Old National Bancorp(US:ONB)2025-07-30 14:04Glossary of Abbreviations and Acronyms This section provides a comprehensive list of abbreviations and acronyms used throughout the report for clarity and reference PART I. FINANCIAL INFORMATION This part presents unaudited financial statements and management's discussion of financial condition and operations Item 1. Financial Statements This section presents the unaudited consolidated financial statements and related notes Consolidated Balance Sheets (unaudited) This section provides a snapshot of the company's assets, liabilities, and shareholders' equity at specific points in time - Total Assets increased by 32.5% from $53.55 billion at December 31, 2024, to $70.98 billion at June 30, 202511 - Total Liabilities increased by 33.1% from $47.21 billion at December 31, 2024, to $62.85 billion at June 30, 202511 - Total Shareholders' Equity increased by 28.2% from $6.34 billion at December 31, 2024, to $8.13 billion at June 30, 202511 Key Balance Sheet Changes (June 30, 2025 vs. Dec 31, 2024) | Metric | Dec 31, 2024 (in thousands) | June 30, 2025 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | :------- | | Cash and cash equivalents | $1,227,968 | $1,808,571 | $580,603 | 47.3% | | Investment securities (AFS) | $7,458,459 | $11,005,196 | $3,546,737 | 47.6% | | Total loans, net | $35,893,365 | $47,337,710 | $11,444,345 | 31.9% | | Total deposits | $40,823,560 | $54,357,683 | $13,534,123 | 33.2% | | Federal Home Loan Bank advances | $4,452,559 | $5,835,918 | $1,383,359 | 31.1% | | Goodwill | $2,175,251 | $2,409,886 | $234,635 | 10.8% | | Other intangible assets | $120,847 | $534,486 | $413,639 | 342.3% | | Accumulated other comprehensive income (loss) | $(746,043) | $(599,608) | $146,435 | -19.6% | Consolidated Statements of Income (unaudited) This section details the company's revenues, expenses, and net income over specific reporting periods - Net Income for the three months ended June 30, 2025, increased by 3.5% to $125.4 million compared to $121.2 million in the same period of 202412 - Net Income for the six months ended June 30, 2025, increased by 11.8% to $270.1 million compared to $241.5 million in the same period of 202412 Key Income Statement Changes (YoY, in thousands) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | % Change | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :------- | :--------------------------- | :--------------------------- | :------- | | Total interest income | $824,961 | $663,663 | 24.3% | $1,455,360 | $1,259,644 | 15.5% | | Total interest expense | $310,171 | $275,242 | 12.7% | $552,927 | $514,765 | 7.4% | | Net interest income | $514,790 | $388,421 | 32.5% | $902,433 | $744,879 | 21.2% | | Provision for credit losses | $106,835 | $36,214 | 195.0% | $138,238 | $55,105 | 150.9% | | Total noninterest income | $132,517 | $87,271 | 51.8% | $226,311 | $164,793 | 37.3% | | Total noninterest expense | $384,766 | $282,999 | 36.0% | $653,237 | $545,316 | 19.8% | | Net income applicable to common shareholders | $121,375 | $117,196 | 3.6% | $262,000 | $233,446 | 12.2% | | Diluted EPS | $0.34 | $0.37 | -8.1% | $0.77 | $0.77 | 0.0% | Consolidated Statements of Comprehensive Income (Loss) (unaudited) This section presents total comprehensive income, including net income and other non-owner changes in equity - Comprehensive Income (Loss) for the three months ended June 30, 2025, increased significantly to $174.3 million from $109.4 million in the prior year period15 - Comprehensive Income (Loss) for the six months ended June 30, 2025, increased significantly to $416.5 million from $188.9 million in the prior year period15 Other Comprehensive Income (Loss), net of tax (YoY, in thousands) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | % Change | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | % Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :------- | :--------------------------- | :--------------------------- | :------- | | Unrealized gains (losses) on available-for-sale securities | $40,621 | $(13,349) | N/M | $125,905 | $(46,800) | N/M | | Changes from securities held-to-maturity | $3,037 | $3,265 | -7.0% | $5,958 | $6,486 | -8.2% | | Changes from hedges | $5,243 | $(1,696) | N/M | $14,572 | $(12,285) | N/M | | Total other comprehensive income (loss), net of tax | $48,901 | $(11,780) | N/M | $146,435 | $(52,599) | N/M | Consolidated Statements of Changes in Shareholders' Equity (unaudited) This section details changes in shareholders' equity, reflecting net income, dividends, and other equity transactions - Total Shareholders' Equity increased from $6.34 billion at December 31, 2024, to $8.13 billion at June 30, 202516 - The acquisition of Bremer Financial Corporation contributed $1.03 billion to shareholders' equity through the issuance of 50.2 million shares of common stock16 - Common stock issued for forward sale agreements added $443.2 million to shareholders' equity16 Consolidated Statements of Cash Flows (unaudited) This section reports the cash generated and used by the company from operating, investing, and financing activities - Net increase in cash and cash equivalents for the six months ended June 30, 2025, was $580.6 million, a significant increase from $58.0 million in the same period of 202417 - Cash and cash equivalents at the end of the period reached $1.81 billion at June 30, 2025, up from $1.23 billion at June 30, 202417 Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------------- | :----------- | :----------- | | Net cash flows provided by (used in) operating activities | $181,093 | $265,213 | | Net cash flows provided by (used in) investing activities | $(684,942) | $(956,643) | | Net cash flows provided by (used in) financing activities | $1,084,452 | $749,418 | | Net increase (decrease) in cash and cash equivalents | $580,603 | $57,988 | - Noncash investing activities included $1.03 billion in common stock issued for merger, net, and $52.1 million in operating lease right-of-use assets obtained in exchange for lease obligations for the six months ended June 30, 202518 Notes to Consolidated Financial Statements (unaudited) This section provides detailed explanations and additional information supporting the consolidated financial statements Note 1. Basis of Presentation This note outlines the accounting principles and conventions used in preparing the unaudited consolidated financial statements - The unaudited consolidated financial statements are prepared in conformity with GAAP, and interim results do not necessarily represent annual results20 - These statements should be read in conjunction with Old National's Annual Report on Form 10-K for the year ended December 31, 202420 Note 2. Recent Accounting Pronouncements This note discusses recently issued accounting standards and their potential impact on the company's financial statements - ASU 2023-09 (Income Taxes) is effective for annual periods beginning after December 15, 2024, requiring additional income tax disclosures, but is not expected to have a material impact22 - ASU 2024-03 (Expense Disaggregation) is effective for annual periods beginning after December 15, 2026, requiring disclosure of specific cost and expense amounts; the impact is currently being evaluated23 - ASU 2024-04 (Convertible Debt) and ASU 2025-03 (Business Combinations/Consolidation) are effective for annual periods beginning after December 15, 2025, and December 15, 2026, respectively, with their impacts currently under evaluation242526 Note 3. Acquisition and Divestiture Activity This note details the company's merger and acquisition activities, including the financial impact of recent transactions - Old National completed the acquisition of Bremer Financial Corporation on May 1, 2025, for $1.35 billion, consisting of 50.2 million shares of common stock and $314.6 million in cash2830 Bremer Acquisition: Preliminary Valuation of Assets Acquired and Liabilities Assumed (May 1, 2025, in thousands) | Category | Amount (in thousands) | | :-------------------------------- | :----------- | | Total assets acquired | $16,303,579 | | Total liabilities assumed | $14,955,684 | | Goodwill | $234,635 | | Other intangible assets | $440,099 | | Common stock issued | $1,033,262 | | Cash consideration | $314,633 | | Total consideration | $1,347,895 | - Merger-related costs for the Bremer acquisition totaled $40.2 million for the three months and $40.9 million for the six months ended June 30, 202533 - The CapStar Financial Holdings, Inc. acquisition was finalized on April 1, 2024, for $417.6 million in an all-stock transaction, adding $3.11 billion in assets and $2.69 billion in liabilities3940 Note 4. Net Income Per Common Share