Company: ONBPP
Filing Date: 2025-07-30
Form Type: 10-Q
Source: 0000707179-25-000018
Chunk: 144

Company: OLD NATIONAL BANCORP /IN/
Filing Date: 2025-07-30
Form: 10-Q
Item: Item 8
Chunk 144
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 and other liabilities, while the corresponding provision for unfunded loan commitments is included in the provision for credit losses. Old National’s activity in the allowance for credit losses on unfunded loan commitments was as follows:Three Months EndedJune 30,Six Months EndedJune 30,(dollars in thousands)2025202420252024Allowance for credit losses on unfunded loan commitments: Balance at beginning of period$22,031 $26,264 $21,654 $31,226 Provision for credit losses on unfunded loan commitments   acquired during the period6,458 1,763 6,458 1,763 Provision (release) for credit losses on unfunded loan   commitments1,114 (2,294)1,491 (7,256)Balance at end of period$29,603 $25,733 $29,603 $25,733 Credit QualityOld National’s management monitors the credit quality of its loans on an ongoing basis with the asset quality rating (“AQR”) for commercial, commercial real estate, and BBCC 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:Special Mention. Loans categorized as special mention 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 Old National’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