,030 | 140,281 | 40,030 | |||||||||||||||||||
Tangible shareholders' common equity (non-GAAP) | $ | 2,703,249 | $ | 1,914,094 | $ | 2,703,249 | $ | 1,914,094 | |||||||||||||||
Period end common shares | 292,893 | 165,732 | 292,893 | 165,732 | |||||||||||||||||||
Tangible common book value (non-GAAP) | 9.23 | 11.55 | 9.23 | 11.55 | |||||||||||||||||||
Return on tangible common equity: | |||||||||||||||||||||||
Net income applicable to common shares (GAAP) | $ | 110,952 | $ | 62,786 | $ | 81,349 | $ | 149,604 | |||||||||||||||
Add: Intangible amortization (net of tax) (1) | 5,378 | 2,182 | 9,312 | 4,488 | |||||||||||||||||||
Tangible net income (non-GAAP) | $ | 116,330 | $ | 64,968 | $ | 90,661 | $ | 154,092 | |||||||||||||||
Tangible shareholders' common equity (non-GAAP) (see above) | $ | 2,703,249 | $ | 1,914,094 | $ | 2,703,249 | $ | 1,914,094 | |||||||||||||||
Return on tangible common equity (non-GAAP) | 17.21 | % | 13.58 | % | 6.71 | % | 16.10 | % | |||||||||||||||
Return on average tangible common equity: | |||||||||||||||||||||||
Tangible net income (non-GAAP) (see above) | $ | 116,330 | $ | 64,968 | $ | 90,661 | $ | 154,092 | |||||||||||||||
Average shareholders' common equity (GAAP) | $ | 4,886,181 | $ | 2,992,693 | $ | 4,495,862 | $ | 2,981,398 | |||||||||||||||
Deduct: | Average goodwill | 1,992,860 | 1,036,994 | 1,736,227 | 1,036,994 | ||||||||||||||||||
Average intangible assets | 144,104 | 41,410 | 109,195 | 42,901 | |||||||||||||||||||
Average tangible shareholders' common equity (non-GAAP) | $ | 2,749,217 | $ | 1,914,289 | $ | 2,650,440 | $ | 1,901,503 | |||||||||||||||
Return on average tangible common equity (non-GAAP) | 16.93 | % | 13.58 | % | 6.84 | % | 16.21 | % | |||||||||||||||
Net interest margin: | |||||||||||||||||||||||
Net interest income (GAAP) | $ | 337,472 | $ | 149,927 | $ | 560,257 | $ | 298,047 | |||||||||||||||
Taxable equivalent adjustment | 4,314 | 3,470 | 8,086 | 6,970 | |||||||||||||||||||
Net interest income - taxable equivalent basis (non-GAAP) | $ | 341,786 | $ | 153,397 | $ | 568,343 | $ | 305,017 | |||||||||||||||
Average earning assets | $ | 41,003,338 | $ | 21,095,280 | $ | 36,269,744 | $ | 20,849,829 | |||||||||||||||
Net interest margin (non-GAAP) | 3.33 | % | 2.91 | % | 3.13 | % | 2.93 | % | |||||||||||||||
Efficiency ratio: | |||||||||||||||||||||||
Noninterest expense (GAAP) | $ | 277,395 | $ | 129,618 | $ | 504,151 | $ | 247,358 | |||||||||||||||
Deduct: Intangible amortization expense | 7,170 | 2,909 | 11,981 | 5,984 | |||||||||||||||||||
Adjusted noninterest expense (non-GAAP) | $ | 270,225 | $ | 126,709 | $ | 492,170 | $ | 241,374 | |||||||||||||||
Net interest income - taxable equivalent basis (non-GAAP) (see above) | $ | 341,786 | $ | 153,397 | $ | 568,343 | $ | 305,017 | |||||||||||||||
Noninterest income | 89,117 | 51,508 | 154,357 | 108,220 | |||||||||||||||||||
Deduct: Debt securities gains (losses), net | (85) | 692 | 257 | 2,685 | |||||||||||||||||||
Adjusted total revenue (non-GAAP) | $ | 430,988 | $ | 204,213 | $ | 722,443 | $ | 410,552 | |||||||||||||||
Efficiency ratio (non-GAAP) | 62.70 | % | 62.05 | % | 68.13 | % | 58.79 | % | |||||||||||||||
Tangible common equity to tangible assets: | |||||||||||||||||||||||
Tangible shareholders' common equity (non-GAAP) (see above) | $ | 2,703,249 | $ | 1,914,094 | $ | 2,703,249 | $ | 1,914,094 | |||||||||||||||
Assets (GAAP) | $ | 45,748,355 | $ | 23,675,666 | $ | 45,748,355 | $ | 23,675,666 | |||||||||||||||
Add: | Trust overdrafts | — | 24 | — | 24 | ||||||||||||||||||
Deduct: | Goodwill | 1,991,534 | 1,036,994 | 1,991,534 | 1,036,994 | ||||||||||||||||||
Intangible assets | 140,281 | 40,030 | 140,281 | 40,030 | |||||||||||||||||||
Tangible assets (non-GAAP) | $ | 43,616,540 | $ | 22,598,666 | $ | 43,616,540 | $ | 22,598,666 | |||||||||||||||
Tangible common equity to tangible assets (non-GAAP) | 6.20 | % | 8.47 | % | 6.20 | % | 8.47 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
(dollars in thousands, except per share data) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||||||||||||||||||||||||||
Income Statement Summary: | ||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 337,472 | $ | 149,927 | 125.1 | % | $ | 560,257 | $ | 298,047 | 88.0 | % | ||||||||||||||||||||||||||
Provision for credit losses | 9,245 | (4,929) | (287.6) | 106,814 | (22,285) | (579.3) | ||||||||||||||||||||||||||||||||
Noninterest income | 89,117 | 51,508 | 73.0 | 154,357 | 108,220 | 42.6 | ||||||||||||||||||||||||||||||||
Noninterest expense | 277,395 | 129,618 | 114.0 | 504,151 | 247,358 | 103.8 | ||||||||||||||||||||||||||||||||
Net income applicable to common shareholders | 110,952 | 62,786 | 76.7 | 81,349 | 149,604 | (45.6) | ||||||||||||||||||||||||||||||||
Net income per common share - diluted | 0.38 | 0.38 | — | 0.31 | 0.90 | (65.6) | ||||||||||||||||||||||||||||||||
Other Data: | ||||||||||||||||||||||||||||||||||||||
Return on average common equity | 9.08 | % | 8.39 | % | 3.62 | % | 10.04 | % | ||||||||||||||||||||||||||||||
Return on tangible common equity (1) | 17.21 | 13.58 | 6.71 | 16.10 | ||||||||||||||||||||||||||||||||||
Return on average tangible common equity (1) | 16.93 | 13.58 | 6.84 | 16.21 | ||||||||||||||||||||||||||||||||||
Efficiency ratio (1) | 62.70 | 62.05 | 68.13 | 58.79 | ||||||||||||||||||||||||||||||||||
Tier 1 leverage ratio | 8.19 | 8.38 | 8.19 | 8.38 | ||||||||||||||||||||||||||||||||||
Net charge-offs (recoveries) to average loans | 0.02 | (0.01) | 0.04 | — |
(Tax equivalent basis, dollars in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||
Earning Assets | Average Balance | Income (1)/ Expense | Yield/ Rate | Average Balance | Income (1)/ Expense | Yield/ Rate | |||||||||||||||||||||||||||||
Money market and other interest-earning investments | $ | 1,088,005 | $ | 1,830 | 0.67 | % | $ | 232,723 | $ | 48 | 0.08 | % | |||||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||||||||||||||
Treasury and government sponsored agencies | 2,487,717 | 11,818 | 1.90 | % | 1,637,396 | 5,967 | 1.46 | % | |||||||||||||||||||||||||||
Mortgage-backed securities | 6,008,470 | 33,534 | 2.23 | % | 3,287,254 | 15,067 | 1.83 | % | |||||||||||||||||||||||||||
States and political subdivisions | 1,834,189 | 14,571 | 3.18 | % | 1,503,447 | 12,364 | 3.29 | % | |||||||||||||||||||||||||||
Other securities | 723,279 | 5,467 | 3.02 | % | 439,197 | 2,690 | 2.45 | % | |||||||||||||||||||||||||||
Total investment securities | 11,053,655 | 65,390 | 2.37 | % | 6,867,294 | 36,088 | 2.10 | % | |||||||||||||||||||||||||||
Loans: (2) | |||||||||||||||||||||||||||||||||||
Commercial | 8,692,646 | 95,743 | 4.36 | % | 4,019,553 | 34,715 | 3.42 | % | |||||||||||||||||||||||||||
Commercial real estate | 11,547,958 | 113,545 | 3.89 | % | 6,146,057 | 57,655 | 3.71 | % | |||||||||||||||||||||||||||
Residential real estate loans | 5,905,151 | 51,686 | 3.50 | % | 2,256,215 | 21,474 | 3.81 | % | |||||||||||||||||||||||||||
Consumer | 2,715,923 | 30,478 | 4.50 | % | 1,573,438 | 13,948 | 3.56 | % | |||||||||||||||||||||||||||
Total loans | 28,861,678 | 291,452 | 4.01 | % | 13,995,263 | 127,792 | 3.62 | % | |||||||||||||||||||||||||||
Total earning assets | 41,003,338 | $ | 358,672 | 3.48 | % | 21,095,280 | $ | 163,928 | 3.09 | % | |||||||||||||||||||||||||
Less: Allowance for credit losses | (282,943) | (117,020) | |||||||||||||||||||||||||||||||||
Non-Earning Assets | |||||||||||||||||||||||||||||||||||
Cash and due from banks | 277,283 | 238,326 | |||||||||||||||||||||||||||||||||
Other assets | 4,735,701 | 2,520,937 | |||||||||||||||||||||||||||||||||
Total assets | $ | 45,733,379 | $ | 23,737,523 | |||||||||||||||||||||||||||||||
Interest-Bearing Liabilities | |||||||||||||||||||||||||||||||||||
Checking and NOW accounts | $ | 8,445,683 | $ | 1,786 | 0.08 | % | $ | 4,954,817 | $ | 514 | 0.04 | % | |||||||||||||||||||||||
Savings accounts | 6,835,675 | 673 | 0.04 | % | 3,647,952 | 492 | 0.05 | % | |||||||||||||||||||||||||||
Money market accounts | 5,317,300 | 1,027 | 0.08 | % | 2,085,132 | 433 | 0.08 | % | |||||||||||||||||||||||||||
Time deposits | 2,499,445 | 1,701 | 0.27 | % | 1,024,777 | 1,293 | 0.51 | % | |||||||||||||||||||||||||||
Total interest-bearing deposits | 23,098,103 | 5,187 | 0.09 | % | 11,712,678 | 2,732 | 0.09 | % | |||||||||||||||||||||||||||
Federal funds purchased and interbank borrowings | 1,222 | 2 | 0.47 | % | 1,460 | — | 0.02 | % | |||||||||||||||||||||||||||
Securities sold under agreements to repurchase | 466,885 | 85 | 0.07 | % | 406,251 | 95 | 0.09 | % | |||||||||||||||||||||||||||
FHLB advances | 3,053,423 | 6,925 | 0.91 | % | 1,906,078 | 5,218 | 1.10 | % | |||||||||||||||||||||||||||
Other borrowings | 611,772 | 4,687 | 3.06 | % | 269,259 | 2,486 | 3.69 | % | |||||||||||||||||||||||||||
Total borrowed funds | 4,133,302 | 11,699 | 1.14 | % | 2,583,048 | 7,799 | 1.21 | % | |||||||||||||||||||||||||||
Total interest-bearing liabilities | $ | 27,231,405 | $ | 16,886 | 0.25 | % | $ | 14,295,726 | $ | 10,531 | 0.30 | % | |||||||||||||||||||||||
Noninterest-Bearing Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||||||||||
Demand deposits | $ | 12,714,946 | $ | 6,140,424 | |||||||||||||||||||||||||||||||
Other liabilities | 657,128 | 308,680 | |||||||||||||||||||||||||||||||||
Shareholders' equity | 5,129,900 | 2,992,693 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 45,733,379 | $ | 23,737,523 | |||||||||||||||||||||||||||||||
Net interest income - taxable equivalent basis | $ | 341,786 | 3.33 | % | $ | 153,397 | 2.91 | % | |||||||||||||||||||||||||||
Taxable equivalent adjustment | (4,314) | (3,470) | |||||||||||||||||||||||||||||||||
Net interest income (GAAP) | $ | 337,472 | 3.29 | % | $ | 149,927 | 2.84 | % |
(Tax equivalent basis, dollars in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||
Earning Assets | Average Balance | Income (1)/ Expense | Yield/ Rate | Average Balance | Income (1)/ Expense | Yield/ Rate | |||||||||||||||||||||||||||||
Money market and other interest-earning investments | $ | 1,211,518 | $ | 2,138 | 0.36 | % | $ | 301,025 | $ | 136 | 0.09 | % | |||||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||||||||||||||
Treasury and government sponsored agencies | 2,342,401 | 20,038 | 1.71 | % | 1,397,791 | 10,852 | 1.55 | % | |||||||||||||||||||||||||||
Mortgage-backed securities | 5,441,902 | 57,910 | 2.13 | % | 3,299,713 | 30,900 | 1.87 | % | |||||||||||||||||||||||||||
States and political subdivisions | 1,786,684 | 28,208 | 3.16 | % | 1,490,865 | 24,564 | 3.30 | % | |||||||||||||||||||||||||||
Other securities | 664,741 | 9,611 | 2.89 | % | 446,266 | 5,433 | 2.44 | % | |||||||||||||||||||||||||||
Total investment securities | 10,235,728 | 115,767 | 2.26 | % | 6,634,635 | 71,749 | 2.16 | % | |||||||||||||||||||||||||||
Loans: (2) | |||||||||||||||||||||||||||||||||||
Commercial | 7,301,008 | 151,026 | 4.11 | % | 3,997,281 | 70,282 | 3.50 | % | |||||||||||||||||||||||||||
Commercial real estate | 10,156,292 | 190,952 | 3.74 | % | 6,063,872 | 113,401 | 3.72 | % | |||||||||||||||||||||||||||
Residential real estate loans | 4,953,222 | 85,673 | 3.46 | % | 2,264,988 | 42,821 | 3.78 | % | |||||||||||||||||||||||||||
Consumer | 2,411,976 | 52,393 | 4.38 | % | 1,588,028 | 28,276 | 3.59 | % | |||||||||||||||||||||||||||
Total loans | 24,822,498 | 480,044 | 3.86 | % | 13,914,169 | 254,780 | 3.65 | % | |||||||||||||||||||||||||||
Total earning assets | 36,269,744 | $ | 597,949 | 3.29 | % | 20,849,829 | $ | 326,665 | 3.13 | % | |||||||||||||||||||||||||
Less: Allowance for credit losses | (225,876) | (125,398) | |||||||||||||||||||||||||||||||||
Non-Earning Assets | |||||||||||||||||||||||||||||||||||
Cash and due from banks | 273,083 | 263,336 | |||||||||||||||||||||||||||||||||
Other assets | 4,111,637 | 2,503,865 | |||||||||||||||||||||||||||||||||
Total assets | $ | 40,428,588 | $ | 23,491,632 | |||||||||||||||||||||||||||||||
Interest-Bearing Liabilities | |||||||||||||||||||||||||||||||||||
Checking and NOW accounts | $ | 7,619,757 | $ | 2,381 | 0.06 | % | $ | 4,965,095 | $ | 1,139 | 0.05 | % | |||||||||||||||||||||||
Savings accounts | 6,073,081 | 1,262 | 0.04 | % | 3,572,057 | 979 | 0.06 | % | |||||||||||||||||||||||||||
Money market accounts | 4,552,241 | 1,719 | 0.08 | % | 2,059,439 | 861 | 0.08 | % | |||||||||||||||||||||||||||
Time deposits | 2,124,382 | 3,019 | 0.29 | % | 1,052,856 | 2,912 | 0.56 | % | |||||||||||||||||||||||||||
Total interest-bearing deposits | 20,369,461 | 8,381 | 0.08 | % | 11,649,447 | 5,891 | 0.10 | % | |||||||||||||||||||||||||||
Federal funds purchased and interbank borrowings | 1,168 | 2 | 0.25 | % | 1,303 | — | — | % | |||||||||||||||||||||||||||
Securities sold under agreements to repurchase | 458,459 | 181 | 0.08 | % | 402,478 | 215 | 0.11 | % | |||||||||||||||||||||||||||
FHLB advances | 2,822,984 | 12,888 | 0.92 | % | 1,915,661 | 10,627 | 1.12 | % | |||||||||||||||||||||||||||
Other borrowings | 522,599 | 8,154 | 3.12 | % | 266,152 | 4,915 | 3.69 | % | |||||||||||||||||||||||||||
Total borrowed funds | 3,805,210 | 21,225 | 1.12 | % | 2,585,594 | 15,757 | 1.23 | % | |||||||||||||||||||||||||||
Total interest-bearing liabilities | $ | 24,174,671 | $ | 29,606 | 0.25 | % | $ | 14,235,041 | $ | 21,648 | 0.31 | % | |||||||||||||||||||||||
Noninterest-Bearing Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||||||||||
Demand deposits | $ | 11,014,359 | $ | 5,949,412 | |||||||||||||||||||||||||||||||
Other liabilities | 562,882 | 325,781 | |||||||||||||||||||||||||||||||||
Shareholders' equity | 4,676,676 | 2,981,398 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 40,428,588 | $ | 23,491,632 | |||||||||||||||||||||||||||||||
Net interest income - taxable equivalent basis | $ | 568,343 | 3.13 | % | $ | 305,017 | 2.93 | % | |||||||||||||||||||||||||||
Taxable equivalent adjustment | (8,086) | (6,970) | |||||||||||||||||||||||||||||||||
Net interest income (GAAP) | $ | 560,257 | 3.09 | % | $ | 298,047 | 2.86 | % |
From Three Months Ended June 30, 2021 to Three Months Ended June 30, 2022 | From Six Months Ended June 30, 2021 to Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||
Total Change (1) | Attributed to | Total Change (1) | Attributed to | ||||||||||||||||||||||||||||||||
(dollars in thousands) | Volume | Rate | Volume | Rate | |||||||||||||||||||||||||||||||
Interest Income | |||||||||||||||||||||||||||||||||||
Money market and other interest-earning investments | $ | 1,782 | $ | 805 | $ | 977 | $ | 2,002 | $ | 1,003 | $ | 999 | |||||||||||||||||||||||
Investment securities (2) | 29,302 | 23,383 | 5,919 | 44,018 | 39,797 | 4,221 | |||||||||||||||||||||||||||||
Loans (2) | 163,660 | 142,491 | 21,169 | 225,264 | 204,866 | 20,398 | |||||||||||||||||||||||||||||
Total interest income | 194,744 | 166,679 | 28,065 | 271,284 | 245,666 | 25,618 | |||||||||||||||||||||||||||||
Interest Expense | |||||||||||||||||||||||||||||||||||
Checking and NOW deposits | 1,272 | 563 | 709 | 1,242 | 829 | 413 | |||||||||||||||||||||||||||||
Savings deposits | 181 | 335 | (154) | 283 | 695 | (412) | |||||||||||||||||||||||||||||
Money market deposits | 594 | 620 | (26) | 858 | 927 | (69) | |||||||||||||||||||||||||||||
Time deposits | 408 | 1,451 | (1,043) | 107 | 2,264 | (2,157) | |||||||||||||||||||||||||||||
Federal funds purchased and interbank borrowings | 2 | — | 2 | 2 | — | 2 | |||||||||||||||||||||||||||||
Securities sold under agreements to repurchase | (10) | 12 | (22) | (34) | 28 | (62) | |||||||||||||||||||||||||||||
FHLB advances | 1,707 | 2,883 | (1,176) | 2,261 | 4,629 | (2,368) | |||||||||||||||||||||||||||||
