Loans and Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Composition of Loans and Impact of Adoption

The portfolio segment reclassifications follow:


	Balance Sheet Line Item		Portfolio Segment Reclassifications		Portfolio Segment After Reclassifications

(dollars in thousands)
December 31, 2023
Commercial (1)	$	9,512,230	$	(232,764)	$	9,279,466
Commercial real estate	14,140,629		(169,058)		13,971,571
BBCC	N/A		401,822		401,822
Residential real estate	6,699,443		—		6,699,443
Consumer	2,639,625		(2,639,625)		N/A
Indirect	N/A		1,050,982		1,050,982
Direct	N/A		523,172		523,172
Home equity	N/A		1,065,471		1,065,471
Total loans (2)	32,991,927		—		32,991,927
Allowance for credit losses on loans	(307,610)		—		(307,610)
Net loans	$	32,684,317	$	—	$	32,684,317

December 31, 2022
Commercial (1)	$	9,508,904	$	(210,280)	$	9,298,624
Commercial real estate	12,457,070		(158,322)		12,298,748
BBCC	N/A		368,602		368,602
Residential real estate	6,460,441		—		6,460,441
Consumer	2,697,226		(2,697,226)		N/A
Indirect	N/A		1,034,257		1,034,257
Direct	N/A		629,186		629,186
Home equity	N/A		1,033,783		1,033,783
Total loans (2)	31,123,641		—		31,123,641
Allowance for credit losses on loans	(303,671)		—		(303,671)
Net loans	$	30,819,970	$	—	$	30,819,970

(1) Includes direct finance leases of $169.7 million at December 31, 2023 and $188.1 million at December 31, 2022.

(2) Includes unearned income of $93.7 million at December 31, 2023 and $126.7 million at December 31, 2022.

Schedule of Activity in Allowance for Loan Losses

Old National’s activity in the allowance for credit losses on loans by portfolio segment was as follows:


(dollars in thousands)	Balance at Beginning of Period		Allowance Established for Acquired PCD Loans		Charge-offs		Recoveries		Provision (Release) for Loan Losses		Balance at End of Period
Year Ended December 31, 2023
Commercial	$	120,612	$	—	$	(41,451)	$	4,172	$	35,000	$	118,333
Commercial real estate	138,244		—		(11,198)		2,417		25,636		155,099
BBCC	2,431		—		(1,650)		275		1,831		2,887
Residential real estate	21,916		—		(256)		1,268		(2,091)		20,837
Indirect	1,532		—		(2,948)		1,559		1,093		1,236
Direct	12,116		—		(10,517)		2,331		(761)		3,169
Home equity	6,820		—		(443)		531		(859)		6,049
Total	$	303,671	$	—	$	(68,463)	$	12,553	$	59,849	$	307,610

Year Ended December 31, 2022
Commercial	$	27,232	$	38,780	$	(6,885)	$	4,610	$	56,875	$	120,612
Commercial real estate	64,004		49,419		(6,519)		1,095		30,245		138,244
BBCC	2,458		—		(85)		281		(223)		2,431
Residential real estate	9,347		136		(344)		760		12,017		21,916
Indirect	1,743		—		(2,525)		1,263		1,051		1,532
Direct	528		31		(10,799)		2,557		19,799		12,116
Home equity	2,029		723		(124)		616		3,576		6,820
Total	$	107,341	$	89,089	$	(27,281)	$	11,182	$	123,340	$	303,671

Year Ended December 31, 2021
Commercial	$	30,567	$	—	$	(1,228)	$	791	$	(2,898)	$	27,232
Commercial real estate	75,810		—		(264)		4,403		(15,945)		64,004
BBCC	6,120		—		(144)		105		(3,623)		2,458
Residential real estate	12,608		—		(346)		339		(3,254)		9,347
Indirect	3,580		—		(1,087)		1,682		(2,432)		1,743
Direct	855		—		(1,159)		777		55		528
Home equity	1,848		—		(82)		978		(715)		2,029
Total	$	131,388	$	—	$	(4,310)	$	9,075	$	(28,812)	$	107,341

Old National’s activity in the allowance for credit losses on unfunded loan commitments was as follows:


	Years Ended December 31,
(dollars in thousands)	2023		2022		2021
Balance at beginning of period	$	32,188	$	10,879	$	11,689
Provision for credit losses on unfunded loan commitments acquired during the period	—		11,013		—
Provision (release) for credit losses on unfunded loan commitments	(962)		10,296		(810)
Balance at end of period	$	31,226	$	32,188	$	10,879

