Company: ONBPP
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000707179-25-000005
Chunk: 125

Company: OLD NATIONAL BANCORP /IN/
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7
Chunk 125
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)%Total loans:Net charge-offs (recoveries)$62,004 $55,910 $16,099 Average loans for the year (1)$35,506,298 $32,233,020 $27,589,442 Net charge-offs (recoveries)/average loans0.17 %0.17 %0.06 %

(1)Average loans exclude loans held-for-sale.

The allowance for credit losses on loans was $392.5 million at December 31, 2024, compared to $307.6 million at December 31, 2023. The increase was driven primarily by the acquisition of CapStar, as well as organic loan growth and other factors. Continued loan growth in future periods, a decline in our current level of recoveries, or an increase in charge-offs could result in an increase in provision expense. Additionally, provision expense may be volatile due to changes in CECL model assumptions of credit quality, macroeconomic factors and conditions, and loan composition, which drive the allowance for credit losses balance.

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The following table details the allowance for credit losses on loans by loan category and the percent of loans in each category compared to total loans at December 31.

20242023(dollars in thousands)AllowanceAmount% ofLoansto TotalLoansAllowanceAmount% ofLoansto TotalLoansCommercial$148,722 27.7 %$118,333 28.1 %Commercial real estate200,309 44.5 155,099 42.4 BBCC2,813 1.1 2,887 1.2 Residential real estate22,922 18.8 20,837 20.3 Indirect8,434 3.0 1,236 3.2 Direct2,304 1.4 3,169 1.6 Home equity7,018 3.5 6,049 3.2 Total$392,522 100.0 %$307,610 100.0 %

We maintain an allowance for credit losses on unfunded loan commitments to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the allowance for credit losses on loans, modified to take into account the probability of a drawdown on the commitment. The allowance for credit losses on unfunded loan commitments is classified