Company: ONBPP
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0000707179-25-000064
Chunk: 202

Company: OLD NATIONAL BANCORP /IN/
Filing Date: 2025-10-29
Form: 10-Q
Item: Item 8
Chunk 202
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Net income applicable to common   shareholders178,533 139,768 27.7 440,533 373,214 18.0 Net income per common share -    diluted0.46 0.44 4.5 1.23 1.21 1.7 Other Data:Return on average common equity9.01 %9.40 %8.26 %8.78 %Return on average tangible common    equity (1)15.87 15.96 14.30 15.00 Efficiency ratio (1)58.84 53.83 56.43 56.37 Tier 1 leverage ratio8.72 9.05 8.72 9.05 Net charge-offs to average loans0.25 0.19 0.24 0.16 

(1)Represents a non-GAAP financial measure. Refer to “Non-GAAP Financial Measures” section for reconciliations to GAAP financial measures.

Net Interest Income

Net interest income is the most significant component of our earnings, comprising 81% of revenues for the nine months ended September 30, 2025. Net interest income and net interest margin are influenced by many factors, primarily the volume and mix of earning assets, funding sources, and interest rate fluctuations. Other factors include the level of accretion income on purchased loans, prepayment risk on mortgage and investment-related assets, and the composition and maturity of interest-earning assets and interest-bearing liabilities.

During the third quarter of 2025, the Federal Reserve decreased interest rates, resulting in rates that were also reduced compared to those in effect as of September 30, 2024. The Federal Reserve’s Federal Funds Rate is currently in a target range of 4.00% to 4.25%, with the Effective Federal Funds Rate of 4.09% at September 30, 2025 compared to 4.83% at September 30, 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