Company: ONBPP
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0000707179-25-000009
Chunk: 26

Company: OLD NATIONAL BANCORP /IN/
Filing Date: 2025-04-30
Form: 10-Q
Item: Item 1
Chunk 26
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 Repayment of these loans depends largely on the personal income of the borrowers, which can be affected by changes in economic conditions such as unemployment levels. Portfolio risk is mitigated by the fact that the loans are of smaller amounts spread over many borrowers.Home EquityHome equity loans are generally secured by 1-4 family residences that are owner-occupied. Old National has established underwriting standards such as minimum FICO scores, maximum loan-to-value ratios, and maximum debt-to-income ratios. Repayment of these loans depends largely on the personal income of the borrowers, which can be affected by changes in economic conditions such as unemployment levels. Portfolio risk is mitigated by the 

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fact that the loans are of smaller amounts spread over many borrowers, along with monitoring of updated borrower credit scores.Allowance for Credit LossesLoansCredit loss assumptions used when computing the level of expected credit losses are estimated using a model that categorizes loan pools based on loss history, delinquency status, and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. The base forecast scenario considers unemployment, gross domestic product, home price index, and the BBB ratio (BBB spread to the 10-year U.S. Treasury rate). In addition to the quantitative inputs, several qualitative factors are considered. These factors include the risk that macroeconomic forecasts of unemployment, gross domestic product, home price index, and the BBB ratio may prove to be more severe and/or prolonged than our baseline forecast due to a variety of considerations. Old National’s activity in the allowance for credit losses on loans by portfolio segment was as follows:(dollars in thousands)Balance atBeginning ofPeriodCharge-offsRecoveriesProvisionfor LoanLossesBalance atEnd ofPeriodThree Months Ended March 31, 2025Commercial$148,722 $(9,311)$1,280 $16,896 $157,587 Commercial real estate200,309 (11,660)270 9,191 198,110 BBCC2,813 (4)300 (414)2,695 Residential real estate22,922 (30)88 1,234 24,214 Indirect8,434 (1,934)439 2,124 9,063 Direct2,304 (1,601)512 838 2,053 Home equity7,018 — 35 1,157 8,210 Total$392,522