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Investment Securities
 6 Months Ended
Jun. 30, 2021
Investments, Debt and Equity Securities [Abstract]  
Investment Securities INVESTMENT SECURITIES
The following table summarizes the amortized cost and fair value of the available-for-sale investment securities portfolio and the corresponding amounts of unrealized gains, unrealized losses, and basis adjustments recognized in accumulated other comprehensive income (loss):
(dollars in thousands)Amortized
Cost		Unrealized
Gains		Unrealized
Losses		Basis
Adjustments (1)		Fair
Value
June 30, 2021    
Available-for-Sale    
U.S. Treasury$237,135 $1,579 $(9,420)$5,498 $234,792 
U.S. government-sponsored entities and agencies1,447,432 10,665 (29,280)(6,530)1,422,287 
Mortgage-backed securities - Agency3,262,520 54,002 (35,539)— 3,280,983 
States and political subdivisions1,491,787 77,383 (1,239)— 1,567,931 
Pooled trust preferred securities13,746 — (4,358)— 9,388 
Other securities249,277 11,040 (521)— 259,796 
Total available-for-sale securities$6,701,897 $154,669 $(80,357)$(1,032)$6,775,177 
December 31, 2020
Available-for-Sale
U.S. Treasury$9,909 $299 $— $— $10,208 
U.S. government-sponsored entities and agencies841,133 5,744 (3,921)(968)841,988 
Mortgage-backed securities - Agency3,249,002 91,086 (990)— 3,339,098 
States and political subdivisions1,405,868 86,325 (31)— 1,492,162 
Pooled trust preferred securities13,763 — (5,850)— 7,913 
Other securities265,079 14,260 (593)— 278,746 
Total available-for-sale securities$5,784,754 $197,714 $(11,385)$(968)$5,970,115 
(1)    Basis adjustments represent the cumulative fair value adjustments included in the carrying amounts of fixed-rate investment securities assets in fair value hedging arrangements.
Proceeds from sales or calls of available-for-sale investment securities and the resulting realized gains and realized losses were as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
(dollars in thousands)2021202020212020
Proceeds from sales of available-for-sale debt securities$15,247 $20,028 $67,715 $256,438 
Proceeds from calls of available-for-sale debt securities46,750 141,964 56,995 305,735 
Total$61,997 $161,992 $124,710 $562,173 
Realized gains on sales of available-for-sale debt securities$736 $545 $2,736 $6,140 
Realized gains on calls of available-for-sale debt securities48 27 61 40 
Realized losses on sales of available-for-sale debt securities(85)(61)(85)(470)
Realized losses on calls of available-for-sale debt securities(7)— (27)(25)
Debt securities gains (losses), net$692 $511 $2,685 $5,685 
All of the mortgage-backed securities in the investment portfolio are residential mortgage-backed securities.  The amortized cost and fair value of the investment securities portfolio are shown by contractual maturity.  Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.  Weighted average yield is based on amortized cost.
 June 30, 2021
(dollars in thousands)Amortized
Cost		Fair
Value		Weighted
Average
Yield
Maturity
Available-for-Sale   
Within one year$155,512 $157,167 2.45 %
One to five years2,510,178 2,563,562 2.17 
Five to ten years1,793,204 1,774,222 1.78 
Beyond ten years2,243,003 2,280,226 2.48 
Total$6,701,897 $6,775,177 2.17 %
The following table summarizes the available-for-sale investment securities with unrealized losses for which an allowance for credit losses has not been recorded by aggregated major security type and length of time in a continuous unrealized loss position:
 Less than 12 months12 months or longerTotal
(dollars in thousands)Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized Losses
June 30, 2021      
Available-for-Sale      
U.S. Treasury$133,626 $(9,420)$— $— $133,626 $(9,420)
U.S. government-sponsored entities
   and agencies		836,281 (29,280)— — 836,281 (29,280)
Mortgage-backed securities - Agency1,453,544 (35,462)3,431 (77)1,456,975 (35,539)
States and political subdivisions145,415 (1,239)— — 145,415 (1,239)
Pooled trust preferred securities— — 9,388 (4,358)9,388 (4,358)
Other securities17,851 (294)27,651 (227)45,502 (521)
Total available-for-sale$2,586,717 $(75,695)$40,470 $(4,662)$2,627,187 $(80,357)
December 31, 2020
Available-for-Sale
U.S. government-sponsored entities
   and agencies		$355,528 $(3,921)$— $— $355,528 $(3,921)
Mortgage-backed securities - Agency275,833 (895)3,572 (95)279,405 (990)
States and political subdivisions3,497 (31)— — 3,497 (31)
Pooled trust preferred securities—— 7,913 (5,850)7,913 (5,850)
Other securities19,404 (70)24,871 (523)44,275 (593)
Total available-for-sale$654,262 $(4,917)$36,356 $(6,468)$690,618 $(11,385)
Available-for-sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For available-for sale debt securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for sale debt securities that do not meet the criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. No allowance for credit losses for available-for-sale debt securities
was needed at June 30, 2021 or December 31, 2020. Accrued interest receivable on available-for-sale debt securities is excluded from the estimate of credit losses and totaled $33.9 million at June 30, 2021 and $27.0 million at December 31, 2020.
