Old National Bancorp

07/29/2026 | Press release | Distributed by Public on 07/29/2026 09:03

Quarterly Report for Quarter Ending June 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 six months ended June 30, 2026 compared to the same period in 2025, and financial condition as of June 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) 		June 30, March 31, December 31, September 30, June 30,
2026 2026 2025 2025 2025
Income Statement:
Net interest income $ 578,988 $ 572,573 $ 580,832 $ 574,609 $ 514,790
Taxable equivalent adjustment (1) (3)
7,510 7,849 8,013 7,975 7,063
Net interest income - taxable equivalent basis (3)
586,498 580,422 588,845 582,584 521,853
Provision for credit losses 36,206 34,946 32,745 26,738 106,835
Noninterest income 153,564 122,346 109,759 130,461 132,517
Noninterest expense 372,161 364,704 386,320 445,734 384,766
Net income applicable to common shareholders 249,381 229,638 212,589 178,533 121,375
Per Common Share Data:
Weighted average diluted common shares 383,273 388,054 389,550 390,496 361,436
Net income (diluted) $ 0.65 $ 0.59 $ 0.55 $ 0.46 $ 0.34
Cash dividends 0.145 0.145 0.14 0.14 0.14
Common dividend payout ratio (2)
22 % 25 % 25 % 30 % 41 %
Book value $ 21.80 $ 21.40 $ 21.17 $ 20.64 $ 20.12
Stock price 25.90 22.10 22.31 21.95 21.34
Tangible common book value (3)
14.32 13.93 13.71 13.15 12.60
Performance Ratios:
Return on average assets 1.38 % 1.29 % 1.21 % 1.03 % 0.77 %
Return on average common equity 12.07 11.07 10.44 9.01 6.74
Return on average tangible common equity (3)
19.84 18.41 17.76 15.87 12.00
Net interest margin (3)
3.54 3.55 3.65 3.64 3.53
Efficiency ratio (3)
47.04 48.25 51.58 58.84 55.80
Net charge-offs to average loans 0.26 0.26 0.27 0.25 0.24
Allowance for credit losses on loans to ending loans 1.14 1.15 1.17 1.19 1.18
Allowance for credit losses (4) to ending loans
1.21 1.22 1.24 1.26 1.24
Non-performing loans to ending loans 0.91 1.03 1.07 1.23 1.24
Balance Sheet:
Total loans $ 50,772,584 $ 49,731,844 $ 48,764,162 $ 47,967,915 $ 47,902,819
Total assets 74,189,417 73,002,651 72,151,967 71,210,162 70,979,805
Total deposits 56,146,770 55,672,472 55,088,195 55,006,184 54,357,683
Total borrowed funds 8,423,983 7,823,198 7,451,367 6,766,381 7,346,098
Total shareholders' equity 8,583,843 8,510,653 8,494,788 8,309,271 8,126,387
Capital Ratios:
Risk-based capital ratios:
Tier 1 common equity 11.09 % 11.11 % 11.08 % 11.02 % 10.74 %
Tier 1 11.53 11.56 11.53 11.49 11.20
Total 13.65 13.71 12.85 12.78 12.59
Leverage ratio (to average assets) 8.95 8.93 8.90 8.72 9.26
Total equity to assets (averages) 11.61 11.79 11.73 11.48 11.38
Tangible common equity to tangible assets (3)
7.68 7.67 7.72 7.53 7.26
Nonfinancial Data:
Full-time equivalent employees 4,914 4,948 4,971 5,243 5,313
Banking centers 346 346 346 351 351
(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:
Six Months Ended June 30,
(dollars and shares in thousands, except per share data) 2026 2025
Income Statement:
Net interest income $ 1,151,561 $ 902,433
Taxable equivalent adjustment (1) (3)
15,359 12,423
Net interest income - taxable equivalent basis (3)
1,166,920 914,856
Provision for credit losses 71,152 138,238
Noninterest income 275,910 226,311
Noninterest expense 736,865 653,237
Net income applicable to common shareholders 479,019 262,000
Per Common Share Data:
Weighted average diluted common shares 385,697 340,250
Net income (diluted) $ 1.24 $ 0.77
Cash dividends 0.29 0.28
Common dividend payout ratio (2)
23 % 36 %
Book value $ 21.80 $ 20.12
Stock price 25.90 21.34
Tangible common book value (3)
14.32 12.60
Performance Ratios:
Return on average assets 1.34 % 0.91 %
Return on average common equity 11.57 7.83
Return on average tangible common equity (3)
19.13 13.39
Net interest margin (3)
3.54 3.41
Efficiency ratio (3)
47.63 54.92
Net charge-offs to average loans 0.26 0.24
Allowance for credit losses on loans to ending loans 1.14 1.18
Allowance for credit losses (4) to ending loans
1.21 1.24
Non-performing loans to ending loans 0.91 1.24
Balance Sheet:
Total loans $ 50,772,584 $ 47,902,819
Total assets 74,189,417 70,979,805
Total deposits 56,146,770 54,357,683
Total borrowed funds 8,423,983 7,346,098
Total shareholders' equity 8,583,843 8,126,387
Capital Ratios:
Risk-based capital ratios:
Tier 1 common equity 11.09 % 10.74 %
Tier 1 11.53 11.20
Total 13.65 12.59
Leverage ratio (to average assets) 8.95 9.26
Total equity to assets (averages) 11.70 11.66
Tangible common equity to tangible assets (3)
7.68 7.26
(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, 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) 		June 30, March 31, December 31, September 30, June 30,
2026 2026 2025 2025 2025
Net income per common share:
Net income applicable to common shares $ 249,381 $ 229,638 $ 212,589 $ 178,533 $ 121,375
Adjustments:
Merger-related charges 12,109 7,323 24,547 69,274 41,206
Pension plan (gain) loss (13,240) - 15,878 - (21,001)
Debt securities (gains) losses 34 (75) (73) (7) 41
Distribution of excess pension assets expense - 3,394 - - -
FDIC special assessment - - (2,994) - -
CECL Day 1 non-PCD provision expense - - - - 75,604
Less: tax effect on net total adjustments (2)
2,091 (2,630) (8,973) (16,492) (26,372)
Net income applicable to common shares, adjusted (1)
$ 250,375 $ 237,650 $ 240,974 $ 231,308 $ 190,853
Weighted average diluted common shares outstanding 383,273 388,054 389,550 390,496 361,436
Net income per common share, diluted $ 0.65 $ 0.59 $ 0.55 $ 0.46 $ 0.34
Adjusted net income per common share, diluted (1)
$ 0.65 $ 0.61 $ 0.62 $ 0.59 $ 0.53
Tangible common book value:
