OLD NATIONAL BAN(ONBPP) - 2025 Q1 - Quarterly Report

Financial Performance - Net interest income for Q1 2025 was $387,643,000, a slight decrease from $394,180,000 in Q4 2024, but an increase from $356,458,000 in Q1 2024[163]. - Net income available to common shareholders for Q1 2025 was $140,625,000, down from $149,839,000 in Q4 2024 but up from $116,250,000 in Q1 2024[163]. - Noninterest income decreased by $2.0 million to $93.8 million compared to Q4 2024, reflecting lower company-owned life insurance and seasonally lower bank fees[178]. - Noninterest income increased by $16.3 million to $93.8 million for the three months ended March 31, 2025, compared to $77.5 million in the same period of 2024, representing a 21.0% increase[200]. - The effective tax rate decreased to 20.3% for the three months ended March 31, 2025, compared to 21.3% for the same period in 2024, reflecting an increase in tax credits[204]. Loan and Deposit Growth - Total loans as of March 31, 2025, reached $36,413,944,000, compared to $36,285,887,000 at the end of 2024[163]. - Total deposits rose to $41,034,572,000 as of March 31, 2025, compared to $40,823,560,000 at the end of 2024[163]. - Loan balances increased by $128.1 million, or 1.4% annualized, to $36.4 billion at March 31, 2025, with a 2.3% annualized increase when excluding $71 million of commercial real estate loans sold in the quarter[176]. - Total deposits increased by $211.0 million to $41.03 billion, reflecting organic growth, while wholesale funding constituted 12% of total funding[225]. Credit Quality and Losses - Provision for credit losses increased to $31,403,000 in Q1 2025 from $27,017,000 in Q4 2024 and $18,891,000 in Q1 2024[163]. - Non-performing loans to ending loans ratio increased to 1.29% in Q1 2025 from 1.23% in Q4 2024[163]. - The company reported a net charge-off rate of 0.24% for the three months ended March 31, 2025, compared to 0.14% in the same period of 2024, indicating an increase of 68.5%[199]. - Net charge-offs on loans totaled $21.6 million for the three months ended March 31, 2025, compared to $11.8 million for the same period in 2024, with annualized net charge-offs to average loans at 0.24%[240]. - The allowance for credit losses on loans was $401.9 million at March 31, 2025, an increase from $392.5 million at December 31, 2024, driven by macroeconomic factors and loan growth[244]. Capital and Equity - The Tier 1 common equity ratio improved to 11.62% in Q1 2025 from 11.38% in Q4 2024[163]. - Shareholders' equity rose to $6.5 billion as of March 31, 2025, up from $6.3 billion on December 31, 2024[227]. - Old National's Tier 1 capital to total average assets ratio was 9.44% as of March 31, 2025, exceeding the regulatory minimum of 4%[229]. - The total capital to risk-weighted total assets ratio stood at 13.68% as of March 31, 2025, well above the regulatory minimum of 10.50%[229]. Mergers and Acquisitions - The acquisition of CapStar was completed on April 1, 2024, enhancing the company's presence in Nashville and other high-growth Southeastern markets[181]. - A definitive merger agreement with Bremer Financial Corporation has been approved, with the transaction expected to close on May 1, 2025[181]. Risk Management - The company maintains a risk appetite statement to assess and mitigate various risks, including credit, market, and operational risks[232]. - Stress testing is performed periodically to ensure sufficient capital and alignment with the company's risk appetite, influencing decisions on pricing and capital deployment[231]. - The company utilizes a model to quantify the impact of changing interest rates on projected net interest income, assessing various interest rate scenarios[250]. Interest Income and Expense - Net interest margin on a fully taxable equivalent basis remained stable at 3.27% for the three months ended March 31, 2025, compared to the same period in 2024[194]. - Total interest income is projected to reach $6,654,179 thousand by March 31, 2025, up from $3,692,135 thousand in the previous year, indicating a growth of approximately 80.5%[252]. - Total interest expense is expected to increase to $3,357,153 thousand by March 31, 2025, compared to $737,428 thousand in the previous year, representing a growth of about 355.5%[252]. Asset Management - Total assets increased to $53,877,944,000 as of March 31, 2025, from $53,552,272,000 at the end of 2024[163]. - The investment securities portfolio increased to $11.2 billion at March 31, 2025, from $10.9 billion at December 31, 2024, representing 23% of earning assets[209]. - Earning assets rose by $337.3 million to $48.4 billion as of March 31, 2025, compared to $48.0 billion at December 31, 2024[207]. Liquidity Management - Liquidity management strategies include maintaining strategic and contingency liquidity plans to ensure sufficient funding for balance sheet growth and unexpected liquidity requirements[257]. - Management believes the company can generate adequate liquidity to meet short-term and long-term requirements[262].