Old National Bancorp

10/28/2026 | Press release | Distributed by Public on 10/28/2026 09:02

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is an analysis generally discussing our results of operations for the three and nine months ended September 30, 2026 compared to the same period in 2025, and financial condition as of September 30, 2026 compared to December 31, 2025. This discussion and analysis should be read in conjunction with the consolidated financial statements and related notes, as well as our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Annual Report on Form 10-K").
FORWARD-LOOKING STATEMENTS
This report contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), Section 27A of the Securities Act of 1933 and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934 and Rule 3b-6 promulgated thereunder, notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in our future filings with the SEC, in press releases, and in oral and written statements made by us that are not statements of historical fact and constitute forward‐looking statements within the meaning of the Act. These statements include, but are not limited to, descriptions of Old National's financial condition, results of operations, asset and credit quality trends, profitability and business plans or opportunities. Forward-looking statements can be identified by the use of words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "guidance," "intend," "may," "outlook," "plan," "potential," "predict," "should," "would," and "will," and other words of similar meaning. These forward-looking statements express management's current expectations or forecasts of future events and, by their nature, are subject to risks and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those in such statements, including, but not limited to: competition; government legislation, regulations and policies, including trade and tariff policies; the ability of Old National to execute its business plan; unanticipated changes in our liquidity position, including but not limited to changes in our access to sources of liquidity and capital to address our liquidity needs; changes in economic conditions and economic and business uncertainty which could materially impact credit quality trends and the ability to generate loans and gather deposits; inflation and governmental responses to inflation, including increasing interest rates; market, economic, operational, liquidity, credit, and interest rate risks associated with our business; our ability to successfully manage our credit risk and the sufficiency of our allowance for credit losses; the potential impact of future business combinations on our performance and financial condition, including our ability to successfully integrate the businesses, the success of revenue-generating and cost reduction initiatives, and the diversion of management's attention from ongoing business operations and opportunities; failure or circumvention of our internal controls; operational risks or risk management failures by us or critical third parties, including without limitation with respect to data processing, information technology systems, cybersecurity, technological changes, vendor issues, business interruption, and fraud risks; significant changes in accounting, tax or regulatory practices or requirements; new legal obligations or liabilities; disruptive technologies in payment systems and other services traditionally provided by banks; adverse effects on our information technology systems, or those of third parties, resulting from failures, disruptions or cybersecurity attacks, including ransomware; security breaches, including denial of service attacks, hacking, social engineering attacks, malware intrusion and other cybersecurity threats; the effects of climate change on Old National and its customers, borrowers, or service providers; political and economic uncertainty and instability; the impacts of pandemics, epidemics and other infectious disease outbreaks; other matters discussed in this report; and other factors identified in our 2025 Annual Report on Form 10-K and other filings with the SEC. These forward-looking statements are made only as of the date of this report and are not guarantees of future results, performance, or outcomes.
Such forward-looking statements are based on assumptions and estimates, which although believed to be reasonable, may turn out to be incorrect. Therefore, undue reliance should not be placed upon these estimates and statements. We cannot assure that any of these statements, estimates, or beliefs will be realized and actual results or outcomes may differ from those contemplated in these forward-looking statements. Old National does not undertake an obligation to update these forward-looking statements to reflect events or conditions after the date of this report. You are advised to consult further disclosures we may make on related subjects in our filings with the SEC.
Investors should consider these risks, uncertainties, and other factors in addition to the factors under the heading "Risk Factors" included in Item 1A of Part I of Old National's 2025 Annual Report on Form 10-K and our other filings with the SEC.
FINANCIAL HIGHLIGHTS
The following table sets forth certain financial highlights of Old National for the previous five quarters:
Three Months Ended
(dollars and shares in thousands,
except per share data) 		September 30, June 30, March 31, December 31, September 30,
2026 2026 2026 2025 2025
Income Statement:
Net interest income $ 584,287 $ 578,988 $ 572,573 $ 580,832 $ 574,609
Taxable equivalent adjustment (1) (3)
7,667 7,510 7,849 8,013 7,975
Net interest income - taxable equivalent basis (3)
591,954 586,498 580,422 588,845 582,584
Provision for credit losses 33,580 36,206 34,946 32,745 26,738
Noninterest income 128,446 153,564 122,346 109,759 130,461
Noninterest expense 355,380 372,161 364,704 386,320 445,734
Net income applicable to common shareholders 249,960 249,381 229,638 212,589 178,533
Per Common Share Data:
Weighted average diluted common shares 380,900 383,273 388,054 389,550 390,496
Net income (diluted) $ 0.66 $ 0.65 $ 0.59 $ 0.55 $ 0.46
Cash dividends 0.145 0.145 0.145 0.14 0.14
Common dividend payout ratio (2)
22 % 22 % 25 % 25 % 30 %
Book value $ 21.26 $ 21.80 $ 21.40 $ 21.17 $ 20.64
Stock price 24.64 25.90 22.10 22.31 21.95
Tangible common book value (3)
13.77 14.32 13.93 13.71 13.15
Performance Ratios:
Return on average assets 1.37 % 1.38 % 1.29 % 1.21 % 1.03 %
Return on average common equity 12.03 12.07 11.07 10.44 9.01
Return on average tangible common equity (3)
19.59 19.84 18.41 17.76 15.87
Net interest margin (3)
3.52 3.54 3.55 3.65 3.64
Efficiency ratio (3)
46.09 47.04 48.25 51.58 58.84
Net charge-offs to average loans 0.27 0.26 0.26 0.27 0.25
Allowance for credit losses on loans to ending loans 1.13 1.14 1.15 1.17 1.19
Allowance for credit losses (4) to ending loans
1.20 1.21 1.22 1.24 1.26
Non-performing loans to ending loans 0.92 0.91 1.03 1.07 1.23
Balance Sheet:
Total loans $ 51,148,063 $ 50,772,584 $ 49,731,844 $ 48,764,162 $ 47,967,915
Total assets 74,423,980 74,189,417 73,002,651 72,151,967 71,210,162
Total deposits 57,639,107 56,146,770 55,672,472 55,088,195 55,006,184
Total borrowed funds 7,134,231 8,423,983 7,823,198 7,451,367 6,766,381
Total shareholders' equity 8,295,211 8,583,843 8,510,653 8,494,788 8,309,271
Capital Ratios:
Risk-based capital ratios:
Tier 1 common equity 11.11 % 11.09 % 11.11 % 11.08 % 11.02 %
Tier 1 11.54 11.53 11.56 11.53 11.49
Total 13.59 13.65 13.71 12.85 12.78
Leverage ratio (to average assets) 8.98 8.95 8.93 8.90 8.72
Total equity to assets (averages) 11.52 11.61 11.79 11.73 11.48
Tangible common equity to tangible assets (3)
7.28 7.68 7.67 7.72 7.53
Nonfinancial Data:
Full-time equivalent employees 4,894 4,914 4,948 4,971 5,243
Banking centers 346 346 346 346 351
(1)Calculated using the federal statutory tax rate in effect of 21% for all periods.
(2)Cash dividends per common share divided by net income per common share (basic).
(3)Represents a non-GAAP financial measure. Refer to the "Non-GAAP Financial Measures" section for reconciliations to GAAP financial measures.
(4)Includes the allowance for credit losses on loans and unfunded loan commitments.
The following table sets forth certain financial highlights of Old National for the year-to-date periods:
Nine Months Ended September 30,
(dollars and shares in thousands, except per share data) 2026 2025
Income Statement:
Net interest income $ 1,735,848 $ 1,477,042
Taxable equivalent adjustment (1) (3)
23,026 20,398
Net interest income - taxable equivalent basis (3)
1,758,874 1,497,440
Provision for credit losses 104,732 164,976
Noninterest income 404,356 356,772
Noninterest expense 1,092,245 1,098,971
Net income applicable to common shareholders 728,979 440,533
Per Common Share Data:
Weighted average diluted common shares 384,156 357,278
Net income (diluted) $ 1.90 $ 1.23
Cash dividends 0.435 0.42
Common dividend payout ratio (2)
23 % 34 %
Book value $ 21.26 $ 20.64
Stock price 24.64 21.95
Tangible common book value (3)
13.77 13.15
Performance Ratios:
Return on average assets 1.35 % 0.95 %
Return on average common equity 11.72 8.26
Return on average tangible common equity (3)
19.28 14.30
Net interest margin (3)
3.53 3.50
Efficiency ratio (3)
47.12 56.43
Net charge-offs to average loans 0.26 0.24
Allowance for credit losses on loans to ending loans 1.13 1.19
Allowance for credit losses (4) to ending loans
1.20 1.26
Non-performing loans to ending loans 0.92 1.23
Balance Sheet:
Total loans $ 51,148,063 $ 47,967,915
Total assets 74,423,980 71,210,162
Total deposits 57,639,107 55,006,184
Total borrowed funds 7,134,231 6,766,381
Total shareholders' equity 8,295,211 8,309,271
Capital Ratios:
Risk-based capital ratios:
Tier 1 common equity 11.11 % 11.02 %
Tier 1 11.54 11.49
Total 13.59 12.78
Leverage ratio (to average assets) 8.98 8.72
Total equity to assets (averages) 11.64 11.59
Tangible common equity to tangible assets (3)
7.28 7.53
(1)Calculated using the federal statutory tax rate in effect of 21% for all periods.
(2)Cash dividends per common share divided by net income per common share (basic).
(3)Represents a non-GAAP financial measure. Refer to the "Non-GAAP Financial Measures" section for reconciliations to GAAP financial measures.