Shareholders' common equity $ 8,340,124 $ 8,266,934 $ 8,251,069 $ 8,065,552 $ 7,882,668
Deduct: Goodwill and intangible assets 2,862,427 2,886,419 2,907,986 2,926,960 2,944,372
Tangible shareholders' common equity (1)
$ 5,477,697 $ 5,380,515 $ 5,343,083 $ 5,138,592 $ 4,938,296
Period end common shares 382,537 386,315 389,662 390,768 391,818
Tangible common book value (1)
$ 14.32 $ 13.93 $ 13.71 $ 13.15 $ 12.60
Return on average tangible common equity:
Net income applicable to common shares $ 249,381 $ 229,638 $ 212,589 $ 178,533 $ 121,375
Add: Intangible amortization (net of tax) (2)
17,994 19,217 19,512 19,638 14,722
Tangible net income (1)
$ 267,375 $ 248,855 $ 232,101 $ 198,171 $ 136,097
Average shareholders' common equity $ 8,264,486 $ 8,300,501 $ 8,147,348 $ 7,924,856 $ 7,208,397
Deduct: Average goodwill and intangible assets 2,873,898 2,894,824 2,919,924 2,931,319 2,670,710
Average tangible shareholders' common equity (1)
$ 5,390,588 $ 5,405,677 $ 5,227,424 $ 4,993,537 $ 4,537,687
Return on average tangible common equity (1)
19.84 % 18.41 % 17.76 % 15.87 % 12.00 %
Net interest margin:
Net interest income $ 578,988 $ 572,573 $ 580,832 $ 574,609 $ 514,790
Taxable equivalent adjustment 7,510 7,849 8,013 7,975 7,063
Net interest income - taxable equivalent basis (1)
$ 586,498 $ 580,422 $ 588,845 $ 582,584 $ 521,853
Average earning assets $ 66,341,949 $ 65,433,548 $ 64,456,815 $ 64,032,811 $ 59,061,249
Net interest margin (1)
3.54 % 3.55 % 3.65 % 3.64 % 3.53 %
Efficiency ratio:
Noninterest expense $ 372,161 $ 364,704 $ 386,320 $ 445,734 $ 384,766
Deduct: Intangible amortization expense 23,992 25,623 26,016 26,184 19,630
Noninterest expense excluding intangible
amortization expense (1)
$ 348,169 $ 339,081 $ 360,304 $ 419,550 $ 365,136
Net interest income - taxable equivalent basis (1)
(see above)
$ 586,498 $ 580,422 $ 588,845 $ 582,584 $ 521,853
Noninterest income 153,564 122,346 109,759 130,461 132,517
Deduct: Debt securities gains (losses), net (34) 75 73 7 (41)
Total revenue excluding debt securities gains
(losses) (1)
$ 740,096 $ 702,693 $ 698,531 $ 713,038 $ 654,411
Efficiency ratio (1)
47.04 % 48.25 % 51.58 % 58.84 % 55.80 %
Tangible common equity to tangible assets:
Tangible shareholders' equity (1) (see above)
$ 5,477,697 $ 5,380,515 $ 5,343,083 $ 5,138,592 $ 4,938,296
Assets $ 74,189,417 $ 73,002,651 $ 72,151,967 $ 71,210,162 $ 70,979,805
Deduct: Goodwill and intangible assets 2,862,427 2,886,419 2,907,986 2,926,960 2,944,372
Tangible assets (1)
$ 71,326,990 $ 70,116,232 $ 69,243,981 $ 68,283,202 $ 68,035,433
Tangible common equity to tangible assets (1)
7.68 % 7.67 % 7.72 % 7.53 % 7.26 %
(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:
Six Months Ended June 30,
(dollars and shares in thousands, except per share data) 2026 2025
Net income per common share:
Net income applicable to common shares $ 479,019 $ 262,000
Adjustments:
Merger-related charges 19,432 47,062
Pension plan gain (13,240) (21,001)
Distribution of excess pension assets expense 3,394 -
Debt securities (gains) losses (41) 117
CECL Day 1 non-PCD provision expense - 75,604
Less: tax effect on net total adjustments (2)
(540) (27,475)
Net income applicable to common shares, adjusted (1)
$ 488,024 $ 336,307
Weighted average diluted common shares outstanding 385,697 340,250
Net income per common share, diluted $ 1.24 $ 0.77
Adjusted net income per common share, diluted (1)
$ 1.27 $ 0.99
Tangible common book value:
Shareholders' common equity $ 8,340,124 $ 7,882,668
Deduct: Goodwill and intangible assets 2,862,427 2,944,372
Tangible shareholders' common equity (1)
$ 5,477,697 $ 4,938,296
Period end common shares 382,537 391,818
Tangible common book value (1)
$ 14.32 $ 12.60
Return on average tangible common equity:
Net income applicable to common shares $ 479,019 $ 262,000
Add: Intangible amortization (net of tax) (2)
37,211 19,845
Tangible net income (1)
$ 516,230 $ 281,845
Average shareholders' common equity $ 8,282,394 $ 6,693,442
Deduct: Average goodwill and intangible assets 2,884,304 2,482,663
Average tangible shareholders' common equity (1)
$ 5,398,090 $ 4,210,779
Return on average tangible common equity (1)
19.13 % 13.39 %
Net interest margin:
Net interest income $ 1,151,561 $ 902,433
Taxable equivalent adjustment 15,359 12,423
Net interest income - taxable equivalent basis (1)
$ 1,166,920 $ 914,856
Average earning assets $ 65,890,258 $ 53,599,627
Net interest margin (1)
3.54 % 3.41 %
Efficiency ratio:
Noninterest expense $ 736,865 $ 653,237
Deduct: Intangible amortization expense 49,615 26,460
Noninterest expense excluding intangible
amortization expense (1)
$ 687,250 $ 626,777
Net interest income - taxable equivalent basis (1)
(see above)
$ 1,166,920 $ 914,856
Noninterest income 275,910 226,311
Deduct: Debt securities gains (losses), net 41 (117)
Total revenue excluding debt securities gains
(losses) (1)
$ 1,442,789 $ 1,141,284
Efficiency ratio (1)
47.63 % 54.92 %
Tangible common equity to tangible assets:
Tangible shareholders' equity (1) (see above)
$ 5,477,697 $ 4,938,296
Assets $ 74,189,417 $ 70,979,805
Deduct: Goodwill and intangible assets 2,862,427 2,944,372
Tangible assets (1)
$ 71,326,990 $ 68,035,433
Tangible common equity to tangible assets (1)
7.68 % 7.26 %
(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 fifth 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 $74.2 billion at June 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 second quarter of 2026 was $249.4 million, or $0.65 per diluted common share, compared to $229.6 million, or $0.59 per diluted common share, for the first quarter of 2026.