Schedule of Risk Category of Commercial and Commercial Real Estate Loans

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:


	Origination Year														Revolving to Term
(dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving				Total
December 31, 2023
Commercial:
Risk Rating:
Pass	$	1,826,289	$	1,573,669	$	985,964	$	520,883	$	450,911	$	495,979	$	2,051,985	$	651,953	$	8,557,633
Criticized	20,038		90,031		19,953		36,906		25,756		47,357		89,765		44,348		374,154
Classified:
Substandard	27,271		41,164		27,990		37,618		10,461		29,981		72,703		56,716		303,904
Nonaccrual	32		7,034		—		—		823		3,411		—		5,461		16,761
Doubtful	—		7,261		5,925		4,875		1,742		7,211		—		—		27,014
Total	$	1,873,630	$	1,719,159	$	1,039,832	$	600,282	$	489,693	$	583,939	$	2,214,453	$	758,478	$	9,279,466

Commercial real estate:
Risk Rating:
Pass	$	2,177,841	$	3,515,702	$	2,563,638	$	1,576,044	$	1,010,351	$	1,161,119	$	103,332	$	960,386	$	13,068,413
Criticized	69,648		69,946		68,708		27,059		52,107		95,896		3,893		64,730		451,987
Classified:
Substandard	26,638		56,423		21,401		28,983		61,186		49,558		—		48,760		292,949
Nonaccrual	—		21,919		10,706		1,975		1,634		8,632		—		1,400		46,266
Doubtful	5,360		429		30,897		2,306		37,777		35,187		—		—		111,956
Total	$	2,279,487	$	3,664,419	$	2,695,350	$	1,636,367	$	1,163,055	$	1,350,392	$	107,225	$	1,075,276	$	13,971,571

BBCC:
Risk Rating:
Pass	$	81,102	$	64,583	$	44,307	$	38,086	$	27,557	$	19,028	$	68,807	$	33,361	$	376,831
Criticized	—		—		857		700		1,001		349		2,144		12,728		17,779
Classified:
Substandard	436		193		252		—		—		604		15		1,006		2,506
Nonaccrual	—		—		482		—		4		1,105		—		1,402		2,993
Doubtful	302		727		254		286		60		84		—		—		1,713
Total	$	81,840	$	65,503	$	46,152	$	39,072	$	28,622	$	21,170	$	70,966	$	48,497	$	401,822


	Origination Year														Revolving to Term
(dollars in thousands)	2022		2021		2020		2019		2018		Prior		Revolving				Total
December 31, 2022
Commercial:
Risk Rating:
Pass	$	2,388,618	$	1,754,364	$	796,340	$	738,208	$	362,986	$	388,617	$	1,988,763	$	329,119	$	8,747,015
Criticized	40,856		30,661		63,557		33,490		9,195		5,312		61,036		4,327		248,434
Classified:
Substandard	37,223		47,522		16,540		22,925		4,844		21,204		67,402		25,143		242,803
Nonaccrual	3,627		1,453		566		—		—		—		1,634		6,623		13,903
Doubtful	2,821		17,604		3,720		8,005		5,968		8,351		—		—		46,469
Total	$	2,473,145	$	1,851,604	$	880,723	$	802,628	$	382,993	$	423,484	$	2,118,835	$	365,212	$	9,298,624

Commercial real estate:
Risk Rating:
Pass	$	3,066,960	$	2,828,758	$	1,989,000	$	1,219,025	$	675,572	$	1,018,719	$	57,818	$	689,553	$	11,545,405
Criticized	75,306		34,422		22,569		82,637		86,504		56,864		—		23,282		381,584
Classified:
Substandard	46,231		16,928		24,319		78,468		57,824		21,591		—		4,108		249,469
Nonaccrual	3,151		9,541		5,014		—		2,312		22,155		—		3,257		45,430
Doubtful	1,934		38,386		10,011		4,605		1,523		20,401		—		—		76,860
Total	$	3,193,582	$	2,928,035	$	2,050,913	$	1,384,735	$	823,735	$	1,139,730	$	57,818	$	720,200	$	12,298,748