(4)Includes the allowance for credit losses on loans and unfunded loan commitments.
NON-GAAP FINANCIAL MEASURES
The Company's accounting and reporting policies conform to GAAP and general practices within the banking industry. As a supplement to GAAP, the Company provides non-GAAP performance results, which the Company believes are useful because they assist users of the financial information in assessing the Company's operating performance. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the following table.
The Company presents net income per common share and net income applicable to common shares, adjusted for certain notable items. These items include merger-related charges associated with completed and pending acquisitions, pension plan gain/loss, realized debt securities gains/losses, distribution of excess pension assets expense, FDIC special assessment expense, and CECL Day 1 non-PCD provision expense. Management believes excluding these items from net income per common share and net income applicable to common shares may be useful in assessing the Company's underlying operational performance since these items do not pertain to its core business operations and their exclusion may facilitate better comparability between periods. Management believes that excluding merger-related charges from these metrics may be useful to the Company, as well as analysts and investors, since these expenses can vary significantly based on the size, type, and structure of each acquisition. Additionally, management believes excluding these items from these metrics may enhance comparability for peer comparison purposes.
The taxable equivalent adjustment to net interest income and net interest margin recognizes the income tax savings when comparing taxable and tax-exempt assets. Interest income and yields on tax-exempt securities and loans are presented using the current federal income tax rate of 21%. Management believes that it is standard practice in the banking industry to present net interest income and net interest margin on a fully tax-equivalent basis and that it may enhance comparability for peer comparison purposes.
In management's view, tangible common equity measures are capital adequacy metrics that may be meaningful to the Company, as well as users of the financial information, in assessing the Company's use of equity and in facilitating comparisons with peers. These non-GAAP measures are valuable indicators of a financial institution's capital strength since they eliminate intangible assets from shareholders' equity and retain the effect of AOCI in shareholders' equity.
Although intended to enhance understanding of the Company's business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. In addition, these non-GAAP financial measures may differ from those used by other financial institutions to assess their business and performance. See the previously provided tables and the following reconciliations in the "Non-GAAP Reconciliations" section for details on the calculation of these measures to the extent presented herein.
The following table presents GAAP to non-GAAP reconciliations for the previous five quarters:
Three Months Ended
(dollars and shares in thousands,
except per share data) 		September 30, June 30, March 31, December 31, September 30,
2026 2026 2026 2025 2025
Net income per common share:
Net income applicable to common shares $ 249,960 $ 249,381 $ 229,638 $ 212,589 $ 178,533
Adjustments:
Merger-related charges 689 12,109 7,323 24,547 69,274
Pension plan (gain) loss (893) (13,240) - 15,878 -
Debt securities (gains) losses (5) 34 (75) (73) (7)
Distribution of excess pension assets expense - - 3,394 - -
FDIC special assessment - - - (2,994) -
Less: tax effect on net total adjustments (2)
(38) 2,091 (2,630) (8,973) (16,492)
Net income applicable to common shares, adjusted (1)
$ 249,713 $ 250,375 $ 237,650 $ 240,974 $ 231,308
Weighted average diluted common shares outstanding 380,900 383,273 388,054 389,550 390,496
Net income per common share, diluted $ 0.66 $ 0.65 $ 0.59 $ 0.55 $ 0.46
Adjusted net income per common share, diluted (1)
$ 0.66 $ 0.65 $ 0.61 $ 0.62 $ 0.59
Tangible common book value:
Shareholders' common equity $ 8,051,492 $ 8,340,124 $ 8,266,934 $ 8,251,069 $ 8,065,552
Deduct: Goodwill and intangible assets 2,839,096 2,862,427 2,886,419 2,907,986 2,926,960
Tangible shareholders' common equity (1)
$ 5,212,396 $ 5,477,697 $ 5,380,515 $ 5,343,083 $ 5,138,592
Period end common shares 378,639 382,537 386,315 389,662 390,768
Tangible common book value (1)
$ 13.77 $ 14.32 $ 13.93 $ 13.71 $ 13.15
Return on average tangible common equity:
Net income applicable to common shares $ 249,960 $ 249,381 $ 229,638 $ 212,589 $ 178,533
Add: Intangible amortization (net of tax) (2)
17,498 17,994 19,217 19,512 19,638
Tangible net income (1)
$ 267,458 $ 267,375 $ 248,855 $ 232,101 $ 198,171
Average shareholders' common equity $ 8,311,725 $ 8,264,486 $ 8,300,501 $ 8,147,348 $ 7,924,856
Deduct: Average goodwill and intangible assets 2,850,422 2,873,898 2,894,824 2,919,924 2,931,319
Average tangible shareholders' common equity (1)
$ 5,461,303 $ 5,390,588 $ 5,405,677 $ 5,227,424 $ 4,993,537
Return on average tangible common equity (1)
19.59 % 19.84 % 18.41 % 17.76 % 15.87 %
Net interest margin:
Net interest income $ 584,287 $ 578,988 $ 572,573 $ 580,832 $ 574,609
Taxable equivalent adjustment 7,667 7,510 7,849 8,013 7,975
Net interest income - taxable equivalent basis (1)
$ 591,954 $ 586,498 $ 580,422 $ 588,845 $ 582,584
Average earning assets $ 67,301,047 $ 66,341,949 $ 65,433,548 $ 64,456,815 $ 64,032,811
Net interest margin (1)
3.52 % 3.54 % 3.55 % 3.65 % 3.64 %
Efficiency ratio:
Noninterest expense $ 355,380 $ 372,161 $ 364,704 $ 386,320 $ 445,734
Deduct: Intangible amortization expense 23,331 23,992 25,623 26,016 26,184
Noninterest expense excluding intangible
amortization expense (1)
$ 332,049 $ 348,169 $ 339,081 $ 360,304 $ 419,550
Net interest income - taxable equivalent basis (1)
(see above)
$ 591,954 $ 586,498 $ 580,422 $ 588,845 $ 582,584
Noninterest income 128,446 153,564 122,346 109,759 130,461
Deduct: Debt securities gains (losses), net 5 (34) 75 73 7
Total revenue excluding debt securities gains
(losses) (1)
$ 720,395 $ 740,096 $ 702,693 $ 698,531 $ 713,038
Efficiency ratio (1)
46.09 % 47.04 % 48.25 % 51.58 % 58.84 %
Tangible common equity to tangible assets:
Tangible shareholders' equity (1) (see above)
$ 5,212,396 $ 5,477,697 $ 5,380,515 $ 5,343,083 $ 5,138,592
Assets $ 74,423,980 $ 74,189,417 $ 73,002,651 $ 72,151,967 $ 71,210,162
Deduct: Goodwill and intangible assets 2,839,096 2,862,427 2,886,419 2,907,986 2,926,960
Tangible assets (1)
$ 71,584,884 $ 71,326,990 $ 70,116,232 $ 69,243,981 $ 68,283,202
Tangible common equity to tangible assets (1)
7.28 % 7.68 % 7.67 % 7.72 % 7.53 %
(1)Represents a non-GAAP financial measure.
(2)Calculated using management's estimate of the annual fully taxable equivalent income tax rates (federal and state).
The following table presents GAAP to non-GAAP reconciliations for the year-to-date periods:
Nine Months Ended September 30,
(dollars and shares in thousands, except per share data) 2026 2025
Net income per common share:
Net income applicable to common shares $ 728,979 $ 440,533
Adjustments:
Merger-related charges 20,121 116,336
Pension plan gain (14,133) (21,001)
Distribution of excess pension assets expense 3,394 -
Debt securities (gains) losses (46) 110
CECL Day 1 non-PCD provision expense - 75,604
Less: tax effect on net total adjustments (2)
(578) (43,969)
Net income applicable to common shares, adjusted (1)
$ 737,737 $ 567,613
Weighted average diluted common shares outstanding 384,156 357,278
Net income per common share, diluted $ 1.90 $ 1.23
Adjusted net income per common share, diluted (1)
$ 1.92 $ 1.59
Tangible common book value:
Shareholders' common equity $ 8,051,492 $ 8,065,552
Deduct: Goodwill and intangible assets 2,839,096 2,926,960
Tangible shareholders' common equity (1)
$ 5,212,396 $ 5,138,592
Period end common shares 378,639 390,768
Tangible common book value (1)
$ 13.77 $ 13.15
Return on average tangible common equity:
Net income applicable to common shares $ 728,979 $ 440,533
Add: Intangible amortization (net of tax) (2)
54,709 39,483
Tangible net income (1)
$ 783,688 $ 480,016
Average shareholders' common equity $ 8,292,278 $ 7,108,424
Deduct: Average goodwill and intangible assets 2,872,886 2,633,858
Average tangible shareholders' common equity (1)
$ 5,419,392 $ 4,474,566
Return on average tangible common equity (1)
19.28 % 14.30 %
Net interest margin:
Net interest income $ 1,735,848 $ 1,477,042
Taxable equivalent adjustment 23,026 20,398
Net interest income - taxable equivalent basis (1)
$ 1,758,874 $ 1,497,440
Average earning assets $ 66,365,689 $ 57,115,572
Net interest margin (1)
3.53 % 3.50 %
Efficiency ratio:
Noninterest expense $ 1,092,245 $ 1,098,971
Deduct: Intangible amortization expense 72,946 52,644
Noninterest expense excluding intangible
amortization expense (1)
$ 1,019,299 $ 1,046,327
Net interest income - taxable equivalent basis (1)
(see above)
$ 1,758,874 $ 1,497,440
Noninterest income 404,356 356,772
Deduct: Debt securities gains (losses), net 46 (110)
Total revenue excluding debt securities gains
(losses) (1)
$ 2,163,184 $ 1,854,322
Efficiency ratio (1)
47.12 % 56.43 %
Tangible common equity to tangible assets:
Tangible shareholders' equity (1) (see above)
$ 5,212,396 $ 5,138,592
Assets $ 74,423,980 $ 71,210,162
Deduct: Goodwill and intangible assets 2,839,096 2,926,960
Tangible assets (1)
$ 71,584,884 $ 68,283,202
Tangible common equity to tangible assets (1)
7.28 % 7.53 %
(1)Represents a non-GAAP financial measure.