Results for the second quarter of 2026 were impacted by $12.1 million in pre-tax merger-related expenses and a $13.2 million pre-tax gain associated with the settlement of the Bremer pension plan. Results for the first quarter of 2026 were impacted by $7.3 million of merger-related expenses and a $3.4 million non-cash, pre-tax expense associated with the distribution of excess pension plan assets with the resolution of the legacy First Midwest Bancorp, Inc. ("First Midwest") plan. Excluding these items, net income applicable to common shares for the second quarter of 2026 was $250.4 million, or $0.65 per diluted common share on an adjusted basis1, compared to $237.7 million, or $0.61 per diluted common share on an adjusted basis1, for the first quarter of 2026.
Our results for the second quarter of 2026 reflect solid growth in total loans and deposits, disciplined expense management, and strong credit quality and capital.
Deposits: Period-end total deposits increased $474.3 million, or 3% annualized, to $56.1 billion at June 30, 2026 compared to March 31, 2026.
Loans: Our loan balances, excluding loans held-for-sale, increased $1.0 billion, or 8% annualized, to $50.8 billion at June 30, 2026 compared to March 31, 2026 reflecting strong commercial loan production.
Net Interest Income: Net interest income increased $6.4 million to $579.0 million compared to the first quarter of 2026 driven by high quality loan growth and stable core deposit pricing, partly offset by funding mix.
Provision for Credit Losses: Provision for credit losses was $36.2 million compared to $34.9 million in the first quarter of 2026.
Noninterest Income: Noninterest income was $153.6 million, or $140.4 million excluding a $13.2 million pre-tax gain associated with the settlement of the Bremer pension plan, compared to $122.3 million in the first quarter of 2026. The increase reflects strong increases in all fee income lines as well as elevated other income due to market value adjustments, higher company-owned life insurance income, and an asset recovery.
Noninterest Expense: Noninterest expense increased $7.5 million compared to the first quarter of 2026. In the second quarter of 2026, noninterest expense included $12.1 million of merger-related expenses. In the first quarter of 2026, noninterest expense included $7.3 million of merger-related expenses and 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 was $360.1 million for the second quarter of 2026, an increase of $6.1 million from $354.0 million for the first 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
June 30, 		%
Change 		Six Months Ended
June 30, 		%
Change
2026 2025 2026 2025
Income Statement Summary:
Net interest income $ 578,988 $ 514,790 12.5 % $ 1,151,561 $ 902,433 27.6 %
Provision for credit losses 36,206 106,835 (66.1) 71,152 138,238 (48.5)
Noninterest income 153,564 132,517 15.9 275,910 226,311 21.9
Noninterest expense 372,161 384,766 (3.3) 736,865 653,237 12.8
Net income applicable to common
shareholders 		249,381 121,375 105.5 479,019 262,000 82.8
Net income per common share -
diluted 		0.65 0.34 91.2 1.24 0.77 61.0
Other Data:
Return on average common equity 12.07 % 6.74 % 11.57 % 7.83 %
Return on average tangible common
equity (1)
19.84 12.00 19.13 13.39
Efficiency ratio (1)
47.04 55.80 47.63 54.92
Tier 1 leverage ratio 8.95 9.26 8.95 9.26
Net charge-offs to average loans 0.26 0.24 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 six months ended June 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 held its interest rates steady during the second quarter of 2026 and decreased interest rates compared to those in effect as of June 30, 2025. The Federal Reserve's Federal Funds Rate is currently in a target range of 3.50% to 3.75%, with the Effective Federal Funds Rate of 3.63% at June 30, 2026 compared to 4.33% at June 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
June 30, 2026 		Three Months Ended
June 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 		$ 1,212,043 $ 11,121 3.68 % $ 1,424,700 $ 14,791 4.16 %
Investment securities:
Treasury and government sponsored agencies 2,349,871 18,993 3.23 % 2,396,691 20,820 3.47 %
Mortgage-backed securities 10,428,343 111,157 4.26 % 8,567,318 87,734 4.10 %
States and political subdivisions 1,450,389 12,017 3.31 % 1,596,899 13,402 3.36 %
Other securities 828,774 12,395 5.98 % 970,581 15,770 6.50 %
Total investment securities 15,057,377 154,562 4.11 % 13,531,489 137,726 4.07 %
Loans: (2)
Commercial 15,792,290 238,663 6.05 % 13,240,876 219,446 6.63 %
Commercial real estate 22,234,235 339,925 6.12 % 20,022,403 316,422 6.32 %
Residential real estate loans 8,722,341 103,162 4.73 % 7,792,440 88,852 4.56 %
Consumer 3,323,663 54,468 6.57 % 3,049,341 54,787 7.21 %
Total loans 50,072,529 736,218 5.88 % 44,105,060 679,507 6.16 %
Total earning assets 66,341,949 $ 901,901 5.44 % 59,061,249 $ 832,024 5.64 %
Deduct: Allowance for credit losses on loans (580,550) (404,871)
Non-Earning Assets
Cash and due from banks 545,346 426,513
Other assets 6,991,436 6,403,239
Total assets $ 73,298,181 $ 65,486,130
Interest-Bearing Liabilities
Checking and NOW accounts $ 11,106,289 $ 47,349 1.71 % $ 9,672,146 $ 41,862 1.74 %