This note details the calculation of basic and diluted net income per common share and factors affecting share count - Diluted net income per common share decreased to $0.34 for the three months ended June 30, 2025, from $0.37 in the prior year period45 - Diluted net income per common share remained flat at $0.77 for the six months ended June 30, 2025, compared to the prior year period45 - Weighted average diluted common shares outstanding increased to 361.4 million for the three months and 340.3 million for the six months ended June 30, 2025, primarily due to acquisitions45 Note 5. Investment Securities This note breaks down the company's investment securities portfolio, including available-for-sale and held-to-maturity categories - Available-for-sale (AFS) securities had a fair value of $11.01 billion at June 30, 2025, up from $7.46 billion at December 31, 2024, with net unrealized losses improving to $(722.4) million from $(890.5) million1147240 - Held-to-maturity (HTM) securities had a fair value of $2.47 billion at June 30, 2025, with unrecognized losses improving to $(456.0) million from $(484.1) million at December 31, 2024114950240 - At June 30, 2025, 2,477 out of 3,215 securities were in an unrealized loss position due to interest rate fluctuations, but Old National has no intent to sell them prior to anticipated recovery56 - Alternative investments, primarily in affordable housing and economic development, totaled $920.5 million at June 30, 2025, up from $609.2 million at December 31, 20241159 Note 6. Loans and Allowance for Credit Losses This note details the company's loan portfolio, credit quality, and allowance for credit losses - Total loans, net of unearned income, increased by 32.0% to $47.90 billion at June 30, 2025, from $36.29 billion at December 31, 2024, primarily due to the Bremer acquisition1170 - The allowance for credit losses on loans increased to $565.1 million at June 30, 2025, from $392.5 million at December 31, 2024, including $90.4 million for acquired PCD loans and $69.1 million for non-PCD Bremer loans1175 - Nonaccrual loans increased to $594.7 million at June 30, 2025, from $448.0 million at December 31, 2024, with $126.8 million attributed to the Bremer acquisition86269 - Net charge-offs on loans totaled $26.5 million (0.24% annualized) for the three months and $48.1 million (0.24% annualized) for the six months ended June 30, 202574271 - The allowance for credit losses on unfunded loan commitments increased to $29.6 million at June 30, 2025, from $21.7 million at December 31, 2024, including $6.5 million from the Bremer acquisition76277 Note 7. Leases This note outlines the company's lease arrangements, including operating and finance lease liabilities and right-of-use assets - Operating lease liabilities were $237.6 million at June 30, 2025, compared to $200.1 million at December 31, 202497 - Finance lease liabilities were $21.2 million at June 30, 2025, compared to $24.8 million at December 31, 202497 - The weighted-average remaining lease term for operating leases was 9.0 years and for finance leases was 8.8 years at June 30, 202597 Note 8. Goodwill and Other Intangible Assets This note details goodwill and other intangible assets, including changes from acquisitions and amortization - Goodwill increased to $2.41 billion at June 30, 2025, from $2.18 billion at December 31, 2024, with $234.6 million added from the Bremer acquisition1199 - Net other intangible assets increased to $534.5 million at June 30, 2025, from $120.8 million at December 31, 2024, including $397.1 million in core deposit intangibles and $43.0 million in customer relationship intangibles from Bremer11101 - Total amortization expense for intangibles was $26.5 million for the six months ended June 30, 2025, up from $12.9 million in the prior year period102 - No impairment charges were recorded for goodwill or other intangible assets during the six months ended June 30, 2025 or 2024100102 Note 9. Qualified Affordable Housing Projects and Other Tax Credit Investments This note details investments in qualified affordable housing and other tax credit projects and their financial impacts - Total investments in qualified affordable housing and other tax credit projects were $377.0 million at June 30, 2025, up from $290.7 million at December 31, 2024105 - Unfunded commitments for