Company: ONBPP
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0000707179-25-000064
Chunk: 32

Company: OLD NATIONAL BANCORP /IN/
Filing Date: 2025-10-29
Form: 10-Q
Item: Item 1
Chunk 32
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CD loans established through acquisition accounting adjustments on or after the CapStar acquisition date.  In addition, the provision for credit losses on loans in the nine months ended September 30, 2024 included $15.3 million to establish an allowance for credit losses on non-PCD CapStar loans acquired. Accrued interest receivable on loans is excluded from the estimate of credit losses and totaled $226.6 million at September 30, 2025, compared to $171.6 million at December 31, 2024.Unfunded Loan CommitmentsOld National maintains 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 as a liability account on the balance sheet within accrued expenses 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 EndedSeptember 30,Nine Months EndedSeptember 30,(dollars in thousands)2025202420252024Allowance for credit losses on unfunded loan commitments: Balance at beginning of period$29,603 $25,733 $21,654 $31,226 Provision for credit losses on unfunded loan commitments   acquired during the period— — 6,458 1,763 Provision (release) for credit losses on unfunded loan   commitments2,735 (679)4,226 (7,935)Balance at end of period$32,338 $25,054 $32,338 $25,054 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.