Savings accounts 4,950,785 3,032 0.25 % 4,968,232 3,777 0.30 %
Money market accounts 16,485,000 99,903 2.43 % 15,282,970 113,542 2.98 %
Time deposits 10,145,661 87,220 3.45 % 8,318,060 80,907 3.90 %
Total interest-bearing deposits 42,687,735 237,504 2.23 % 38,241,408 240,088 2.52 %
Federal funds purchased and interbank
borrowings 		42,228 391 3.71 % 88,603 953 4.31 %
Securities sold under agreements to repurchase 257,217 561 0.87 % 295,948 636 0.86 %
FHLB advances 6,561,147 61,744 3.77 % 6,037,462 59,042 3.92 %
Other borrowings 1,360,976 15,203 4.48 % 828,214 9,452 4.58 %
Total borrowed funds 8,221,568 77,899 3.80 % 7,250,227 70,083 3.88 %
Total interest-bearing liabilities $ 50,909,303 $ 315,403 2.48 % $ 45,491,635 $ 310,171 2.73 %
Noninterest-Bearing Liabilities and
Shareholders' Equity
Demand deposits $ 12,860,401 $ 11,568,854
Other liabilities 1,020,272 973,525
Shareholders' equity 8,508,205 7,452,116
Total liabilities and shareholders' equity $ 73,298,181 $ 65,486,130
Net interest income - taxable equivalent basis $ 586,498 3.54 % $ 521,853 3.53 %
Taxable equivalent adjustment (7,510) (7,063)
Net interest income (GAAP) $ 578,988 3.49 % $ 514,790 3.49 %
(1)Interest income is reflected on a fully taxable equivalent basis.
(2)Includes loans held-for-sale.
(Tax equivalent basis,
dollars in thousands) 		Six Months Ended
June 30, 2026 		Six Months Ended
June 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 		$ 1,213,528 $ 22,065 3.67 % $ 1,109,634 $ 23,606 4.29 %
Investment securities:
Treasury and government sponsored agencies 2,384,129 38,114 3.20 % 2,357,995 40,839 3.46 %
Mortgage-backed securities 10,348,439 218,622 4.23 % 7,433,868 142,257 3.83 %
States and political subdivisions 1,487,627 24,558 3.30 % 1,603,821 26,644 3.32 %
Other securities 834,327 25,772 6.18 % 871,262 26,282 6.03 %
Total investment securities 15,054,522 307,066 4.08 % 12,266,946 236,022 3.85 %
Loans: (2)
Commercial 15,550,178 472,103 6.07 % 11,827,287 385,041 6.51 %
Commercial real estate 22,146,063 675,873 6.10 % 18,128,526 562,357 6.20 %
Residential real estate loans 8,628,736 202,115 4.68 % 7,306,465 156,500 4.28 %
Consumer 3,297,231 107,919 6.60 % 2,960,769 104,257 7.10 %
Total loans 49,622,208 1,458,010 5.88 % 40,223,047 1,208,155 6.01 %
Total earning assets 65,890,258 $ 1,787,141 5.43 % 53,599,627 $ 1,467,783 5.48 %
Deduct: Allowance for credit losses on loans (576,848) (401,835)
Non-Earning Assets
Cash and due from banks 547,129 399,620
Other assets 7,017,805 5,901,705
Total assets $ 72,878,344 $ 59,499,117
Interest-Bearing Liabilities
Checking and NOW $ 11,036,650 $ 93,644 1.71 % $ 8,853,822 $ 71,325 1.62 %
Savings 4,935,795 6,043 0.25 % 4,830,998 7,385 0.31 %
Money market 16,513,687 199,859 2.44 % 13,523,239 202,817 3.02 %
Time deposits 9,948,542 171,289 3.47 % 7,644,494 149,056 3.93 %
Total interest-bearing deposits 42,434,674 470,835 2.24 % 34,852,553 430,583 2.49 %
Federal funds purchased and interbank
borrowings 		23,038 414 3.62 % 118,202 2,578 4.40 %
Securities sold under agreements to repurchase 259,031 1,155 0.90 % 284,518 1,187 0.84 %
FHLB advances 6,433,228 119,796 3.76 % 5,255,372 100,938 3.87 %
Other borrowings 1,267,288 28,021 4.46 % 752,408 17,641 4.73 %
Total borrowed funds 7,982,585 149,386 3.77 % 6,410,500 122,344 3.85 %
Total interest-bearing liabilities $ 50,417,259 $ 620,221 2.48 % $ 41,263,053 $ 552,927 2.70 %
Noninterest-Bearing Liabilities and
Shareholders' Equity
Demand deposits $ 12,875,219 $ 10,339,594
Other liabilities 1,059,753 959,309
Shareholders' equity 8,526,113 6,937,161
Total liabilities and shareholders' equity $ 72,878,344 $ 59,499,117
Net interest income - taxable equivalent basis $ 1,166,920 3.54 % $ 914,856 3.41 %
Taxable equivalent adjustment (15,359) (12,423)
Net interest income (GAAP) $ 1,151,561 3.50 % $ 902,433 3.37 %
(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
June 30, 2025 to Three
Months Ended June 30, 2026
From Six Months Ended
June 30, 2025 to Six
Months Ended June 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 		$ (3,670) $ (2,080) $ (1,590) $ (1,541) $ 2,073 $ (3,614)
Investment securities (2)
16,836 15,598 1,238 71,044 55,247 15,797
Loans (3)
56,711 89,858 (33,147) 249,855 279,503 (29,648)
Total interest income 69,877 103,376 (33,499) 319,358 336,823 (17,465)
Interest Expense
Checking and NOW deposits 5,487 6,170 (683) 22,319 18,110 4,209
Savings deposits (745) (11) (734) (1,342) 151 (1,493)
Money market deposits (13,639) 8,148 (21,787) (2,958) 40,869 (43,827)
Time deposits 6,313 16,781 (10,468) 22,233 42,556 (20,323)
Federal funds purchased and interbank
borrowings 		(562) (464) (98) (2,164) (1,899) (265)
Securities sold under agreements to
repurchase 		(75) (84) 9 (32) (111) 79
FHLB advances 2,702 5,034 (2,332) 18,858 22,384 (3,526)
Other borrowings 5,751 6,024 (273) 10,380 11,782 (1,402)
Total interest expense 5,232 41,598 (36,366) 67,294 133,842 (66,548)
Net interest income $ 64,645 $ 61,778 $ 2,867 $ 252,064 $ 202,981 $ 49,083
(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 $4.9 million during the three and six months ended June 30, 2026, respectively, and $2.7 million and $5.3 million during the three and six months ended June 30, 2025, respectively; using the federal statutory rate in effect of 21%.