Other borrowings | 2,201 | 2,892 | (691) | 3,239 | 4,363 | (1,124) | |||||||||||||||||||||||||||||
Total interest expense | 6,355 | 8,756 | (2,401) | 7,958 | 13,735 | (5,777) | |||||||||||||||||||||||||||||
Net interest income | $ | 188,389 | $ | 157,923 | $ | 30,466 | $ | 263,326 | $ | 231,931 | $ | 31,395 |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | |||||||||||||||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||||
Wealth management fees | $ | 19,304 | $ | 10,734 | 79.8 | % | $ | 33,934 | $ | 20,442 | 66.0 | % | ||||||||||||||||||||||||||
Service charges on deposit accounts | 21,144 | 8,514 | 148.3 | 35,870 | 16,638 | 115.6 | ||||||||||||||||||||||||||||||||
Debit card and ATM fees | 10,402 | 5,583 | 86.3 | 17,301 | 10,726 | 61.3 | ||||||||||||||||||||||||||||||||
Mortgage banking revenue | 6,522 | 7,827 | (16.7) | 13,767 | 24,352 | (43.5) | ||||||||||||||||||||||||||||||||
Investment product fees | 8,568 | 6,042 | 41.8 | 15,890 | 11,906 | 33.5 | ||||||||||||||||||||||||||||||||
Capital markets income | 7,261 | 5,871 | 23.7 | 11,703 | 9,586 | 22.1 | ||||||||||||||||||||||||||||||||
Company-owned life insurance | 4,571 | 2,783 | 64.2 | 8,095 | 5,497 | 47.3 | ||||||||||||||||||||||||||||||||
Debt securities gains (losses), net | (85) | 692 | (112.3) | 257 | 2,685 | (90.4) | ||||||||||||||||||||||||||||||||
Other income | 11,430 | 3,462 | 230.2 | 17,540 | 6,388 | 174.6 | ||||||||||||||||||||||||||||||||
Total noninterest income | $ | 89,117 | $ | 51,508 | 73.0 | % | $ | 154,357 | $ | 108,220 | 42.6 | % |
Three Months Ended June 30, | % | Six Months Ended June 30, | % | |||||||||||||||||||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||||
Salaries and employee benefits | $ | 161,817 | $ | 72,640 | 122.8 | % | $ | 285,964 | $ | 140,757 | 103.2 | % | ||||||||||||||||||||||||||
Occupancy | 26,496 | 14,054 | 88.5 | 47,515 | 28,926 | 64.3 | ||||||||||||||||||||||||||||||||
Equipment | 7,550 | 4,506 | 67.6 | 12,718 | 8,475 | 50.1 | ||||||||||||||||||||||||||||||||
Marketing | 9,119 | 2,632 | 246.5 | 13,395 | 4,694 | 185.4 | ||||||||||||||||||||||||||||||||
Data processing | 25,883 | 11,697 | 121.3 | 44,645 | 24,050 | 85.6 | ||||||||||||||||||||||||||||||||
Communication | 5,878 | 2,411 | 143.8 | 9,295 | 5,289 | 75.7 | ||||||||||||||||||||||||||||||||
Professional fees | 6,336 | 8,528 | (25.7) | 26,127 | 11,252 | 132.2 | ||||||||||||||||||||||||||||||||
FDIC assessment | 4,699 | 1,226 | 283.3 | 7,274 | 2,833 | 156.8 | ||||||||||||||||||||||||||||||||
Amortization of intangibles | 7,170 | 2,909 | 146.5 | 11,981 | 5,984 | 100.2 | ||||||||||||||||||||||||||||||||
Amortization of tax credit investments | 1,525 | 1,813 | (15.9) | 3,041 | 3,015 | 0.9 | ||||||||||||||||||||||||||||||||
Other expense | 20,922 | 7,202 | 190.5 | 42,196 | 12,083 | 249.2 | ||||||||||||||||||||||||||||||||
Total noninterest expense | $ | 277,395 | $ | 129,618 | 114.0 | % | $ | 504,151 | $ | 247,358 | 103.8 | % |
June 30, 2022 | December 31, 2021 | |||||||||||||||||||
(dollars in thousands) | Outstanding | Exposure | Nonaccrual | Outstanding | Exposure | Nonaccrual | ||||||||||||||
By Industry: | ||||||||||||||||||||
Manufacturing | $ | 1,810,117 | $ | 2,748,807 | $ | 5,223 | $ | 612,873 | $ | 1,152,774 | $ | 6,689 | ||||||||
Construction | 681,550 | 1,378,937 | 1,627 | 310,649 | 744,610 | 1,429 | ||||||||||||||
Health care and social assistance | 1,402,311 | 1,783,160 | 4,791 | 376,664 | 550,400 | 444 | ||||||||||||||
Public administration | 235,481 | 369,807 | 921 | 247,770 | 357,310 | — | ||||||||||||||
Wholesale trade | 912,714 | 1,387,295 | 2,677 | 240,618 | 438,357 | 1,598 | ||||||||||||||
Educational services | 231,914 | 388,165 | 5,283 | 216,384 | 295,065 | — | ||||||||||||||
Other services | 175,026 | 366,555 | 2,343 | 121,577 | 260,413 | 2,542 | ||||||||||||||
Professional, scientific, and technical services | 475,971 | 788,843 | 4,004 | 141,364 | 279,185 | 937 | ||||||||||||||
Finance and insurance | 351,466 | 613,321 | 30 | 162,920 | 232,847 | 44 | ||||||||||||||
Retail trade | 271,126 | 462,229 | 1,246 | 131,303 | 289,478 | 945 | ||||||||||||||
Real estate rental and leasing | 628,454 | 978,331 | 1,647 | 204,612 | 347,991 | 504 | ||||||||||||||
Transportation and warehousing | 334,706 | 491,703 | 2,380 | 134,072 | 243,086 | 1,594 | ||||||||||||||
Administrative and support and waste management and remediation services | 330,737 | 502,056 | 5,434 | 86,307 | 149,417 | — | ||||||||||||||
Agriculture, forestry, fishing, and hunting | 219,171 | 374,560 | 1,017 | 114,699 | 164,364 | 1,521 | ||||||||||||||
Accommodation and food services | 441,217 | 542,930 | 1,059 | 78,689 | 108,724 | 2,399 | ||||||||||||||
Utilities | 35,875 | 94,858 | — | 26,322 | 75,439 | — | ||||||||||||||
Arts, entertainment, and recreation | 142,966 | 199,291 | 314 | 71,055 | 110,574 | 2,189 | ||||||||||||||
Information | 132,197 | 175,395 | 1,943 | 43,713 | 78,877 | 1,809 | ||||||||||||||
Mining | 37,446 | 53,281 | — | 30,161 | 62,231 | 5 | ||||||||||||||
Management of companies and enterprises | 30,198 | 56,388 | — | 15,124 | 36,046 | — | ||||||||||||||
Other | 43,340 | 142,912 | — | 24,893 | 24,943 | — | ||||||||||||||
Total | $ | 8,923,983 | $ | 13,898,824 | $ | 41,939 | $ | 3,391,769 | $ | 6,002,131 | $ | 24,649 | ||||||||
By Loan Size: | ||||||||||||||||||||
Less than $200,000 | 6 | % | 5 | % | 5 | % | 8 | % | 6 | % | 7 | % | ||||||||
$200,000 to $1,000,000 | 14 | 14 | 36 | 18 | 16 | 42 | ||||||||||||||
$1,000,000 to $5,000,000 | 27 | 28 | 46 | 31 | 29 | 51 | ||||||||||||||
$5,000,000 to $10,000,000 | 16 | 17 | 13 | 15 | 16 | — | ||||||||||||||
$10,000,000 to $25,000,000 | 30 | 26 | — | 18 | 18 | — | ||||||||||||||
Greater than $25,000,000 | 7 | 10 | — | 10 | 15 | — | ||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
June 30, 2022 | December 31, 2021 | ||||||||||||||||||||||
(dollars in thousands) | Outstanding | % | Outstanding | % | |||||||||||||||||||
By Property Type: | |||||||||||||||||||||||
Multifamily | $ | 3,596,449 | 30 | % | $ | 1,995,803 | 31 | % | |||||||||||||||
Retail | 1,848,075 | 16 | 1,037,034 | 16 | |||||||||||||||||||
Office | 1,738,934 | 15 | 1,018,973 | 16 | |||||||||||||||||||
Warehouse / Industrial | 1,718,735 | 15 | 851,956 | 14 | |||||||||||||||||||
Single family | 411,811 | 3 | 333,221 | 5 | |||||||||||||||||||
Other (1) | 2,482,499 | 21 | 1,143,687 | 18 | |||||||||||||||||||
Total | $ | 11,796,503 | 100 | % | $ | 6,380,674 | 100 | % |
Regulatory Guidelines Minimum | June 30, | December 31, | ||||||||||||||||||||||||
2022 | 2021 | 2021 | ||||||||||||||||||||||||
Risk-based capital: | ||||||||||||||||||||||||||
Tier 1 capital to total average assets (leverage ratio) | 4.00 | % | 8.19 | % | 8.38 | % | 8.59 | % | ||||||||||||||||||
Common equity Tier 1 capital to risk-adjusted total assets | 7.00 | 9.90 | 11.95 | 12.04 | ||||||||||||||||||||||
Tier 1 capital to risk-adjusted total assets | 8.50 | 10.63 | 11.95 | 12.04 | ||||||||||||||||||||||
Total capital to risk-adjusted total assets | 10.50 | 12.03 | 12.73 | 12.77 | ||||||||||||||||||||||
Shareholders' equity to assets | N/A | 11.10 | 12.63 | 12.32 |
Regulatory Guidelines Minimum | Prompt Corrective Action "Well Capitalized" Guidelines | June 30, | December 31, | |||||||||||||||||||||||||||||
2022 | 2021 | 2021 | ||||||||||||||||||||||||||||||
Risk-based capital: | ||||||||||||||||||||||||||||||||
Tier 1 capital to total average assets (leverage ratio) | 4.00 | % | 5.00 | % | 7.81 | % | 8.65 | % | 8.81 | % | ||||||||||||||||||||||
Common equity Tier 1 capital to risk-adjusted total assets | 7.00 | 6.50 | 10.28 | 12.27 | 12.34 | |||||||||||||||||||||||||||
Tier 1 capital to risk-adjusted total assets | 8.50 | 8.00 | 10.28 | 12.27 | 12.34 | |||||||||||||||||||||||||||
Total capital to risk-adjusted total assets | 10.50 | 10.00 | 10.92 | 12.79 | 12.82 |
June 30, | December 31, | |||||||||||||||||||
(dollars in thousands) | 2022 | 2021 | 2021 | |||||||||||||||||
Total nonaccrual loans | $ | 214,924 | $ | 128,268 | $ | 106,691 | ||||||||||||||
TDRs still accruing | 15,665 | 14,222 | 18,378 | |||||||||||||||||
Total past due loans (90 days or more and still accruing) | 882 | 9 | 7 | |||||||||||||||||
Foreclosed assets | 12,618 | 520 | 2,030 | |||||||||||||||||
Total under-performing assets | $ | 244,089 | $ | 143,019 | $ | 127,106 | ||||||||||||||
Classified loans (includes nonaccrual, TDRs still accruing, past due 90 days, and other problem loans) | $ | 706,372 | $ | 289,272 | $ | 269,270 | ||||||||||||||
Other classified assets (1) | 25,004 | 4,305 | 4,338 | |||||||||||||||||
Criticized loans | 452,835 | 228,264 | 235,910 | |||||||||||||||||
Total criticized and classified assets | $ | 1,184,211 | $ | 521,841 | $ | 509,518 | ||||||||||||||
Asset Quality Ratios: | ||||||||||||||||||||
Nonaccrual loans/total loans (2) | 0.73 | % | 0.93 | % | 0.78 | % | ||||||||||||||
Non-performing loans/total loans (2) (3) | 0.78 | 1.03 | 0.92 | |||||||||||||||||
Under-performing assets/total loans and other real estate owned | 0.83 | 1.04 | 0.93 | |||||||||||||||||
Under-performing assets/total assets | 0.53 | 0.60 | 0.52 | |||||||||||||||||
Allowance/under-performing assets | 117.99 | 76.52 | 84.45 | |||||||||||||||||
Allowance/nonaccrual loans | 134.00 | 85.32 | 100.61 |
Immediate Rate Decrease | Immediate Rate Increase | ||||||||||||||||||||||||||||
(dollars in thousands) | -50 Basis Points | Base | +100 Basis Points | +200 Basis Points | +300 Basis Points | ||||||||||||||||||||||||
June 30, 2022 | |||||||||||||||||||||||||||||
Projected interest income: | |||||||||||||||||||||||||||||
Money market, other interest earning investments, and investment securities | $ | 617,680 | $ | 639,428 | $ | 683,561 | $ | 726,946 | $ | 770,079 | |||||||||||||||||||
Loans | 2,151,455 | 2,308,609 | 2,618,757 | 2,931,908 | 3,242,547 | ||||||||||||||||||||||||
Total interest income | 2,769,135 | 2,948,037 | 3,302,318 | 3,658,854 | 4,012,626 | ||||||||||||||||||||||||
Projected interest expense: | |||||||||||||||||||||||||||||
Deposits | 44,713 | 72,114 | 274,985 | 484,116 | 693,243 | ||||||||||||||||||||||||
Borrowings | 210,225 | 238,638 | 299,725 | 360,822 | 421,923 | ||||||||||||||||||||||||
Total interest expense | 254,938 | 310,752 | 574,710 | 844,938 | 1,115,166 | ||||||||||||||||||||||||
Net interest income | $ | 2,514,197 | $ | 2,637,285 | $ | 2,727,608 | $ | 2,813,916 | $ | 2,897,460 | |||||||||||||||||||
Change from base | $ | (123,088) | $ | 90,323 | $ | 176,631 | $ | 260,175 | |||||||||||||||||||||
% change from base | (4.67) | % | 3.42 | % | 6.70 | % | 9.87 | % | |||||||||||||||||||||
June 30, 2021 | |||||||||||||||||||||||||||||
Projected interest income: | |||||||||||||||||||||||||||||
Money market, other interest earning investments, and investment securities | $ | 266,770 | $ | 283,033 | $ | 314,772 | $ | 339,937 | $ | 362,929 | |||||||||||||||||||
Loans | 838,058 | 870,225 | 1,009,602 | 1,149,951 | 1,288,437 | ||||||||||||||||||||||||
Total interest income | 1,104,828 | 1,153,258 | 1,324,374 | 1,489,888 | 1,651,366 | ||||||||||||||||||||||||
Projected interest expense: | |||||||||||||||||||||||||||||
Deposits | 15,289 | 24,627 | 105,133 | 185,790 | 266,444 | ||||||||||||||||||||||||
Borrowings | 60,615 | 68,546 | 100,943 | 134,207 | 170,592 | ||||||||||||||||||||||||
Total interest expense | 75,904 | 93,173 | 206,076 | 319,997 | 437,036 | ||||||||||||||||||||||||
Net interest income | $ | 1,028,924 | $ | 1,060,085 | $ | 1,118,298 | $ | 1,169,891 | $ | 1,214,330 | |||||||||||||||||||
Change from base | $ | (31,161) | $ | 58,213 | $ | 109,806 | $ | 154,245 | |||||||||||||||||||||
% change from base | (2.94) | % | 5.49 | % | 10.36 | % | 14.55 | % |
(dollars in thousands) | ||||||||||||||
Maturity Bucket | Amount | Rate | ||||||||||||
2022 | $ | 1,397,092 | 0.29 | % | ||||||||||
2023 | 715,540 | 0.51 | ||||||||||||
2024 | 189,250 | 0.69 | ||||||||||||
2025 | 95,089 | 0.65 | ||||||||||||
2026 | 70,085 | 0.49 | ||||||||||||
2027 and beyond | 40,560 | 0.57 | ||||||||||||
Total | $ | 2,507,616 | 0.41 | % |
Moody's Investors Service | ||||||||
Long-term | Short-term | |||||||
Old National | A3 | N/A | ||||||
Old National Bank | Aa3 | P-1 |
(dollars in thousands) | Parent Company | Subsidiaries | |||||||||
Available liquid funds: | |||||||||||
Cash and due from banks | $ | 271,788 | $ | 526,176 | |||||||
Unencumbered government-issued debt securities | — | 2,232,603 | |||||||||
Unencumbered investment grade municipal securities | — | 776,659 | |||||||||
Unencumbered corporate securities | — | 313,602 | |||||||||
Availability of borrowings: | |||||||||||
Amount available from Federal Reserve discount window* | — | 614,215 | |||||||||
Amount available from Federal Home Loan Bank* | — | 1,113,553 | |||||||||
Total available funds | $ | 271,788 | $ | 5,576,808 |
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | |||||||||||||||||||
04/01/22 - 04/30/22 | 1,568 | $ | 16.00 | — | $ | 136,093,633 | |||||||||||||||||
05/01/22 - 05/31/22 | 17,656 | $ | 15.18 | — | $ | 136,093,633 | |||||||||||||||||
06/01/22 - 06/30/22 | 1,888 | $ | 15.49 | — | $ | 136,093,633 | |||||||||||||||||
Total | 21,112 | $ | 15.27 | — | $ | 136,093,633 |
Exhibit No. | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
3.4 | ||||||||
3.5 | ||||||||
3.6 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101 | The following materials from Old National’s Form 10-Q Report for the quarterly period ended June 30, 2022, formatted in inline XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income (Loss), (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements. | |||||||
104 | The cover page from Old National’s Form 10-Q Report for the quarterly period ended June 30, 2022, formatted in inline XBRL and contained in Exhibit 101. |
OLD NATIONAL BANCORP | ||||||||
(Registrant) | ||||||||
By: | /s/ Brendon B. Falconer | |||||||
Brendon B. Falconer | ||||||||
Senior Executive Vice President and Chief Financial Officer | ||||||||
Duly Authorized Officer and Principal Financial Officer | ||||||||
Date: August 3, 2022 |
Date: | August 3, 2022 | By: | /s/ James C. Ryan, III | |||||||||||
James C. Ryan, III | ||||||||||||||
Chief Executive Officer | ||||||||||||||
(Principal Executive Officer) |
Date: | August 3, 2022 | By: | /s/ Brendon B. Falconer | |||||||||||
Brendon B. Falconer | ||||||||||||||
Chief Financial Officer | ||||||||||||||
(Principal Financial Officer) |
By: | /s/ James C. Ryan, III | |||||||
James C. Ryan, III | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) | ||||||||
Date: August 3, 2022 |
By: | /s/ Brendon B. Falconer | |||||||
Brendon B. Falconer | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) | ||||||||
Date: August 3, 2022 |
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Investment securities - held-to-maturity, fair value | $ 2,779,290 | $ 0 |
Preferred stock, shares authorized (in shares) | 2,000 | 2,000 |
Preferred stock, shares issued (in shares) | 231 | 0 |
Preferred stock, shares outstanding (in shares) | 231 | 0 |
Common stock, stated value (in dollars per share) | $ 1.00 | $ 1.00 |
Authorized and unissued common shares reserved for issuance (in shares) | 600,000 | 600,000 |
Common stock, shares issued (in shares) | 292,893 | 165,838 |
Common stock, shares outstanding (in shares) | 292,893 | 165,838 |
Consolidated Statements of Income (unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Loans including fees: | ||||
Taxable | $ 285,249 | $ 123,577 | $ 469,264 | $ 246,106 |
Nontaxable | 4,802 | 3,171 | 8,309 | 6,528 |
