OLD NATIONAL BAN(ONBPP) - 2024 Q2 - Quarterly Report

Financial Performance - Net interest income for Q2 2024 was $388,421,000, an increase from $382,171,000 in Q2 2023, reflecting a growth of 1.3% year-over-year[168]. - Noninterest income for Q2 2024 was $87,271,000, compared to $81,629,000 in Q2 2023, representing a growth of 6.5%[168]. - Net income available to common shareholders for Q2 2024 was $117,196,000, a slight decrease from $151,003,000 in Q2 2023, down by 22.4%[168]. - Net interest income for the six months ended June 30, 2024, was $744,879, a decrease of 2.9% from $763,659 in 2023[170]. - Net income available to common shareholders decreased to $233,446, down 20.5% from $293,569 in 2023[170]. - Adjusted net income per common share, diluted, was $0.46 for June 30, 2024, compared to $0.51 in the previous quarter, reflecting a decrease of 9.8%[177]. - Net income applicable to common shares for Q2 2024 was $117.2 million, or $0.37 per diluted share, compared to $116.3 million, or $0.40 per diluted share in Q1 2024[182]. Asset and Loan Growth - Total loans reached $36,150,513,000 as of June 30, 2024, up from $32,432,473,000 a year earlier, marking an increase of 11.1%[168]. - Total assets increased to $53,119,645,000 in Q2 2024 from $48,496,755,000 in Q2 2023, reflecting a growth of 9.3%[168]. - Total deposits rose to $39,999,228,000 in Q2 2024, compared to $36,231,315,000 in Q2 2023, an increase of 10.5%[168]. - Total loans increased to $36,150,513, a growth of 11.0% from $32,432,473 in 2023[170]. - Total assets grew to $53,119,645, up 9.3% from $48,496,755 in the previous year[170]. - Total loans reached $36,079,180 thousand for the three months ended June 30, 2024, compared to $32,255,865 thousand in the same period of 2023, marking a growth of 11.3%[199]. - The loan portfolio totaled $36.151 billion as of June 30, 2024, reflecting a $3.159 billion increase from $32.992 billion at December 31, 2023, a 9.6% growth[226]. Credit Losses and Risk - Provision for credit losses increased to $36,214,000 in Q2 2024 from $14,787,000 in Q2 2023, indicating a significant rise in expected credit losses[168]. - Provision for credit losses increased significantly to $55,105, compared to $28,224 in the same period last year, reflecting a rise of 95.3%[170]. - The allowance for credit losses on loans increased to $366.3 million at June 30, 2024, an increase from $307.6 million at December 31, 2023, reflecting $23.9 million for acquired PCD loans from the CapStar acquisition[256]. - Total provision for credit losses increased by 144.9% to $36,214 thousand for the three months ended June 30, 2024, compared to $14,787 thousand for the same period in 2023[211]. - Total nonaccrual loans increased to $340.2 million, up from $274.8 million at December 31, 2023, indicating a rise in credit risk[248]. - Under-performing assets rose to $353.7 million, representing 0.98% of total loans, a 12 basis point increase from 0.86% at December 31, 2023[249]. Operational Efficiency - The common dividend payout ratio increased to 38% in Q2 2024 from 27% in Q2 2023, indicating a higher return of earnings to shareholders[168]. - The efficiency ratio improved to 57.17% for the quarter, down from 51.66% in the previous quarter, suggesting enhanced operational efficiency[177]. - The efficiency ratio for Q2 2024 was 57.73%, compared to 52.01% in Q2 2023, indicating increased operational costs[192]. - Noninterest expense for the three months ended June 30, 2024, was $282.999 million, a 14.8% increase from $246.584 million in the same period of 2023[215]. - Excluding merger-related expenses, noninterest expense increased to $263.6 million for the three months ended June 30, 2024, compared to $240.6 million for the same period in 2023[216]. Market Expansion - The company reported a total of 280 banking centers as of June 30, 2024, an increase from 256 centers a year earlier, reflecting ongoing expansion efforts[168]. - The company operates 280 banking centers, an increase from 256 in 2023, reflecting ongoing market expansion efforts[170]. - The acquisition of CapStar on April 1, 2024, added approximately $3.1 billion in total assets and strengthened Old National's presence in Nashville, Tennessee[191]. Capital and Liquidity - Shareholders' equity increased to $6.1 billion at June 30, 2024, up from $5.6 billion at December 31, 2023, partly due to the issuance of 24 million shares related to the CapStar acquisition[239]. - Old National's capital ratios remain strong, with Tier 1 capital to total average assets at 8.90% as of June 30, 2024, compared to 8.83% at December 31, 2023[241]. - The company maintains available liquid funds of $436,277 thousand at the parent company level and $13,251,213 thousand at the subsidiary level as of June 30, 2024[274]. - Management believes the company can generate adequate liquidity to meet both short-term and long-term requirements[274]. Interest Rate Management - The company established guidelines for asset and liability management to measure short and long-term sensitivities to interest rate changes, which are reviewed by the Enterprise Risk Committee[262]. - The model used to quantify interest rate risk shows projected net interest income sensitivity based on interest rate changes over a two-year cumulative horizon[262]. - The company may use various techniques to manage interest rate risk, including adjusting balance sheet mix and modifying investment securities characteristics[263].