(2)Calculated using management's estimate of the annual fully taxable equivalent income tax rates (federal and state).
EXECUTIVE SUMMARY
Old National is the sixth largest commercial bank headquartered in the Midwest by asset size and ranks among the top 25 banking companies headquartered in the United States with consolidated assets of $74.4 billion at September 30, 2026. The Company's corporate headquarters and principal executive office are located in Evansville, Indiana. Through our wholly owned banking subsidiary and non-bank affiliates, we provide a wide range of services primarily throughout the Midwest and Southeast regions of the United States. In addition to providing extensive services in consumer and commercial banking, Old National offers comprehensive wealth management and capital markets services.
Net income applicable to common shares for the third quarter of 2026 was $250.0 million, or $0.66 per diluted common share, compared to $249.4 million, or $0.65 per diluted common share, for the second quarter of 2026.
Results for the third quarter of 2026 were impacted by $0.7 million in pre-tax merger-related expenses and a $0.9 million pre-tax gain associated with the settlement of the Bremer pension plan. Results for the second quarter of 2026 were impacted by $12.1 million of merger-related expenses and a $13.2 million pre-tax gain associated with the settlement of the Bremer pension plan. Excluding these items and realized debt securities gains, net income applicable to common shares for the third quarter of 2026 was $249.7 million, or $0.66 per diluted common share on an adjusted basis1, compared to $250.4 million, or $0.65 per diluted common share on an adjusted basis1, for the second quarter of 2026.
Our results for the third quarter of 2026 reflect growth in total loans and deposits, disciplined expense management, and strong credit quality and capital.
Deposits: Period-end total deposits increased $1.5 billion, or 11% annualized, to $57.6 billion at September 30, 2026 compared to June 30, 2026.
Loans: Our loan balances, excluding loans held-for-sale, increased $375.5 million, or 3% annualized, to $51.1 billion at September 30, 2026 compared to June 30, 2026 reflecting high quality commercial loan production.
Net Interest Income: Net interest income increased $5.3 million to $584.3 million compared to the second quarter of 2026 driven by high quality loan and deposit growth, partly offset by core deposit pricing and funding mix.
Provision for Credit Losses: Provision for credit losses was $33.6 million compared to $36.2 million in the second quarter of 2026.
Noninterest Income: Noninterest income was $128.4 million, or $127.5 million excluding a $0.9 million pre-tax gain associated with the settlement of the Bremer pension plan, compared to $153.6 million, or $140.4 million excluding a $13.2 million pre-tax gain associated with the settlement of the Bremer pension plan in the second quarter of 2026. Bank and wealth fees remained resilient as other income normalized from elevated levels in the second quarter of 2026 due to market value adjustments, higher company-owned life insurance income, and an asset recovery.
Noninterest Expense: Noninterest expense decreased $16.8 million compared to the second quarter of 2026. In the third quarter of 2026, noninterest expense included $0.7 million of merger-related expenses. In the second quarter of 2026, noninterest expense included $12.1 million of merger-related expenses. Excluding these expenses, noninterest expense was $354.7 million for the third quarter of 2026, a decrease of $5.4 million from $360.1 million for the second quarter of 2026 reflecting disciplined expense management.
(1)Represents a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" section for reconciliations to GAAP financial measures.
RESULTS OF OPERATIONS
The following table sets forth certain income statement information of Old National:
(dollars in thousands, except
per share data) 		Three Months Ended
September 30, 		%
Change 		Nine Months Ended
September 30, 		%
Change
2026 2025 2026 2025
Income Statement Summary:
Net interest income $ 584,287 $ 574,609 1.7 % $ 1,735,848 $ 1,477,042 17.5 %
Provision for credit losses 33,580 26,738 25.6 104,732 164,976 (36.5)
Noninterest income 128,446 130,461 (1.5) 404,356 356,772 13.3
Noninterest expense 355,380 445,734 (20.3) 1,092,245 1,098,971 (0.6)
Net income applicable to common
shareholders 		249,960 178,533 40.0 728,979 440,533 65.5
Net income per common share -
diluted 		0.66 0.46 43.5 1.90 1.23 54.5
Other Data:
Return on average common equity 12.03 % 9.01 % 11.72 % 8.26 %
Return on average tangible common
equity (1)
19.59 15.87 19.28 14.30
Efficiency ratio (1)
46.09 58.84 47.12 56.43
Tier 1 leverage ratio 8.98 8.72 8.98 8.72
Net charge-offs to average loans 0.27 0.25 0.26 0.24
(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 nine months ended September 30, 2026. 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 increased interest rates during the third quarter of 2026, but interest rates remained lower compared to those in effect as of September 30, 2025. The Federal Reserve's Federal Funds Rate is currently in a target range of 3.75% to 4.00%, with the Effective Federal Funds Rate of 3.88% at September 30, 2026 compared to 4.09% at September 30, 2025. 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 to achieve the same after-tax yield as a taxable asset. We used the current federal statutory tax rate in effect of 21% for all periods. This analysis portrays the income tax benefits related to tax-exempt assets and helps to facilitate a comparison between taxable and tax-exempt assets. Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully taxable equivalent basis and that it may enhance comparability for peer comparison purposes for both management and investors.
The following tables present the average balance sheet for each major asset and liability category, its related interest income and yield, or its expense and rate.
(Tax equivalent basis,
dollars in thousands) 		Three Months Ended
September 30, 2026 		Three Months Ended
September 30, 2025
Earning Assets Average
Balance
Income (1)/
Expense
Yield/
Rate 		Average
Balance
Income (1)/
Expense
Yield/
Rate
Money market and other interest-earning
investments 		$ 1,170,557 $ 10,979 3.72 % $ 1,159,564 $ 12,207 4.18 %
Investment securities:
Treasury and government sponsored agencies 2,358,480 19,370 3.29 % 2,391,564 20,721 3.47 %
Mortgage-backed securities 10,479,035 114,368 4.37 % 9,854,107 105,596 4.29 %
States and political subdivisions 1,417,175 11,844 3.34 % 1,577,384 13,109 3.32 %
Other securities 824,408 12,488 6.06 % 874,728 16,265 7.44 %
Total investment securities 15,079,098 158,070 4.19 % 14,697,783 155,691 4.24 %
Loans: (2)
Commercial 16,207,022 248,740 6.14 % 14,722,785 249,569 6.78 %
Commercial real estate 22,660,192 346,840 6.12 % 21,999,016 356,014 6.47 %
Residential real estate loans 8,800,325 104,378 4.74 % 8,287,155 95,129 4.59 %
Consumer 3,383,853 55,490 6.51 % 3,166,508 56,557 7.09 %
Total loans 51,051,392 755,448 5.92 % 48,175,464 757,269 6.28 %
Total earning assets 67,301,047 $ 924,497 5.49 % 64,032,811 $ 925,167 5.78 %
Deduct: Allowance for credit losses on loans (592,670) (566,102)
Non-Earning Assets
Cash and due from banks 526,400 492,415
Other assets 7,040,733 7,177,663
Total assets $ 74,275,510 $ 71,136,787
Interest-Bearing Liabilities
Checking and NOW accounts $ 11,217,310 $ 52,484 1.86 % $ 10,807,113 $ 52,301 1.92 %
Savings accounts 4,878,272 3,071 0.25 % 5,009,293 3,866 0.31 %
Money market accounts 17,085,773 104,643 2.43 % 17,007,426 125,717 2.93 %
Time deposits 10,831,986 96,449 3.53 % 9,337,597 90,717 3.85 %
Total interest-bearing deposits 44,013,341 256,647 2.31 % 42,161,429 272,601 2.57 %
Federal funds purchased and interbank
borrowings 		9,668 90 3.69 % 157,192 1,816 4.58 %
Securities sold under agreements to repurchase 258,721 577 0.88 % 289,323 731 1.00 %
FHLB advances 6,068,074 59,292 3.88 % 5,552,780 57,143 4.08 %
Other borrowings 1,449,183 15,937 4.36 % 871,996 10,292 4.68 %
Total borrowed funds 7,785,646 75,896 3.87 % 6,871,291 69,982 4.04 %
Total interest-bearing liabilities $ 51,798,987 $ 332,543 2.55 % $ 49,032,720 $ 342,583 2.77 %
Noninterest-Bearing Liabilities and
Shareholders' Equity
Demand deposits $ 12,837,453 $ 12,731,654
Other liabilities 1,083,626 1,203,838
Shareholders' equity 8,555,444 8,168,575
Total liabilities and shareholders' equity $ 74,275,510 $ 71,136,787
Net interest income - taxable equivalent basis $ 591,954 3.52 % $ 582,584 3.64 %
Taxable equivalent adjustment (7,667) (7,975)
Net interest income (GAAP) $ 584,287 3.47 % $ 574,609 3.59 %
(1)Interest income is reflected on a fully taxable equivalent basis.