Investment securities: | ||||
Taxable | 51,459 | 24,401 | 88,868 | 48,532 |
Nontaxable | 11,018 | 9,261 | 21,284 | 18,393 |
Money market and other interest-earning investments | 1,830 | 48 | 2,138 | 136 |
Total interest income | 354,358 | 160,458 | 589,863 | 319,695 |
Interest Expense | ||||
Deposits | 5,187 | 2,732 | 8,381 | 5,891 |
Federal funds purchased and interbank borrowings | 2 | 0 | 2 | 0 |
Securities sold under agreements to repurchase | 85 | 95 | 181 | 215 |
Federal Home Loan Bank advances | 6,925 | 5,218 | 12,888 | 10,627 |
Other borrowings | 4,687 | 2,486 | 8,154 | 4,915 |
Total interest expense | 16,886 | 10,531 | 29,606 | 21,648 |
Net interest income | 337,472 | 149,927 | 560,257 | 298,047 |
Provision for credit losses | 9,245 | (4,929) | 106,814 | (22,285) |
Net interest income after provision for credit losses | 328,227 | 154,856 | 453,443 | 320,332 |
Noninterest Income | ||||
Wealth management fees | 19,304 | 10,734 | 33,934 | 20,442 |
Service charges on deposit accounts | 21,144 | 8,514 | 35,870 | 16,638 |
Debit card and ATM fees | 10,402 | 5,583 | 17,301 | 10,726 |
Mortgage banking revenue | 6,522 | 7,827 | 13,767 | 24,352 |
Investment product fees | 8,568 | 6,042 | 15,890 | 11,906 |
Capital markets income | 7,261 | 5,871 | 11,703 | 9,586 |
Company-owned life insurance | 4,571 | 2,783 | 8,095 | 5,497 |
Debt securities gains (losses), net | (85) | 692 | 257 | 2,685 |
Other income | 11,430 | 3,462 | 17,540 | 6,388 |
Total noninterest income | 89,117 | 51,508 | 154,357 | 108,220 |
Noninterest Expense | ||||
Salaries and employee benefits | 161,817 | 72,640 | 285,964 | 140,757 |
Occupancy | 26,496 | 14,054 | 47,515 | 28,926 |
Equipment | 7,550 | 4,506 | 12,718 | 8,475 |
Marketing | 9,119 | 2,632 | 13,395 | 4,694 |
Data processing | 25,883 | 11,697 | 44,645 | 24,050 |
Communication | 5,878 | 2,411 | 9,295 | 5,289 |
Professional fees | 6,336 | 8,528 | 26,127 | 11,252 |
FDIC assessment | 4,699 | 1,226 | 7,274 | 2,833 |
Amortization of intangibles | 7,170 | 2,909 | 11,981 | 5,984 |
Amortization of tax credit investments | 1,525 | 1,813 | 3,041 | 3,015 |
Other expense | 20,922 | 7,202 | 42,196 | 12,083 |
Total noninterest expense | 277,395 | 129,618 | 504,151 | 247,358 |
Income before income taxes | 139,949 | 76,746 | 103,649 | 181,194 |
Income tax expense | 24,964 | 13,960 | 16,250 | 31,590 |
Net income | 114,985 | 62,786 | 87,399 | 149,604 |
Preferred dividends | (4,033) | 0 | (6,050) | 0 |
Net income applicable to common shareholders | $ 110,952 | $ 62,786 | $ 81,349 | $ 149,604 |
Net income per common share - basic (in dollars per share) | $ 0.38 | $ 0.38 | $ 0.31 | $ 0.91 |
Net income per common share - diluted (in dollars per share) | $ 0.38 | $ 0.38 | $ 0.31 | $ 0.90 |
Weighted average number of common shares outstanding - basic (in shares) | 290,862 | 165,175 | 259,108 | 165,086 |
Weighted average number of common shares outstanding - diluted (in shares) | 291,881 | 165,934 | 260,253 | 165,821 |
Dividends per common share (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.28 | $ 0.28 |
Consolidated Statements of Changes in Shareholders' Equity (unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Statement of Stockholders' Equity [Abstract] | ||||||
Dividends per common share (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.14 | $ 0.14 | $ 0.28 | $ 0.28 |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include the accounts of Old National Bancorp and its wholly-owned subsidiaries (hereinafter collectively referred to as “Old National”) and have been prepared in conformity with accounting principles generally accepted in the United States of America and prevailing practices within the banking industry. Such principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosures of contingent assets and liabilities at the date of the financial statements and amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the consolidated financial statements contain all the normal and recurring adjustments necessary for a fair statement of the financial position of Old National as of June 30, 2022 and December 31, 2021, and the results of its operations for the three and six months ended June 30, 2022 and 2021. Interim results do not necessarily represent annual results. These financial statements should be read in conjunction with Old National’s Annual Report on Form 10-K for the year ended December 31, 2021. All significant intercompany transactions and balances have been eliminated. Certain prior year amounts have been reclassified to conform to the current presentation. Such reclassifications had no effect on prior period net income or shareholders’ equity and were insignificant amounts. There have been no material changes from the significant accounting policies disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
|
Recent Accounting Pronouncements |
6 Months Ended |
---|---|
Jun. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Accounting Guidance Adopted in 2022 FASB ASC 470 and 815 – In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to clarify the accounting for certain financial instruments with characteristics of liabilities and equity. The amendments in this update reduce the number of accounting models for convertible debt instruments and convertible preferred stock by removing the cash conversion model and the beneficial conversion feature model. In addition, this ASU improves disclosure requirements for convertible instruments and earnings-per-share guidance. The amendments in this update are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The adoption of this guidance on January 1, 2022 did not have a material impact on the consolidated financial statements. FASB ASC 842 – In July 2021, the FASB issued ASU 2021-05, Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments, to amend the lease classification requirements for lessors to align them with practice under ASC Topic 840. The amendments in this update are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The adoption of this guidance on January 1, 2022 did not have a material impact on the consolidated financial statements. FASB ASC 848 – In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary, optional guidance to ease the potential burden in accounting for, or recognizing the effects of, the transition away from the LIBOR or other interbank offered rate on financial reporting. The guidance is applicable only to contracts or hedge accounting relationships that reference LIBOR or another reference rate expected to be discontinued. Because the guidance is meant to help entities through the transition period, it will be in effect for a limited time and will not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, for which an entity has elected certain optional expedients that are retained through the end of the hedging relationship. The amendments in this ASU are effective March 12, 2020 through December 31, 2022. Old National believes the adoption of this guidance on activities subsequent to June 30, 2022 through December 31, 2022 will not have a material impact on the consolidated financial statements. Accounting Guidance Pending Adoption FASB ASC 805 – In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities From Contracts With Customers, to address diversity in practice and inconsistency related to the accounting for revenue contracts with customers acquired in a business combination. The amendments require that the acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and liabilities. The amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Entities should apply the amendments prospectively to business combinations that occur after the effective date. Early adoption is permitted, including in any interim period. The new guidance is not expected to have a material impact on the consolidated financial statements. FASB ASC 815 – In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method, to expand the current single-layer method of electing hedge accounting to allow multiple hedged layers of a single closed portfolio under the method and renames the last-of-layer method the portfolio layer method. The amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted for any entity that has adopted the amendments in ASU No. 2017-12 for the corresponding period. If an entity adopts the amendments in an interim period, the effect of adopting the amendments related to basis adjustments should be reflected as of the beginning of the fiscal year of adoption (i.e., the initial application date). Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements. FASB ASC 326 – In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, to eliminate the TDR recognition and measurement guidance and, instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The amendments require that an entity disclose current-period gross charge-offs by year of origination for financing receivables and net investment in leases within the vintage disclosures required by ASC 326. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. These amendments should be applied prospectively, except for the transition method related to the recognition and measurement of TDRs, which an entity has the option to apply a modified retrospective transition method resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. Early adoption is permitted if an entity has adopted ASU No. 2016-13, including adoption in an interim period. If an entity elects to early adopt ASU No. 2022-02 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes the interim period. An entity may elect to early adopt the amendments about TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements. FASB ASC 820 – In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, to clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements.
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Acquisition and Divestiture Activity |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Acquisition and Divestiture Activity | ACQUISITION AND DIVESTITURE ACTIVITY Merger First Midwest Bancorp, Inc. On February 15, 2022, Old National completed its previously announced merger of equals transaction with First Midwest pursuant to an agreement and plan of merger, dated as of May 30, 2021, to combine in an all-stock transaction. Following the merger, the new organization is operating under the Old National Bancorp and Old National Bank names, with the corporate headquarters and principal office located in Evansville, Indiana and commercial and consumer banking operations headquartered in Chicago, Illinois. Old National believes that it will be able to achieve synergies and cost savings by integrating the operations of the companies. The combined organization has a presence in additional Midwestern markets, strong commercial banking capabilities, a robust retail footprint, a significant wealth platform, and an enhanced ability to attract talent. The combined organization also creates the scale and profitability to accelerate digital and technology capabilities to drive future investments in consumer and commercial banking, as well as wealth management services. Pursuant to the terms of the merger agreement, each First Midwest common stockholder received 1.1336 shares of Old National common stock for each share of First Midwest common stock such stockholder owned, plus, if applicable, cash in lieu of fractional shares of Old National common stock resulting from the exchange ratio. Each outstanding share of 7.000% fixed-rate non-cumulative perpetual preferred stock, Series A, no par value, and each outstanding share of 7.000% fixed-rate non-cumulative perpetual preferred stock, Series C, no par value, of First Midwest was converted into the right to receive one share of an applicable newly created series of Old National preferred stock, no par value, having terms that are not materially less favorable than the applicable series of outstanding First Midwest preferred stock (respectively, “Old National Series A Preferred Stock” and “Old National Series C Preferred Stock,” and collectively, the “Old National Preferred Stock”). In this regard, Old National issued 108,000 shares of Old National Series A Preferred Stock and 122,500 shares of Old National Series C Preferred Stock. Old National entered into two deposit agreements, each dated as of February 15, 2022, by and among Old National, Continental Stock Transfer & Trust Company, as depository, and the holders from time to time of the depositary receipts in connection with the issuance of the Old National Preferred Stock. Pursuant to the deposit agreements, Old National issued 4,320,000 depositary shares, each representing a 1/40th interest in a share of Old National Series A Preferred Stock, and 4,900,000 depositary shares, each representing a 1/40th interest in a share of Old National Series C Preferred Stock. The assets acquired and liabilities assumed, both intangible and tangible, in the merger were recorded at their estimated fair values as of the merger date and have been accounted for under the acquisition method of accounting. During the three months ended June 30, 2022, Old National decreased goodwill totaling $5.6 million to update the provisional valuation of the fair values of assets acquired and liabilities assumed. These adjustments affected goodwill, loans, premises and equipment, operating lease right-of-use assets, other assets, and accrued expenses and other liabilities. The following table presents the preliminary valuation of the assets acquired and liabilities assumed, net of the fair value adjustments and the fair value of consideration as of the merger date:
Goodwill related to this merger will not be deductible for tax purposes. Other intangible assets acquired included core deposit intangibles and customer trust relationships. The estimated fair value of the core deposit intangible was $77.9 million and is being amortized over an estimated useful life of 10 years. The estimated fair value of customer trust relationships was $39.7 million and is being amortized over an estimated useful life of 13 years. The fair value of purchased financial assets with credit deterioration was $1.4 billion on the date of the merger. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $1.5 billion. Old National estimates, on the date of the merger, that $78.5 million of the contractual cash flows specific to the purchased financial assets with credit deterioration will not be collected. Transaction costs totaling $77.9 million associated with the merger have been expensed for the six months ended June 30, 2022 and additional transaction and integration costs will be expensed in future periods as incurred. As a result of the merger, Old National assumed sponsorship of First Midwest’s defined benefit pension plan (the “Pension Plan”) under which both plan participation and benefit accruals had been previously frozen. Subsequent to the close of the merger, Old National began taking the steps required to terminate the Pension Plan. At June 30, 2022, the accumulated benefit obligation was $55.9 million and the fair value of Pension Plan assets was $72.4 million. Pension costs were not material for the six months ended June 30, 2022. Summary of Unaudited Pro-Forma Financial Information The following table presents supplemental unaudited pro-forma financial information as if the First Midwest merger had occurred on January 1, 2021. The pro-forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effective as of this assumed date.