(3)Interest income on loans includes taxable equivalent adjustments of $5.1 million and $10.4 million during the three and six months ended June 30, 2026, respectively, and $4.4 million and $7.1 million during the three and six months ended June 30, 2025, respectively; using the federal statutory rate in effect of 21%.
The increase in net interest income for the three and six months ended June 30, 2026 compared to the same periods in 2025 was driven by the acquisition of Bremer as well as strong loan growth, and lower costs of average interest-bearing liabilities, partially offset by higher balances of average interest-bearing liabilities and lower yields on loans.
The increase in net interest margin on a fully taxable equivalent basis for the three and six months ended June 30, 2026 compared to the same periods in 2025 was primarily due to the impact of Bremer, loan growth, and lower costs of average interest-bearing liabilities, partially offset by higher balances of average interest-bearing liabilities and lower yields on loans. The yield on interest earning assets decreased 20 basis points and the cost of interest-bearing liabilities decreased 25 basis points in the three months ended June 30, 2026 compared to the same quarter a year ago. The yield on interest earning assets decreased 5 basis points and the cost of interest-bearing liabilities decreased 22 basis points in the six months ended June 30, 2026 compared to the same period a year ago.
Average earning assets increased $7.3 billion and $12.3 billion for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025 primarily due to Bremer loans and securities acquired as well as strong loan growth.
Average loans, including loans held-for-sale, increased $6.0 billion and $9.4 billion for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025 primarily due to Bremer loans acquired as well as strong commercial and commercial real estate loan growth. Bremer loans totaled $11.2 billion at the close of the acquisition.
Average noninterest-bearing deposits increased $1.3 billion while average interest-bearing deposits increased $4.4 billion for the three months ended June 30, 2026 when compared to the same period in 2025 reflecting Bremer deposits assumed and organic growth. Average noninterest-bearing deposits increased $2.5 billion while average
interest-bearing deposits increased $7.6 billion for the six months ended June 30, 2026 when compared to the same period in 2025 reflecting Bremer deposits assumed and organic growth. Bremer deposits assumed totaled $12.9 billion at the close of the acquisition.
Provision for Credit Losses
The following table details the components of the provision for credit losses:
Three Months Ended
June 30, 		% Six Months Ended
June 30, 		%
(dollars in thousands) 2026 2025 Change 2026 2025 Change
Provision for credit losses on loans $ 38,400 $ 99,263 (61.3) % $ 75,254 $ 130,289 (42.2) %
Provision (release) for credit losses on
unfunded loan commitments 		(2,194) 7,572 (129.0) (4,102) 7,949 (151.6)
Total provision for credit losses $ 36,206 $ 106,835 (66.1) % $ 71,152 $ 138,238 (48.5) %
Net (charge-offs) recoveries on non-PCD
loans 		$ (26,007) $ (23,363) 11.3 % $ (48,451) $ (42,199) 14.8 %
Net (charge-offs) recoveries on PCD
loans 		(6,240) (3,165) 97.2 (15,812) (5,945) 166.0
Total net (charge-offs) recoveries on
loans 		$ (32,247) $ (26,528) 21.6 % $ (64,263) $ (48,144) 33.5 %
Net charge-offs (recoveries) to average
loans 		0.26 % 0.24 % 7.0 % 0.26 % 0.24 % 8.2
Total provision for credit losses on loans decreased in the three and six months ended June 30, 2026 compared to the same periods 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 three and six months ended June 30, 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.
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
June 30, 		% Six Months Ended
June 30, 		%
(dollars in thousands) 2026 2025 Change 2026 2025 Change
Wealth and investment services fees $ 42,098 $ 35,817 17.5 % $ 81,813 $ 65,465 25.0 %
Service charges on deposit accounts 28,009 23,878 17.3 54,946 45,034 22.0
Debit card and ATM fees 13,092 12,922 1.3 25,130 22,913 9.7
Mortgage banking revenue 11,163 10,032 11.3 20,717 16,911 22.5
Capital markets income 12,329 7,114 73.3 23,345 11,620 100.9
Company-owned life insurance 8,531 6,625 28.8 16,092 12,006 34.0
Debt securities gains (losses), net (34) (41) (17.1) 41 (117) (135.0)
Other income 38,376 36,170 6.1 53,826 52,479 2.6
Total noninterest income $ 153,564 $ 132,517 15.9 % $ 275,910 $ 226,311 21.9 %
Noninterest income for three and six months ended June 30, 2026 included a $13.2 million gain in other income associated with the settlement of the Bremer pension plan. Noninterest income for the three and six months ended June 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 $28.8 million and $57.4 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. These increases were driven by the acquisition of Bremer in May 2025, organic growth of fee-based businesses, and elevated other income.
Capital markets income increased $5.2 million and $11.7 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025 primarily due to higher levels of commercial real estate client interest rate swap fees and the Bremer acquisition.
