Company: ONBPP
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0000707179-25-000009
Chunk: 166

Company: OLD NATIONAL BANCORP /IN/
Filing Date: 2025-04-30
Form: 10-Q
Item: Item 8
Chunk 166
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140,625 116,250 21.0 Net income per common share - diluted0.44 0.40 10.0 Other Data:Return on average common equity9.11 %8.74 %Return on average tangible common equity (1)15.02 14.93 Efficiency ratio (1)53.74 58.34 Tier 1 leverage ratio9.44 8.96 Net charge-offs to average loans0.24 0.14 

(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 three months ended March 31, 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.

The Federal Reserve held 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