(1) Includes net interest income and total noninterest income. Supplemental pro-forma earnings for the three months ended June 30, 2022 were adjusted to exclude $36.6 million of merger-related costs. Supplemental pro-forma earnings for the three months ended June 30, 2021 were adjusted to include these costs. Supplemental pro-forma earnings for the six months ended June 30, 2022 were adjusted to exclude $77.9 million of merger-related costs, $11.0 million of provision for credit losses on unfunded loan commitments, and $96.3 million of provision for credit losses to establish an allowance for credit losses on non-PCD loans acquired in the transaction. Supplemental pro-forma earnings for the six months ended June 30, 2021 were adjusted to include these costs. Divestiture On June 27, 2022, Old National entered into a Custodial Transfer and Asset Purchase Agreement with UMB Bank, n.a. (“UMB”), pursuant to which UMB will acquire Old National’s business of acting as a qualified custodian for, and administering, health savings accounts. Old National serves as custodian for health savings accounts comprised of both investment accounts and deposit accounts. Upon completion of the sale, UMB will pay Old National a premium on deposit account balances transferred at closing, or approximately $95 million based on June 30, 2022 balances. Subject to customary closing conditions and regulatory approval, the parties anticipate completing the sale in the fourth quarter of 2022.
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Net Income Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Common Share | NET INCOME PER COMMON SHARE Basic and diluted net income per common share are calculated using the two-class method. Net income applicable to common shares is divided by the weighted-average number of common shares outstanding during the period. Adjustments to the weighted average number of common shares outstanding are made only when such adjustments will dilute net income per common share. Net income applicable to common shares is then divided by the weighted-average number of common shares and common share equivalents during the period. The following table presents the calculation of basic and diluted net income per common share:
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Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | INVESTMENT SECURITIES The following table summarizes the amortized cost and fair value of the available-for-sale and held-to-maturity investment securities portfolios and the corresponding amounts of gross unrealized gains, unrealized losses, and basis adjustments in accumulated other comprehensive income (loss) and gross unrecognized gains and losses. The Company held no securities classified as held-to-maturity as of December 31, 2021.
(1) Basis adjustments represent the cumulative fair value adjustments included in the carrying amounts of fixed-rate investment securities assets in fair value hedging arrangements. During the six months ended June 30, 2022, U.S government-sponsored entities and agencies, agency mortgage-backed securities, and state and political subdivision securities with a fair value of $3.0 billion were transferred from the available-for-sale portfolio to the held-to-maturity portfolio. The $125.2 million unrealized holding loss, net of tax, at the date of transfer will continue to be reported as a separate component of shareholders’ equity and is being amortized over the remaining term of the securities as an adjustment to yield. The corresponding discount on these securities will offset this adjustment to yield as it is amortized. Proceeds from sales or calls of available-for-sale investment securities and the resulting realized gains and realized losses were as follows:
Substantially all of the mortgage-backed securities in the investment portfolio are residential mortgage-backed securities. The amortized cost and fair value of the investment securities portfolio are shown by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Weighted average yield is based on amortized cost.
The following table summarizes the available-for-sale investment securities with unrealized losses for which an allowance for credit losses has not been recorded by aggregated major security type and length of time in a continuous unrealized loss position:
The following table summarizes the held-to-maturity investment securities with unrecognized losses aggregated by major security type and length of time in a continuous loss position:
The unrecognized losses on held-to-maturity investment securities presented in the table above include unrecognized losses on securities that were transferred from available-for-sale to held-for-maturity totaling $161.5 million at June 30, 2022. Available-for-sale securities in unrealized loss positions are evaluated at least quarterly to determine if a decline in fair value should be recorded through income or other comprehensive income. For available-for sale securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security, before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for sale securities that do not meet the criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any decline in fair value that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. No allowance for credit losses for available-for-sale securities was needed at June 30, 2022 or December 31, 2021. An allowance on held-to-maturity debt securities is maintained for certain municipal bonds to account for expected lifetime credit losses. Substantially all of the U.S. government-sponsored entities and agencies and agency mortgage-backed securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses. Therefore, for those securities, we do not record expected credit losses. The allowance for credit losses on held-to-maturity debt securities was $0.2 million at June 30, 2022. Accrued interest receivable on the securities portfolio is excluded from the estimate of credit losses and totaled $50.9 million at June 30, 2022 and $35.5 million at December 31, 2021. At June 30, 2022, Old National’s securities portfolio consisted of 3,232 securities, 2,679 of which were in an unrealized loss position. The unrealized losses attributable to our U.S. Treasury, U.S. government-sponsored entities and agencies, agency mortgage-backed securities, states and political subdivisions, and other securities are the result of fluctuations in interest rates and temporary market movements. Old National’s pooled trust preferred securities are evaluated using collateral-specific assumptions to estimate the expected future interest and principal cash flows. At June 30, 2022, we had no intent to sell any securities that were in an unrealized loss position nor is it expected that we would be required to sell the securities prior to their anticipated recovery. Old National’s pooled trust preferred securities have experienced credit defaults. However, we believe that the value of the instruments lies in the full and timely interest payments that will be received through maturity, the steady amortization that will be experienced until maturity, and the full return of principal by the final maturity of the collateralized debt obligations. Old National did not recognize any losses on these securities for the six months ended June 30, 2022 or 2021. Equity Securities Old National’s equity securities with readily determinable fair values totaled $55.9 million at June 30, 2022 and $13.2 million at December 31, 2021. There were losses on equity securities of $2.4 million during the three months ended June 30, 2022 and losses of $4.2 million during the six months ended June 30, 2022, compared to gains of $0.2 million during the three months ended June 30, 2021 and gains of $0.7 million during the six months ended June 30, 2021. Alternative Investments Old National has alternative investments without readily determinable fair values that are included in other assets totaling $265.7 million at June 30, 2022, consisting of $143.0 million of illiquid investments of partnerships, limited liability companies, and other ownership interests that support affordable housing and $122.7 million of economic development and community revitalization initiatives in low-to-moderate income neighborhoods. These alternative investments totaled $186.0 million at December 31, 2021. There have been no impairments or adjustments on equity securities without readily determinable fair values, except for amortization of tax credit investments in the six months ended June 30, 2022 and 2021. See Note 11 to the consolidated financial statements for detail regarding these investments.
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Loans and Allowance for Credit Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Allowance for Credit Losses | LOANS AND ALLOWANCE FOR CREDIT LOSSES Loans Old National’s loans consist primarily of loans made to consumers and commercial clients in many diverse industries, including manufacturing, agribusiness, transportation, mining, wholesaling, and retailing, among others. Most of Old National’s lending activity occurs within our principal geographic markets of Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Wisconsin, and Missouri. Old National manages concentrations of credit exposure by industry, product, geography, client relationship, and loan size. The loan categories used to monitor and analyze interest income and yields are different than the portfolio segments used to determine the allowance for credit losses for loans. The allowance for credit losses was calculated by pooling loans of similar credit risk characteristics and credit monitoring procedures. The four loan portfolios – commercial, commercial real estate, residential real estate, and consumer – are classified into seven segments of loans – commercial, commercial real estate, BBCC, residential real estate, indirect, direct, and home equity. The commercial and commercial real estate loan categories shown on the balance sheet include the same pool of loans as the commercial, commercial real estate, and BBCC portfolio segments. The consumer loan category shown on the balance sheet is comprised of the same loans in the indirect, direct, and home equity portfolio segments. The portfolio segment reclassifications follow:
The composition of loans by portfolio segment follows:
(1)Includes direct finance leases of $66.5 million at June 30, 2022 and $25.1 million at December 31, 2021. (2)Includes PPP loans of $81.6 million at June 30, 2022 and $169.0 million at December 31, 2021. The risk characteristics of each loan portfolio segment are as follows: Commercial Commercial loans are classified primarily on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its clients. Commercial Real Estate Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing Old National’s commercial real estate portfolio are diverse in terms of type and geographic location. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. Included with commercial real estate are construction loans, which are underwritten utilizing independent appraisal reviews, sensitivity analysis of absorption and lease rates, financial analysis of the developers and property owners, and feasibility studies, if available. Construction loans are generally based on estimates of costs and value associated with the complete project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders (including Old National), sales of developed property, or an interim loan commitment from Old National until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions, and the availability of long-term financing. At 224%, Old National Bank’s commercial real estate loans as a percentage of its risk-based capital remained well below the regulatory guideline limit of 300% at June 30, 2022. BBCC BBCC loans are typically granted to small businesses with gross revenues of less than $5 million and aggregate debt of less than $1 million. Old National has established minimum debt service coverage ratios, minimum FICO scores for owners and guarantors, and the ability to show relatively stable earnings as criteria to help mitigate risk. Repayment of these loans depends on the personal income of the borrowers and the cash flows of the business. These factors can be affected by factors such as changes in economic conditions and unemployment levels. Residential With respect to residential loans that are secured by 1-4 family residences and are generally owner occupied, Old National typically establishes a maximum loan-to-value ratio and generally requires private mortgage insurance if that ratio is exceeded. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment can also be impacted by changes in residential property values. Portfolio risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers. Indirect Indirect loans are secured by automobile collateral, generally new and used cars and trucks from auto dealers that operate within our footprint. Old National typically mitigates the risk of indirect loans by establishing minimum FICO scores, maximum loan-to-value ratios, and maximum debt-to-income ratios. Repayment of these loans depends largely on the personal income of the borrowers, which can be affected by changes in economic conditions such as unemployment levels. Portfolio risk is mitigated by the fact that the loans are of smaller amounts spread over many borrowers, conservative credit policies, and ongoing reviews of dealer relationships. Direct Direct loans are typically secured by collateral such as auto or real estate or are unsecured. Old National has established conservative underwriting standards such as minimum FICO scores, maximum loan-to-value ratios, and maximum debt-to-income ratios. Repayment of these loans depends largely on the personal income of the borrowers, which can be affected by changes in economic conditions such as unemployment levels. Portfolio risk is mitigated by the fact that the loans are of smaller amounts spread over many borrowers along with conservative credit policies. Home Equity Home equity loans are generally secured by 1-4 family residences that are owner occupied. Old National has established conservative underwriting standards such as minimum FICO scores, maximum loan-to-value ratios, and maximum debt-to-income ratios. Repayment of these loans depends largely on the personal income of the borrowers, which can be affected by changes in economic conditions such as unemployment levels. Portfolio risk is mitigated by the fact that the loans are of smaller amounts spread over many borrowers, along with conservative credit policies as well as monitoring of updated borrower credit scores. Allowance for Credit Losses Loans Credit quality within the loans held for investment portfolio is continuously monitored by management and is reflected within the allowance for credit losses for loans. The allowance for credit losses is an estimate of expected losses inherent within the Company’s loans held for investment portfolio. Credit quality is assessed and monitored by evaluating various attributes and the results of those evaluations are utilized in underwriting new loans and in our process for estimating expected credit losses. Expected credit loss inherent in non-cancelable off-balance-sheet credit exposures is accounted for as a separate liability included in other liabilities on the balance sheet. The allowance for credit losses for loans held for investment is adjusted by a credit loss expense, which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries. Old National has made a policy election to report accrued interest receivable as a separate line item on the balance sheet. Accrued interest receivable on loans is excluded from the estimate of credit losses and totaled $104.6 million at June 30, 2022 and $47.6 million at December 31, 2021. The allowance for credit loss estimation process involves procedures to appropriately consider the unique characteristics of its loan portfolio segments. These segments are further disaggregated into loan classes based on the level at which credit risk is monitored. When computing the level of expected credit losses, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history, delinquency status, and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In future periods evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense in those future periods. The allowance level is influenced by loan volumes, loan AQR migration or delinquency status, changes in historical loss experience, and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses has two basic components: first, an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans; and second, a pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics. The base forecast scenario considers unemployment, gross domestic product, and the BBB ratio (BBB spread to the 10-year U.S. Treasury rate). In addition to the quantitative inputs, several qualitative factors were considered. These factors include the risk that unemployment, gross domestic product, housing product index, and the BBB ratio prove to be more severe and/or prolonged than our baseline forecast due to the conflict in Ukraine, supply chain issues, inflation, and the ongoing impact of the COVID-19 pandemic. Activity in the allowance for credit losses for loans by portfolio segment was as follows:
The allowance for credit losses increased for the six months ended June 30, 2022 primarily due to $78.5 million of allowance for credit losses on acquired PCD loans established through acquisition accounting adjustments on the merger date and $96.3 million of provision for credit losses to establish an allowance for credit losses on non-PCD loans acquired in the First Midwest merger. Loan growth and qualitative factors contributed to the increase in the allowance for credit losses in the three months ended June 30, 2022. Unfunded Loan Commitments Old National maintains an allowance for credit losses on unfunded commercial lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the allowance for credit losses for loans, modified to take into account the probability of a drawdown on the commitment. The allowance for credit losses on unfunded loan commitments is classified as a liability account on the balance sheet within accrued expenses and other liabilities, while the corresponding provision for these credit losses is recorded as a component of other expense. Old National’s activity in the allowance for credit losses on unfunded loan commitments was as follows:
Credit Quality Old National’s management monitors the credit quality of its loans on an ongoing basis with the AQR for commercial loans reviewed annually or at renewal and the performance of its residential and consumer loans based upon the accrual status refreshed at least quarterly. Internally, management assigns an AQR to each non-homogeneous commercial, commercial real estate, and BBCC loan in the portfolio. The primary determinants of the AQR are the reliability of the primary source of repayment and the past, present, and projected financial condition of the borrower. The AQR will also consider current industry conditions. Major factors used in determining the AQR can vary based on the nature of the loan, but commonly include factors such as debt service coverage, internal cash flow, liquidity, leverage, operating performance, debt burden, FICO scores, occupancy, interest rate sensitivity, and expense burden. Old National uses the following definitions for risk ratings: Criticized. Special mention loans that have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Classified – Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Classified – Nonaccrual. Loans classified as nonaccrual have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection in full, on the basis of currently existing facts, conditions, and values, in doubt. Classified – Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as nonaccrual, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Pass rated loans are those loans that are other than criticized, classified – substandard, classified – nonaccrual, or classified – doubtful. The following table summarizes the amortized cost of term loans by risk category of commercial, commercial real estate, and BBCC loans by loan portfolio segment, class of loan, and origination year:
For residential real estate and consumer loan classes, Old National evaluates credit quality based on the aging status of the loan and by payment activity. The performing or nonperforming status is updated on an on-going basis dependent upon improvement and deterioration in credit quality. The following table presents the amortized cost of term residential real estate and consumer loans based on payment activity and origination year:
Nonaccrual and Past Due Loans Old National does not record interest on nonaccrual loans until principal is recovered. For all loan classes, a loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectability of principal or interest. Interest accrued but not received is reversed against earnings. Cash interest received on these loans is applied to the principal balance until the principal is recovered or until the loan returns to accrual status. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current, remain current for a prescribed period, and future payments are reasonably assured. The following table presents the aging of the amortized cost basis in past due loans by class of loans:
The following table presents the amortized cost basis of loans on nonaccrual status and loans past due 90 days or more and still accruing by class of loan:
Interest income recognized on nonaccrual loans was insignificant during the three and six months ended June 30, 2022 and 2021. When management determines that foreclosure is probable, expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of the collateral. The class of loan represents the primary collateral type associated with the loan. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following table presents the amortized cost basis of collateral dependent loans by class of loan:
Loan Participations Old National has loan participations, which qualify as participating interests, with other financial institutions. At June 30, 2022, these loans totaled $2.4 billion, of which $1.2 billion had been sold to other financial institutions and $1.2 billion was retained by Old National. The loan participations convey proportionate ownership rights with equal priority to each participating interest holder; involve no recourse (other than ordinary representations and warranties) to, or subordination by, any participating interest holder; all cash flows are divided among the participating interest holders in proportion to each holder’s share of ownership; and no holder has the right to pledge the entire financial asset unless all participating interest holders agree. Troubled Debt Restructurings Old National may choose to restructure the contractual terms of certain loans. The decision to restructure a loan, versus aggressively enforcing the collection of the loan, may benefit Old National by increasing the ultimate probability of collection. Any loans that are modified are reviewed by Old National to identify if a TDR has occurred, which is when for economic or legal reasons related to a borrower’s financial difficulties, Old National Bank grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status. The modification of the terms of such loans includes one or a combination of the following: a reduction of the stated interest rate of the loan, an extension of the maturity date at a stated rate of interest lower than the current market rate of new debt with similar risk, or a permanent reduction of the recorded investment of the loan. Loans modified in a TDR are typically placed on nonaccrual status until we determine the future collection of principal and interest is reasonably assured, which generally requires that the borrower demonstrate a period of performance according to the restructured terms for six months. If we are unable to resolve a nonperforming loan issue, the credit will be charged off when it is apparent there will be a loss. For large commercial type loans, each relationship is individually analyzed for evidence of apparent loss based on quantitative benchmarks or subjectively based upon certain events or particular circumstances. For residential and consumer loans, a charge off is recorded at the time foreclosure is initiated or when the loan becomes 120 to 180 days past due, whichever is earlier. For commercial TDRs, an allocation is established within the allowance for credit losses for the difference between the carrying value of the loan and its computed value. To determine the computed value of the loan, one of the following methods is selected: (1) the present value of expected cash flows discounted at the loan’s original effective interest rate, (2) the loan’s observable market price, or (3) the fair value of the collateral, if the loan is collateral dependent. The allocation is established as the difference between the carrying value of the loan and the collectable value. If there are significant changes in the amount or timing of the loan’s expected future cash flows, the allowance allocation is recalculated and adjusted accordingly. When a residential or consumer loan is identified as a TDR, the loan is typically written down to its collateral value less selling costs. The following table presents activity in TDRs:
TDRs included within nonaccrual loans totaled $24.3 million at June 30, 2022 and $11.7 million at December 31, 2021. Old National has established specific allowances for credit losses for clients whose loan terms have been modified as TDRs totaling $5.8 million at June 30, 2022 and $0.7 million at December 31, 2021. Old National had not committed to lend any additional funds to clients with outstanding loans that were classified as TDRs at June 30, 2022 or December 31, 2021. The pre-modification and post-modification outstanding recorded investments of loans modified as TDRs during the six months ended June 30, 2022 and 2021 are the same except for when the loan modifications involve the forgiveness of principal. One loan met the qualifications to be removed from TDR status for the six months ended June 30, 2021. The TDRs that occurred during the six months ended June 30, 2022 increased the allowance for credit losses by $5.5 million and resulted in no charge-offs. The TDRs that occurred during the six months ended June 30, 2021 did not have a material impact on the allowance for credit losses and resulted in no charge-offs. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. TDRs for which there was a payment default within twelve months following the modification were insignificant during the six months ended June 30, 2022 and 2021. The terms of certain other loans were modified during 2022 and 2021 that did not meet the definition of a TDR. It is our process to review all classified and criticized loans that, during the period, have been renewed, have entered into a forbearance agreement, have gone from principal and interest to interest only, or have extended the maturity date. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on its debt in the foreseeable future without the modification. The evaluation is performed under our internal underwriting policy. We also evaluate whether a concession has been granted or if we were adequately compensated through a market interest rate, additional collateral, or a bona fide guarantee. We also consider whether the modification was insignificant relative to the other terms of the agreement or the delay in a payment. In general, once a modified loan is considered a TDR, the loan will always be considered a TDR until it is paid in full, otherwise settled, sold, or charged off. However, guidance also permits for loans to be removed from TDR status when subsequently restructured under these circumstances: (1) at the time of the subsequent restructuring, the borrower is not experiencing financial difficulties, and this is documented by a current credit evaluation at the time of the restructuring, (2) under the terms of the subsequent restructuring agreement, the institution has granted no concession to the borrower; and (3) the subsequent restructuring agreement includes market terms that are no less favorable than those that would be offered for a comparable new loan. For loans subsequently restructured that have cumulative principal forgiveness, the loan should continue to be measured in accordance with ASC 310-10, Receivables – Overall. However, consistent with ASC 310-40-50-2, Troubled Debt Restructurings by Creditors, Creditor Disclosure of Troubled Debt Restructurings, the loan would not be required to be reported in the years following the restructuring if the subsequent restructuring meets both of these criteria: (1) has an interest rate at the time of the subsequent restructuring that is not less than a market interest rate; and (2) is performing in compliance with its modified terms after the subsequent restructuring. Purchased Credit Deteriorated Loans Old National has purchased loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows:
(1)Old National merged with First Midwest effective February 15, 2022.