BBCC:
Risk Rating:
Pass	$	90,341	$	64,161	$	52,304	$	36,868	$	23,618	$	11,333	$	60,016	$	18,881	$	357,522
Criticized	1,504		525		368		692		353		—		1,006		1,603		6,051
Classified:
Substandard	811		143		—		421		—		—		543		682		2,600
Nonaccrual	42		37		118		—		429		284		—		639		1,549
Doubtful	40		107		439		157		64		73		—		—		880
Total	$	92,738	$	64,973	$	53,229	$	38,138	$	24,464	$	11,690	$	61,565	$	21,805	$	368,602

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:


	Origination Year														Revolving to Term
(dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving				Total
December 31, 2023
Residential real estate:
Performing	$	453,743	$	1,508,671	$	1,836,078	$	1,705,131	$	430,783	$	722,987	$	—	$	279	$	6,657,672
Nonperforming	116		4,563		4,004		3,375		4,078		25,635		—		—		41,771
Total	$	453,859	$	1,513,234	$	1,840,082	$	1,708,506	$	434,861	$	748,622	$	—	$	279	$	6,699,443

Indirect:
Performing	$	393,369	$	355,822	$	162,735	$	82,871	$	37,967	$	13,815	$	—	$	196	$	1,046,775
Nonperforming	372		1,472		1,207		547		318		291		—		—		4,207
Total	$	393,741	$	357,294	$	163,942	$	83,418	$	38,285	$	14,106	$	—	$	196	$	1,050,982

Direct:
Performing	$	109,372	$	90,310	$	92,491	$	48,387	$	29,659	$	67,129	$	75,080	$	4,852	$	517,280
Nonperforming	67		531		517		560		210		3,872		124		11		5,892
Total	$	109,439	$	90,841	$	93,008	$	48,947	$	29,869	$	71,001	$	75,204	$	4,863	$	523,172

Home equity:
Performing	$	290	$	164	$	160	$	140	$	679	$	4,483	$	1,019,389	$	23,918	$	1,049,223
Nonperforming	—		310		328		404		741		4,327		2,844		7,294		16,248
Total	$	290	$	474	$	488	$	544	$	1,420	$	8,810	$	1,022,233	$	31,212	$	1,065,471

	Origination Year														Revolving to Term
	2022		2021		2020		2019		2018		Prior		Revolving				Total
December 31, 2022
Residential real estate:
Performing	$	1,327,168	$	1,945,792	$	1,825,762	$	478,529	$	136,260	$	712,175	$	7	$	88	$	6,425,781
Nonperforming	59		529		861		873		1,826		30,512		—		—		34,660
Total	$	1,327,227	$	1,946,321	$	1,826,623	$	479,402	$	138,086	$	742,687	$	7	$	88	$	6,460,441

Indirect:
Performing	$	504,410	$	249,407	$	144,265	$	82,304	$	31,484	$	19,095	$	—	$	62	$	1,031,027
Nonperforming	348		1,074		645		531		304		328		—		—		3,230
Total	$	504,758	$	250,481	$	144,910	$	82,835	$	31,788	$	19,423	$	—	$	62	$	1,034,257

Direct:
Performing	$	132,934	$	164,126	$	77,406	$	57,919	$	45,299	$	59,212	$	87,622	$	671	$	625,189
Nonperforming	115		851		614		205		327		1,526		5		354		3,997
Total	$	133,049	$	164,977	$	78,020	$	58,124	$	45,626	$	60,738	$	87,627	$	1,025	$	629,186

Home equity:
Performing	$	919	$	896	$	1,849	$	1,497	$	983	$	11,646	$	990,001	$	14,792	$	1,022,583
Nonperforming	166		160		166		446		794		4,308		1,698		3,462		11,200
Total	$	1,085	$	1,056	$	2,015	$	1,943	$	1,777	$	15,954	$	991,699	$	18,254	$	1,033,783

The following table summarizes the gross charge-offs of loans by loan portfolio segment and origination year:


	Origination Year
(dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving		Total
Year Ended December 31, 2023
Commercial	$	—	$	6,475	$	24,022	$	120	$	7,245	$	2,880	$	709		$	41,451
Commercial real estate	—		54		2,808		2,144		—		6,192		—			11,198
BBCC	670		548		362		70		—		—		—			1,650
Residential real estate	—		—		—		—		—		256		—			256
Indirect	271		1,447		787		159		152		132		—			2,948
Direct	173		1,899		2,367		746		1,207		543		3,582			10,517
Home equity	—		—		—		35		—		408		—			443
Total gross charge-offs	$	1,114	$	10,423	$	30,346	$	3,274	$	8,604	$	10,411	$	4,291		$	68,463

