Financial 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]. - Diluted net income per share decreased to $1.68 in 2024 from $1.94 in 2023, representing a decline of approximately 13.4% [234]. - Net income applicable to common shares for 2024 was $523,053, down from $565,857 in 2023, reflecting a decrease of approximately 6% [244]. - Adjusted net income applicable to common shares for 2024 was $578,054, compared to $599,227 in 2023, indicating a decline of about 3.5% [244]. - Return on average common equity decreased to 9.06% in 2024 from 11.29% in 2023, while return on average tangible common equity fell to 15.37% from 20.15% [246]. Asset and Deposit Growth - Total assets reached $53.55 billion as of December 31, 2024, with total loans at $36.29 billion [232]. - Total assets grew to $53,552,272 in 2024, compared to $49,089,836 in 2023, marking an increase of approximately 9.9% [234]. - Total deposits rose to $40,823,560 in 2024, up from $37,235,180 in 2023, reflecting a growth of about 6.9% [234]. - Core deposits grew by approximately 10% in 2024, funding a corresponding 10% growth in loans [230]. - 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]. Loan Performance - Total loans increased to $36,285,887 in 2024, up from $32,991,927 in 2023, indicating a growth of about 10.4% [234]. - Total loans reached $36.3 billion in 2024, an increase of $3.3 billion or 10.0% from 2023, driven by growth in commercial and commercial real estate loans [281]. - The 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]. - Commercial and commercial real estate loans increased by $2.9 billion to $26.6 billion, primarily due to the acquisition of CapStar and balanced loan production [284]. Interest Income and Expense - Net interest income increased by 2% to $1.5 billion in 2024, driven by loan growth and the interest rate environment [228]. - Net interest income for 2024 reached $1,503,153, compared to $1,503,153 in 2023, reflecting a stable performance [234]. - The net interest margin for 2024 was 3.31%, a decrease from 3.54% in 2023, reflecting a decline of approximately 6.5% [244]. - Total interest income is projected to increase to $5.8 billion in 2024, compared to $5.3 billion in 2023, indicating a year-over-year growth of 9.4% [342]. - 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]. Noninterest Income and Expense - 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 income for 2024 was $354,697, compared to $333,342 in 2023, showing an increase of approximately 6.4% [244]. - 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]. - Salaries and employee benefits rose by 10.4% to $603.1 million in 2024, reflecting merit increases [269]. Credit Quality and Allowance for Credit Losses - The allowance for credit losses on loans increased to 1.08% of ending loans in 2024, compared to 0.93% in 2023, suggesting a more conservative approach to credit risk [234]. - Non-performing loans to ending loans increased to 1.23% in 2024 from 0.83% in 2023, indicating a rise in credit quality concerns [234]. - 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]. - The allowance for credit losses on loans was 87.62% for nonaccrual loans as of December 31, 2024, down from 111.93% in 2023 [323]. Mergers and Acquisitions - Old National completed the acquisition of CapStar on April 1, 2024, enhancing its presence in Nashville and other 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]. - Average loans, including loans held-for-sale, rose by $3.3 billion in 2024, primarily due to loans acquired in the CapStar transaction, totaling $2.1 billion at transaction close [260]. Capital and Equity - The Tier 1 capital ratio improved to 11.98% in 2024 from 11.35% in 2023, indicating stronger capital adequacy [234]. - Shareholders' equity reached $6.3 billion, representing 12% of total assets, up from $5.6 billion or 11% in 2023 [302]. - The tangible common book value increased to $11.91 per share in 2024 from $11.00 in 2023, showing an increase of about 8.3% [244]. Economic and Regulatory Environment - The Federal Reserve's Effective Federal Funds Rate decreased to 4.33% in December 2024 from 5.33% in December 2023, impacting net interest margin [248]. - The effective tax rate decreased to 20.8% in 2024 from 22.5% in 2023, attributed to increased tax credits and tax-exempt income [271]. - The company reported a provision for credit losses on loans of $120.2 million in 2024, significantly higher than the $59.8 million in 2023 [331].
OLD NATIONAL BAN(ONBPO) - 2024 Q4 - Annual Report