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Premises and Equipment |
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Premises and Equipment | PREMISES AND EQUIPMENT The composition of premises and equipment was as follows:
The increase in premises and equipment at June 30, 2022 when compared to December 31, 2021 was primarily due to assets acquired in the merger with First Midwest totaling $112.4 million. Depreciation expense was $10.0 million for the three months ended June 30, 2022 and $17.7 million for the six months ended June 30, 2022, compared to $7.0 million for the three months ended June 30, 2021 and $14.1 million for the six months ended June 30, 2021. Finance Leases Old National leases certain banking center buildings and equipment under finance leases that are included in premises and equipment. See Notes 8 and 14 to the consolidated financial statements for detail regarding these leases.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES Old National has operating and finance leases for land, office space, banking centers, and equipment. These leases are generally for periods of 5 to 20 years with various renewal options. We include certain renewal options in the measurement of our right-of-use assets and lease liabilities if they are reasonably certain to be exercised. Variable lease payments that are dependent on an index or a rate are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. Variable lease payments that are not dependent on an index or a rate are excluded from the measurement of the lease liability and are recognized in profit and loss when incurred. Variable lease payments are defined as payments made for the right to use an asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time. Old National has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated. For certain equipment leases, Old National accounts for the lease and non-lease components as a single lease component using the practical expedient available for that class of assets. Old National does not have any material sub-lease agreements. The components of lease expense were as follows:
Supplemental balance sheet information related to leases was as follows:
Supplemental cash flow information related to leases was as follows:
The following table presents a maturity analysis of the Company’s lease liability by lease classification at June 30, 2022:
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Leases | LEASES Old National has operating and finance leases for land, office space, banking centers, and equipment. These leases are generally for periods of 5 to 20 years with various renewal options. We include certain renewal options in the measurement of our right-of-use assets and lease liabilities if they are reasonably certain to be exercised. Variable lease payments that are dependent on an index or a rate are initially measured using the index or rate at the commencement date and are included in the measurement of the lease liability. Variable lease payments that are not dependent on an index or a rate are excluded from the measurement of the lease liability and are recognized in profit and loss when incurred. Variable lease payments are defined as payments made for the right to use an asset that vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time. Old National has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated. For certain equipment leases, Old National accounts for the lease and non-lease components as a single lease component using the practical expedient available for that class of assets. Old National does not have any material sub-lease agreements. The components of lease expense were as follows:
Supplemental balance sheet information related to leases was as follows:
Supplemental cash flow information related to leases was as follows:
The following table presents a maturity analysis of the Company’s lease liability by lease classification at June 30, 2022:
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Goodwill and Other Intangible Assets |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS The following table presents the changes in the carrying amount of goodwill:
During the six months ended June 30, 2022, Old National recorded $954.5 million of goodwill associated with the First Midwest merger. The decrease in goodwill for the three months ended June 30, 2022 resulted from the measurement period adjustments related to updating the fair values of the assets acquired and liabilities assumed in the First Midwest merger. See Note 3 to the consolidated financial statements for additional detail regarding this transaction. Old National performed the required annual goodwill impairment test as of August 31, 2021 and there was no impairment. No events or circumstances since the August 31, 2021 annual impairment test were noted that would indicate it was more likely than not a goodwill impairment exists. The gross carrying amounts and accumulated amortization of other intangible assets were as follows:
Other intangible assets consist of core deposit intangibles and customer relationship intangibles and are being amortized primarily on an accelerated basis over their estimated useful lives, generally over a period of 5 to 15 years. During the six months ended June 30, 2022, Old National recorded $77.9 million of core deposit intangibles and $39.7 million of customer trust relationships intangible associated with the First Midwest merger. Old National reviews other intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. No impairment charges were recorded during the six months ended June 30, 2022 or 2021. Total amortization expense associated with intangible assets was $7.2 million for the three months ended June 30, 2022 and $12.0 million for the six months ended June 30, 2022, compared to $2.9 million for the three months ended June 30, 2021 and $6.0 million for the six months ended June 30, 2021. Estimated amortization expense for future years is as follows:
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Loan Servicing Rights |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan Servicing Rights | LOAN SERVICING RIGHTS Loan servicing rights are included in other assets on the balance sheet. At June 30, 2022, loan servicing rights derived from mortgage loans sold with servicing retained totaled $38.1 million, compared to $30.0 million at December 31, 2021. Loans serviced for others are not reported as assets. The principal balance of mortgage loans serviced for others was $4.4 billion at June 30, 2022, compared to $3.7 billion at December 31, 2021. Custodial escrow balances maintained in connection with serviced loans were $58.1 million at June 30, 2022 and $18.2 million at December 31, 2021. The following table summarizes the carrying values and activity related to loan servicing rights and the related valuation allowance:
(1)Additions in the six months ended June 30, 2022 include loan servicing rights of $7.7 million acquired in the First Midwest merger on February 15, 2022. At June 30, 2022, the fair value of servicing rights was $46.8 million, which was determined using a discount rate of 9% and a conditional prepayment rate of 9%. At December 31, 2021, the fair value of servicing rights was $33.8 million, which was determined using a discount rate of 9% and a conditional prepayment rate of 10%.
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Qualified Affordable Housing Projects and Other Tax Credit Investments |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Affordable Housing Projects [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Qualified Affordable Housing Projects and Other Tax Credit Investments | QUALIFIED AFFORDABLE HOUSING PROJECTS AND OTHER TAX CREDIT INVESTMENTS Old National is a limited partner in several tax-advantaged limited partnerships whose purpose is to invest in approved qualified affordable housing, renewable energy, or other renovation or community revitalization projects. These investments are included in other assets on the balance sheet, with any unfunded commitments included with other liabilities. As of June 30, 2022, Old National expects to recover its remaining investments through the use of the tax credits that are generated by the investments. The following table summarizes Old National’s investments in qualified affordable housing projects and other tax credit investments:
(1)All commitments will be paid by Old National by December 31, 2027. The following table summarizes the amortization expense and tax benefit recognized for Old National’s qualified affordable housing projects and other tax credit investments:
(1)The amortization expense for the LIHTC investments is included in our income tax expense. The amortization expense for the FHTC, NMTC, and Renewable Energy tax credits is included in noninterest expense. (2)All of the tax benefits recognized are included in our income tax expense. The tax benefit recognized for the FHTC, NMTC, and Renewable Energy investments primarily reflects the tax credits generated from the investments and excludes the net tax expense (benefit) and deferred tax liability of the investments’ income (loss).
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Securities Sold Under Agreements to Repurchase |
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Securities Sold under Agreements to Repurchase [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Sold Under Agreements to Repurchase | SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE Securities sold under agreements to repurchase are secured borrowings. Old National pledges investment securities to secure these borrowings. The following table presents securities sold under agreements to repurchase and related weighted-average interest rates:
The following table presents the contractual maturity of our secured borrowings and class of collateral pledged:
The fair value of securities pledged to secure repurchase agreements may decline. Old National has pledged securities valued at 115% of the gross outstanding balance of repurchase agreements at June 30, 2022 to manage this risk.
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Federal Home Loan Bank Advances |
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Federal Home Loan Banks [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal Home Loan Bank Advances | FEDERAL HOME LOAN BANK ADVANCES The following table summarizes Old National Bank’s FHLB advances:
FHLB advances had weighted-average rates of 1.68% at June 30, 2022 and 1.30% at December 31, 2021. Investment securities and residential real estate loans collateralize these borrowings up to 140% of outstanding debt. At June 30, 2022, total unamortized prepayment fees related to debt modifications completed in prior years totaled $23.2 million, compared to $26.2 million at December 31, 2021. Contractual maturities of FHLB advances at June 30, 2022 were as follows:
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Other Borrowings |
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Other Liabilities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Borrowings | OTHER BORROWINGS The following table summarizes Old National’s other borrowings:
Contractual maturities of other borrowings at June 30, 2022 were as follows:
Senior Notes In August 2014, Old National issued $175.0 million of senior unsecured notes with a 4.125% interest rate. These notes pay interest on February 15 and August 15 and mature on August 15, 2024. Junior Subordinated Debentures Junior subordinated debentures related to trust preferred securities are classified in “other borrowings.” Junior subordinated debentures qualify as Tier 2 capital for regulatory purposes, subject to certain limitations. Through various acquisitions, Old National assumed junior subordinated debenture obligations related to various trusts that issued trust preferred securities. Old National guarantees the payment of distributions on the trust preferred securities issued by the trusts. Proceeds from the issuance of each of these securities were used to purchase junior subordinated debentures with the same financial terms as the securities issued by the trusts. Old National, at any time, may redeem the junior subordinated debentures at par and, thereby cause a redemption of the trust preferred securities in whole or in part. The following table summarizes the terms of our outstanding junior subordinated debentures at June 30, 2022:
Subordinated Debentures On November 1, 2017, Old National assumed $12.0 million of subordinated fixed-to-floating notes related to the acquisition of Anchor (MN). The subordinated debentures had a 5.75% fixed rate of interest through October 29, 2020. From October 30, 2020 to the October 30, 2025 maturity date, the debentures have a floating rate of interest equal to the three-month LIBOR rate plus 4.356%. On February 15, 2022, Old National assumed $150.0 million of subordinated fixed rate notes related to the First Midwest merger. The subordinated debentures have a 5.875% fixed rate of interest through the September 29, 2026 maturity date. Leveraged Loans The leveraged loans are directly related to the New Markets Tax Credit structure. As part of the transaction structure, Old National has the right to sell its interest in the entity that received the leveraged loans at an agreed upon price to the leveraged lender at the end of the New Markets Tax Credit seven year compliance period. See Note 11 to the consolidated financial statements for additional information on the Company’s New Markets Tax Credit investments. Finance Lease Liabilities Old National has long-term finance lease liabilities for certain banking centers and equipment totaling $15.9 million at June 30, 2022. See Note 8 to the consolidated financial statements for a maturity analysis of the Company’s finance lease liabilities.
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Accumulated Other Comprehensive Income (Loss) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes within each classification of AOCI, net of tax:
(1)See tables below for details about reclassifications to income. The following table summarizes the significant amounts reclassified out of each component of AOCI for the three months ended June 30, 2022 and 2021:
The following table summarizes the significant amounts reclassified out of each component of AOCI for the six months ended June 30, 2022 and 2021:
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Share-Based Compensation |
6 Months Ended |
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Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION At June 30, 2022, Old National had 9.1 million shares remaining available for issuance under the Company’s Amended and Restated 2008 Incentive Compensation Plan (the “ICP”). An amendment to increase the number of shares authorized for issuance under the ICP by 9.0 million was approved on May 18, 2022. The granting of awards to key employees is typically in the form of restricted stock awards or units. Restricted Stock Awards Old National granted 0.9 million time-based restricted stock awards to certain key employees during the six months ended June 30, 2022. Additionally, in connection with the First Midwest merger, each restricted stock award of First Midwest common stock that was outstanding, unvested, and unsettled at the merger date was assumed and equitably converted into a restricted stock award of Old National common stock subject to the same vested terms and conditions, resulting in an issuance of an aggregate 0.9 million restricted stock awards of Old National common stock. Shares generally vest annually over a three year period, cliff vest in three years from the grant date, or vest 50% on the second anniversary of the grant date and 50% on the third anniversary of the grant date. At June 30, 2022, unvested shares totaled 2.0 million. Compensation expense is measured as the fair value of the award at grant date recognized over the service period of the award. Shares are subject to certain restrictions and risk of forfeiture by the participants. At June 30, 2022, unrecognized compensation expense for unvested restricted stock awards was $23.6 million. Old National recorded share-based compensation expense, net of tax, related to restricted stock awards of $2.9 million during the three months ended June 30, 2022 and $5.4 million for the six months ended June 30, 2022, compared to $0.7 million for the three months ended June 30, 2021 and $1.4 million for the six months ended June 30, 2021. Restricted Stock Units Old National granted 1.2 million shares of performance based restricted stock units to certain key officers during the six months ended June 30, 2022. Additionally, in connection with the First Midwest merger, each time-based or performance-based restricted stock unit award of First Midwest common stock that was outstanding, unvested, and unsettled at the merger date was assumed and equitably converted into a time-based restricted stock unit award of Old National common stock subject to the same vested terms and conditions (other than performance conditions), resulting in an issuance of an aggregate 0.7 million restricted stock units of Old National common stock. Shares vest at the end of a 24 or 36 month period based on the achievement of certain targets. If targets are achieved prior to the end of the 24 month performance period, vesting can be accelerated. At June 30, 2022, unvested shares totaled 2.1 million. Compensation expense is recognized on a straight line basis over the performance period of the award. For certain awards, the level of performance could increase or decrease the number of shares earned. Shares are subject to certain restrictions and risk of forfeiture by the participants. As of June 30, 2022, there was $21.9 million of unrecognized compensation cost related to unvested restricted stock units. Old National recorded share-based compensation expense, net of tax, related to restricted stock units of $3.0 million during the three months ended June 30, 2022 and $5.4 million for the six months ended June 30, 2022, compared to $0.7 million during the three months ended June 30, 2021 and $1.3 million for the six months ended June 30, 2021. Stock Options and Appreciation Rights Old National has not granted stock options since 2009. However, Old National did acquire stock options and stock appreciation rights through its prior acquisitions. Old National recorded no incremental expense associated with the conversion of these options and stock appreciation rights. At June 30, 2022, 8 thousand stock appreciation rights remained outstanding.