these investments totaled $152.1 million at June 30, 2025105 Amortization Expense and Tax Benefit (Six Months Ended June 30, in thousands) | Investment Type | Amortization Expense (in thousands) | Tax Expense (Benefit) Recognized (in thousands) | | :-------------------------------- | :------------------- | :------------------------------- | | LIHTC | $6,409 | $(8,815) | | FHTC | $1,169 | $(1,418) | | NMTC | $9,239 | $(11,309) | | Total | $16,817 | $(21,542) | Note 10. Securities Sold Under Agreements to Repurchase This note provides information on repurchase agreements, including outstanding balances and weighted-average interest rates - Securities sold under agreements to repurchase outstanding at period end were $297.6 million at June 30, 2025, compared to $269.0 million at December 31, 202411109110 - The weighted-average interest rate at period end was 0.91% at June 30, 2025, up from 0.86% at December 31, 2024109110 Note 11. Federal Home Loan Bank Advances This note details the company's borrowings from the Federal Home Loan Bank, including outstanding balances, rates, and maturities - Total Federal Home Loan Bank (FHLB) advances were $5.84 billion at June 30, 2025, up from $4.45 billion at December 31, 202411112 - The weighted-average rate for FHLB advances was 3.82% at June 30, 2025, compared to 3.54% at December 31, 2024112 - Contractual maturities for FHLB advances include $1.63 billion due in 2025 and $2.18 billion due thereafter113 Note 12. Other Borrowings This note breaks down other debt instruments, including junior subordinated debentures and leveraged loans for tax credit investments - Total other borrowings increased to $872.3 million at June 30, 2025, from $689.6 million at December 31, 202411114 - Other borrowings include $198.5 million in junior subordinated debentures with rates ranging from 5.98% to 8.12% at June 30, 2025114119 - Leveraged loans for New Markets Tax Credit (NMTC) totaled $398.5 million at June 30, 2025, up from $210.3 million at December 31, 2024114120 Note 13. Accumulated Other Comprehensive Income (Loss) This note details components of accumulated other comprehensive income (loss), including unrealized gains/losses on securities and hedges - Accumulated Other Comprehensive Income (Loss) improved to $(599.6) million at June 30, 2025, from $(746.0) million at December 31, 202411122 - Unrealized gains and losses on available-for-sale debt securities improved to $(542.2) million at June 30, 2025, from $(668.1) million at December 31, 2024122 - Gains and losses on hedges increased to $18.9 million at June 30, 2025, from $4.3 million at December 31, 2024122 Note 14. Income Taxes This note provides information on income tax expense, effective tax rate, deferred tax assets, and net operating loss carryforwards - Income tax expense for the six months ended June 30, 2025, was $67.2 million, a slight decrease from $67.7 million in the prior year period125 - The effective tax rate decreased to 19.9% for the six months ended June 30, 2025, from 21.9% in the prior year period, reflecting an increase in tax credits125235 - Net deferred tax assets totaled $527.9 million at June 30, 2025, up from $456.4 million at December 31, 2024, with no valuation allowance required126 - Federal net operating loss carryforwards increased to $183.1 million at June 30, 2025, from $60.2 million at December 31, 2024, primarily due to acquisitions128 Note 15. Derivative Financial Instruments This note describes the company's use of derivative instruments for hedging, including their fair values and notional amounts - Derivatives designated as hedging instruments were in a net asset position with a fair value gain of $15.9 million at June 30, 2025, compared to a net liability position with a fair value loss of $7.0 million at December 31, 2024288 - Cash flow hedges (interest rate swaps, collars, and floors on loan pools and borrowings) had a notional amount of $1.95 billion at June 30, 2025136140 - Fair value hedges (interest rate swaps on investment securities and borrowings) had a notional amount of $2.03 billion at June 30, 2025139140 - Derivatives not designated as hedges, including customer and counterparty interest rate swaps, had a total notional amount of $9.02 billion at June 30, 2025, up from $6.26 billion at December 31, 2024145 Note 16. Commitments, Contingencies, and