(2)Includes loans held-for-sale.
(Tax equivalent basis,
dollars in thousands) 		Nine Months Ended
September 30, 2026 		Nine Months Ended
September 30, 2025
Earning Assets Average
Balance
Income (1)/
Expense
Yield/
Rate 		Average
Balance
Income (1)/
Expense
Yield/
Rate
Money market and other interest-earning
investments 		$ 1,199,047 $ 33,044 3.68 % $ 1,126,460 $ 35,813 4.25 %
Investment securities:
Treasury and government sponsored agencies 2,375,485 57,484 3.23 % 2,369,307 61,560 3.46 %
Mortgage-backed securities 10,392,449 332,990 4.27 % 8,249,480 247,853 4.01 %
States and political subdivisions 1,463,885 36,402 3.32 % 1,594,912 39,753 3.32 %
Other securities 830,985 38,260 6.14 % 872,430 42,547 6.50 %
Total investment securities 15,062,804 465,136 4.12 % 13,086,129 391,713 3.99 %
Loans: (2)
Commercial 15,771,532 720,843 6.09 % 12,803,059 634,610 6.61 %
Commercial real estate 22,319,323 1,022,713 6.11 % 19,432,867 918,371 6.30 %
Residential real estate loans 8,686,561 306,493 4.70 % 7,636,955 251,629 4.39 %
Consumer 3,326,422 163,409 6.57 % 3,030,102 160,814 7.10 %
Total loans 50,103,838 2,213,458 5.89 % 42,902,983 1,965,424 6.11 %
Total earning assets 66,365,689 $ 2,711,638 5.45 % 57,115,572 $ 2,392,950 5.59 %
Deduct: Allowance for credit losses on loans (582,180) (457,192)
Non-Earning Assets
Cash and due from banks 540,143 430,891
Other assets 7,025,532 6,331,698
Total assets $ 73,349,184 $ 63,420,969
Interest-Bearing Liabilities
Checking and NOW $ 11,097,532 $ 146,128 1.76 % $ 9,512,075 $ 123,627 1.74 %
Savings 4,916,410 9,114 0.25 % 4,891,083 11,251 0.31 %
Money market 16,706,478 304,502 2.44 % 14,697,398 328,533 2.99 %
Time deposits 10,246,260 267,738 3.49 % 8,215,063 239,773 3.90 %
Total interest-bearing deposits 42,966,680 727,482 2.26 % 37,315,619 703,184 2.52 %
Federal funds purchased and interbank
borrowings 		18,532 504 3.64 % 131,341 4,394 4.47 %
Securities sold under agreements to repurchase 258,927 1,732 0.89 % 286,137 1,918 0.90 %
FHLB advances 6,310,172 179,088 3.79 % 5,355,597 158,081 3.95 %
Other borrowings 1,328,586 43,958 4.42 % 792,708 27,933 4.71 %
Total borrowed funds 7,916,217 225,282 3.80 % 6,565,783 192,326 3.92 %
Total interest-bearing liabilities $ 50,882,897 $ 952,764 2.50 % $ 43,881,402 $ 895,510 2.73 %
Noninterest-Bearing Liabilities and
Shareholders' Equity
Demand deposits $ 12,862,492 $ 11,145,709
Other liabilities 1,067,798 1,041,715
Shareholders' equity 8,535,997 7,352,143
Total liabilities and shareholders' equity $ 73,349,184 $ 63,420,969
Net interest income - taxable equivalent basis $ 1,758,874 3.53 % $ 1,497,440 3.50 %
Taxable equivalent adjustment (23,026) (20,398)
Net interest income (GAAP) $ 1,735,848 3.49 % $ 1,477,042 3.45 %
(1)Interest income is reflected on a fully taxable equivalent basis.
(2)Includes loans held-for-sale.
The following table presents the dollar amount of changes in taxable equivalent net interest income attributable to changes in the average balances of assets and liabilities and the yields earned or rates paid.
From Three Months Ended
September 30, 2025 to Three
Months Ended September 30, 2026
From Nine Months Ended
September 30, 2025 to Nine
Months Ended September 30, 2026
Total
Change (1)
Attributed to
Total
Change (1)
Attributed to
(dollars in thousands) Volume Rate Volume Rate
Interest Income
Money market and other interest-earning
investments 		$ (1,228) $ 103 $ (1,331) $ (2,769) $ 2,163 $ (4,932)
Investment securities (2)
2,379 4,018 (1,639) 73,423 60,104 13,319
Loans (3)
(1,821) 43,851 (45,672) 248,034 324,063 (76,029)
Total interest income (670) 47,972 (48,642) 318,688 386,330 (67,642)
Interest Expense
Checking and NOW deposits 183 1,937 (1,754) 22,501 20,767 1,734
Savings deposits (795) (94) (701) (2,137) 55 (2,192)
Money market deposits (21,074) 439 (21,513) (24,031) 40,909 (64,940)
Time deposits 5,732 13,822 (8,090) 27,965 56,296 (28,331)
Federal funds purchased and interbank
borrowings 		(1,726) (1,533) (193) (3,890) (3,425) (465)
Securities sold under agreements to
repurchase 		(154) (73) (81) (186) (182) (4)
FHLB advances 2,149 5,136 (2,987) 21,007 27,681 (6,674)
Other borrowings 5,645 6,549 (904) 16,025 18,335 (2,310)
Total interest expense (10,040) 26,183 (36,223) 57,254 160,436 (103,182)
Net interest income $ 9,370 $ 21,789 $ (12,419) $ 261,434 $ 225,894 $ 35,540
(1)The variance not solely due to rate or volume is allocated equally between the rate and volume variances.
(2)Interest income on investment securities includes taxable equivalent adjustments of $2.4 million and $7.3 million during the three and nine months ended September 30, 2026, respectively, and $2.6 million and $7.9 million during the three and nine months ended September 30, 2025, respectively; using the federal statutory rate in effect of 21%.
(3)Interest income on loans includes taxable equivalent adjustments of $5.3 million and $15.7 million during the three and nine months ended September 30, 2026, respectively, and $5.4 million and $12.5 million during the three and nine months ended September 30, 2025, respectively; using the federal statutory rate in effect of 21%.
The increase in net interest income for the three and nine months ended September 30, 2026 compared to the same periods in 2025 was driven by strong loan growth and core deposit pricing, partly offset by deposit growth and funding mix. In addition, the comparison between the nine months ended September 30, 2026 to the same period in 2025 was impacted by the acquisition of Bremer.
The decrease in net interest margin on a fully taxable equivalent basis for the three months ended September 30, 2026 compared to the same period in 2025 was primarily due to deposit growth and lower yields on loans, partly offset by loan growth and core deposit pricing. The increase in net interest margin on a fully taxable equivalent basis for the nine months ended September 30, 2026 compared to the same period in 2025 was primarily due to the impact of Bremer, loan growth, and lower core deposit pricing, partly offset by deposit growth and lower yields on loans. The yield on interest earning assets decreased 29 basis points and the cost of interest-bearing liabilities decreased 22 basis points in the three months ended September 30, 2026 compared to the same quarter a year ago. The yield on interest earning assets decreased 14 basis points and the cost of interest-bearing liabilities decreased 23 basis points in the nine months ended September 30, 2026 compared to the same period a year ago.
Average earning assets increased $3.3 billion and $9.3 billion for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025 reflecting strong loan growth. In addition, the nine months ended September 30, 2026 was impacted by the acquisition of Bremer loans and securities acquired.
Average loans, including loans held-for-sale, increased $2.9 billion and $7.2 billion for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025 reflecting strong commercial and commercial real estate loan growth. The increase for the nine months ended September 30, 2026 compared to the same period in 2025 also reflected Bremer loans acquired.
Average noninterest-bearing deposits increased $105.8 million while average interest-bearing deposits increased $1.9 billion for the three months ended September 30, 2026 when compared to the same period in 2025 reflecting organic growth. Average noninterest-bearing deposits increased $1.7 billion while average interest-bearing deposits increased $5.7 billion for the nine months ended September 30, 2026 when compared to the same period in 2025 reflecting Bremer deposits assumed and organic growth.
Provision for Credit Losses
The following table details the components of the provision for credit losses:
Three Months Ended
September 30, 		% Nine Months Ended
September 30, 		%
(dollars in thousands) 2026 2025 Change 2026 2025 Change
Provision for credit losses on loans $ 33,237 $ 24,003 38.5 % $ 108,491 $ 154,292 (29.7) %
Provision (release) for credit losses on
unfunded loan commitments 		343 2,735 (87.5) (3,759) 10,684 (135.2)
Total provision for credit losses $ 33,580 $ 26,738 25.6 % $ 104,732 $ 164,976 (36.5) %
Net (charge-offs) recoveries on non-PCD
loans 		$ (29,970) $ (19,000) 57.7 % $ (78,421) $ (61,199) 28.1 %
Net (charge-offs) recoveries on PCD
loans 		(4,120) (11,038) (62.7) (19,932) (16,983) 17.4
Total net (charge-offs) recoveries on
loans 		$ (34,090) $ (30,038) 13.5 % $ (98,353) $ (78,182) 25.8 %
Net charge-offs (recoveries) to average
loans 		0.27 % 0.25 % 7.1 % 0.26 % 0.24 % 7.7
Total provision for credit losses on loans increased in the three months ended September 30, 2026 compared to the same period in 2025 primarily due to loan growth and higher net charge-offs. Total provision for credit losses on loans decreased in the nine months ended September 30, 2026 compared to the same period in 2025 primarily due to $75.6 million to establish an allowance for credit losses on non-PCD Bremer loans and unfunded loan commitments acquired in the nine months ended September 30, 2025, partly offset by loan growth. 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.