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Income Taxes |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES Following is a summary of the major items comprising the differences in taxes from continuing operations computed at the federal statutory rate and as recorded in the consolidated statements of income:
The provision for income taxes was recorded at June 30, 2022 and 2021 based on the current estimate of the effective annual rate. The lower effective tax rate during the three and six months ended June 30, 2022 compared to the same periods in 2021 reflected the recognition of $1.7 million of previously unrealized tax benefits in the three months ended June 30, 2022, partially offset by higher post-merger estimated state effective tax rates. The six months ended June 30, 2022 also reflected additional one-time benefits of $1.2 million related to share-based payments and $0.9 million related to the remeasurement of the Company’s deferred taxes post-merger. Net Deferred Tax Assets Net deferred tax assets are included in other assets on the balance sheet. At June 30, 2022, net deferred tax assets totaled $337.5 million, compared to $32.9 million at December 31, 2021. The increase in net deferred tax assets was driven by $180.1 million of deferred tax assets related to the market value adjustments of certain investments and $126.6 million related to the merger with First Midwest. The Company’s retained earnings at June 30, 2022 included an appropriation for acquired thrifts’ tax bad debt allowances totaling $58.6 million for which no provision for federal or state income taxes has been made. If, in the future, this portion of retained earnings were distributed as a result of the liquidation of the Company or its subsidiaries, federal and state income taxes would be imposed at the then applicable rates. No valuation allowance was recorded at June 30, 2022 or December 31, 2021 because, based on current expectations, Old National believes it will generate sufficient income in future years to realize deferred tax assets. Old National has federal net operating loss carryforwards totaling $90.4 million at June 30, 2022 and $36.7 million at December 31, 2021. This federal net operating loss was acquired from the acquisition of Anchor (WI) in 2016 and First Midwest in 2022. If not used, the federal net operating loss carryforwards will begin expiring in 2030 and later. Old National has recorded state net operating loss carryforwards totaling $133.9 million at June 30, 2022 and $116.1 million at December 31, 2021. If not used, the state net operating loss carryforwards will expire from 2027 to 2036. The federal and recorded state net operating loss carryforwards are subject to an annual limitation under Internal Revenue Code section 382. Old National believes that all of the federal and recorded state net operating loss carryforwards will be used prior to expiration.
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Derivative Financial Instruments |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS As part of our overall interest rate risk management, Old National uses derivative instruments, including interest rate swaps, collars, caps, and floors. The notional amount does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual agreements. Derivative instruments are recognized on the balance sheet at their fair value and are not reported on a net basis. Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. Old National’s exposure is limited to the termination value of the contracts rather than the notional, principal, or contract amounts. There are provisions in our agreements with the counterparties that allow for certain unsecured credit exposure up to an agreed threshold. Exposures in excess of the agreed thresholds are collateralized. In addition, we minimize credit risk through credit approvals, limits, and monitoring procedures. Derivatives Designated as Hedges Subsequent changes in fair value for a hedging instrument that has been designated and qualifies as part of a hedging relationship are accounted for in the following manner: Cash flow hedges: changes in fair value are recognized as a component in other comprehensive income. Fair value hedges: changes in fair value are recognized concurrently in earnings. As long as a hedging instrument is designated and the results of the effectiveness testing support that the instrument qualifies for hedge accounting treatment, 100% of the periodic changes in fair value of the hedging instrument are accounted for as outlined above. This is the case whether or not economic mismatches exist in the hedging relationship. As a result, there is no periodic measurement or recognition of ineffectiveness. Rather, the full impact of hedge gains and losses is recognized in the period in which the hedged transactions impact earnings. The change in fair value of the hedging instrument that is included in the assessment of hedge effectiveness is presented in the same income statement line item that is used to present the earnings effect of the hedged item. Cash Flow Hedges Interest rate swaps of certain borrowings were designated as cash flow hedges totaling $150.0 million notional amount at both June 30, 2022 and December 31, 2021. Interest rate collars and floors related to variable-rate commercial loan pools were designated as cash flow hedges totaling $900.0 million notional amount at June 30, 2022 and $600.0 million notional amount at December 31, 2021. The hedges were determined to be effective during all periods presented and we expect them to remain effective during the remaining terms. Old National has designated its interest rate collars as cash flow hedges. The structure of these instruments is such that Old National pays the counterparty an incremental amount if the collar index exceeds the cap rate. Conversely, Old National receives an incremental amount if the index falls below the floor rate. No payments are required if the collar index falls between the cap and floor rates. Old National has designated its interest rate floor transactions as cash flow hedges. The structure of these instruments is such that Old National receives an incremental amount if the index falls below the floor strike rate. No payments are required if the index remains above the floor strike rate. Fair Value Hedges Interest rate swaps of certain borrowings were designated as fair value hedges totaling $352.5 million notional amount at June 30, 2022 and $377.5 million notional amount at December 31, 2021. Interest rate swaps of certain available-for-sale investment securities were designated as fair value hedges totaling $910.0 million notional amount at both June 30, 2022 and December 31, 2021. The hedges were determined to be effective during all periods presented and we expect them to remain effective during the remaining terms. The following table summarizes Old National’s derivatives designated as hedges:
(1)Derivative assets are included in other assets on the balance sheet. (2)Derivative liabilities are included in other liabilities on the balance sheet. (3)The fair values of certain counterparty interest rate swaps are zero due to the settlement of centrally-cleared variation margin rules. The effect of derivative instruments in fair value hedging relationships on the consolidated statements of income were as follows:
The effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income were as follows:
Amounts reported in AOCI related to cash flow hedges will be reclassified to interest income or interest expense as interest payments are received or paid on Old National’s derivative instruments. During the next 12 months, we estimate that $2.4 million will be reclassified to interest income and $7.2 million will be reclassified to interest expense. Derivatives Not Designated as Hedges Commitments to fund certain mortgage loans (interest rate lock commitments) and forward commitments for the future delivery of mortgage loans to third party investors are considered derivatives. These derivative contracts do not qualify for hedge accounting. At June 30, 2022, the notional amounts of the interest rate lock commitments were $94.7 million and forward commitments were $100.1 million. At December 31, 2021, the notional amounts of the interest rate lock commitments were $90.7 million and forward commitments were $126.1 million. It is our practice to enter into forward commitments for the future delivery of residential mortgage loans to third party investors when interest rate lock commitments are entered into in order to economically hedge the effect of changes in interest rates resulting from our commitment to fund the loans. Old National also enters into derivative instruments for the benefit of its clients. The notional amounts of these customer derivative instruments and the offsetting counterparty derivative instruments were $4.9 billion at June 30, 2022. The notional amounts of these customer derivative instruments and the offsetting counterparty derivative instruments were $2.4 billion at December 31, 2021. These derivative contracts do not qualify for hedge accounting. These instruments include interest rate swaps, caps, and collars. Commonly, Old National will economically hedge significant exposures related to these derivative contracts entered into for the benefit of clients by entering into offsetting contracts with approved, reputable, independent counterparties with substantially matching terms. Old National enters into derivative financial instruments as part of its foreign currency risk management strategies. These derivative instruments consist of foreign currency forward contracts to accommodate the business needs of its clients. Old National does not designate these foreign currency forward contracts for hedge accounting treatment. The following table summarizes Old National’s derivatives not designated as hedges:
(1)Derivative assets are included in other assets on the balance sheet. (2)Derivative liabilities are included in other liabilities on the balance sheet. (3)The fair values of certain counterparty interest rate swaps are zero due to the settlement of centrally-cleared variation margin rules. The effect of derivatives not designated as hedging instruments on the consolidated statements of income were as follows:
(1)Includes the valuation differences between the customer and offsetting swaps.
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Litigation In the normal course of business, Old National Bancorp and its subsidiaries have been named, from time to time, as defendants in various legal actions. Certain of the actual or threatened legal actions may include claims for compensatory and/or punitive damages or claims for indeterminate amounts of damages. Old National contests liability and/or the amount of damages as appropriate in each pending matter. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases where claimants seek indeterminate damages or where investigations and proceedings are in the early stages, Old National cannot predict with certainty the loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, or other relief, if any, might be. Subject to the foregoing, Old National believes, based on current knowledge and after consultation with counsel, that the outcome of such pending matters will not have a material adverse effect on the consolidated financial condition of Old National, although the outcome of such matters could be material to Old National’s operating results and cash flows for a particular future period, depending on, among other things, the level of Old National’s revenues or income for such period. Old National will accrue for a loss contingency if (1) it is probable that a future event will occur and confirm the loss and (2) the amount of the loss can be reasonably estimated. Old National is not currently involved in any material litigation. Credit-Related Financial Instruments In the normal course of business, Old National’s banking affiliates have entered into various agreements to extend credit, including loan commitments of $8.2 billion and standby letters of credit of $223.0 million at June 30, 2022. At June 30, 2022, approximately 10% of the loan commitments had fixed rates, with the remainder having floating rates ranging from 0% to 21%. At December 31, 2021, loan commitments totaled $4.5 billion and standby letters of credit totaled $75.7 million. These commitments are not reflected in the consolidated financial statements. The allowance for unfunded loan commitments totaled $22.0 million at June 30, 2022 and $10.9 million at December 31, 2021. The increase in the allowance for credit losses on unfunded loan commitments was driven by the merger with First Midwest. Old National had credit extensions with various unaffiliated banks related to letter of credit commitments issued on behalf of Old National’s clients totaling $6.7 million at June 30, 2022 and $21.8 million December 31, 2021. Old National provided collateral to the unaffiliated banks to secure credit extensions totaling $6.5 million at June 30, 2022 and December 31, 2021. Old National did not provide collateral for the remaining credit extensions. Visa Class B Restricted Shares In 2008, Old National received Visa Class B restricted shares as part of Visa’s initial public offering. These shares are transferable only under limited circumstances until they can be converted into the publicly traded Class A common shares. This conversion will not occur until the final settlement of certain litigation for which Visa is indemnified by the holders of Visa’s Class B shares, including Old National. Visa funded an escrow account from its initial public offering to settle these litigation claims. Increases in litigation claims requiring Visa to fund the escrow account due to insufficient funds will result in a reduction of the conversion ratio of each Visa Class B share to unrestricted Class A shares. As of June 30, 2022, the conversion ratio was 1.6059. Based on the existing transfer restriction and the uncertainty of the outcome of the Visa litigation, the 65,466 Class B shares that Old National owns at June 30, 2022 are carried at a zero cost basis and are included in other assets with our equity securities that have no readily determinable fair value.
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Financial Guarantees |
6 Months Ended |
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Jun. 30, 2022 | |
Guarantees and Product Warranties [Abstract] | |
Financial Guarantees | FINANCIAL GUARANTEES Old National holds instruments, in the normal course of business with clients, that are considered financial guarantees in accordance with FASB ASC 460-10 (FIN 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others), which requires Old National to record the instruments at fair value. Standby letters of credit guarantees are issued in connection with agreements made by clients to counterparties. Standby letters of credit are contingent upon failure of the client to perform the terms of the underlying contract. Credit risk associated with standby letters of credit is essentially the same as that associated with extending loans to clients and is subject to normal credit policies. The term of these standby letters of credit is typically one year or less. At June 30, 2022, the notional amount of standby letters of credit was $223.0 million, which represented the maximum amount of future funding requirements, and the carrying value was $0.5 million. At December 31, 2021, the notional amount of standby letters of credit was $75.7 million, which represented the maximum amount of future funding requirements, and the carrying value was $0.5 million. Old National is a party in risk participation transactions of interest rate swaps, which had total notional amount of $230.5 million at June 30, 2022.
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Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | FAIR VALUE Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: •Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. •Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. •Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Old National used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: Investment securities and equity securities: The fair values for investment securities and equity securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Discounted cash flows are calculated using swap and LIBOR curves plus spreads that adjust for loss severities, volatility, credit risk, and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations. Residential loans held for sale: The fair value of loans held for sale is determined using quoted prices for a similar asset, adjusted for specific attributes of that loan (Level 2). Derivative financial instruments: The fair values of derivative financial instruments are based on derivative valuation models using market data inputs as of the valuation date (Level 2). Recurring Basis Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which we have elected the fair value option, are summarized below:
The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
The accretion of discounts on securities in the table above is included in interest income. The increase or decrease in the fair value of securities in the table above is included in the unrealized holding gains (losses) for the period in the statement of other comprehensive income. An increase in fair value is reflected in the balance sheet as an increase in the fair value of investment securities available-for-sale, an increase in accumulated other comprehensive income, which is included in shareholders’ equity, and a decrease in other assets related to the tax impact. A decrease in fair value is reflected in the balance sheet as a decrease in the fair value of investment securities available-for-sale, a decrease in accumulated other comprehensive income, which is included in shareholders’ equity, and an increase in other assets related to the tax impact. Old National’s pooled trust preferred securities with a fair value of $11.1 million were transferred out of Level 3 and into Level 2 in the three and six months ended June 30, 2022 because of available observable market data for these investments. The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level 3 of the fair value hierarchy:
(1)Assuming no prepayments. (2)Each currently performing pool asset is assigned a default probability based on the banking environment, which is adjusted for specific issuer evaluation, of 0%, 50%, or 100%. (3)Each currently defaulted pool asset is assigned a recovery probability based on specific issuer evaluation of 0%, 25%, or 100%. (4)Unobservable inputs are weighted by the estimated number of defaults and current performing collateral of the instruments. Significant changes in any of the unobservable inputs used in the fair value measurement in isolation would have resulted in a significant change to the fair value measurement. The pooled trust preferred securities Old National owns are subordinate note classes that rely on an ongoing cash flow stream to support their values. The senior note classes receive the benefit of prepayments to the detriment of subordinate note classes since the ongoing interest cash flow stream is reduced by the early redemption. Generally, a change in prepayment rates or additional pool asset defaults would have an impact that is directionally opposite from a change in the expected recovery of a defaulted pool asset. Non-Recurring Basis Assets measured at fair value at June 30, 2022 on a non-recurring basis are summarized below:
Commercial and commercial real estate loans that are deemed collateral dependent are valued using the discounted cash flows. The liquidation amounts are based on the fair value of the underlying collateral using the most recently available appraisals with certain adjustments made based on the type of property, age of appraisal, current status of the property, and other related factors to estimate the current value of the collateral. These commercial and commercial real estate loans had a principal amount of $84.5 million, with a valuation allowance of $14.8 million at June 30, 2022. Old National recorded provision expense associated with these loans totaling $12.8 million for the three months ended June 30, 2022 and $28.6 million for the six months ended June 30, 2022. Old National recorded provision expense associated with commercial and commercial real estate loans that were deemed collateral dependent totaling $0.2 million for the three months ended June 30, 2021 and provision recoveries totaling $38 thousand for the six months ended June 30, 2021. Other real estate owned and other repossessed property is measured at fair value less costs to sell on a non-recurring basis and had a net carrying amount of $0.5 million at June 30, 2022. There were $0.1 million write-downs of other real estate owned for the three months ended June 30, 2022 and $0.3 million for the six months ended June 30, 2022. There were no writedowns of other real estate owned for the three months ended June 30, 2021 and $23 thousand for the six months ended June 30, 2021. Loan servicing rights are evaluated for impairment based upon the fair value of the rights as compared to the carrying amount. If the carrying amount of an individual tranche exceeds fair value, impairment is recorded on that tranche so that the servicing asset is carried at fair value. Fair value is determined at a tranche level, based on market prices for comparable mortgage servicing contracts when available, or alternatively based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model utilizes a discount rate, weighted average prepayment speed, and other economic factors that market participants would use in estimating future net servicing income and that can be validated against available market data (Level 2). There was no valuation allowance for loan servicing rights with impairments at June 30, 2022. Old National recorded immaterial recoveries associated with these loan servicing rights during the three months ended June 30, 2022. Old National recorded recoveries associated with these loan servicing rights totaling $46 thousand for the six months ended June 30, 2022. There were recoveries of $41 thousand for the three months ended June 30, 2021 and $1.3 million for the six months ended June 30, 2021. Assets measured at fair value at December 31, 2021 on a non-recurring basis are summarized below:
At December 31, 2021, commercial and commercial real estate loans that are deemed collateral dependent had a principal amount of $21.0 million, with a valuation allowance of $2.1 million. The valuation allowance for loan servicing rights with impairments at December 31, 2021 totaled $46 thousand. The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level 3 of the fair value hierarchy:
(1)Unobservable inputs were weighted by the relative fair value of the instruments. Fair Value Option Old National may elect to report most financial instruments and certain other items at fair value on an instrument-by instrument basis with changes in fair value reported in net income. After the initial adoption, the election is made at the acquisition of an eligible financial asset, financial liability, or firm commitment or when certain specified reconsideration events occur. The fair value election may not be revoked once an election is made. Residential Loans Held For Sale Old National has elected the fair value option for residential loans held for sale. For these loans, interest income is recorded in the consolidated statements of income based on the contractual amount of interest income earned on the financial assets (except any that are on nonaccrual status). None of these loans are 90 days or more past due, nor are any on nonaccrual status. Included in the income statement is interest income for loans held for sale totaling $0.7 million for the three months ended June 30, 2022 and $1.2 million for the six months ended June 30, 2022, compared to $0.4 million for the three months ended June 30, 2021 and $0.8 million for the six months ended June 30, 2021. Old National has elected the fair value option for newly originated conforming fixed-rate and adjustable-rate first mortgage loans held for sale. These loans are intended for sale and are hedged with derivative instruments. Old National has elected the fair value option to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplification. The fair value option was not elected for loans held for investment. The difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected was as follows:
Accrued interest at period end is included in the fair value of the instruments. The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value:
Financial Instruments Not Carried at Fair Value The carrying amounts and estimated fair values of financial instruments not carried at fair value were as follows:
The methods utilized to measure the fair value of financial instruments at June 30, 2022 and December 31, 2021 represent an approximation of exit price, however, an actual exit price may differ.
