OLD NATIONAL BAN(ONBPP) - 2025 Q2 - Quarterly Report

Financial Performance - Net interest income for Q2 2025 reached $514,790, an increase from $388,421 in Q2 2024, representing a growth of 32.5% year-over-year[183] - Noninterest income rose to $132,517 in Q2 2025, up from $87,271 in Q2 2024, reflecting a growth of 51.8% year-over-year[183] - Net income available to common shareholders for Q2 2025 was $121,375, a decrease from $117,196 in Q2 2024, reflecting a decline of 1.5%[183] - Net interest income for the six months ended June 30, 2025, was $902,433,000, an increase of 21.14% from $744,879,000 in 2024[185] - Noninterest income increased to $226,311,000 in 2025, up 37.24% from $164,793,000 in 2024[185] - Net interest income rose by $127.1 million to $514.8 million compared to Q1 2025, driven by Bremer, organic loan growth, and higher asset yields[201] - Noninterest income increased by $38.7 million to $132.5 million compared to Q1 2025, reflecting Bremer and organic growth in fee-based businesses[203] Credit Losses and Provisions - Provision for credit losses increased to $106,835 in Q2 2025, compared to $36,214 in Q2 2024, indicating a significant rise in expected credit losses[183] - Provision for credit losses rose significantly to $138,238,000 in 2025 from $55,105,000 in 2024, reflecting a 150.36% increase[185] - Total provision for credit losses increased by 195.0% to $106.8 million for the three months ended June 30, 2025, compared to $36.2 million in 2024, driven by the establishment of an allowance for credit losses on Bremer loans[226] - The allowance for credit losses on loans increased to $404,871 thousand in Q2 2025 from $331,043 thousand in Q2 2024, indicating a rise of 22.2%[213] - The allowance for credit losses on loans was $565.1 million at June 30, 2025, an increase from $392.5 million at December 31, 2024, reflecting $90.4 million related to acquired PCD loans from the Bremer acquisition[275] Assets and Loans - Total loans increased to $47,902,819 as of June 30, 2025, compared to $36,150,513 a year earlier, marking a growth of 32.6%[183] - Total assets reached $70,979,805 as of June 30, 2025, up from $53,119,645 in the same period last year, representing a growth of 33.7%[183] - Total loans reached $44,105,060 thousand in Q2 2025, a 22.2% increase compared to $36,079,180 thousand in Q2 2024[213] - Total loans increased to $47.9 billion as of June 30, 2025, a 32.0% increase from $36.3 billion at December 31, 2024[242] - Total deposits increased to $54,357,683,000, up 36.06% from $39,999,228,000 in 2024[185] Operational Efficiency - The efficiency ratio for Q2 2025 was 55.80%, compared to 57.17% in Q2 2024, indicating improved operational efficiency[183] - The efficiency ratio improved to 54.92% in 2025 from 57.73% in 2024, indicating better cost management[185] - The efficiency ratio improved to 54.92% in Q2 2025 from 57.73% in Q2 2024[207] Workforce and Employment - The number of full-time equivalent employees increased to 5,313 in Q2 2025, up from 4,267 in Q2 2024, reflecting a growth in workforce[183] - The number of full-time equivalent employees increased to 5,313 in 2025, up from 4,267 in 2024, reflecting growth in operations[185] Dividends and Shareholder Equity - The common dividend payout ratio increased to 41% in Q2 2025, compared to 38% in Q2 2024, indicating a higher proportion of earnings distributed as dividends[183] - Shareholders' equity increased to $8.1 billion at June 30, 2025, up from $6.3 billion at December 31, 2024, due to the issuance of 50.2 million shares related to the Bremer acquisition[257] Acquisitions and Growth - Old National completed the acquisition of Bremer Financial Corporation on May 1, 2025, for a total consideration of $1.3 billion[206] - The investment securities portfolio was $14.5 billion at June 30, 2025, compared to $10.9 billion at December 31, 2024, driven by the acquisition of Bremer[239] - Nonaccrual loans increased by $146.7 million from December 31, 2024, to June 30, 2025, reflecting $126.8 million of nonaccrual loans acquired in the Bremer acquisition[269] Risk Management - The company performs stress testing periodically to ensure sufficient capital during economic stress, evaluating decisions related to pricing, loan concentrations, and mergers[261] - The company has adopted a Risk Appetite Statement to better assess and mitigate various risks, including credit, market, and liquidity risks[263] Projections and Future Outlook - Projected net interest income for June 30, 2025, is estimated at $8,885,950 thousand, reflecting a year-over-year increase driven by loan growth and asset repricing[284] - Total interest income is projected to rise from $4,880,115 thousand in 2024 to $8,885,950 thousand in 2025, indicating a significant growth trajectory[284] - Total interest expense is expected to increase from $1,013,949 thousand in 2024 to $4,651,760 thousand in 2025, highlighting the impact of rising interest rates[284]