Noninterest Expense
The following table details the components in noninterest expense:
Three Months Ended
June 30, 		% Six Months Ended
June 30, 		%
(dollars in thousands) 2026 2025 Change 2026 2025 Change
Salaries and employee benefits $ 184,765 $ 202,112 (8.6) % $ 368,838 $ 350,417 5.3 %
Occupancy 33,452 30,432 9.9 70,447 59,485 18.4
Equipment 11,077 12,566 (11.8) 23,152 21,467 7.8
Marketing 15,601 13,759 13.4 32,035 25,699 24.7
Technology 29,630 31,452 (5.8) 58,655 53,472 9.7
Communication 6,130 5,014 22.3 12,326 9,148 34.7
Professional fees 10,735 21,931 (51.1) 23,091 29,850 (22.6)
FDIC assessment 13,592 13,409 1.4 27,348 23,109 18.3
Amortization of intangibles 23,992 19,630 22.2 49,615 26,460 87.5
Amortization of tax credit investments 7,807 5,815 34.3 14,918 9,239 61.5
Other expense 35,380 28,646 23.5 56,440 44,891 25.7
Total noninterest expense $ 372,161 $ 384,766 (3.3) % $ 736,865 $ 653,237 12.8 %
Noninterest expense included $12.1 million and $41.2 million of merger-related expenses for the three months ended June 30, 2026 and 2025, respectively. Excluding these expenses, noninterest expense increased to $360.1 million for the three months ended June 30, 2026, compared to $343.6 million for the three months ended June 30, 2025. This increase was driven primarily by operating costs and additional amortization of intangibles related to the acquisition of Bremer.
Noninterest expense included $19.4 million and $47.1 million of merger-related expenses for the six months ended June 30, 2026 and 2025, respectively. Noninterest expense for the six months ended June 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 $714.0 million for the six months ended June 30, 2026, compared to $606.2 million for the six months ended June 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 $2.0 million and $5.7 million for the three and six months ended June 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 21.8% and 21.4% for the three and six months ended June 30, 2026, respectively, compared to 19.5% and 19.9% for the three and six months ended June 30, 2025, respectively, reflecting an increase in pre-tax book income contributing to an increase in state 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 June 30, 2026 based on the current estimate of the effective annual rate.
FINANCIAL CONDITION
Overview
At June 30, 2026, our assets were $74.2 billion, a $2.0 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 June 30, 2026, a $2.1 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 $15.1 billion at June 30, 2026, compared to $14.9 billion at December 31, 2025. Investment securities represented 22% of earning assets at June 30, 2026, compared to 23% at December 31, 2025. At June 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 $666.5 million and $570.4 million at June 30, 2026 and December 31, 2025, respectively. The investment securities held-to-maturity portfolio had net unrealized losses of $376.3 million and $355.3 million at June 30, 2026 and December 31, 2025, respectively.
The investment securities available-for-sale portfolio including securities hedges had an effective duration of 4.08 at June 30, 2026, compared to 3.80 at December 31, 2025. The total investment securities portfolio had an effective duration of 4.69 at June 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 4.11% and 4.08% for the three and six months ended June 30, 2026, respectively, compared to 4.07% and 3.85% for the three and six months ended June 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) June 30,
2026 		December 31,
2025 		$ Change % Change
Commercial $ 16,112,685 $ 14,983,861 $ 1,128,824 7.5 %
Commercial real estate 22,535,229 22,050,007 485,222 2.2
Residential real estate 8,760,832 8,467,496 293,336 3.5
Consumer 3,363,838 3,262,798 101,040 3.1
Total loans $ 50,772,584 $ 48,764,162 $ 2,008,422 4.1 %
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
June 30, 2026
Minnesota $ 2,802,206 $ 5,053,884 $ 1,850,696 $ 399,614 $ 10,106,400 20 %
Illinois 3,015,165 3,534,824 1,459,897 646,553 8,656,439 17 %
Indiana 1,905,572 1,858,655 1,086,543 981,895 5,832,665 11 %
Wisconsin 1,143,129 2,693,471 545,323 189,580 4,571,503 9 %
Michigan 841,529 1,423,589 641,142 275,026 3,181,286 6 %
Tennessee 432,849 1,229,948 321,512 232,851 2,217,160 4 %
Kentucky 326,751 629,607 263,255 409,982 1,629,595 3 %
North Dakota 435,560 961,486 133,291 30,915 1,561,252 3 %
Texas 459,346 704,961 291,096 10,896 1,466,299 3 %
Florida 331,236 605,438 341,178 38,925 1,316,777 3 %
Ohio 721,108 424,786 11,123 16,774 1,173,791 2 %
Other 3,698,234 3,414,580 1,815,776 130,827 9,059,417 18 %
Total $ 16,112,685 $ 22,535,229 $ 8,760,832 $ 3,363,838 $ 50,772,584 100 %
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 June 30, 2026, compared to 57% at December 31, 2025. At June 30, 2026, commercial and commercial real estate loans were $38.6 billion, an increase of $1.6 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.