Financial Guarantees This note discloses the company's off-balance sheet commitments, potential liabilities, and financial guarantees - Unfunded loan commitments totaled $11.41 billion at June 30, 2025, an increase from $8.53 billion at December 31, 2024155 - Standby letters of credit had a notional amount of $267.7 million at June 30, 2025, up from $194.3 million at December 31, 2024155 - Risk participation transactions of interest rate swaps had total notional amounts of $1.0 billion at June 30, 2025157 Note 17. Fair Value This note discloses fair value measurements of financial instruments, categorized by valuation inputs (Level 1, 2, or 3) - Financial instruments measured at fair value on a recurring basis include equity securities ($121.0 million, Level 1), investment securities available-for-sale ($11.01 billion, primarily Level 2), loans held-for-sale ($77.6 million, Level 2), and derivative assets/liabilities (primarily Level 2)161 - Assets measured at fair value on a non-recurring basis at June 30, 2025, included collateral dependent loans ($160.5 million, Level 3) and foreclosed assets ($2.8 million, Level 3)162163 - The fair value option was elected for loans held-for-sale, which totaled $77.6 million at June 30, 2025, up from $34.5 million at December 31, 2024169171 Note 18. Segment Information This note explains the company's operating segments and how performance is evaluated and resources are allocated - Old National operates as a single reportable segment, as the Chief Operating Decision Maker (CODM) evaluates performance and allocates resources on a consolidated basis175178 - The company provides a wide range of commercial and consumer banking services, wealth management, and capital markets services primarily throughout the Midwest and Southeast regions of the United States176 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's discussion and analysis of financial condition and results of operations Forward-Looking Statements This section cautions readers about forward-looking statements subject to various risks and uncertainties - Forward-looking statements are subject to various risks and uncertainties, including competition, government regulations, economic conditions, and integration costs of mergers, which could cause actual results to differ materially180 - The company does not undertake an obligation to update these statements, and investors are advised to consult further disclosures in SEC filings181 Financial Highlights This section summarizes key financial performance indicators and significant changes in the company's financial position - Net income applicable to common shareholders increased by 3.6% to $121.4 million for Q2 2025 and by 12.2% to $262.0 million for YTD Q2 2025 compared to the prior year periods183185 - Diluted EPS was $0.34 for Q2 2025 (down 8.1% YoY) and $0.77 for YTD Q2 2025 (flat YoY)183185 - Total assets grew to $71.0 billion at June 30, 2025 (up 33.6% YoY), total loans to $47.9 billion (up 32.5% YoY), and total deposits to $54.4 billion (up 36.0% YoY)183185 Key Performance Ratios (YTD Q2 2025 vs. YTD Q2 2024) | Metric | YTD Q2 2025 | YTD Q2 2024 | Change | | :-------------------------------- | :---------- | :---------- | :----- | | Return on average assets | 0.91% | 0.95% | -0.04% | | Return on average common equity | 7.83% | 8.45% | -0.62% | | Net interest margin (taxable equivalent) | 3.41% | 3.31% | +0.10% | | Efficiency ratio | 54.92% | 57.73% | -2.81% | | Net charge-offs to average loans | 0.24% | 0.15% | +0.09% | | Non-performing loans to ending loans | 1.24% | 0.94% | +0.30% | Non-GAAP Financial Measures This section explains the company's use of non-GAAP financial measures and provides reconciliations to GAAP measures - The company uses non-GAAP measures like adjusted net income, tangible common equity, and taxable equivalent net interest income/margin to provide additional insights into operating performance and facilitate peer comparisons187188189190 - Adjusted diluted EPS for YTD Q2 2025 increased to $0.99 from $0.90 in YTD Q2 2024195 - Tangible common book value was $12.60 at June 30, 2025, up from $11.05 at June 30, 2024195 Executive Summary This section provides a high-level overview of the company's strategic position, financial performance, and key operational achievements - Old National is the fifth largest commercial