Company: ONBPP
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0000707179-25-000009
Chunk: 74

Company: OLD NATIONAL BANCORP /IN/
Filing Date: 2025-04-30
Form: 10-Q
Item: Item 1
Chunk 74
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 its interest rates steady during the first quarter of 2025 and decreased interest rates compared to March 31, 2024. The Federal Reserve’s Federal Funds Rate is currently in a target range of 4.25% to 4.50%, with the Effective Federal Funds Rate of 4.33% at March 31, 2025 compared to 5.33% at March 31, 2024. Management actively takes balance sheet restructuring, derivative, and deposit pricing actions to help mitigate interest rate risk. See the section of this Item 7 titled “Market Risk” for additional information regarding this risk.

Loans typically generate more interest income than investment securities with similar maturities. Funding from client deposits generally costs less than wholesale funding sources. Factors such as general economic activity, Federal Reserve monetary policy, and price volatility of competing alternative investments can also exert significant influence on our ability to optimize our mix of assets and funding, net interest income, and net interest margin.

Net interest income is the excess of interest received from interest-earning assets over interest paid on interest-bearing liabilities. For analytical purposes, net interest income is presented in the table that follows, adjusted to a taxable equivalent basis to reflect what our tax-exempt assets would need to yield in order to achieve the same after-tax yield as a taxable asset. We used the current federal statutory tax rate in effect of 21% for all periods. This analysis portrays the income tax benefits related to tax-exempt assets and helps to facilitate a comparison between taxable and tax-exempt assets. Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully taxable equivalent basis and that it may enhance comparability for peer comparison purposes for both management and investors.

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The following table presents the average balance sheet for each major asset and liability category, its related interest income and yield, or its expense and rate.

(Tax equivalent basis,dollars in thousands)Three Months EndedMarch 31, 2025Three Months EndedMarch 31, 2024Earning AssetsAverage BalanceIncome (1)/ExpenseYield/RateAverage BalanceIncome (1)/ExpenseYield/RateMoney market and other interest-earning   investments$791,067 $8,815 4.52 %$757,244 $9,985 5.30 %Investment securities:Treasury and government sponsored agencies2,318,869 20,019