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Basis of Presentation (Policies) |
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Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include the accounts of Old National Bancorp and its wholly-owned subsidiaries (hereinafter collectively referred to as “Old National”) and have been prepared in conformity with accounting principles generally accepted in the United States of America and prevailing practices within the banking industry. Such principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosures of contingent assets and liabilities at the date of the financial statements and amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the consolidated financial statements contain all the normal and recurring adjustments necessary for a fair statement of the financial position of Old National as of June 30, 2022 and December 31, 2021, and the results of its operations for the three and six months ended June 30, 2022 and 2021. Interim results do not necessarily represent annual results. These financial statements should be read in conjunction with Old National’s Annual Report on Form 10-K for the year ended December 31, 2021. All significant intercompany transactions and balances have been eliminated. Certain prior year amounts have been reclassified to conform to the current presentation. Such reclassifications had no effect on prior period net income or shareholders’ equity and were insignificant amounts. There have been no material changes from the significant accounting policies disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
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Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Accounting Guidance Adopted in 2022 FASB ASC 470 and 815 – In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to clarify the accounting for certain financial instruments with characteristics of liabilities and equity. The amendments in this update reduce the number of accounting models for convertible debt instruments and convertible preferred stock by removing the cash conversion model and the beneficial conversion feature model. In addition, this ASU improves disclosure requirements for convertible instruments and earnings-per-share guidance. The amendments in this update are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The adoption of this guidance on January 1, 2022 did not have a material impact on the consolidated financial statements. FASB ASC 842 – In July 2021, the FASB issued ASU 2021-05, Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments, to amend the lease classification requirements for lessors to align them with practice under ASC Topic 840. The amendments in this update are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The adoption of this guidance on January 1, 2022 did not have a material impact on the consolidated financial statements. FASB ASC 848 – In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary, optional guidance to ease the potential burden in accounting for, or recognizing the effects of, the transition away from the LIBOR or other interbank offered rate on financial reporting. The guidance is applicable only to contracts or hedge accounting relationships that reference LIBOR or another reference rate expected to be discontinued. Because the guidance is meant to help entities through the transition period, it will be in effect for a limited time and will not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, for which an entity has elected certain optional expedients that are retained through the end of the hedging relationship. The amendments in this ASU are effective March 12, 2020 through December 31, 2022. Old National believes the adoption of this guidance on activities subsequent to June 30, 2022 through December 31, 2022 will not have a material impact on the consolidated financial statements. Accounting Guidance Pending Adoption FASB ASC 805 – In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities From Contracts With Customers, to address diversity in practice and inconsistency related to the accounting for revenue contracts with customers acquired in a business combination. The amendments require that the acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The ASU also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and liabilities. The amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Entities should apply the amendments prospectively to business combinations that occur after the effective date. Early adoption is permitted, including in any interim period. The new guidance is not expected to have a material impact on the consolidated financial statements. FASB ASC 815 – In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method, to expand the current single-layer method of electing hedge accounting to allow multiple hedged layers of a single closed portfolio under the method and renames the last-of-layer method the portfolio layer method. The amendments in this update are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted for any entity that has adopted the amendments in ASU No. 2017-12 for the corresponding period. If an entity adopts the amendments in an interim period, the effect of adopting the amendments related to basis adjustments should be reflected as of the beginning of the fiscal year of adoption (i.e., the initial application date). Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements. FASB ASC 326 – In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, to eliminate the TDR recognition and measurement guidance and, instead, require that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The amendments require that an entity disclose current-period gross charge-offs by year of origination for financing receivables and net investment in leases within the vintage disclosures required by ASC 326. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. These amendments should be applied prospectively, except for the transition method related to the recognition and measurement of TDRs, which an entity has the option to apply a modified retrospective transition method resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. Early adoption is permitted if an entity has adopted ASU No. 2016-13, including adoption in an interim period. If an entity elects to early adopt ASU No. 2022-02 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes the interim period. An entity may elect to early adopt the amendments about TDRs and related disclosure enhancements separately from the amendments related to vintage disclosures. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements. FASB ASC 820 – In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, to clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. Old National is currently evaluating the impact of adopting the new guidance on the consolidated financial statements.
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Acquisition and Divestiture Activity (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Business Acquisition | The following table presents the preliminary valuation of the assets acquired and liabilities assumed, net of the fair value adjustments and the fair value of consideration as of the merger date:
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Schedule of Pro Forma Information | The following table presents supplemental unaudited pro-forma financial information as if the First Midwest merger had occurred on January 1, 2021. The pro-forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effective as of this assumed date.
(1) Includes net interest income and total noninterest income.
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Net Income Per Common Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Table Reconciling Basic and Diluted Net Income Per Share | The following table presents the calculation of basic and diluted net income per common share:
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Investment Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost and Fair Value of Available-for-Sale Investment Securities Portfolio | The following table summarizes the amortized cost and fair value of the available-for-sale and held-to-maturity investment securities portfolios and the corresponding amounts of gross unrealized gains, unrealized losses, and basis adjustments in accumulated other comprehensive income (loss) and gross unrecognized gains and losses. The Company held no securities classified as held-to-maturity as of December 31, 2021.
(1) Basis adjustments represent the cumulative fair value adjustments included in the carrying amounts of fixed-rate investment securities assets in fair value hedging arrangements.
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Schedule of Proceeds from Sales or Calls and Realized Gain and Losses of Available-for-Sale Investment Securities and Other Securities | Proceeds from sales or calls of available-for-sale investment securities and the resulting realized gains and realized losses were as follows:
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Expected Maturities of Investment Securities Portfolio | Weighted average yield is based on amortized cost.
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Available-for-Sale Investment Securities with Unrealized Losses by Aggregated Major Security Type and Length of Time in Continuous Unrealized Loss Position | The following table summarizes the available-for-sale investment securities with unrealized losses for which an allowance for credit losses has not been recorded by aggregated major security type and length of time in a continuous unrealized loss position:
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Schedule of Held-to-Maturity Investment Securities with Unrecognized Losses | The following table summarizes the held-to-maturity investment securities with unrecognized losses aggregated by major security type and length of time in a continuous loss position:
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Loans and Allowance for Credit Losses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Composition of Loans and Impact of Adoption | The portfolio segment reclassifications follow:
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Schedule of Composition of Loans | The composition of loans by portfolio segment follows:
(1)Includes direct finance leases of $66.5 million at June 30, 2022 and $25.1 million at December 31, 2021. (2)Includes PPP loans of $81.6 million at June 30, 2022 and $169.0 million at December 31, 2021.
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Schedule of Activity in Allowance for Loan Losses | Activity in the allowance for credit losses for loans by portfolio segment was as follows:
The allowance for credit losses increased for the six months ended June 30, 2022 primarily due to $78.5 million of allowance for credit losses on acquired PCD loans established through acquisition accounting adjustments on the merger date and $96.3 million of provision for credit losses to establish an allowance for credit losses on non-PCD loans acquired in the First Midwest merger. Loan growth and qualitative factors contributed to the increase in the allowance for credit losses in the three months ended June 30, 2022.Old National’s activity in the allowance for credit losses on unfunded loan commitments was as follows:
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Schedule of Risk Category of Loans and Amortized Cost | The following table summarizes the amortized cost of term loans by risk category of commercial, commercial real estate, and BBCC loans by loan portfolio segment, class of loan, and origination year:
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Schedule of Past Due Financing Receivables | The following table presents the aging of the amortized cost basis in past due loans by class of loans:
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Schedule of Nonaccrual and Past Due Loans | The following table presents the amortized cost basis of loans on nonaccrual status and loans past due 90 days or more and still accruing by class of loan:
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Schedule of Activity in Trouble Debt Restructurings | The following table presents activity in TDRs:
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Schedule of Credit Deteriorated Loans | Old National has purchased loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows:
(1)Old National merged with First Midwest effective February 15, 2022.
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Premises and Equipment (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Premises and Equipment | The composition of premises and equipment was as follows:
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Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Lease Expense | The components of lease expense were as follows:
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Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows:
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Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows:
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Schedule of Maturity Analysis of Lease Liability by Lease Classification | The following table presents a maturity analysis of the Company’s lease liability by lease classification at June 30, 2022:
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Goodwill and Other Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Carrying Amount of Goodwill | The following table presents the changes in the carrying amount of goodwill:
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Schedule of Gross Carrying Amounts and Accumulated Amortization of Other Intangible Assets | The gross carrying amounts and accumulated amortization of other intangible assets were as follows:
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Schedule of Estimated Amortization Expense for Future Years | Estimated amortization expense for future years is as follows:
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Loan Servicing Rights (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Loan Servicing Rights and Valuation Allowance | The following table summarizes the carrying values and activity related to loan servicing rights and the related valuation allowance:
(1)Additions in the six months ended June 30, 2022 include loan servicing rights of $7.7 million acquired in the First Midwest merger on February 15, 2022.
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Qualified Affordable Housing Projects and Other Tax Credit Investments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Affordable Housing Projects [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Qualified Affordable Housing Projects and Other Tax Credit Investments | The following table summarizes Old National’s investments in qualified affordable housing projects and other tax credit investments:
(1)All commitments will be paid by Old National by December 31, 2027. The following table summarizes the amortization expense and tax benefit recognized for Old National’s qualified affordable housing projects and other tax credit investments:
(1)The amortization expense for the LIHTC investments is included in our income tax expense. The amortization expense for the FHTC, NMTC, and Renewable Energy tax credits is included in noninterest expense. (2)All of the tax benefits recognized are included in our income tax expense. The tax benefit recognized for the FHTC, NMTC, and Renewable Energy investments primarily reflects the tax credits generated from the investments and excludes the net tax expense (benefit) and deferred tax liability of the investments’ income (loss).
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Securities Sold Under Agreements to Repurchase (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Sold under Agreements to Repurchase [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Securities Sold Under Agreements to Repurchase and Weighted-Average Interest Rates | The following table presents securities sold under agreements to repurchase and related weighted-average interest rates:
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Schedule of Remaining Contractual Maturity of Secured Borrowings and Class of Collateral Pledged Under Repurchase Agreements | The following table presents the contractual maturity of our secured borrowings and class of collateral pledged:
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Federal Home Loan Bank Advances (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal Home Loan Banks [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of FHLB Advances | The following table summarizes Old National Bank’s FHLB advances:
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Summary of Contractual Maturities of FHLB Advances | Contractual maturities of FHLB advances at June 30, 2022 were as follows:
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Other Borrowings (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Other Borrowings | The following table summarizes Old National’s other borrowings:
The following table summarizes the terms of our outstanding junior subordinated debentures at June 30, 2022:
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Summary of Contractual Maturities of Other Borrowings | Contractual maturities of other borrowings at June 30, 2022 were as follows:
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Accumulated Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of AOCI | The following table summarizes the changes within each classification of AOCI, net of tax:
(1)See tables below for details about reclassifications to income.
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Reclassifications out of AOCI | The following table summarizes the significant amounts reclassified out of each component of AOCI for the three months ended June 30, 2022 and 2021:
The following table summarizes the significant amounts reclassified out of each component of AOCI for the six months ended June 30, 2022 and 2021:
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Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Differences in Taxes from Continuing Operations Computed at Statutory Rate | Following is a summary of the major items comprising the differences in taxes from continuing operations computed at the federal statutory rate and as recorded in the consolidated statements of income:
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Derivative Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Interest Rate Derivatives | The following table summarizes Old National’s derivatives designated as hedges:
(1)Derivative assets are included in other assets on the balance sheet. (2)Derivative liabilities are included in other liabilities on the balance sheet. (3)The fair values of certain counterparty interest rate swaps are zero due to the settlement of centrally-cleared variation margin rules.
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Schedule of Derivative Instruments Effect on Consolidated Statement of Income | The effect of derivative instruments in fair value hedging relationships on the consolidated statements of income were as follows:
The effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income were as follows:
The effect of derivatives not designated as hedging instruments on the consolidated statements of income were as follows:
(1)Includes the valuation differences between the customer and offsetting swaps.
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Summary of Derivatives Not Designated as Hedging Instruments | The following table summarizes Old National’s derivatives not designated as hedges:
(1)Derivative assets are included in other assets on the balance sheet. (2)Derivative liabilities are included in other liabilities on the balance sheet. (3)The fair values of certain counterparty interest rate swaps are zero due to the settlement of centrally-cleared variation margin rules.
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Fair Value (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which we have elected the fair value option, are summarized below:
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Reconciliation of All Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
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Schedule of Quantitative Information about Significant Unobservable Inputs Used in Fair Value Measurements | The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level 3 of the fair value hierarchy:
(1)Assuming no prepayments. (2)Each currently performing pool asset is assigned a default probability based on the banking environment, which is adjusted for specific issuer evaluation, of 0%, 50%, or 100%. (3)Each currently defaulted pool asset is assigned a recovery probability based on specific issuer evaluation of 0%, 25%, or 100%. (4)Unobservable inputs are weighted by the estimated number of defaults and current performing collateral of the instruments. The table below provides quantitative information about significant unobservable inputs used in fair value measurements within Level 3 of the fair value hierarchy:
(1)Unobservable inputs were weighted by the relative fair value of the instruments.