Noninterest Income
We generate revenues in the form of noninterest income through client fees, sales commissions, and gains and losses from our core banking franchise and other related businesses, such as wealth management, investment consulting, and investment products. The following table details the components in noninterest income:
Three Months Ended
September 30, 		% Nine Months Ended
September 30, 		%
(dollars in thousands) 2026 2025 Change 2026 2025 Change
Wealth and investment services fees $ 42,244 $ 39,684 6.5 % $ 124,057 $ 105,149 18.0 %
Service charges on deposit accounts 29,187 27,856 4.8 84,133 72,890 15.4
Debit card and ATM fees 13,325 13,197 1.0 38,455 36,110 6.5
Mortgage banking revenue 8,966 10,442 (14.1) 29,683 27,353 8.5
Capital markets income 12,348 12,629 (2.2) 35,693 24,249 47.2
Company-owned life insurance 7,326 7,565 (3.2) 23,418 19,571 19.7
Debt securities gains (losses), net 5 7 (28.6) 46 (110) (141.8)
Other income 15,045 19,081 (21.2) 68,871 71,560 (3.8)
Total noninterest income $ 128,446 $ 130,461 (1.5) % $ 404,356 $ 356,772 13.3 %
Noninterest income for the three months ended September 30, 2026 included a $0.9 million gain in other income associated with the settlement of the Bremer pension plan. Strong year-over-year growth in fee-based businesses
was partly offset by lower mortgage banking and capital markets volumes. In addition, other income was elevated for the three months ended September 30, 2025.
Noninterest income for the nine months ended September 30, 2026 included a $14.1 million gain in other income associated with the settlement of the Bremer pension plan. Noninterest income for the nine months ended September 30, 2025 included a $21.0 million gain in other income associated with the freezing of benefits of the Bremer pension plan. Excluding these gains, noninterest income increased $54.5 million for the nine months ended September 30, 2026, compared to the same period in 2025 driven by the acquisition of Bremer in May 2025, as well as organic growth of fee-based businesses.
Noninterest Expense
The following table details the components in noninterest expense:
Three Months Ended
September 30, 		% Nine Months Ended
September 30, 		%
(dollars in thousands) 2026 2025 Change 2026 2025 Change
Salaries and employee benefits $ 180,018 $ 211,345 (14.8) % $ 548,856 $ 561,762 (2.3) %
Occupancy 34,784 34,442 1.0 105,231 93,927 12.0
Equipment 11,326 12,703 (10.8) 34,478 34,170 0.9
Marketing 16,462 15,093 9.1 48,497 40,792 18.9
Technology 27,529 36,122 (23.8) 86,184 89,594 (3.8)
Communication 6,323 7,742 (18.3) 18,649 16,890 10.4
Professional fees 12,260 13,598 (9.8) 35,351 43,448 (18.6)
FDIC assessment 13,243 14,095 (6.0) 40,591 37,204 9.1
Amortization of intangibles 23,331 26,184 (10.9) 72,946 52,644 38.6
Amortization of tax credit investments 8,131 7,057 15.2 23,049 16,296 41.4
Other expense 21,973 67,353 (67.4) 78,413 112,244 (30.1)
Total noninterest expense $ 355,380 $ 445,734 (20.3) % $ 1,092,245 $ 1,098,971 (0.6) %
Noninterest expense included $0.7 million and $69.3 million of merger-related expenses for the three months ended September 30, 2026 and 2025, respectively. Excluding these expenses, noninterest expense decreased to $354.7 million for the three months ended September 30, 2026, compared to $376.5 million for the three months ended September 30, 2025. This decrease was driven primarily by disciplined expense management.
Noninterest expense included $20.1 million and $116.3 million of merger-related expenses for the nine months ended September 30, 2026 and 2025, respectively. Noninterest expense for the nine months ended September 30, 2026 also included a $3.4 million non-cash, pre-tax expense associated with the distribution of excess pension assets with the resolution of the legacy First Midwest plan. Excluding these expenses, noninterest expense increased to $1.1 billion for the nine months ended September 30, 2026, compared to $982.6 million for the nine months ended September 30, 2025. This increase was driven primarily by operating costs and additional amortization of intangibles related to the acquisition of Bremer.
Amortization of tax credit investments increased $1.1 million and $6.8 million for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025 primarily due to additional amortization related to the Bremer acquisition. In addition, the recognition of tax credit amortization expense is contingent upon the successful completion of the rehabilitation of a historic building or completion of a solar project within the reporting period. Many factors including weather, labor availability, building regulations, inspections, and other unexpected construction delays related to a rehabilitation project can cause a project to exceed its estimated completion date. See Note 9 to the consolidated financial statements for additional information on our tax credit investments.
Provision for Income Taxes
We record a provision for income taxes currently payable and for income taxes payable or benefits to be received in the future, which arise due to timing differences in the recognition of certain items for financial statement and income tax purposes. The major difference between the effective tax rate applied to our financial statement income and the federal statutory tax rate is caused by a tax benefit from our tax credit investments and interest on tax-exempt securities and loans. The effective tax rate was 21.6% and 21.4% for the three and nine months ended
September 30, 2026, respectively, compared to 21.5% and 20.6% for the three and nine months ended September 30, 2025, respectively. The increase in the effective tax rate for the nine months ended September 30, 2026 compared to the same period in 2025 reflected an increase in state income taxes. See Note 14 to the consolidated financial statements for additional information. In accordance with ASC 740-270, Accounting for Interim Reporting, the provision for income taxes was recorded at September 30, 2026 based on the current estimate of the effective annual rate.
FINANCIAL CONDITION
Overview
At September 30, 2026, our assets were $74.4 billion, a $2.3 billion increase compared to assets of $72.2 billion at December 31, 2025, reflective of strong loan growth.
Earning Assets
Our earning assets are comprised of investment securities, portfolio loans, loans held-for-sale, money market investments, interest-earning accounts with the Federal Reserve, and equity securities. Earning assets were $67.1 billion at September 30, 2026, a $2.2 billion increase compared to earning assets of $65.0 billion at December 31, 2025.
Investment Securities
We classify the majority of our investment securities as available-for-sale to give management the flexibility to sell the securities prior to maturity based on fluctuating interest rates or changes in our funding requirements.
The investment securities portfolio, including equity securities, was $14.8 billion at September 30, 2026, compared to $14.9 billion at December 31, 2025. Investment securities represented 22% of earning assets at September 30, 2026, compared to 23% at December 31, 2025. At September 30, 2026, we had no intent to sell any securities that were in an unrealized loss position nor is it expected that we would be required to sell the securities prior to their anticipated recovery.
The investment securities available-for-sale portfolio had net unrealized losses of $1.1 billion and $570.4 million at September 30, 2026 and December 31, 2025, respectively. The investment securities held-to-maturity portfolio had net unrealized losses of $559.0 million and $355.3 million at September 30, 2026 and December 31, 2025, respectively. Net unrealized losses in both portfolios increased during the nine months ended September 30, 2026 reflecting the impact of higher rates.
The investment securities available-for-sale portfolio including securities hedges had an effective duration of 4.65 at September 30, 2026, compared to 3.80 at December 31, 2025. The total investment securities portfolio had an effective duration of 5.15 at September 30, 2026, compared to 4.51 at December 31, 2025. Effective duration represents the percentage change in the fair value of the portfolio in response to a change in interest rates and is used to evaluate the portfolio's price volatility at a single point in time. Generally, there is more uncertainty in interest rates over a longer average maturity, resulting in a higher duration percentage. The weighted average yields on investment securities, on a taxable equivalent basis, were 4.19% and 4.12% for the three and nine months ended September 30, 2026, respectively, compared to 4.24% and 3.99% for the three and nine months ended September 30, 2025, respectively.
Loan Portfolio
We lend to consumer and commercial clients in many diverse industries including real estate rental and leasing, manufacturing, healthcare, wholesale trade, construction, and agriculture, among others. Old National manages concentrations of credit exposure by industry, product, geography, client relationship, and loan size. The following table presents the composition of the loan portfolio:
(dollars in thousands) September 30,
2026 		December 31,
2025 		$ Change % Change
Commercial $ 16,260,724 $ 14,983,861 $ 1,276,863 8.5 %
Commercial real estate 22,692,502 22,050,007 642,495 2.9
Residential real estate 8,770,515 8,467,496 303,019 3.6
Consumer 3,424,322 3,262,798 161,524 5.0
Total loans $ 51,148,063 $ 48,764,162 $ 2,383,901 4.9 %
The following table presents the composition of the loan portfolio by state:
(dollars in thousands) Commercial Commercial
Real Estate 		Residential
Real Estate 		Consumer Total
Loans 		Percent of
Total
September 30, 2026
Minnesota $ 2,674,771 $ 5,100,539 $ 1,870,987 $ 408,973 $ 10,055,270 20 %
Illinois 3,113,734 3,399,973 1,449,081 658,156 8,620,944 17 %
Indiana 1,879,476 1,906,985 1,100,280 993,707 5,880,448 11 %
Wisconsin 1,181,067 2,655,086 544,851 197,600 4,578,604 9 %
Michigan 876,523 1,381,135 639,659 282,560 3,179,877 6 %
Tennessee 464,512 1,232,853 334,266 232,355 2,263,986 4 %
Kentucky 388,272 616,456 270,088 415,683 1,690,499 3 %
North Dakota 442,799 922,152 130,603 31,768 1,527,322 3 %
Texas 435,633 778,031 283,793 10,734 1,508,191 3 %
Florida 366,897 620,757 339,406 35,855 1,362,915 3 %
Ohio 646,790 461,093 10,987 17,976 1,136,846 2 %
Other 3,790,250 3,617,442 1,796,514 138,955 9,343,161 18 %
Total $ 16,260,724 $ 22,692,502 $ 8,770,515 $ 3,424,322 $ 51,148,063 100 %
Geographic location in the preceding table is determined by collateral location for real estate loans and borrower location for non-real estate loans.
