OLD NATIONAL BAN(US:ONBPP)2025-02-19 19:19Financial Performance - Net income applicable to common shareholders for 2024 was $523.1 million, or $1.68 per diluted common share, with an adjusted net income of $578.1 million, or $1.86 per diluted common share [226][227]. - Net income applicable to common shares for 2024 was $523,053,000, a decrease from $565,857,000 in 2023 [244]. - Adjusted net income applicable to common shares for 2024 was $578,054,000 compared to $599,227,000 in 2023 [244]. - Diluted net income per share decreased to $1.68 in 2024 from $1.94 in 2023, representing a decline of 29% [234]. - Return on average assets for the fourth quarter of 2024 was 1.14%, while return on average common equity was 9.83% [232]. - Return on average tangible common equity for 2024 was 15.37%, down from 20.15% in 2023 [244]. - Total revenue for 2024 was $1,910,206,000, an increase from $1,866,188,000 in 2023 [244]. Asset and Deposit Growth - Total assets as of December 31, 2024, were $53.55 billion, with total loans at $36.29 billion and total deposits at $40.82 billion [232]. - Total assets rose to $53,552,272 in 2024, up from $49,089,836 in 2023, marking an increase of about 9% [234]. - Total deposits increased to $40,823,560 in 2024, compared to $37,235,180 in 2023, showing a growth of approximately 7% [234]. - Total deposits rose to $40.82 billion, a 9.6% increase from $37.24 billion in 2023, driven by the CapStar transaction and organic growth [300]. - Core deposits grew by approximately 10% in 2024, funding a corresponding 10% growth in loans [230]. Loan Growth and Quality - Total loans increased to $36,285,887 in 2024 from $32,991,927 in 2023, indicating a growth of approximately 10% [234]. - Average loans for the year increased to $35.5 billion in 2024 from $32.2 billion in 2023, reflecting growth in the loan portfolio [331]. - The allowance for credit losses on loans increased to $392.5 million from $307.6 million, reflecting organic loan growth and the CapStar acquisition [295]. - Non-performing loans to ending loans ratio increased to 1.23% in 2024 from 0.83% in 2023, highlighting potential credit quality concerns [234]. - Total provision for credit losses increased by $51.7 million in 2024, reaching $110.6 million, primarily due to loan growth and credit migration [262]. Income and Expense Analysis - Net interest income increased by 2% to $1.5 billion during 2024, driven by strong loan growth and the interest rate environment [228]. - Noninterest income rose from $333.3 million in 2023 to $354.7 million in 2024, primarily due to the CapStar merger and higher fees [228]. - Noninterest expense increased by $68.1 million in 2024, including $37.3 million of merger-related expenses and $13.3 million related to pension asset distribution [228]. - The efficiency ratio improved to 55.85% in 2024 from 53.70% in 2023, indicating enhanced operational efficiency [234]. - Total interest expense is projected to rise to $2.9 billion in 2024, up from $2.0 billion in 2023, marking a 44.1% increase [342]. Capital and Risk Management - The Tier 1 capital ratio improved to 11.98% in 2024 from 11.35% in 2023, reflecting stronger capital adequacy [234]. - The allowance for credit losses on loans to average loans ratio was 1.11 in 2024, up from 0.95 in 2023, indicating a higher provision relative to the loan portfolio [331]. - The company maintains strategic and contingency liquidity plans to ensure sufficient funding for balance sheet growth and unexpected liquidity requirements [347]. - The allowance for credit losses on loans was $392.5 million at December 31, 2024, compared to $307.6 million at December 31, 2023, primarily driven by the CapStar acquisition and organic loan growth [333]. Mergers and Acquisitions - Old National completed the acquisition of CapStar on April 1, 2024, enhancing its presence in Nashville and other high-growth Southeastern markets [229]. - The partnership with Bremer Bank was announced in 2024, expected to close in mid-2025, expanding opportunities in the upper Midwest [230]. - Goodwill and other intangible assets totaled $2.3 billion, an increase of $195.1 million due to the CapStar acquisition [298]. Interest Rate and Economic Factors - The Federal Reserve's Effective Federal Funds Rate decreased to 4.33% at December 31, 2024, down from 5.33% at December 31, 2023, impacting interest income dynamics [248]. - The yield on average earning assets increased by 41 basis points from 5.18% in 2023 to 5.59% in 2024, while the cost of interest-bearing liabilities rose by 73 basis points to 2.98% [258]. - The company anticipates that future loan growth and changes in credit quality could lead to increased provision expenses due to the volatility of macroeconomic factors [333].