The U.S. government sponsored entities and agencies and mortgage-backed securities – agency are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses. Therefore, for those securities, we do not record expected credit losses.
At June 30, 2021, Old National’s securities portfolio consisted of 1,891 securities, 213 of which were in an unrealized loss position.  The unrealized losses attributable to our U.S. Treasury, U.S. government-sponsored entities and agencies, agency mortgage-backed securities, states and political subdivisions, and other securities are the result of fluctuations in interest rates.  Our pooled trust preferred securities are discussed below.  At June 30, 2021, we had no intent to sell any securities that were in an unrealized loss position nor is it expected that we would be required to sell the securities prior to their anticipated recovery.
Pooled Trust Preferred Securities
At June 30, 2021, our securities portfolio contained two pooled trust preferred securities with a fair value of $9.4 million and unrealized losses of $4.4 million.  These securities are evaluated using collateral-specific assumptions to estimate the expected future interest and principal cash flows.  For the six months ended June 30, 2021 and 2020, we did not recognize any losses on these securities.
The table below summarizes the relevant characteristics of our pooled trust preferred securities as well as our single issuer trust preferred securities that are included in the “other securities” category in this footnote.  Each of the pooled trust preferred securities support a more senior tranche of security holders.  Both pooled trust preferred securities have experienced credit defaults.  However, we believe that the value of the instruments lies in the full and timely interest payments that will be received through maturity, the steady amortization that will be experienced until maturity, and the full return of principal by the final maturity of the collateralized debt obligations.
(dollars in thousands)ClassLowest
Credit
Rating (1)		Amortized
Cost		Fair
Value		Unrealized
Gain/
(Loss)		# of Issuers
Currently
Performing/
Remaining		Actual
Deferrals
and Defaults
as a % of
Original
Collateral		Expected
Defaults as
a % of
Remaining
Performing
Collateral		Excess
Subordination
as a % of
Current
Performing
Collateral
June 30, 2021
Pooled trust preferred securities:         
Pretsl XXVII LTDBBB$4,197 $2,926 $(1,271)
32/41
14.4%10.5%42.3%
Trapeza Ser 13AA2AA9,549 6,462 (3,087)
38/40
4.5%6.2%61.0%
 13,746 9,388 (4,358)
Single Issuer trust preferred securities:
JP Morgan Chase & CoBBB-4,816 4,645 (171)
Total$18,562 $14,033 $(4,529)
(1)Lowest rating for the security provided by any nationally recognized credit rating agency.
Equity Securities
Old National’s equity securities with readily determinable fair values totaled $2.5 million at June 30, 2021 and December 31, 2020.  There were gains on equity securities of $0.2 million during the three months ended June 30, 2021 and $0.7 million during the six months ended June 30, 2021, compared to $0.6 million during the three months ended June 30, 2020 and $0.7 million during the six months ended June 30, 2020.  Old National also has equity securities without readily determinable fair values that are included in other assets that totaled $127.6 million at June 30, 2021 and $105.8 million at December 31, 2020.  These equity securities without readily determinable fair values are illiquid investments that consist of partnerships, limited liability companies, and other ownership interests that support affordable housing, economic development, and community revitalization initiatives in low-to-moderate income neighborhoods.  There have been no impairments or adjustments on equity securities without readily determinable fair values in the six months ended June 30, 2021 or 2020.