Commercial and Commercial Real Estate Loans
Commercial and commercial real estate loans are the largest classifications within earning assets, representing 58% at September 30, 2026, compared to 57% at December 31, 2025. At September 30, 2026, commercial and commercial real estate loans were $39.0 billion, an increase of $1.9 billion from December 31, 2025 driven primarily by disciplined commercial loan production.
The following table provides detail on commercial loans by industry classification (as defined by the North American Industry Classification System) and by loan size.
September 30, 2026 December 31, 2025
(dollars in thousands) Outstanding
Exposure(1)
Nonaccrual Outstanding
Exposure(1)
Nonaccrual
By Industry:
Health care and social assistance $ 3,084,527 $ 3,835,798 $ 10,466 $ 2,805,380 $ 3,464,934 $ 24,489
Manufacturing 2,761,140 4,244,009 17,831 2,139,977 3,614,096 16,915
Real estate rental and leasing 1,450,177 1,996,951 19,618 1,518,886 2,274,601 25,021
Construction 1,228,698 2,468,543 12,209 1,064,375 2,333,033 6,996
Wholesale trade 1,133,903 1,895,083 1,728 1,049,963 1,927,612 4,154
Accommodation and food services 1,103,447 1,307,291 42,354 1,159,348 1,422,249 19,153
Professional, scientific, and
technical services 		860,443 1,406,954 4,705 795,520 1,367,099 6,298
Agriculture, forestry, fishing,
and hunting 		705,091 1,008,333 307 776,845 1,126,107 5,393
Finance and insurance 696,955 1,438,537 303 678,034 1,305,205 317
Retail trade 523,048 759,679 10,336 486,717 777,389 13,121
Administrative and support and
waste management and
remediation services 		488,439 690,330 33,848 440,155 667,738 4,552
Transportation and warehousing 378,286 505,033 16,268 474,426 634,311 29,733
Arts, Entertainment, and Recreation 355,617 480,667 9,015 303,815 419,632 3,153
Educational services 322,378 476,615 2 295,001 472,694 8
Public administration 293,010 317,894 - 306,621 344,205 -
Other services 263,857 417,360 14,249 270,337 435,139 11,969
Other 611,708 1,037,728 12,827 418,461 886,189 2,570
Total $ 16,260,724 $ 24,286,805 $ 206,066 $ 14,983,861 $ 23,472,233 $ 173,842
By Loan Size:
Less than $200,000 2 % 2 % 2 % 5 % 3 % 10 %
$200,000 to $1,000,000 9 9 9 12 10 16
$1,000,000 to $5,000,000 19 21 35 25 24 42
$5,000,000 to $10,000,000 14 14 13 17 16 21
$10,000,000 to $25,000,000 26 25 16 23 25 11
Greater than $25,000,000 30 29 25 18 22 -
Total 100 % 100 % 100 % 100 % 100 % 100 %
(1) Includes unfunded loan commitments.
The following table provides detail on commercial real estate loans classified by property type.
September 30, 2026 December 31, 2025
(dollars in thousands) Outstanding
Exposure(1)
Nonaccrual Outstanding
Exposure(1)
Nonaccrual
By Property Type:
Multifamily $ 6,842,761 $ 8,498,527 $ 43,770 $ 6,648,859 $ 7,978,053 $ 104,993
Warehouse / Industrial 4,571,417 4,884,140 10,151 4,180,226 4,481,580 5,144
Retail 3,239,412 3,401,329 22,645 3,225,434 3,373,296 21,636
Office 2,978,644 3,178,883 43,514 2,705,874 2,891,180 49,201
Senior housing 1,166,377 1,184,443 9,164 1,269,488 1,307,281 29,723
Single family 567,516 587,691 1,858 616,035 632,748 4,826
Other (2)
3,326,375 3,588,405 17,064 3,404,091 3,694,867 30,737
Total $ 22,692,502 $ 25,323,418 $ 148,166 $ 22,050,007 $ 24,359,005 $ 246,260
(1) Includes unfunded loan commitments.
(2) Other includes commercial development, agriculture real estate, hotels, self-storage, land development, religion, and mixed-use properties.
The mix of properties securing the loans in our commercial real estate portfolio is comprised of owner-occupied and non-owner-occupied categories and is diverse in terms of type and geographic location, generally within the
Company's primary market area. Approximately 27% of the commercial real estate portfolio is owner-occupied at September 30, 2026, compared to 29% at December 31, 2025.
The Company actively reviews its broader loan portfolio in the normal course of business and has performed a targeted review of contractual maturities in its non-owner-occupied commercial real estate portfolio as part of its response to current market conditions to identify exposure to credit risk associated with renewals. At September 30, 2026, the Company held $540.1 million of non-owner-occupied commercial real estate loans, or 1% of total loans, that mature within 18 months with an interest rate below 4%.
Residential Real Estate Loans
At September 30, 2026, residential real estate loans held in our loan portfolio were $8.8 billion, an increase of $303.0 million compared to December 31, 2025. Changes in interest rates may impact the number of refinancings and new originations of residential real estate loans. If interest rates decrease in the future, there may be an increase in refinancings and new originations of residential real estate loans. Conversely, future increases in interest rates may result in a decline in the level of refinancings and new originations of residential real estate loans.
Consumer Loans
Consumer loans, including automobile loans, personal, and home equity loans and lines of credit, increased $161.5 million to $3.4 billion at September 30, 2026 compared to December 31, 2025.
Funding
The following table summarizes Old National's total funding, comprised of deposits and wholesale borrowings:
(dollars in thousands) September 30,
2026 		December 31,
2025 		$ Change % Change
Deposits:
Noninterest-bearing demand $ 12,847,561 $ 13,247,483 $ (399,922) (3.0) %
Interest-bearing:
Checking and NOW 11,177,144 10,740,919 436,225 4.1 %
Savings 4,812,222 4,909,138 (96,916) (2.0) %
Money market 17,949,816 16,529,631 1,420,185 8.6 %
Time deposits 10,852,364 9,661,024 1,191,340 12.3 %
Total deposits 57,639,107 55,088,195 2,550,912 4.6 %
Wholesale borrowings:
Federal funds purchased and interbank borrowings 484 100,197 (99,713) (99.5) %
Securities sold under agreements to repurchase 240,698 261,366 (20,668) (7.9) %
Federal Home Loan Bank advances 5,484,611 6,237,375 (752,764) (12.1) %
Other borrowings 1,408,438 852,429 556,009 65.2 %
Total wholesale borrowings 7,134,231 7,451,367 (317,136) (4.3) %
Total funding $ 64,773,338 $ 62,539,562 $ 2,233,776 3.6 %
The increase in total deposits was due to organic growth. We use wholesale funding to augment deposit funding and to help maintain our desired interest rate risk position. Wholesale funding as a percentage of total funding was 11% at September 30, 2026, compared to 12% at December 31, 2025. The increase in other borrowings was due to the issuance and sale of $450.0 million aggregate principal amount of subordinated notes in January 2026. The Company intends to use the net proceeds from this offering for general corporate purposes.
Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities at September 30, 2026 increased $237.8 million compared to December 31, 2025 primarily due to higher derivative liabilities.
Capital
Shareholders' equity totaled $8.3 billion at September 30, 2026, compared to $8.5 billion at December 31, 2025. Retained earnings were offset by changes in unrealized losses on available-for-sale investment securities that decreased equity by $423.5 million, the repurchase of 12.2 million shares of Common Stock under share repurchase plans that were approved by the Company's Board of Directors, which reduced equity by $301.6 million, and
dividends totaling $179.1 million during the nine months ended September 30, 2026. As of September 30, 2026, Old National had remaining authorization to repurchase up to $176.6 million of its outstanding Common Stock through February 28, 2027.
Capital Adequacy
Old National and the banking industry are subject to various regulatory capital requirements administered by the federal banking agencies. At September 30, 2026, Old National and its bank subsidiary exceeded the regulatory minimums, and Old National Bank met the regulatory definition of "well-capitalized" based on the most recent regulatory definition.
Old National's consolidated capital position remains strong as evidenced by the following key industry ratios.
Regulatory
Guidelines
Minimum 		Prompt
Corrective
Action "Well
Capitalized"
Guidelines 		September 30,
2026 		December 31,
2025
Tier 1 capital to total average assets (leverage
ratio) 		4.00 % N/A % 8.98 % 8.90 %
Common equity Tier 1 capital to risk-weighted
total assets 		7.00 N/A 11.11 11.08
Tier 1 capital to risk-weighted total assets 8.50 6.00 11.54 11.53
Total capital to risk-weighted total assets 10.50 10.00 13.59 12.85
Shareholders' equity to assets N/A N/A 11.15 11.77
Old National Bank, Old National's bank subsidiary, maintained a strong capital position as evidenced by the following key industry ratios.