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Schedule of Assets Measured at Fair Value on a Non-Recurring Basis | Assets measured at fair value at June 30, 2022 on a non-recurring basis are summarized below:
Assets measured at fair value at December 31, 2021 on a non-recurring basis are summarized below:
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Schedule of Difference Between the Aggregate Fair Value and the Aggregate Remaining Principal Balance | The difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected was as follows:
The following table presents the amount of gains and losses from fair value changes included in income before income taxes for financial assets carried at fair value:
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Carrying Amounts and Estimated Fair Values of Financial Instruments, Not Carried at Fair Value | The carrying amounts and estimated fair values of financial instruments not carried at fair value were as follows:
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Acquisition and Divestiture Activity - Pro Forma (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Business Combination and Asset Acquisition [Abstract] | ||||
Total revenues | $ 426,589 | $ 391,993 | $ 798,935 | $ 786,304 |
Income before income taxes | $ 176,549 | $ 109,285 | $ 264,868 | $ 127,879 |
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Earnings Per Share [Abstract] | ||||||
Net income | $ 114,985 | $ (27,586) | $ 62,786 | $ 86,818 | $ 87,399 | $ 149,604 |
Preferred dividends | (4,033) | 0 | (6,050) | 0 | ||
Net income applicable to common shareholders | $ 110,952 | $ 62,786 | $ 81,349 | $ 149,604 | ||
Weighted average common shares outstanding: | ||||||
Weighted average common shares outstanding (in shares) | 290,862 | 165,175 | 259,108 | 165,086 | ||
Effect of dilutive securities: | ||||||
Restricted stock (in shares) | 1,014 | 737 | 1,136 | 713 | ||
Stock appreciation rights (in shares) | 5 | 22 | 9 | 22 | ||
Weighted average diluted shares outstanding (in shares) | 291,881 | 165,934 | 260,253 | 165,821 | ||
Basic net income per common share (in dollars per share) | $ 0.38 | $ 0.38 | $ 0.31 | $ 0.91 | ||
Diluted net income per common share (in dollars per share) | $ 0.38 | $ 0.38 | $ 0.31 | $ 0.90 |
Investment Securities - Schedule of Proceeds from Sales or Calls and Realized Gain and Losses of Available-for-sale Investment Securities and Other Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Proceeds from Sale, Maturity and Collection of Investments [Abstract] | ||||
Proceeds from sales of available-for-sale securities | $ 1,903 | $ 15,247 | $ 12,742 | $ 67,715 |
Proceeds from calls of available-for-sale securities | 21,331 | 46,750 | 60,605 | 56,995 |
Total | 23,234 | 61,997 | 73,347 | 124,710 |
Realized gains on sales of available-for-sale securities | 5 | 736 | 344 | 2,736 |
Realized gains on calls of available-for-sale securities | 43 | 48 | 167 | 61 |
Realized losses on sales of available-for-sale securities | (52) | (85) | (147) | (85) |
Realized losses on calls of available-for-sale securities | (81) | (7) | (107) | (27) |
Debt securities gains (losses), net | $ (85) | $ 692 | $ 257 | $ 2,685 |
Investment Securities - Held-to-Maturity with Unrecognized Losses (Details) $ in Thousands |
Jun. 30, 2022
USD ($)
|
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Fair Value | |
Less than 12 months | $ 2,108,785 |
12 months or longer | 642,541 |
Total | 2,751,326 |
Unrecognized Losses | |
Less than 12 months | (260,532) |
12 months or longer | (44,603) |
Total | (305,135) |
U.S. government-sponsored entities and agencies | |
Fair Value | |
Less than 12 months | 529,507 |
12 months or longer | 190,927 |
Total | 720,434 |
Unrecognized Losses | |
Less than 12 months | (69,932) |
12 months or longer | (25,466) |
Total | (95,398) |
Mortgage-backed securities | |
Fair Value | |
Less than 12 months | 649,804 |
12 months or longer | 419,930 |
Total | 1,069,734 |
Unrecognized Losses | |
Less than 12 months | (47,157) |
12 months or longer | (12,783) |
Total | (59,940) |
States and political subdivisions | |
Fair Value | |
Less than 12 months | 929,474 |
12 months or longer | 31,684 |
Total | 961,158 |
Unrecognized Losses | |
Less than 12 months | (143,443) |
12 months or longer | (6,354) |
Total | $ (149,797) |
Loans and Allowance for Credit Losses - Schedule of Allowance for Credit Losses on Unfunded Loan Commitments (Details) - Unfunded Loan Commitment - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Balance at beginning of period | $ 22,045 | $ 10,365 | $ 10,879 | $ 11,689 |
Provision for credit losses on unfunded commitments for loans acquired during the period | 0 | 0 | 11,013 | 0 |
Expense (reversal of expense) for credit losses | (79) | 64 | 74 | (1,260) |
Balance at end of period | $ 21,966 | $ 10,429 | $ 21,966 | $ 10,429 |
Loans and Allowance for Credit Losses - Purchased Credit Deteriorated Loans (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Feb. 15, 2022 |
Jun. 30, 2022 |
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Receivables [Abstract] | ||
Purchase price of loans at acquisition | $ 1,400,000 | $ 1,400,831 |
Allowance for credit losses at acquisition | 78,500 | 78,531 |
Non-credit discount/(premium) at acquisition | 9,003 | |
Par value of acquired loans at acquisition | $ 1,500,000 | $ 1,488,365 |
Premises and Equipment - Summary of Premises and Equipment (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 754,106 | $ 629,868 |
Accumulated depreciation | (168,075) | (153,682) |
Premises and equipment, net | 586,031 | 476,186 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 97,194 | 71,014 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 450,537 | 394,400 |
Furniture, fixtures, and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 143,975 | 118,124 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 62,400 | $ 46,330 |
Premises and Equipment - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Feb. 15, 2022 |
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Property, Plant and Equipment [Abstract] | |||||
Depreciation | $ 10,000 | $ 7,000 | $ 17,742 | $ 14,068 | |
First Midwest | |||||
Business Acquisition [Line Items] | |||||
Premises and equipment | $ 112,426 |
Leases - Additional Information (Details) |
Jun. 30, 2022 |
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Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 5 years |
Finance lease term | 5 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 20 years |
Finance lease term | 20 years |
Leases - Schedule of Components of Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Finance lease cost: | ||||
Total | $ 9,135 | $ 3,887 | $ 14,897 | $ 7,451 |
Occupancy/Equipment expense | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease cost | 8,558 | 3,092 | 13,666 | 6,393 |
Occupancy expense | ||||
Finance lease cost: | ||||
Amortization of right-of-use assets | 648 | 810 | 1,323 | 1,121 |
Sub-lease income | (174) | (135) | (302) | (278) |
Interest expense | ||||
Finance lease cost: | ||||
Interest on lease liabilities | $ 103 | $ 120 | $ 210 | $ 215 |
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Operating Leases | ||
Operating lease right-of-use assets | $ 192,196 | $ 69,560 |
Operating lease liabilities | 215,188 | 76,236 |
Finance Leases | ||
Premises and equipment, net | 15,017 | 16,451 |
Other borrowings | $ 15,910 | $ 17,233 |
Finance lease, right-of-use asset, statement of financial position [Extensible Enumeration] | Premises and equipment, net | Premises and equipment, net |
Finance lease, liability, statement of financial position [Extensible Enumeration] | Other borrowings | Other borrowings |
Weighted-Average Remaining Lease Term (in Years) | ||
Operating leases | 9 years 2 months 12 days | 10 years 4 months 24 days |
Finance leases | 7 years 3 months 18 days | 7 years 7 months 6 days |
Weighted-Average Discount Rate | ||
Operating leases | 2.89% | 3.34% |
Finance leases | 3.10% | 3.02% |
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 13,705 | $ 7,166 |
Operating cash flows from finance leases | 210 | 215 |
Financing cash flows from finance leases | $ 1,210 | $ 993 |
Leases - Schedule of Maturity Analysis of Lease Liability by Lease Classification (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Operating Leases | ||
2022 | $ 16,553 | |
2023 | 30,296 | |
2024 | 28,888 | |
2025 | 27,581 | |
2026 | 26,582 | |
Thereafter | 116,859 | |
Total undiscounted lease payments | 246,759 | |
Amounts representing interest | (31,571) | |
Lease liability | 215,188 | $ 76,236 |
Finance Leases | ||
2022 | 1,432 | |
2023 | 2,892 | |
2024 | 2,942 | |
2025 | 2,952 | |
2026 | 1,712 | |
Thereafter | 5,914 | |
Total undiscounted lease payments | 17,844 | |
Amounts representing interest | (1,934) | |
Lease liability | $ 15,910 | $ 17,233 |
Goodwill and Other Intangible Assets - Schedule of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Goodwill [Roll Forward] | ||||
Balance at beginning of period | $ 1,997,157 | $ 1,036,994 | $ 1,036,994 | $ 1,036,994 |
Acquisitions and adjustments | (5,623) | 0 | 954,540 | 0 |
Balance at end of period | $ 1,991,534 | $ 1,036,994 | $ 1,991,534 | $ 1,036,994 |
Goodwill and Other Intangible Assets - Schedule of Gross Carrying Amounts and Accumulated Amortization of Other Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 226,885 | $ 109,301 |
Accumulated Amortization and Impairment | (86,604) | (74,623) |
Net Carrying Amount | 140,281 | 34,678 |
Core deposit | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 170,642 | 92,754 |
Accumulated Amortization and Impairment | (69,819) | (60,036) |
Net Carrying Amount | 100,823 | 32,718 |
Customer trust relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 56,243 | 16,547 |
Accumulated Amortization and Impairment | (16,785) | (14,587) |
Net Carrying Amount | $ 39,458 | $ 1,960 |
Goodwill and Other Intangible Assets - Schedule of Estimated Amortization Expense for Future Years (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2022 remaining | $ 13,748 | |
2023 | 24,342 | |
2024 | 21,298 | |
2025 | 18,417 | |
2026 | 15,614 | |
Thereafter | 46,862 | |
Net Carrying Amount | $ 140,281 | $ 34,678 |
Loan Servicing Rights - Additional Information (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
Jun. 30, 2021 |
|
Transfers and Servicing [Abstract] | |||
Servicing asset | $ 38,121 | $ 30,000 | $ 28,781 |
Principal balance of loans serviced for others | 4,400,000 | 3,700,000 | |
Funds held in escrow | 58,100 | 18,200 | |
Fair value of servicing rights | $ 46,800 | $ 33,800 | |
Fair value at discount rate | 9.00% | 9.00% | |
Fair value inputs weighted average prepayment speed | 9.00% | 10.00% |
Loan Servicing Rights - Components of Loan Servicing Rights and Valuation Allowance (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Servicing asset: | |||||
Balance at beginning of period | $ 38,246 | $ 28,262 | $ 30,085 | $ 28,124 | |
Additions | 1,347 | 3,058 | 11,013 | 6,171 | |
Amortization | (1,472) | (2,434) | (2,977) | (5,409) | |
Balance before valuation allowance at end of period | 38,121 | 28,886 | 38,121 | 28,886 | |
Valuation allowance: | |||||
Balance at beginning of period | (1) | (146) | (46) | (1,407) | |
(Additions)/recoveries | 1 | 41 | 46 | 1,302 | |
Balance at end of period | 0 | (105) | 0 | (105) | |
Loan servicing rights, net | $ 38,121 | $ 28,781 | 38,121 | $ 28,781 | $ 30,000 |
First Midwest | |||||
Servicing asset: | |||||
Additions | $ 7,700 |
Securities Sold Under Agreements to Repurchase - Schedule of Securities Sold under Agreements to Repurchase and Related Weighted-Average Interest Rates (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Securities Sold under Agreements to Repurchase [Abstract] | |||
Securities sold under agreements to repurchase | $ 476,173 | $ 396,129 | $ 392,275 |
Average amount outstanding during the period | 458,459 | 402,478 | |
Maximum amount outstanding at any month-end during the period | $ 509,275 | $ 405,278 | |
Weighted average interest rate during period | 0.08% | 0.11% | |
Weighted average interest rate at end of period | 0.08% | 0.09% | 0.10% |
Securities Sold Under Agreements to Repurchase - Additional Information (Details) |
6 Months Ended |
---|---|
Jun. 30, 2022 | |
Securities Sold under Agreements to Repurchase [Abstract] | |
Gross outstanding balance of repurchase agreements collateralized by securities percentage | 115.00% |
Federal Home Loan Bank Advances - Summary of FHLB Advances (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Federal Home Loan Bank, Advances [Line Items] | ||
FHLB advances (fixed rates 0.00% to 4.96% and variable rates 0.91% to 1.60%) maturing July 2022 to January 2041 | $ 3,303,178 | $ 1,902,655 |
Fair value hedge basis adjustments and unamortized prepayment fees | (19,215) | (16,636) |
Federal Home Loan Bank advances | $ 3,283,963 | $ 1,886,019 |
Minimum | FHLB Advances | ||
Federal Home Loan Bank, Advances [Line Items] | ||
Fixed rate | 0.00% | |
Variable rate | 0.91% | |
Maximum | FHLB Advances | ||
Federal Home Loan Bank, Advances [Line Items] | ||
Fixed rate | 4.96% | |
Variable rate | 1.60% |
Federal Home Loan Bank Advances - Additional Information (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Federal Home Loan Bank, Advances [Line Items] | ||
Weighted-average rates of FHLB advances | 1.68% | 1.30% |
Modifications, unamortized prepayment fees | $ 23.2 | $ 26.2 |
FHLB Advances | ||
Federal Home Loan Bank, Advances [Line Items] | ||
Percentage of borrowings collateralized by investment securities and residential real estate loans | 140.00% |
Federal Home Loan Bank Advances - Summary of Contractual Maturities of FHLB Advances (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Federal Home Loan Banks [Abstract] | ||
Due in 2022 | $ 227,500 | |
Due in 2023 | 100,150 | |
Due in 2024 | 225,243 | |
Due in 2025 | 550,285 | |
Due in 2026 | 100,000 | |
Thereafter | 2,100,000 | |
Fair value hedge basis adjustments and unamortized prepayment fees | (19,215) | $ (16,636) |
Federal Home Loan Bank advances | $ 3,283,963 | $ 1,886,019 |
Other Borrowings - Contractual Maturities of Other Borrowings (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Due in 2022 | $ 1,232 | |
Due in 2023 | 2,529 | |
Due in 2024 | 177,631 | |
Due in 2025 | 14,693 | |
Due in 2026 | 151,501 | |
Thereafter | 219,517 | |
Unamortized debt issuance costs and other basis adjustments | 55,611 | |
Total | $ 622,714 | $ 296,670 |
Other Borrowings - Additional Information (Details) - USD ($) $ in Thousands |
Nov. 01, 2017 |
Jun. 30, 2022 |
Feb. 15, 2022 |
Dec. 31, 2021 |
Aug. 31, 2014 |
---|---|---|---|---|---|
Debt Instrument [Line Items] | |||||
Lease liability | $ 15,910 | $ 17,233 | |||
Old National Bank | |||||
Debt Instrument [Line Items] | |||||
Lease liability | 15,910 | 17,233 | |||
First Midwest | |||||
Debt Instrument [Line Items] | |||||
Subordinated debentures | $ 150,000 | ||||
Subordinated Debentures | Anchor Bank (MN) | Subordinated Fixed-to-Floating Notes | |||||
Debt Instrument [Line Items] | |||||
Fixed rate | 5.75% | ||||
Value of subordinated fixed-to-floating notes assumed | $ 12,000 | ||||
Subordinated Debentures | Anchor Bank (MN) | Subordinated Fixed-to-Floating Notes | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Variable rate | 4.356% | ||||
Old National Bancorp | Senior Unsecured Notes | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured notes | $ 175,000 | $ 175,000 | $ 175,000 | ||
Fixed rate | 4.125% | 4.125% |
Income Taxes - Summary of Differences in Taxes from Continuing Operations Computed at Statutory Rate (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Provision at statutory rate of 21% | $ 29,389 | $ 16,117 | $ 21,766 | $ 38,051 |
Tax-exempt income: | ||||
Tax-exempt interest | (3,413) | (2,762) | (6,406) | (5,541) |
Section 291/265 interest disallowance | 38 | 30 | 66 | 63 |
Company-owned life insurance income | (938) | (556) | (1,656) | (1,099) |
Tax-exempt income | (4,313) | (3,288) | (7,996) | (6,577) |
State income taxes | 4,085 | 2,200 | 758 | 5,173 |
Interim period effective rate adjustment | (3,967) | (662) | 3,073 | (2,437) |
Tax credit investments - federal | (1,292) | (1,430) | (2,561) | (2,523) |
Other, net | 1,062 | 1,023 | 1,210 | (97) |
Income tax expense (benefit) | $ 24,964 | $ 13,960 | $ 16,250 | $ 31,590 |
Effective tax rate | 17.80% | 18.20% | 15.70% | 17.40% |
Income Taxes - Additional Information (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Income Taxes [Line Items] | |||||
Tax benefit, share-based payment | $ 1,200,000 | ||||
Income tax benefit | $ (24,964,000) | $ (13,960,000) | (16,250,000) | $ (31,590,000) | |
Net deferred tax assets | 337,500,000 | 337,500,000 | $ 32,900,000 | ||
Deferred tax assets related to the market value | 180,100,000 | ||||
Bad debt reserves, created for tax purposes | 58,600,000 | 58,600,000 | |||
Valuation allowance recorded | 0 | 0 | 0 | ||
Federal | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforwards | 90,400,000 | 90,400,000 | 36,700,000 | ||
State | |||||
Income Taxes [Line Items] | |||||
Recognition of unrealized tax benefits | 1,700,000 | ||||
Operating loss carryforwards | 133,900,000 | 133,900,000 | $ 116,100,000 | ||
First Midwest | |||||
Income Taxes [Line Items] | |||||
Income tax benefit | 900,000 | ||||
Net deferred tax assets | $ 126,600,000 | $ 126,600,000 |
Commitments and Contingencies (Details) |
6 Months Ended | |
---|---|---|
Jun. 30, 2022
USD ($)
shares
|
Dec. 31, 2021
USD ($)
|
|
Loss Contingencies [Line Items] | ||
Loan commitments | $ 8,200,000,000 | $ 4,500,000,000 |
Standby letters of credit | $ 223,000,000 | 75,700,000 |
Fixed rate loan commitment, percent | 10.00% | |
Loan commitments floating rate, minimum | 0.00% | |
Loan commitments floating rate, maximum | 21.00% | |
Allowance for unfunded loan commitments | $ 22,000,000 | 10,900,000 |
Extended credit | 6,700,000 | 21,800,000 |
Credit extensions with collateral | $ 6,500,000 | $ 6,500,000 |
Class B Restricted Shares | Visa | ||
Loss Contingencies [Line Items] | ||
Restricted stock conversion ratio | 1.6059 | |
Investment owned, balance, shares (in shares) | shares | 65,466 | |
Investment owned, at cost | $ 0 |
Financial Guarantees (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
Financial Guarantees [Line Items] | ||
Term of standby letters of credit (up to) | 1 year | |
Notional amount of standby letters of credit | $ 223,000,000 | $ 75,700,000 |
Carrying value of letters of credit | 500,000 | $ 500,000 |
Interest Rate Swap | ||
Financial Guarantees [Line Items] | ||
Notional amount | $ 230,500,000 |
Fair Value - Reconciliation of All Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) (Details) - Pooled trust preferred securities - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Transfers out of Level 3 | $ (11,100) | $ (11,100) | ||
Transfers out of Level 3 | 11,100 | 11,100 | ||
Significant Unobservable Inputs (Level 3) | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | 9,665 | $ 8,210 | 9,496 | $ 7,913 |
Accretion of discount | 7 | 5 | 12 | 10 |
Sales/payments received | (12) | (27) | ||
Increase in fair value of securities | 1,429 | 1,185 | 1,593 | 1,492 |
Transfers out of Level 3 | (11,101) | (11,101) | ||
Balance at end of period | 0 | $ 9,388 | 0 | $ 9,388 |
Transfers out of Level 3 | $ 11,101 | $ 11,101 |
Fair Value - Schedule of Difference between the Aggregate Fair Value and the Aggregate Remaining Principal Balance (Details) - Residential loans held for sale - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Aggregate Fair Value | $ 26,217 | $ 35,458 |
Difference | 283 | 1,342 |
Contractual Principal | $ 25,934 | $ 34,116 |
Fair Value - Changes in Fair Value for Items Measured at Fair Value Pursuant to Election of the Fair Value (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||
Interest Income | $ 337,472 | $ 149,927 | $ 560,257 | $ 298,047 |
Interest (Expense) | (16,886) | (10,531) | (29,606) | (21,648) |
Residential loans held for sale | ||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||
Other Gains and (Losses) | 278 | 790 | (1,065) | (1,590) |
Interest Income | 9 | 0 | 9 | 2 |
Interest (Expense) | 0 | (1) | (3) | (1) |
Total Changes in Fair Values Included in Current Period Earnings | $ 287 | $ 789 | $ (1,059) | $ (1,589) |
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