June 30, 2026 December 31, 2025
(dollars in thousands) Outstanding
Exposure(1)
Nonaccrual Outstanding
Exposure(1)
Nonaccrual
By Industry:
Health care and social assistance $ 2,990,290 $ 3,661,508 $ 18,802 $ 2,805,380 $ 3,464,934 $ 24,489
Manufacturing 2,654,369 4,081,240 37,087 2,139,977 3,614,096 16,915
Real estate rental and leasing 1,523,840 2,106,105 22,290 1,518,886 2,274,601 25,021
Construction 1,203,618 2,467,297 7,308 1,064,375 2,333,033 6,996
Wholesale trade 1,191,364 2,000,081 4,234 1,049,963 1,927,612 4,154
Accommodation and food services 1,080,876 1,274,843 12,660 1,159,348 1,422,249 19,153
Professional, scientific, and
technical services 		891,988 1,415,906 6,518 795,520 1,367,099 6,298
Agriculture, forestry, fishing,
and hunting 		711,579 1,047,582 5,518 776,845 1,126,107 5,393
Finance and insurance 652,759 1,452,641 314 678,034 1,305,205 317
Retail trade 547,108 900,563 12,215 486,717 777,389 13,121
Administrative and support and
waste management and
remediation services 		466,610 641,285 16,473 440,155 667,738 4,552
Transportation and warehousing 381,983 538,491 15,176 474,426 634,311 29,733
Arts, Entertainment, and Recreation 338,799 463,006 3,900 303,815 419,632 3,153
Educational services 323,058 472,944 2 295,001 472,694 8
Public administration 295,995 319,516 - 306,621 344,205 -
Other services 252,849 411,158 14,796 270,337 435,139 11,969
Other 605,600 983,369 2,114 418,461 886,189 2,570
Total $ 16,112,685 $ 24,237,535 $ 179,407 $ 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 10 13 12 10 16
$1,000,000 to $5,000,000 20 22 46 25 24 42
$5,000,000 to $10,000,000 16 15 14 17 16 21
$10,000,000 to $25,000,000 27 25 12 23 25 11
Greater than $25,000,000 26 26 13 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.
June 30, 2026 December 31, 2025
(dollars in thousands) Outstanding
Exposure(1)
Nonaccrual Outstanding
Exposure(1)
Nonaccrual
By Property Type:
Multifamily $ 6,770,178 $ 8,307,405 $ 46,561 $ 6,648,859 $ 7,978,053 $ 104,993
Warehouse / Industrial 4,516,324 4,834,580 12,298 4,180,226 4,481,580 5,144
Retail 3,272,975 3,445,418 24,316 3,225,434 3,373,296 21,636
Office 2,916,504 3,090,586 45,389 2,705,874 2,891,180 49,201
Senior housing 1,154,331 1,182,958 23,402 1,269,488 1,307,281 29,723
Single family 533,553 556,839 1,747 616,035 632,748 4,826
Other (2)
3,371,364 3,650,885 16,888 3,404,091 3,694,867 30,737
Total $ 22,535,229 $ 25,068,671 $ 170,601 $ 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 26% of the commercial real estate portfolio is owner-occupied at June 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 June 30, 2026, the Company held $680.7 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 June 30, 2026, residential real estate loans held in our loan portfolio were $8.8 billion, an increase of $293.3 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 $101.0 million to $3.4 billion at June 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) June 30,
2026 		December 31,
2025 		$ Change % Change
Deposits:
Noninterest-bearing demand $ 12,665,278 $ 13,247,483 $ (582,205) (4.4) %
Interest-bearing:
Checking and NOW 11,129,286 10,740,919 388,367 3.6 %
Savings 4,924,639 4,909,138 15,501 0.3 %
Money market 16,936,441 16,529,631 406,810 2.5 %
Time deposits 10,491,126 9,661,024 830,102 8.6 %
Total deposits 56,146,770 55,088,195 1,058,575 1.9 %
Wholesale borrowings:
Federal funds purchased and interbank borrowings 250,389 100,197 150,192 149.9 %
Securities sold under agreements to repurchase 265,301 261,366 3,935 1.5 %
Federal Home Loan Bank advances 6,520,296 6,237,375 282,921 4.5 %
Other borrowings 1,387,997 852,429 535,568 62.8 %
Total wholesale borrowings 8,423,983 7,451,367 972,616 13.1 %
Total funding $ 64,570,753 $ 62,539,562 $ 2,031,191 3.2 %
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 13% at June 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.
Capital
Shareholders' equity totaled $8.6 billion at June 30, 2026, compared to $8.5 billion at December 31, 2025. Retained earnings were offset by the repurchase of 8.3 million shares of Common Stock under share repurchase plans that were approved by the Company's Board of Directors during the six months ended June 30, 2026, which reduced equity by $201.6 million, dividends, and changes in unrealized losses on available-for-sale investment securities during the six months ended June 30, 2026. As of June 30, 2026, Old National had remaining authorization to repurchase up to $276.6 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 June 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 		June 30,
2026 		December 31,
2025
Tier 1 capital to total average assets (leverage
ratio) 		4.00 % N/A % 8.95 % 8.90 %
Common equity Tier 1 capital to risk-weighted
total assets 		7.00 N/A 11.09 11.08
Tier 1 capital to risk-weighted total assets 8.50 6.00 11.53 11.53
Total capital to risk-weighted total assets 10.50 10.00 13.65 12.85
Shareholders' equity to assets N/A N/A 11.57 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 		June 30,
2026 		December 31,
2025
Tier 1 capital to total average assets (leverage
ratio) 		4.00 % 5.00 % 8.80 % 8.52 %
Common equity Tier 1 capital to risk-weighted
total assets 		7.00 6.50 11.34 11.05
Tier 1 capital to risk-weighted total assets 8.50 8.00 11.34 11.05
Total capital to risk-weighted total assets 10.50 10.00 12.29 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 June 30, 2026, our average commercial loan size was approximately $899,000 and our average commercial real estate loan size was approximately $1,627,000. At June 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) June 30,
2026 		December 31,
2025
Nonaccrual loans $ 461,702 $ 521,245
Past due loans (90 days or more and still accruing) 6,832 2,691
Foreclosed assets 3,374 6,235
Total under-performing assets $ 471,908 $ 530,171
Classified loans (includes nonaccrual, past due 90 days
or more, and other problem loans) 		$ 2,387,255 $ 2,283,157
Other classified assets (1)
7,960 20,616
Special mention loans 705,154 805,901
Total criticized and classified assets $ 3,100,369 $ 3,109,674
Asset Quality Ratios:
Nonaccrual loans/total loans (2)
0.91 % 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 123.01 107.42
Allowance for credit losses on loans/nonaccrual loans 125.73 109.26
(1)Includes investment securities that fell below investment grade rating.
(2)Loans exclude loans held-for-sale.
Under-performing assets decreased to $471.9 million at June 30, 2026, compared to $530.2 million at December 31, 2025. Under-performing assets as a percentage of total loans at June 30, 2026 were 0.93%, a 16 basis points decrease from 1.09% at December 31, 2025.