Regulatory
Guidelines
Minimum 		Prompt
Corrective
Action "Well
Capitalized"
Guidelines 		September 30,
2026 		December 31,
2025
Tier 1 capital to total average assets (leverage
ratio) 		4.00 % 5.00 % 8.90 % 8.52 %
Common equity Tier 1 capital to risk-weighted
total assets 		7.00 6.50 11.45 11.05
Tier 1 capital to risk-weighted total assets 8.50 8.00 11.45 11.05
Total capital to risk-weighted total assets 10.50 10.00 12.35 12.00
Management views stress testing as an integral part of the Company's risk management and strategic planning activities. Old National performs stress testing periodically throughout the year. The primary objective of the stress testing is to ensure that Old National has a robust, forward-looking stress testing process and maintains sufficient capital to continue operations throughout times of economic and financial stress. Management also uses the stress testing framework to evaluate decisions relating to pricing, loan concentrations, capital deployment, and mergers and acquisitions to ensure that strategic decisions align with Old National's risk appetite statement. Old National's stress testing process incorporates key risks that include strategic, market, liquidity, credit, operational, information security and technology, talent management, and compliance/regulatory/legal risks. Old National's stress testing policy outlines steps that will be taken if stress test results do not meet internal thresholds under severely adverse economic scenarios.
RISK MANAGEMENT
Overview
Old National has adopted a Risk Appetite Statement to enable our Board of Directors, Enterprise Risk Committee of our Board, Executive Leadership Team, and Senior Management to better assess, understand, monitor, and mitigate Old National's risks. The Risk Appetite Statement addresses the following major risks: strategic, market, liquidity, credit, operational, information security and technology, talent management, and regulatory/legal/compliance. Our Chief Risk Officer provides quarterly reports to the Board's Enterprise Risk Committee on various risk topics. The
following discussion addresses certain of these major risks including credit, market, and liquidity. Discussion of strategic, talent management, operational, information security and technology, and regulatory/legal/compliance risks is provided in the section entitled "Risk Factors" in the Company's 2025 Annual Report on Form 10-K.
Credit Risk
Credit risk represents the risk of loss arising from an obligor's inability or failure to meet contractual payment or performance terms. Our primary credit risks result from our investment and lending activities.
Asset Quality
We lend to consumer and commercial clients in many diverse industries including, among others, real estate rental and leasing, manufacturing, healthcare, wholesale trade, construction, and agriculture. Old National manages concentrations of credit exposure by industry, product, geography, client relationship, and loan size. At September 30, 2026, our average commercial loan size was approximately $969,000 and our average commercial real estate loan size was approximately $1,731,000. At September 30, 2026, we had minimal exposure to foreign borrowers and no sovereign debt. Our policy is to concentrate our lending activity in the geographic market areas we serve, primarily in the Midwest and Southeast regions of the United States.
The following table presents a summary of under-performing assets as well as criticized and classified assets:
(dollars in thousands) September 30,
2026 		December 31,
2025
Nonaccrual loans $ 470,196 $ 521,245
Past due loans (90 days or more and still accruing) 4,079 2,691
Foreclosed assets 2,885 6,235
Total under-performing assets $ 477,160 $ 530,171
Classified loans (includes nonaccrual, past due 90 days
or more, and other problem loans) 		$ 2,211,963 $ 2,283,157
Other classified assets (1)
6,861 20,616
Special mention loans 608,806 805,901
Total criticized and classified assets $ 2,827,630 $ 3,109,674
Asset Quality Ratios:
Nonaccrual loans/total loans (2)
0.92 % 1.07 %
Under-performing assets/total loans (2)
0.93 1.09
Under-performing assets/total assets 0.64 0.73
Allowance for credit losses on loans/under-performing assets 121.48 107.42
Allowance for credit losses on loans/nonaccrual loans 123.28 109.26
(1)Includes investment securities that fell below investment grade rating.
(2)Loans exclude loans held-for-sale.
Under-performing assets decreased to $477.2 million at September 30, 2026, compared to $530.2 million at December 31, 2025. Under-performing assets as a percentage of total loans at September 30, 2026 were 0.93%, a 16 basis points decrease from 1.09% at December 31, 2025.
Nonaccrual loans decreased $51.0 million from December 31, 2025 to September 30, 2026 driven by active portfolio management. As a percentage of nonaccrual loans, the allowance for credit losses on loans was 123.28% at September 30, 2026, compared to 109.26% at December 31, 2025.
Total criticized and classified assets were $2.8 billion at September 30, 2026, a decrease of $282.0 million from December 31, 2025. Other classified assets include investment securities that fell below investment grade rating totaling $6.9 million at September 30, 2026, compared to $20.6 million at December 31, 2025.
Allowance for Credit Losses on Loans and Unfunded Commitments
Net charge-offs on loans totaled $34.1 million during the three months ended September 30, 2026, compared to $30.0 million for the same period in 2025. Annualized, net charge-offs to average loans were 0.27% and 0.25% for the three months ended September 30, 2026 and 2025, respectively. Annualized, net charge-offs to average loans
excluding PCD loans were 0.24% and 0.17% for the three months ended September 30, 2026 and 2025, respectively. Net charge-offs on loans totaled $98.4 million during the nine months ended September 30, 2026, compared to $78.2 million for the same period in 2025. Annualized, net charge-offs to average loans were 0.26% and 0.24% for the nine months ended September 30, 2026 and 2025, respectively. Annualized, net charge-offs to average loans excluding PCD loans were 0.22% and 0.20% for the nine months ended September 30, 2026 and 2025, respectively.
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 are utilized in underwriting new loans and in our process for estimating expected credit losses. Expected credit loss inherent in non-cancelable off-balance-sheet credit exposures (unfunded loan commitments) is accounted for as a separate liability included in other liabilities on the balance sheet. The allowance for credit losses on loans held for investment and unfunded loan commitments is adjusted by a credit loss expense, which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries. Accrued interest receivable is excluded from the estimate of credit losses.
The allowance for credit loss estimation process involves procedures to consider the unique characteristics of our loan portfolio segments. These segments are further disaggregated into loan classes based on the level at which credit risk of the loan is monitored. When computing the level of expected credit losses, credit loss assumptions 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. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense in those future periods.
The allowance level is influenced by loan volumes, loan AQR migration or delinquency status, changes in historical loss experience, and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses on loans has two basic components: first, an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans; and second, a pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics.
During the third quarter of 2026, the Company completed a recalibration of its estimated credit loss models, incorporating additional loan performance history, enhancements to the expected cash flows assumptions, and multiple forward-looking economic forecasts, which did not have a material impact on the overall allowance for loan loss coverage or the related significant accounting policy.
The allowance for credit losses on loans was $579.7 million at September 30, 2026, compared to $569.5 million at December 31, 2025. 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.
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 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. The allowance for credit losses on unfunded loan commitments totaled $31.9 million at September 30, 2026, compared to $35.6 million at December 31, 2025.
See the section entitled "Risk Factors" in the Company's 2025 Annual Report on Form 10-K for further discussion of our credit risk.
Market Risk
Market risk is the risk that the estimated fair value of our assets, liabilities, and derivative financial instruments will decline as a result of changes in interest rates or financial market volatility, or that our net income will be significantly reduced by interest rate changes.
The objective of our interest rate management process is to maximize net interest income while operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity.
Potential cash flows, sales, or replacement value of many of our assets and liabilities, especially those that earn or pay interest, are sensitive to changes in the general level of interest rates. This interest rate risk arises primarily from our normal business activities of gathering deposits and extending loans. Many factors affect our exposure to changes in interest rates, such as general economic and financial conditions, client preferences, historical pricing relationships, and re-pricing characteristics of financial instruments. Our earnings can also be affected by the monetary and fiscal policies of the U.S. Government and its agencies, particularly the Federal Reserve.
In managing interest rate risk, we establish guidelines for asset and liability management, including measurement of short and long-term sensitivities to changes in interest rates, which are reviewed with the Enterprise Risk Committee of our Board of Directors. Based on the results of our analysis, we may use different techniques to manage changing trends in interest rates including:
•adjusting balance sheet mix or altering interest rate characteristics of assets and liabilities;
•changing product pricing strategies;
•modifying characteristics of the investment securities portfolio; or
•using derivative financial instruments, to a limited degree.
A key element in our ongoing process is to measure and monitor interest rate risk using a model to quantify the likely impact of changing interest rates on Old National's results of operations. The model quantifies the effects of various possible interest rate scenarios on projected net interest income. The model measures the impact on net interest income relative to a base case scenario over a two-year cumulative horizon resulting from an immediate change in interest rates using multiple rate scenarios. The base case scenario assumes that the balance sheet and interest rates are held at current levels. The model shows our projected net interest income sensitivity based on interest rate changes only and does not consider other forecast assumptions. The net interest income projections across all interest rate scenarios include the expected impact of purchase accounting accretion due to recent acquisitions. Due to the dynamics of future interest rate expectations, we also measure and monitor interest rate risk using the forward curve, which may be a more probable scenario of our interest rate exposure. The forward curve represents the relationship between the price of forward contracts and the time to maturity of the forward contracts at a point in time.
