Company: ONBPP
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000707179-25-000005
Chunk: 120

Company: OLD NATIONAL BANCORP /IN/
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7
Chunk 120
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3. Under-performing assets as a percentage of total loans were 1.26% at December 31, 2024, compared to 0.86% at December 31, 2023.

Nonaccrual loans increased $173.2 million from December 31, 2023 to December 31, 2024 including $71.7 million of nonaccrual loans acquired in the CapStar acquisition. Excluding these loans, nonaccrual loans increased $101.5 million reflecting the migration of certain borrowers primarily due to asset quality rating policy changes and the impact of the higher interest rate environment. As a percentage of nonaccrual loans, the allowance for credit losses on loans was 87.62% at December 31, 2024, compared to 111.93% at December 31, 2023.

If nonaccrual and renegotiated loans outstanding at December 31, 2024 and 2023, respectively, had been accruing interest throughout the year in accordance with their original terms, interest income of approximately $20.4 million in 2024 and $13.4 million in 2023 would have been recorded on these loans. The amount of interest income actually recorded on nonaccrual and renegotiated loans was $12.1 million in 2024 and $5.0 million in 2023.

Total criticized and classified assets were $2.5 billion at December 31, 2024, an increase of $725.0 million from December 31, 2023 including $222.1 million of criticized and classified loans related to the CapStar acquisition. Excluding these loans, total criticized and classified assets increased $503.0 million reflecting the migration of certain borrowers primarily due to asset quality rating policy changes and the impact of the higher interest rate environment. Other classified assets include investment securities that fell below investment grade rating totaling $59.0 million at December 31, 2024, compared to $48.9 million at December 31, 2023.

58

Allowance for Credit Losses on Loans and Unfunded Loan Commitments

Credit quality within the loans held for investment portfolio is continuously monitored by management and is reflected within the allowance for credit losses on loans. The allowance for credit losses is an estimate of expected losses inherent within the Company’s loans held for investment portfolio. Credit quality is assessed and monitored by evaluating various attributes and the results of those evaluations