bank headquartered in the Midwest, with consolidated assets of $71.0 billion at June 30, 2025197 - Q2 2025 net income applicable to common shares was $121.4 million ($0.34 diluted EPS), impacted by $41.2 million in merger-related expenses, $75.6 million in CECL Day 1 non-PCD provision, and a $21.0 million pension plan gain from the Bremer acquisition198199 - Adjusted net income applicable to common shares for Q2 2025 was $190.9 million ($0.53 diluted EPS)199 - Deposits: Period-end total deposits increased $13.3 billion to $54.4 billion (1% annualized organic growth excluding Bremer)200 - Loans: Period-end total loans increased $11.5 billion to $47.9 billion (4% annualized organic growth excluding Bremer)201 - Net Interest Income: Increased $127.1 million to $514.8 million QoQ, driven by Bremer, organic loan growth, and higher asset yields202 - Provision for Credit Losses: $106.8 million, adjusted to $31.2 million excluding Bremer CECL Day 1 non-PCD provision203 - Noninterest Income: Increased $38.7 million to $132.5 million QoQ, reflecting Bremer and organic growth204 - Noninterest Expense: Increased $116.3 million QoQ, including $41.2 million merger-related expenses. Adjusted, it increased by $80.9 million due to Bremer operating costs and intangibles amortization204 - The Bremer acquisition, completed May 1, 2025, added approximately $16.3 billion of total assets, $11.1 billion of total loans, and $12.9 billion of deposits206 Results of Operations This section analyzes the company's financial performance over the reporting periods, focusing on key revenue and expense drivers - Net interest income for the six months ended June 30, 2025, increased by 21.2% to $902.4 million, driven by the Bremer acquisition, strong loan growth, and lower costs of average interest-bearing liabilities207221 - Net interest margin on a fully taxable equivalent basis increased to 3.41% for the six months ended June 30, 2025, from 3.31% in the prior year period207222 - Provision for credit losses for the six months ended June 30, 2025, increased by 150.9% to $138.2 million, primarily due to $75.6 million for non-PCD Bremer loans and unfunded commitments207226 - Noninterest income for the six months ended June 30, 2025, increased by 37.3% to $226.3 million, driven by the Bremer and CapStar acquisitions, organic growth in fee-based businesses, and a $21.0 million gain from the Bremer pension plan207229 - Noninterest expense for the six months ended June 30, 2025, increased by 19.8% to $653.2 million, including $47.1 million in merger-related expenses. Adjusted for these and other non-recurring items, it increased to $606.2 million from $506.7 million207233 - The effective tax rate decreased to 19.9% for the six months ended June 30, 2025, from 21.9% in the prior year period, reflecting an increase in tax credits207235 Financial Condition This section analyzes the company's balance sheet, including assets, liabilities, and equity, and discusses changes in financial position - Total assets were $71.0 billion at June 30, 2025, a $17.4 billion increase from December 31, 2024, primarily due to the Bremer acquisition236 - Earning assets increased by $15.6 billion to $63.7 billion at June 30, 2025237 - The investment securities portfolio grew to $14.5 billion at June 30, 2025, from $10.9 billion at December 31, 2024, mainly due to Bremer, with an effective duration of 4.76239241 - The total loan portfolio increased by $11.6 billion to $47.9 billion at June 30, 2025, driven by the Bremer acquisition and commercial loan production242243 - Total funding (deposits and wholesale borrowings) increased by $15.5 billion to $61.7 billion at June 30, 2025, with total deposits up $13.5 billion (33.2%) due to Bremer and organic growth255 - Shareholders' equity reached $8.1 billion at June 30, 2025, benefiting from the Bremer acquisition (+$1.0 billion) and forward sale agreements (+$443.2 million)257 - Old National and its bank subsidiary exceeded regulatory minimums and were 'well-capitalized' at June 30, 2025, with a Tier 1 leverage ratio of 9.26% and Common equity Tier 1 capital ratio of 10.74%258259 Risk Management This section describes the company's approach to identifying, assessing, and mitigating various financial and operational risks - The company's Risk Appetite Statement addresses