The following table illustrates our projected net interest income sensitivity over a two-year cumulative horizon based on the asset/liability model at September 30, 2026 and 2025:
Immediate Rate Decrease
September 30, 2026
Forward
Curve
Immediate Rate Increase
(dollars in thousands) -300
Basis Points 		-200
Basis Points 		-100
Basis Points 		Base +100
Basis Points 		+200
Basis Points 		+300
Basis Points
September 30, 2026
Projected interest income:
Money market, other
interest earning
investments, and
investment
securities 		$ 1,171,485 $ 1,303,214 $ 1,444,466 $ 1,571,590 $ 1,529,976 $ 1,606,105 $ 1,677,606 $ 1,744,576
Loans 4,302,521 4,959,533 5,611,822 6,737,122 6,268,470 6,904,565 7,531,105 8,152,199
Total interest
income 		5,474,006 6,262,747 7,056,288 8,308,712 7,798,446 8,510,670 9,208,711 9,896,775
Projected interest expense:
Deposits 445,823 843,205 1,344,249 2,241,814 1,879,972 2,365,693 2,851,424 3,337,151
Borrowings 410,203 571,791 750,415 1,047,023 933,294 1,105,108 1,276,913 1,448,739
Total interest
expense 		856,026 1,414,996 2,094,664 3,288,837 2,813,266 3,470,801 4,128,337 4,785,890
Net interest
income 		$ 4,617,980 $ 4,847,751 $ 4,961,624 $ 5,019,875 $ 4,985,180 $ 5,039,869 $ 5,080,374 $ 5,110,885
Change from base $ (367,200) $ (137,429) $ (23,556) $ 34,695 $ 54,689 $ 95,194 $ 125,705
% change from base (7.37) % (2.76) % (0.47) % 0.70 % 1.10 % 1.91 % 2.52 %
Immediate Rate Decrease
September 30, 2025
Forward
Curve
Immediate Rate Increase
-300
Basis Points 		-200
Basis Points 		-100
Basis Points 		Base +100
Basis Points 		+200
Basis Points 		+300
Basis Points
September 30, 2025
Projected interest income:
Money market, other
interest earning
investments, and
investment
securities 		$ 999,607 $ 1,133,037 $ 1,243,065 $ 1,326,205 $ 1,347,047 $ 1,414,490 $ 1,465,366 $ 1,513,792
Loans 4,111,169 4,724,332 5,322,745 5,531,692 5,903,821 6,465,088 7,016,893 7,565,404
Total interest
income 		5,110,776 5,857,369 6,565,810 6,857,897 7,250,868 7,879,578 8,482,259 9,079,196
Projected interest expense:
Deposits 461,733 864,580 1,307,043 1,456,812 1,773,997 2,227,048 2,656,621 3,086,179
Borrowings 398,856 528,388 658,503 721,198 806,401 963,163 1,119,933 1,276,636
Total interest
expense 		860,589 1,392,968 1,965,546 2,178,010 2,580,398 3,190,211 3,776,554 4,362,815
Net interest
income 		$ 4,250,187 $ 4,464,401 $ 4,600,264 $ 4,679,887 $ 4,670,470 $ 4,689,367 $ 4,705,705 $ 4,716,381
Change from base $ (420,283) $ (206,069) $ (70,206) $ 9,417 $ 18,897 $ 35,235 $ 45,911
% change from base (9.00) % (4.41) % (1.50) % 0.20 % 0.40 % 0.75 % 0.98 %
The following table illustrates the upper bound, Federal Funds Rate assumed in the simulation above at September 30, 2026 and 2025:
September 30, 2026 September 30, 2025
Basis Point Change Scenario
Federal Funds
Rate (1)
Month 12 (2)
Federal Funds
Rate (1)
Month 12 (2)
+300 4.00 % 7.00 % 4.25 % 7.25 %
+200 4.00 % 6.00 % 4.25 % 6.25 %
+100 4.00 % 5.00 % 4.25 % 5.25 %
Base 4.00 % 4.00 % 4.25 % 4.25 %
-100 4.00 % 3.00 % 4.25 % 3.25 %
-200 4.00 % 2.00 % 4.25 % 2.25 %
-300 4.00 % 1.00 % 4.25 % 1.25 %
(1)Represents the upper bound, Federal Funds Rate.
(2)Represents the Federal Funds Rate in month 12 given a gradual, parallel "ramp" relative to the base implied forward scenario.
Our projected net interest income increased year over year driven by the Bremer acquisition, loan growth, and asset repricing due to current interest rates and economic conditions. Our overall strategy is consistent period over period, as we continue to manage our balance sheet toward a neutral interest rate risk position in a disciplined manner.
A key element in the measurement and modeling of interest rate risk is the re-pricing assumptions of our transaction deposit accounts, which align with our approach to deposit pricing and are consistent period over period. Because the models are driven by expected behavior in various interest rate scenarios and many factors besides market interest rates affect our net interest income, we recognize that model outputs are not guarantees of actual results. For this reason, we model many different combinations of interest rates and balance sheet assumptions to understand our overall sensitivity to market interest rate changes, including shocks, ramps, yield curve flattening, yield curve steepening, as well as forecasts of likely interest rate scenarios tested.
We use cash flow and fair value hedges, primarily interest rate swaps, collars, and floors, to mitigate interest rate risk. Derivatives designated as hedging instruments were in a net liability position with a fair value loss of $74.7 million at September 30, 2026, compared to a net asset position with a fair value gain of $14.8 million at December 31, 2025. See Note 15 to the consolidated financial statements for further discussion of derivative financial instruments.
Liquidity Risk
Liquidity risk arises from the possibility that we may not be able to satisfy current or future financial commitments or may become unduly reliant on alternative funding sources. We establish liquidity risk guidelines that we review with the Enterprise Risk Committee of our Board of Directors and monitor through our Asset/Liability Executive Management Committee. The objective of liquidity management is to ensure we have the ability to fund balance sheet growth and meet deposit and debt obligations in a timely and cost-effective manner. Management monitors liquidity through a regular review of asset and liability maturities, funding sources, and loan and deposit forecasts. We maintain strategic and contingency liquidity plans to ensure sufficient available funding to satisfy requirements for balance sheet growth, to properly manage capital markets' funding sources, and to address unexpected liquidity requirements. On May 28, 2026, we filed an automatic shelf registration statement with the SEC that permits us to issue an unspecified amount of debt or equity securities.
Loan repayments and maturing investment securities are a relatively predictable source of funds. However, deposit flows, calls of investment securities, and prepayments of loans and mortgage-related securities are not as predictable as they are strongly influenced by interest rates, events at other banking organizations, the housing market, general and local economic conditions, competition in the marketplace, and other factors. We continually monitor marketplace trends to identify patterns that might improve the predictability of the timing of deposit flows or asset prepayments.
A maturity schedule for Old National Bank's time deposits is shown in the following table at September 30, 2026.
(dollars in thousands)
Maturity Bucket Amount Rate
2026 $ 3,917,561 4.92 %
2027 6,484,226 3.66
2028 356,248 3.69
2029 44,730 2.58
2030 22,647 4.11
2031 and beyond
26,952 3.45
Total $ 10,852,364 4.12 %
Our ability to acquire funding at competitive prices is influenced by rating agencies' views of our credit quality, liquidity, capital, and earnings.
The credit ratings of Old National and Old National Bank at September 30, 2026 are shown in the following table.
Moody's Investors Service
Long-term Short-term
Old National Baa1 N/A
Old National Bank A1 P-1
Old National Bank maintains relationships in capital markets with brokers and dealers to issue certificates of deposit and short-term and medium-term bank notes as well. At September 30, 2026, Old National and its subsidiaries had the following availability of liquid funds and borrowings:
(dollars in thousands) September 30, 2026
Available liquid funds:
Cash and due from banks $ 1,679,028
Unencumbered government-issued debt securities 5,788,049
Unencumbered investment grade municipal securities 86,555
Unencumbered corporate securities 30,149
Availability of borrowings*:
Amount available from Federal Reserve discount window 4,187,004
Amount available from Federal Home Loan Bank 8,999,779
Total available funds $ 20,770,564
* Based on collateral pledged
Old National Bancorp has routine funding requirements consisting primarily of operating expenses, dividends to shareholders, debt service, net derivative cash flows, and funds used for acquisitions. Old National Bancorp can obtain funding to meet its obligations from dividends and management fees collected from its subsidiaries, operating line of credit, and through the issuance of debt securities. Additionally, Old National Bancorp has a shelf registration in place with the SEC permitting ready access to the public debt and equity markets. At September 30, 2026, Old National Bancorp's other borrowings outstanding were $648.3 million. Management believes the Company has the ability to generate and obtain adequate amounts of liquidity to meet its requirements in the short-term and the long-term.
Federal banking laws regulate the amount of dividends that may be paid by Old National Bank to Old National Bancorp on an unconsolidated basis without obtaining prior regulatory approval. Prior regulatory approval is required if dividends to be declared in any year would exceed net earnings of the current year plus retained net profits for the preceding two years. Prior regulatory approval to pay dividends was not required in 2025 and is not currently required.
CRITICAL ACCOUNTING ESTIMATES
Our most significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. Certain of these accounting policies require management to use significant judgment and estimates, which can have a material impact on the carrying value of certain assets and liabilities. We consider these policies to be our critical accounting estimates. The judgment and assumptions made are based upon historical experience, future forecasts, or other factors that management believes to be reasonable under the circumstances. Because of the nature of the judgment and assumptions, actual results could differ from estimates, which could have a material effect on our financial condition and results of operations.
For additional information regarding critical accounting estimates, see the section titled "Critical Accounting Estimates" included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes in the Company's application of critical accounting estimates since December 31, 2025.
Old National Bancorp published this content on October 28, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 28, 2026 at 15:03 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]