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:


(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
December 31, 2023
Commercial	$	16,128	$	1,332	$	4,861	$	22,321	$	9,257,145	$	9,279,466
Commercial real estate	9,081		5,254		30,660		44,995		13,926,576		13,971,571
BBCC	1,368		134		977		2,479		399,343		401,822
Residential	12,358		367		15,249		27,974		6,671,469		6,699,443
Indirect	7,025		1,854		1,342		10,221		1,040,761		1,050,982
Direct	5,436		1,455		1,787		8,678		514,494		523,172
Home equity	7,791		2,347		6,659		16,797		1,048,674		1,065,471
Total	$	59,187	$	12,743	$	61,535	$	133,465	$	32,858,462	$	32,991,927

December 31, 2022
Commercial	$	14,147	$	4,801	$	11,080	$	30,028	$	9,268,596	$	9,298,624
Commercial real estate	47,240		1,312		32,892		81,444		12,217,304		12,298,748
BBCC	730		365		603		1,698		366,904		368,602
Residential	24,181		5,033		11,753		40,967		6,419,474		6,460,441
Indirect	6,302		2,118		958		9,378		1,024,879		1,034,257
Direct	5,404		2,118		1,928		9,450		619,736		629,186
Home equity	6,585		1,966		4,707		13,258		1,020,525		1,033,783
Total	$	104,589	$	17,713	$	63,921	$	186,223	$	30,937,418	$	31,123,641

Schedule of Financing Receivable, Nonaccrual

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:


	December 31, 2023						December 31, 2022
(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	$	43,775	$	13,143	$	242	$	60,372	$	7,873	$	152
Commercial real estate	158,222		24,507		585		122,290		33,445		—
BBCC	4,706		—		95		2,429		—		—
Residential	41,771		—		—		34,660		—		1,808
Indirect	4,207		—		8		3,230		—		28
Direct	5,892		—		31		3,997		—		133
Home equity	16,248		—		—		11,200		—		529
Total	$	274,821	$	37,650	$	961	$	238,178	$	41,318	$	2,650

The following table presents the amortized cost basis of collateral dependent loans by class of loan:


	Type of Collateral
(dollars in thousands)	Real Estate		Blanket Lien		Investment Securities/Cash		Auto		Other
December 31, 2023
Commercial	$	14,303	$	24,729	$	2,577	$	280	$	328
Commercial Real Estate	146,425		—		1,167		—		6,107
BBCC	3,522		794		—		390		—
Residential	41,771		—		—		—		—
Indirect	—		—		—		4,207		—
Direct	4,727		1		3		366		29
Home equity	16,248		—		—		—		—
Total	$	226,996	$	25,524	$	3,747	$	5,243	$	6,464

December 31, 2022
Commercial	$	8,962	$	42,754	$	2,690	$	1,611	$	980
Commercial Real Estate	108,871		—		1,718		—		6,411
BBCC	1,939		478		—		12		—
Residential	34,660		—		—		—		—
Indirect	—		—		—		3,230		—
Direct	2,991		13		—		232		23
Home equity	11,200		—		—		—		—
Total	$	168,623	$	43,245	$	4,408	$	5,085	$	7,414

Schedule of Activity in Trouble Debt Restructurings

The following table presents the amortized cost basis of financial difficulty modifications at December 31, 2023 that were modified during the year ended December 31, 2023 by class of loans and type of modification:


(dollars in thousands)	Term Extension		Total Class of Loans
Year Ended December 31, 2023
Commercial	$	21,631	0.2	%
Commercial real estate	121,529		0.9	%





Total	$	143,160	0.4	%

Old National monitors the performance of financial difficulty modifications to understand the effectiveness of its efforts. The following table presents the performance of loans identified as financial difficulty modifications at December 31, 2023:


(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
December 31, 2023
Commercial	$	—	$	—	$	—	$	—	$	21,631	$	21,631
Commercial real estate	5,287		—		—		5,287		116,242		121,529





Total	$	5,287	$	—	$	—	$	5,287	$	137,873	$	143,160

The following table summarizes the nature of the financial difficulty modifications during the year ended December 31, 2023 by class of loans:

(dollars in thousands)

Weighted-
Average
Term Extension
(in months)

Year Ended December 31, 2023

Commercial

6.1

Commercial real estate

8.6

Total

8.2