Nonaccrual loans decreased $59.5 million from December 31, 2025 to June 30, 2026 driven by active portfolio management. As a percentage of nonaccrual loans, the allowance for credit losses on loans was 125.73% at June 30, 2026, compared to 109.26% at December 31, 2025.
Total criticized and classified assets were $3.1 billion at June 30, 2026, a decrease of $9.3 million from December 31, 2025. Other classified assets include investment securities that fell below investment grade rating totaling $8.0 million at June 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 $32.2 million during the three months ended June 30, 2026, compared to $26.5 million for the same period in 2025. Annualized, net charge-offs to average loans were 0.26% and 0.24% for the three months ended June 30, 2026 and 2025, respectively. Annualized, net charge-offs to average loans excluding PCD loans were 0.22% for the three months ended June 30, 2026 and 2025. Net charge-offs on loans totaled $64.3 million during the six months ended June 30, 2026, compared to $48.1 million for the same period in 2025. Annualized, net charge-offs to average loans were 0.26% and 0.24% for the six months ended June 30, 2026 and
2025, respectively. Annualized, net charge-offs to average loans excluding PCD loans were 0.20% and 0.22% for the six months ended June 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.
The allowance for credit losses on loans was $580.5 million at June 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 $31.5 million at June 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 June 30, 2026 and 2025:
Immediate Rate Decrease
June 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
June 30, 2026
Projected interest income:
Money market, other
interest earning
investments, and
investment
securities 		$ 1,109,848 $ 1,238,634 $ 1,357,507 $ 1,456,384 $ 1,443,976 $ 1,504,576 $ 1,557,413 $ 1,605,770
Loans 4,047,985 4,692,508 5,332,672 6,165,980 5,980,093 6,609,127 7,222,104 7,829,016
Total interest
income 		5,157,833 5,931,142 6,690,179 7,622,364 7,424,069 8,113,703 8,779,517 9,434,786
Projected interest expense:
Deposits 344,070 688,920 1,147,061 1,806,555 1,653,444 2,114,296 2,575,150 3,036,004
Borrowings 431,368 616,752 803,511 1,054,863 1,004,985 1,207,343 1,410,025 1,612,728
Total interest
expense 		775,438 1,305,672 1,950,572 2,861,418 2,658,429 3,321,639 3,985,175 4,648,732
Net interest
income 		$ 4,382,395 $ 4,625,470 $ 4,739,607 $ 4,760,946 $ 4,765,640 $ 4,792,064 $ 4,794,342 $ 4,786,054
Change from base $ (383,245) $ (140,170) $ (26,033) $ (4,694) $ 26,424 $ 28,702 $ 20,414
% change from base (8.04) % (2.94) % (0.55) % (0.10) % 0.55 % 0.60 % 0.43 %
Immediate Rate Decrease
June 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
June 30, 2025
Projected interest income:
Money market, other
interest earning
investments, and
investment
securities 		$ 1,003,247 $ 1,124,051 $ 1,234,492 $ 1,291,913 $ 1,320,324 $ 1,378,486 $ 1,428,001 $ 1,475,967
Loans 3,876,868 4,538,232 5,169,325 5,326,771 5,761,516 6,320,235 6,866,992 7,409,983
Total interest
income 		4,880,115 5,662,283 6,403,817 6,618,684 7,081,840 7,698,721 8,294,993 8,885,950
Projected interest expense:
Deposits 544,860 959,639 1,396,607 1,487,928 1,860,933 2,332,488 2,777,697 3,222,907
Borrowings 469,089 606,475 749,830 800,724 916,315 1,086,951 1,257,876 1,428,853
Total interest
expense 		1,013,949 1,566,114 2,146,437 2,288,652 2,777,248 3,419,439 4,035,573 4,651,760
Net interest
income 		$ 3,866,166 $ 4,096,169 $ 4,257,380 $ 4,330,032 $ 4,304,592 $ 4,279,282 $ 4,259,420 $ 4,234,190
Change from base $ (438,426) $ (208,423) $ (47,212) $ 25,440 $ (25,310) $ (45,172) $ (70,402)
% change from base (10.19) % (4.84) % (1.10) % 0.59 % (0.59) % (1.05) % (1.64) %
The following table illustrates the upper bound, Federal Funds Rate assumed in the simulation above at June 30, 2026 and 2025:
June 30, 2026 June 30, 2025
Basis Point Change Scenario
Federal Funds
Rate (1)
Month 12 (2)
Federal Funds
Rate (1)
Month 12 (2)
+300 3.75 % 6.75 % 4.50 % 7.50 %
+200 3.75 % 5.75 % 4.50 % 6.50 %
+100 3.75 % 4.75 % 4.50 % 5.50 %
Base 3.75 % 3.75 % 4.50 % 4.50 %
-100 3.75 % 2.75 % 4.50 % 3.50 %
-200 3.75 % 1.75 % 4.50 % 2.50 %
-300 3.75 % 0.75 % 4.50 % 1.50 %
(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 $11.0 million at June 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 June 30, 2026.
(dollars in thousands)
Maturity Bucket Amount Rate
2026 $ 6,888,508 4.07 %
2027 3,421,506 3.60
2028 94,413 2.80
2029 40,133 2.44
2030 21,643 4.06
2031 and beyond
24,923 3.52
Total $ 10,491,126 3.90 %
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 June 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 June 30, 2026, Old National and its subsidiaries had the following availability of liquid funds and borrowings:
(dollars in thousands) June 30, 2026
Available liquid funds:
Cash and due from banks $ 1,768,180
Unencumbered government-issued debt securities 6,360,336
Unencumbered investment grade municipal securities 101,310
Unencumbered corporate securities 31,618
Availability of borrowings*:
Amount available from Federal Reserve discount window 4,356,933
Amount available from Federal Home Loan Bank 8,245,763
Total available funds $ 20,864,140
* 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 June 30, 2026, Old National Bancorp's other borrowings outstanding were $799.5 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 July 29, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 29, 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]