strategic, market, liquidity, credit, operational, information security and technology, talent management, and compliance/regulatory/legal risks263 - Under-performing assets increased to $619.6 million at June 30, 2025, from $456.3 million at December 31, 2024, primarily due to the Bremer acquisition, with nonaccrual loans at $594.7 million266268269 - Total criticized and classified assets were $3.6 billion at June 30, 2025, an increase of $1.1 billion from December 31, 2024, mainly due to Bremer266270 - The allowance for credit losses on loans to nonaccrual loans was 95.02% at June 30, 2025, up from 87.62% at December 31, 2024266269 - Market risk management uses derivative instruments (swaps, collars, floors) to mitigate interest rate risk. Projected net interest income sensitivity to a 300 basis point immediate rate decrease was -10.19% and to a 300 basis point increase was -1.64% at June 30, 2025282284288 - Liquidity risk is managed through strategic and contingency plans, with $485.1 million in available liquid funds at the parent company and $19.46 billion at subsidiaries at June 30, 2025289294 Critical Accounting Estimates This section highlights critical accounting estimates requiring significant judgment and assumptions that could materially affect financial reporting - No material changes in the company's critical accounting estimates have occurred since December 31, 2024297 - These estimates require significant judgment and assumptions, which can materially impact the carrying value of certain assets and liabilities296 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to the market and liquidity risk discussions within Management's Discussion and Analysis - For quantitative and qualitative disclosures about market risk, refer to the 'Market Risk' and 'Liquidity Risk' sections within Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations298 Item 4. Controls and Procedures This section confirms effective disclosure controls and procedures with no material changes in internal control over financial reporting - Old National's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025299 - Management acknowledges the inherent limitations of control systems, including potential for error, fraud, or management override300301 - There were no material changes in Old National's internal control over financial reporting during the period covered by this report302 PART II. OTHER INFORMATION This part includes disclosures on risk factors, equity security sales, other corporate information, and a list of exhibits Item 1A. Risk Factors This section reports no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K - No material changes from the risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024303 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details equity security repurchases for tax withholding and a new stock repurchase program - During Q2 2025, Old National purchased 378,569 shares of common stock at an average price of $21.02 per share304 - These shares were acquired to satisfy tax withholding obligations associated with the vesting of restricted stock or performance shares earned under the company's share-based incentive programs304 - A new $200 million stock repurchase program was approved on February 19, 2025, authorized through February 28, 2026, replacing the prior program305 Item 5. Other Information This section confirms no material changes in board nominee procedures or Rule 10b5-1 trading arrangements by directors or officers - There have been no material changes in the procedure by which security holders recommend nominees to the Company's board of directors306 - No director or Section 16 officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025306 Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including merger agreements and financial statements - The exhibits include the Agreement and Plan of Merger for Bremer Financial Corporation, various amendments to the Articles of Incorporation and By-Laws, and certifications required by the Sarbanes-Oxley Act307 - Financial statements (Consolidated Balance Sheets, Statements of Income, Comprehensive Income (Loss), Changes in Shareholders' Equity, Cash Flows, and Notes) are provided in inline XBRL format307 SIGNATURE This section contains the required signatures for the filing, affirming the accuracy and completeness of the report